In defense of beautiful homes

It seems everyone is constantly thinking about their home: its size, layout, location, and looks. Almost all my social conversations touch on the function, form, and status of houses.

Homes are a problematic and constant topic of conversation in part because our homes have to do too many jobs.

Our homes serve as functional living spaces but also as wealth storage. They need to be close to work and close to school, and close to people you like and activities you enjoy.

Homes need to be pretty but also fit in with the neighborhood aesthetics: their somewhat permanent nature makes it hard to take any chances on them, and well, they are so expensive that you want minimum common denominator aesthetics to maximize the set of future buyers.

Homes are also scarce and increasingly expensive, which makes them ideal targets to use to pursue ever-higher social status. Our brains have us locked in competitive signaling dynamics, and homes have become one of the most visible arenas for that fight.

The center of attention is cost: rapidly increasing in value, homes are a good store of value, and good social signaling vehicles, making them more of a commodity and less of a unique possession. We want homes to be cheaper.

Home prices have increased about 70% since the 70s; why? There seem to be two main explanations. The public policy explanation is that we are not building enough housing: for example, in 1960, NYC permitted to build 13,000 housing units, but it allowed for only 21,000 in all of the ’90s. Surprisingly, average construction costs in the USA have remained relatively steady in real terms since the 70s, staging at a range of 107 and 128 in 2015 USD.

The more significant change is in home sizes, which increased about 1,000 sq ft or 63% since the 1970s, a change eerily similar to the increase in cost.

So homes are more expensive in good measure because homes have gotten bigger.

One solution is to get bigger homes further out from city centers, where the land has not yet been appreciated.

In the 40s and 50s, the automobile and highways helped us expand from the city to the suburbs, but there was a limit to how far we could be from work. In the post covid world, we might see an expansion further out of suburbs into the mountain and beach towns an hour plus from work, or maybe to fully remote work In smaller and cheaper cities.

But another solution is to get smaller houses. Why are today’s houses much bigger than in the 70s? Maybe there is some functional reaction to the growth in individualism, where kids want their own room, and parents want maximum comfort, but for the most part, I think this has to do with a convergence of forces making the house the ultimate status signal. A big house is a sign of prosperity and success.

Is there an alternative model to the big home as social status? Rory Sutherland from Ogilby tells the story of envying the big home of their wealthiest friends. He realized he didn’t want that much space and that he didn’t even think these houses were particularly pretty; he just liked that they signaled success.

He also realized that what he cares about the most was his aesthetic sensibilities: a beautiful home would be valuable in itself, but it would also solve for status since he could tell himself that his house did not need to be the biggest since it was that prettiest.

As for function, his apartment building did not have an elevator so that wasn’t great (it served, however, as a great excuse to get a daily workout climbing stairs), but it was centrally located, which eliminated commute time. A clear preference for the aesthetic solution for all the functional and status issues.

Cookie-cutter, practical, easy to buy, and easy to sell houses are the norm today.

Beautiful and unique houses are rare. I think it is a good social strategy to emulate Sutherland, focusing more on aesthetics than on size.

I believe attention to beauty is an integral part of fixing our current troubled relationship with our homes.

I want to think more about the beauty of a home than about its size. This would require a shift in status signals, but I believe status signals can and do change.

Kevin Simler in the Elephant in the Brain points to David Foster Wallace’s essay on the Lobster, a low-class food in the 1800s, considered akin to rats and limited to one serving a week to prisoners to minimize cruelly. As we all know, these sea rats soon became very desirable and valuable.

Pretty houses are like Lobsters today, rare and in the right mindset, very desirable.