Housing starts in the U.S. were up 24.3 percent year over year in November driven by demand for rentals and multi-family housing with construction of structures with five (5) or more units up 180.5 percent year over year while single-family home starts dropped 1.5 percent.
Permit activity to start construction was up 20.7 percent in November on a year over year basis, once again driven by demand for multi-family housing which increased 80.6 percent versus 3.6 percent for single-family homes.
In the west, total starts were up 66.3 percent year over year, up 17.7 percent for single-family homes while total permit activity was up 29.3 percent, up 13.9 percent for single-family homes.
∙ New Residential Construction: November 2011 [doc.gov]
It would be a lot more efficient to remodel the vacant McMansions that defaulters left behind into multi-family housing. They’re big enough. This conversion would be a quicker way to rebalance our housing stock into what the country really needs. No doubt there would be push back to rezone to higher occupancy though.
Unfortunately, Milkshake, many McMansions are located in areas with poor access to transit, jobs, and services, all of which are things demanded by the segments of the population driving rental demand. It’s a nice idea to convert these McMansions, but its not realistic without a much more substantial suburban retrofit.
From Mike Litchfield, a former editor of Fine Homebuilding magazine, last year. Can McMansions Help Solve Our Housing Crisis?:
Emphasis added. In addition to what Eric wrote, above, most McMansions are deliberately located in areas zoned at a low level of density, because affluent people liked the idea of ‘exclusivity’, so several public policy changes would be involved and as Milkshake allows, NIMBY’s would go crazy when the local planning commissions started considering rezoning.
A lot of these suburban McMansions will wind up being torn down. No one ever promised that American capitalism would produce what’s efficient.
To those who say that a primary residence of 1750 sq.ft. is too small: In 1950 , the average single-family home for 3.4 people was roughly 1100 sq.ft.
Let’s just revert to the 50’s lifestyle and be rockabilly Amish.
Eric – I was going on the assumption that the same people who were foreclosed out of the McMansions would want to continue living in the same area. The poor access to transportation and jobs weren’t a factor when signing a mortgage then why would they be a problem when signing a lease?
While urban areas tend to have a higher proportion of apartments, you can also find apartments in the exurbs too. Check out Antioch and Brentwood for example. You can even find apartments way out in the boonies as well.
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That article that Brahma links refers to how banks are tearing down vacant foreclosed homes because the market is so bad in Cleveland, a city facing problems similar to Detroit’s. Sixty Minutes ran a story recently on that issue and interviewed a few homeowners who are struggling to pay their mortgages with all they’ve got. The subtext of the story was that these proud lower-middle class homeowners were heroically going down with the ship if that’s what it takes. Defaulters were looked on as deadbeats. It is almost as if CBS is trying to assist the banks by influencing underwater homeowners to keep sending in their monthly checks.