One day I had a tour of the big house factory which sits in a former farm field an hour’s drive west of T.O.’s core. Every day this monster turns out one perfect home from specs ordered by its new owner. The wiring and plumbing are finished. Paint and tiles are on. Dining room chandelier is hung. It’s a done deal when spit out the end of this massive building and onto a vehicle that looks like a cross between a flatbed truck and a crazed bulldozer.
The thing is then transported to a waiting hole in the ground a kilometre or two away, and planted. The advantage of indoor building is that it’s never halted by weather, the workers don’t get cold, there are no construction delays, more materials can be recycled and the whole thing runs like a just-in-time auto assembly operation.
These days, as you might imagine, things are slowing down a tad. The builder used to attract young buyers because all they needed to afford one of these showhomes was 1.5% down. For that, they got all the bells and whistles, plus mortgages too large to actually think about. But in a rising market, who cared?
Now that down payments have rocketed to 5% and 40-year amortizations have been slashed to 35 years, the builder’s offering the same homes for up to $70,000 less than last year. And still business is slow, I hear. Who would ever have thought selling expensive new houses to people without money would work out badly? Oh well.
The larger point worth considering is the place where these things end up – the burbs. Do they still have a future? After all, suburbs have been called one of the greatest wastes of resources in human history. Months ago I posted an article here from the Atlantic making a compelling case for the burbs becoming the slums of the future, rife with crime, largely abandoned by the middle class and worth pennies on the dollar.
I’ve also been following an interesting series on the suburbs over at The Oil Drum, where the focus is on what kind of life we’ll all be leading in the peak oil era soon to be upon us. Will energy shortages and rampant gas increases be the final death knell? Or has society sunk far too much into these sprawling mega-communities to ever contemplate their depopulation?
In decades to come, will these factory-made houses stand the test of time? After all, subfloors are particle board now, while joists are composite and soffits made of plastic. Will an energy crisis put an end to any desire to live where it takes a litre of gas to get a litre of milk? Will years of economic hardship simply overwhelm owners with no equity, convincing them they’re better to bail instead of to sink? And if the economy actually spirals into deflation or depression, will the suburbs be the worst of all worlds – no urban community or transportation grid and likely fewer government services, like policing? Will these near-city dwellers have total dependence on wavering utilities and yet be without enough land or resources to become self-sufficient?
Or, more hopefully, will the suburbs become communities where people carpool, telecommute, patrol their hoods and turn patchy backyards into communal gardens? Will they eschew the garage door remote and understand that when whole blocks of people are in the same economic boat they have to row together?
Well, nice thought, but I doubt it. I’ve walked too many of these streets and banged on too many suburban doors not to understand the prime motivation for people moving into these kinds of houses. Stuff. They want stuff. Granite or stone or glass countertops. Hardwood floors. Marble sills, columns, media rooms, stainless appliances, hot tubs and paving stones. Lots of stuff, and lots of credit to finance it. That is the current suburban dream, which is why it has no future.
If this mess continues (and I am forecasting it will, with a second wave of real estate declines next year plus a worsening economy and rising unemployment), I’d say the last place you want to be is anywhere near that housing factory, or a similar development.
The best place, of course, is clear. The exurbs.
