Brave New Homes – with Diana Lind

The Big Rethink: A Weekly Conversation

Photo by Alvin Engler on Unsplash

With the U.S. elections in the rear-view mirror and a vaccine on the horizon, it’s time to start thinking about what a new administration — and new normal — might look like. Brave New Home author Diana Lind joins us to discuss the cognitive dissonance between the pandemic-induced desire to live in the largest home one can afford, and the looming demographic- and climate crises that demand we change approach to how and where we live.

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Transcript

Greg Lindsay
I would like to welcome Diana onto our virtual stage. Thank you so much for joining us.

Diana Lind
Thank you for having me.

Greg Lindsay
So obviously, your timing of writing a book on housing, I mean pandemic aside, excellent timing here with the potential change in administration’s I should say. Let’s hope there is a definite change here of upholding the will of the American voters, which of course, will bring a breath of fresh air into American housing policy. So I guess as a fist step here, can you talk a bit about the book itself, Brave New Home, your overarching thesis, and what is the evolution of American homes, particularly now that we spend 99.9% of our time in them?

Diana Lind
Yeah, well so playing off of some of the themes that you just brought up in your opening presentation. The book in the sense is really about demographic shifts in the United States. So the book, it looks at the history of single family housing, and then new alternatives to it today, and why changing housing could help us solve some of the social, economic, and environmental problems in the US. So, the United States predominantly had single-family homes in most of its residential neighborhoods, across the country. And a lot of that housing was really built in the past century with a demographic in mind of say, like a white heteronormative family of four, where someone commutes into the city every day and you don’t need to necessarily have access to immediate amenities. And so this housing typology that we have, across the US was really built in this, perhaps, like 1950s mindset. Meanwhile, the US has really changed both in terms of its diversity of the population, and in terms of the lifestyles that people are leading. And, to get to your point about how people’s housing preferences, or the way that they’re living has changed during COVID, that idea of being able to access your neighborhood much more easily, walking and biking rather than taking transit, for example, or driving a car. That has really also I think, changed the way that people see their homes.

So the book looks at how we went from housing types in the early parts of the country, prior to World War One that were much more diverse. And so people think of this house with a white picket fence as being the way that we’ve lived in the US forever. And it’s really not the truth. It’s really the way that we’ve lived for a few decades now. But, for the majority of this country’s history, and really humankind’s history, we’ve had much more communal styles of living, much more flexible styles of living, much more affordable styles of living. So that would be things like, boarding houses, apartment hotels and tenements, and single room occupancy buildings. This kind of plethora of housing types really kind of existed in many of our cities. And then, an array of different policy interventions, media, popular movements, really encouraged both homeownership and a move to suburbs and to the single-family home. And, that part of history is, I think, pretty well known. But what has happened now is there is really this mismatch between the housing types that exists and the kinds of housing that I think people actually want. And it doesn’t have to be all Americans. I’ve had conversations with people saying, well, lots of people like their house with a backyard and two car garage, and that is totally fine. We’re really big country in the US, and you could have still 50 million people who want to live differently, which is a relatively small percentage of the population, but it’s still a huge number of people.

So, the second part of the book really looks at what are these different types of living, and I kind of gave four different examples here. The first one being co-living. So living arrangements where people have private spaces and also sort of more public and shared spaces, with programming, sometimes with kind of a co-living operator or it’s more of like a mom and pop operation. And then explore accessory dwelling units and tiny homes and the ways in which this type of housing could be a housing solution for people who want to have a rental property, or who people who want to house a loved one. Or for people who can‘t afford really more than 200 square feet. And I also look at multi-generational housing, and some of the solutions, or rather some of the lack of solutions that we’ve found in the US. And finally, kind of wellness oriented communities. And so I think that all of these trends, in terms of how they play out during COVID, they are things that are being looked at in a different way now, like people have asked me, is anyone going to want to live in a co-living arrangement anymore? And I certainly think that, yes, they will, actually, because a lot of people right now are experiencing loneliness, and a lack of community and that type of living situation, I think, especially when it’s safe, is going to be even more popular afterwards. And multi-generational living, certainly lots of people are moving in with extended family members right now. And I think that’s only going to be even more popular as people recognize that it’s really important to have someone, perhaps someone from your family, who can help look after your kids, or just help around the house or bring in economic resources. So, I definitely think that the single-family home is not going away anytime soon. But I think what’s really exciting is that there are a lot of new housing options that are getting a bit more traction and visibility and kind of conversation out there that are, I think, going to just continue to become more and more popular, even despite COVID.

Greg Lindsay
What happens in terms of affordability of this? I mean, like right now is a golden age to be a homeowner or homebuyer again, as part of the K-shaped recovery. If you have the downpayment, the money is practically free with interest rates this low. So that part isn’t a problem. But obviously, we’ve seen the so called COVID flight out of Manhattan and the Bay Area. People realizing that with no longer having to commute to their jobs, they can now basically head to the cheapest home they want. What sort of part of your prescription about how America should think through this? Because I mean, no, of building affordable housing in some of the most desirable cities in America has been an abject failure for the most part. And also, there’s a secondary trend, of course, where you’re in Philadelphia, that’s where rents are going up, because people are moving to secondary cities and tertiary cities where you get all the urban amenities, but at much less cost, and you can still keep your coastal metro job. So I’m curious, how has COVID scrambled that and what your prescriptions are?

Diana Lind
Yeah, I think, obviously, lots of people are taking advantage right now of the low interest rates. And I think that’s an example of really where we’ve seen somewhat like this two facedness, like the lip service that we give to affordability and to addressing inequality and what we actually do. And so what we actually do, is that we’ve given a tremendous tax loophole to the people who don’t really need another one, right.

Greg Lindsay
And, the Biden administration, even in their documents, talk about homes as a way of building wealth, like this is the way of building wealth while we try and make it affordable.

Diana Lind
Totally, and that’s really what I get at in the conclusion of the book. Which is that we have spent a century essentially perfecting homeownership as a wealth creation mechanism for a fraction of our population. And it works really well for that set, but that’s increasingly an older and whiter population. And so, what do you do about everyone else who is not really able to get into that market. And so, it’s not only people who are in white flight, it’s a lot of people who are continuing to live in the city and buy second homes in a lot of places, because they can do that. And like you said, you’re essentially punished for not taking advantage of low interest rates.

So, I think that if we are really going to address affordability in this country, and if we are really going to try to address inequality, we have to recognize the role that homeownership plays in that, and the ways in which our policies are really aligned towards helping people who don’t need help. And I also think that we have to think about moving beyond homeownership as a way to create wealth because it creates all these other problems like gentrification, like what you’re talking about. I mean, if all of your assets are really tied up in your home, you’re first of all going to be very protective of that and that’s going to bring up your NIMBYist instincts because you don’t want to see your property values go down. And that’s a totally rational thing if that’s all the money that you have. But it’s also probably not how you think of yourself as a citizen and what kind of city you want to live in. And it also really turns people into gentrifiers, even if they don’t really want to be. They’re going into places where they can afford the housing but with the expectation that the housing prices are going to go up because they need that appreciation to subsidize their investment in their home. And so that’s not a great thing either.

So, housing is both where people live and a commodity. And that’s really tricky. And I think that we need to be exploring other types of wealth creation mechanisms. And also thinking about how to build community wealth. For example, rather than investing in that second home for yourself, not to say you don’t want it right, and I’m sure a lot of people want a second home and whatnot, but don’t really need it even, could be happy Airbnb, or whatever. It’d be great to get those people who have this excess capital, to be able to invest in their neighborhood and get a return that is reasonable for them, and feel good about how they’re contributing back to their community. And not really looking at it as some commodity that they have to flip and get their money out of.

Greg Lindsay
Interesting. I know, you’re not a housing analyst. But I’m curious if you’ve had a chance to take a look at some of the Biden housing plans and what in particular might interest you in that. Particularly, the whole notion of Section 8 as an entitlement, which we know gave American‘s a stake in homeownership across the board.

Diana Lind
Yeah. So I mean, I think that’s the most exciting thing from my perspective in terms of the housing plan. I mean, making Section 8 an entitlement I think, would really dramatically change how people are able to access housing in their communities. I think that, to your point though, there’s continued to be a focus on homeownership and how we build homeownership across the board. And I would love to see some ways in which there’s a little bit more progressive thinking on that. I also think that there’s, prior to the whole election season, and I’m not really quite sure where the status is on this particular bill, but the YIMBY Act, that was a bipartisan act around this idea that you really can’t get access to federal funding if you’re going to have restrictive and exclusionary housing. That kind of thinking, I think, is really exciting. And it requires a bit more coordination in terms of the funding that’s given out. So I think that essentially, incentivizing municipalities to think about how they are addressing their restrictive zoning is really exciting. And I think it would actually get some cities to rethink what their policies look like.

Greg Lindsay
Yeah, it’ll be interesting. I say variations in that plan were hallmark of I think, Representative Alexander Ocasio Cortez has talked about this, and Senator Sanders. But I also talked about this with Brookings, Jenny Schuetz, and she gave us the impression that the wealthiest, most restrictive communities don’t rely on federal funds that much. So it will be interesting to see how big a stick it is for most NIMBY suburbs. But I’m curious, I’ve been talking about the lifestyle changes after COVID, I was wondering if you could unpack that a bit further, because it is interesting. On the one hand, you have the hardcore demography, right. Like that if the suburbs and single-family homes are created as vehicles in which to raise children, and there is a declining number of children, that basically the echo bloom is declining there. But at the same time, you have this sort of COVID flight of like, I need to get the biggest possible house I have. Is there a risk that we’re going to end up all alone in giant homes out in the suburbs? And do you think intergenerational housing is something that we’re here to stay. I mean, I’ve seen some really provocative ideas of overlapping kin networks, multiple generations that will have large homes, because they will serve all of our uses with all of our family members. I don’t know what you think will stay, especially now that we know with the promise of a vaccine, normalcy maybe around the corner for 2021. Right?

Diana Lind
So a couple of thoughts. You know, that idea of the big family home, the multi generational home, like that was the way that a lot of housing was built, actually, and it was built to be flexible. So I don’t necessarily think that bigger is worse, per se, I do think that a 4000 square foot house for just a couple is excessive and not necessary. But I could see, 4000 square feet actually serving a multi generational family quite well. And so, the type of housing that people had in the 1800s, a lot of people had large houses because they wanted that flexibility. And so having a border at some point was very, very normal. And so, that kind of like large house with a lot of flexibility idea, ways to house some part of your family. I think that’s a great idea. And I do think that a lot of people have realized we are interdependent. And that that’s okay. We’re interdependent on our family members and on our friends. And so I also think that for a lot of people, they’re going to have this experience of kind of podding up. And it’s going to just sort of like reinforce the ways in which they’re really focused on connecting with a small community or their family members, and I think that is going to be here to stay.

And I think one great thing about that, is that part of this idea of a single-family home is the notion that somehow you’re less than for living with your family. I mean, we see it in the media in terms of how the phrasing, doubling up is the way that we talk about generations living together. And I think that there’s a way in which this experience is going to change people’s minds that like, this is not necessarily a bad thing. Certainly, there’s going to be a lot of people who are saying, this was hell I can’t wait to move out or have my family moved out, and so on. But I think a lot of people are going to be excited about it. The other thing though, is like, I just don’t see people in their 20s, saying that given the choice, my choice is going to be after having spent 18, or maybe 22 years living at home, that they don’t want to test out their life in the city. I would see, for example, co-living being attractive to them and continuing to be attractive. I would just continue to see them being excited about the opportunities and cities. And so, I don’t see that really changing. And I think that even today, people have talked about how the youngest people are the ones who are most enthusiastic about getting back to their office, and they’re probably the ones who are willing to sacrifice space just to be close to their job, and to be close to other amenities.

Greg Lindsay
We talked about the policy aspect, but obviously, housing is provisioned massively by the private sector in the United States, almost by definition. I’m curious, because I think we have time for maybe one more question or two. What are the most interesting developments you’ve seen and also topologies that you’ve seen? Are there any particular fascinating projects to you that stand out. I mentioned Culdesac, of course, at the outset here, Commons out there, Brad Hargreaves, co-living provider, they’re developing a prototype co-living co-working space. There’s some really interesting matchups and hybrids that are coming out there. What stands out to you as an exemplar of what these new topologies after the single-family home should be?

Diana Lind
Okay, well, you sort of stole one of my answers there. I would have said that I think that that RFP, for a more inclusive kind of community where you could work from home, also live there, have some community. That kind of development, I think is going to be increasingly popular. So one of the examples that I have in the book is Seren B, which is essentially an intentional community, it’s a developed community trying to rethink the suburban model, with walkability and community in mind. It’s probably very unique. And it’s not the type of thing that’s super scalable. And I don’t know that any of these examples are going to be super scalable, but I could imagine that we’re going to see a lot more of that all-inclusiveness if you will of a type of community and it doesn’t necessarily have to be all by one private developer. So it could end up being something more like this 15 minutes city or proximity city, which is in some sense, a larger and more diversely funded and supported and integrated kind of example of the type of community. So I see, hyper-local and proximity economies being incredibly important going forward. Whether that ends up being oriented just around the housing, I’m not entirely sure that we’ll see a ton of that. I think that, one of the most interesting things that I have seen in terms of different types of housing from the private sector is this idea of like, we’ll build it for you if you share the rent back to us, that kind of accessory dwelling unit. Because recognizing that for so many people building an accessory dwelling unit is just financially really difficult and in terms of like their expertise and actually going through permits and getting contractors and all that kind of stuff. So taking some of that weight off of the homeowner and then getting a piece of the rent income afterwards. It’s kind of an interesting idea.

Greg Lindsay
Well I was going to say, the flip side of this same question I want to ask is what are some of the worst trends in this? Or some of the most predatory ones? Because if you take that logic far enough, you get into some of these startups that are not just offering debt to would-be homeowners but equity, and also demanding that they sell their homes after three or five years. A handful of these startups, to unlock that equity. The increasing desperation to get into that ownership path before it‘s too late, and you‘re seeing that. And I‘m sorry to interrupt, but also I‘m curious to your thoughts as a final question here. About what are the trends in the housing that worry you or do you think are alarming? And this I go back to when we had on the Big Rethink Ryan Dezember talking about the threat to homeownership posed by the single-family rentals. But also, we’ve seen Open Door, we talked about the need to decommodify housing. Instead, we’ve seen the increasing financialization of housing with a lot of e-buyers, I-buyers, I should say. So where do you think the next housing crisis is? Or what do you think is the next danger to American homeowners or American residents?

Diana Lind
Yeah, I think a huge threat is this idea of just our housing stock becoming priced fixed by a couple of companies. Whether it’s because they’re renting it, or whether it because they’re buying it, cities or communities no longer being essentially independently owned by thousands and millions of homeowners or renters. But really, that all becoming consolidated under a very small number of owners. I think it’s a problem that we’ve seen just in every other industries, like retail, for example. And so it just seems very clearly coming for housing. And so, we didn’t get a chance to really talk about like, who’s going to be the HUD Secretary and whatnot. But I guess the thing that I would really be interested in is someone who’s keeping an eye on that, because it feels like we are constantly sort of 20 years behind the ball on a lot of these kinds of issues. And sort of someone who’s able to look forward thinkingly like, what are the threats here, and recognize, for example, that like the threat in 2008, following the foreclosure crisis wasn’t just, the people were going to be foreclosed upon was going to be who’s going to buy those homes, and the fact that like, that opened up a Wellspring for private investors buy up tens of thousands of homes. So someone who can be for thinking on that kind of stuff, I think it’s really important.

That I would say, and just being very concerned about the amount of people who are entering the homeownership market right now, with the expectation that they’re going to have a job a year from now. With the expectation that, they’re not going to be someone who’s going to be foreclosed upon or that there’s not going to be some kind of housing crash in the future. It just seems like we are entering a housing bubble phase, and that there’s already in the works like the potential for a major recession here and not enough awareness of that. So I think, again, that just drives all the urgency for thinking about other ways of creating wealth beyond just homeownership.

Greg Lindsay
Yeah, there was a thought provoking column by John Dizard in the Financial Times. He pointed out that these are solid days for the underwriters. We’ve seen Quicken Loans rush out an IPO, they’re writing out huge amounts of loan volume. But we know that there’s a looming evictions crisis, that we didn‘t have the time to discuss here, that’s coming, that’s been for-stayed by the federal government. And you start to imagine where we will finally go over that cliff. And that’s coming, in coming months. Well, we could talk about this forever. But it’s been a pleasure. Thank you so much for joining us today Diana.

Diana Lind
Yeah, thank you so much for having me.

Greg Lindsay
Well, thank you all for watching. We’ll be back next week with another episode of The Big Rethink and until then stay safe and take care.

Transcribed by https://otter.ai