HACE 3000Housing and the Family

Andy CarswellTuesday, October 25, 2011

WHAT DO WE MEAN BY “HOUSING”?

Covers A Number of Academic Disciplines

Real Estate/Finance/Business Macro/Microeconomics Sociology Public Policy

HOUSING – AN HISTORICAL PERSPECTIVE

• 1950 Average sq. ft. < 1,000

• 2000 Average sq. ft. = 2,265

HOUSING – AN INTERNATIONAL PERSPECTIVE

• Square footage differences

• Land usage difference• Ownership differences• Social welfare

differences• Regulatory differences

REAL ESTATE AND ITS VARIOUS COMPONENTS

L and Im prov em en ts F ix tu res

R e a l E sta te

COMPONENTS OF LAND

• Air Rights

• Surface Rights

• Mineral Rights

OWNERSHIP RIGHTS

• Right to use the property

• Right to possess the property

• Right to exclude others from the property

• Right to dispose of the property

OTHER CHARACTERISTICS OF REAL ESTATE

• You Have a “Bundle of Rights”

• Involves Several Specialists Within the Industry

• Multiplier Effect

• Various Economic Characteristics

ECONOMIC CHARACTERISTICS OF REAL ESTATE

• Usually high-priced• Usually involves

borrowed funds• High search costs• Scarcity• Situs• Effect of surrounding

structures• Fixity

HOUSING VARIES ACROSS AND WITHIN CULTURES

• Form, Shape, Size and Construction

• Uses and Purposes

• Character of Building and Neighborhood

• Importance of Structure

• Amount of Actors Involved

IMPORTANT DISTINCTION OF TERMS WITHIN THE FIELD

• “House” vs. “Home”

• “Neighborhood” vs. “Community”

• “Household” vs. “Family”

GENERAL INFO ON AMERICAN HOUSEHOLDS

• Traditionally married couples; still comprises a majority of HH

• Non-family households gaining fast• Increasing #’s of single-person HH’s• Declining HH size (w/ accompanying increase in

structure size)• Increasing numbers of elderly households• Both members of traditional HH usually working

more

GENERAL INFO ON HOUSING MARKETS

• Not all the same

• In a constant state of flux

• Governments are important regulators of the local housing industry

How do we get information about households?

• U.S. Census of Population and Housing– every 10 years– attempts to collect information from every

resident of the U.S.

• American Housing Survey– every other year– follows a sample of roughly 50,000 housing units,

adding and deleting homes as needed

What is a home?

• Cultural concept

• Source of human comfort

• Community ties

Human Ecology Model

Social-CulturalEnvironment

Self

Natural Environment

BuiltEnvironment

Meets Needs

Needs can be ranked in order of their importance

Primary needs are physical in nature & have priority

Secondary needs are largely psychological or social—important for quality of life

Maslow’s Hierarchy of Needs

Self Esteem Needs

Self-actualization

Sense of Belonging

Security and Safety Needs

Physiological Needs

Conceptual Framework for Influences on Housing Choice

Household Type

AgeTypeSizeStage in life cycle

Life Style

Cultural orientation

Generational differences

Housing Norms

TenureSpaceStructure

QualityNeighborhood / LocationExpenditure

Housing Choice

Social Class

EducationIncomeOccupation

Housing Values

Micro and Macro Effects

• As we talk about housing choices, we can think about:– what influences individual households’

housing choices (micro level)– how changes in the U.S. population will

result in changes in the overall housing market (macro level)

Human Ecology and Housing Needs

Social-CulturalEnvironment

Self

Need for protection

from m

an & nature

Need for wholesomeself-concept

Nee

d t

o r

elat

eto

oth

ers

Need fo

r soci

al a

nd

psych

ologic

al s

timula

tion

Need fo

r

a se

nse o

f

place

or

roote

dness

Need for creative outlet

Need to fulfill

values

Natural Environment

BuiltEnvironment

SNAPSHOT OF AMERICAN HOUSING QUALITY (circa mid-1990s)

• Median size of occupied units approx. 1750 sq. ft.

• Roughly 700 sq. ft. per person• > ½ of units have >= 3 bedrooms• Only 2.5% considered “overcrowded”

ZELINSKY- “THE HYPOTHESIS OF MOBILITY TRANSITION”

• Mobility low in pre-industrial agricultural societies

• Mobility rises with industrialization• Mobility plateaus at a high level of industrial

development• Mobility fluctuates with economic cycles• Mobility decreases with home business

innovation

WHY DO DEVELOPED NATIONS VARY IN LEVELS OF MOBILITY?

• L-T and persistent historical patterns of moving

• Degree of government intervention/regulation of housing markets

• Number of urban centers• Age of population• Discrimination

Non-Monetary Advantages of Owning a Home

• You have more control over your space.• You have more privacy, including a private

yard.• You have more space.• You are free from restrictive leases.• You can gain a better sense of community.

Disadvantages of Owning a Home• There is no guarantee that your home’s value will

appreciate.• It is often more costly, especially if you move often. • It requires more money management skills.• You need savings for emergencies and periodic large

bills (such as property taxes).• It may be harder to move.• Upkeep can be a lot of work.• You may have to follow the regulations of a

Homeowner’s Association.