What is the future of McMansion suburbs?
There are a few things to know about both McMansion suburbs and other shifting demographic elements.
- McMansions are typically poorly constructed. Shoddy workmanship, shoddy underpinning materials and an emphasis on size and ostentation.
- The communities that they are in are among the lowest density of any attached to urban areas. Lack of density means a lot more cost and energy to provide them with electricity, water, sewage and road access.
- They have huge surface area per person and typically inadequate insulation, meaning heating and air conditioning them is much more expensive. With significant variance in weather extremes, this likely will cause increases in energy costs just to keep them at a comfortable temperature over the coming years.
- They are typically a long way from anything interesting, which means that getting to shopping or entertainment takes a lot of time. And all urban areas are seeing increased congestion, so the opportunity cost of being stuck in traffic is increasing for McMansion dwellers.
- They are in areas with low real estate appreciation per square foot compared to urban centers, which is a major reason that they can sprawl over big lots.
- Carbon is being priced, slowly but surely, either through a carbon price or through regulation. Gasoline and heating gas will be increasing in price.
Those factors in our emerging and transforming economy mean that they will effectively depreciate in value compared to downtown real estate. They will fall apart sooner, they will be more expensive to maintain, they will be more expensive to live in and taxes will tend to make them more expensive as well.
There are some countering trends however.
- Where renewable electricity is increasing, in the absence of other countering factors, electricity prices are rising more slowly. Texas is a case in point with an increase from basically 0% wind and solar in 2010 to 18% in 2018 but much lower than average increase in electricity price.
- Electric cars are hitting the tipping point. Does it matter if gas prices are going up if you have a Tesla and electricity prices are not appreciating in line with inflation?
- Ditto road maintenance vehicles. City fleets are shifting to electric, with a higher capital cost but lower operating costs. They are able to drive down the price of service to their citizens.
- Ditto powering sewage and other services.
- Heat pumps are much higher efficiency and as McMansions age and furnaces die, replacing them with an air-source, ground-source or water-source heat pump makes a huge difference.
- While urban expansion is going vertical, urban density is generally increasing all over. Amenities will be closer to McMansions, whether they want them to be or not.
- Adding insulation and double-paned windows to a McMansion won't be cheap, but it will pay significant dividends in heating and cooling costs.
- Entertainment has been increasingly streaming into homes for decades, with theaters of all types fighting a rearguard action against Netflix-induced obsolescence. This isn't going to change or even slow particularly. Being a homebody is easier than ever.
- Autonomous vehicles will lower the opportunity costs of commuting and other driving, allowing people to live a long way from anything and sleep, work or play as their car delivers them to where they need to be.
- Finally, autonomous electric vehicles will increasingly deliver almost everything that anybody needs for their home on a day-to-day or week-to-week basis and more cheaply and efficiently than delivery today.
Some people like to live in large tasteless boxes a long way from other people. Increasingly, they'll be able to without being an outsized burden on the rest of society and without screwing up their children too much. It certainly isn't optimal in terms of how to live, but if they become relatively benign, who cares?