The Daily - The Rise of the Single-Family Home

Episode Date: October 11, 2022

To tackle its critical shortage of affordable housing, California has taken aim at a central tenet of the American dream: the single-family home.Telling the story of one such property, in San Diego, can teach us about the larger housing crisis and how we might solve it.Guest: Conor Dougherty, an economics reporter at The New York Times and author of “Golden Gates: Fighting for Housing in America.”Background reading: The transformation of 5120 Baxter Street in San Diego is a projection of California’s tighter, taller future.NIMBYs, referring to residents who fight nearby development — especially anything involving apartments — are often blamed for worsening the housing crisis.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

From The New York Times, I'm Sabrina Tavernisi, and this is The Daily. For years, California has been the place where the country's shortage of affordable housing is at its worst. To tackle this problem, the state is now taking aim at one of the most cherished features of American life, the single-family home. Today, my colleague Connor Doherty tells the story of one such home in San Diego and explains what it can teach us about the larger housing crisis and how we might solve it. It's Tuesday, October 11th. So I'm an economics reporter at The Times, and I cover housing. Since the pandemic and continuing through today, there's been a lot of discussion about how obscenely expensive housing has gotten, even in a lot of cities like Spokane or Kansas City, where people have expected the cost of living to be pretty low.

And it kind of just makes me think of my home state and where I live, California. California's housing market keeps breaking records. Housing affordability in California is at its lowest level in nearly 15 years. Here, the median home price is about $800,000, which is about twice the cost of a house nationally. You need to make at least $300,000 a year to buy a home right now in four of our Bay Area counties. To afford the rent, a person earning the minimum wage here in California must work three jobs. California has some of the most overcrowded homes in the country. Three, four families in a house meant for one. You drive through cities like San Francisco and LA,

and there are these block-long homeless encampments across the sidewalks. Nearly a quarter of homeless people in the entire United States live here in California. The state is basically the most extreme example of this affordable housing crisis that is now spreading everywhere. In a way, it sort of feels like the rest of the country is just catching up to where we've been. And as I've been reporting on the affordable housing crisis, there's one thing that comes up over and over and over. People want a house and a yard. People still want to be in a single family home. They want their dog in their backyard. They want a neighborhood. And it's the single family home.

The single family home is an important part of the American dream. Which is the single family home. I believe that the single family home, the white picket fence, it sounds corny, Russ. I still think that's the American dream. I guess maybe I'm hung up on the single-family house. The single-family home is both a physical thing and an idea. The physical thing is, of course, a house with four walls that don't touch your neighbor's walls, usually a yard in the back, sometimes a garage in the front. But it's also this kind of vision people have of what a neighborhood should look like, what a neighborhood should feel like, what a community should be. And what I find so interesting about single-family home neighborhoods is that this is actually what

most of America looks like. In about three quarters of the residential land in most American cities, it's illegal to build anything besides a detached single-family house. So the more reporting I've done, the more I've realized that it's impossible to fully understand the affordable housing crisis without first understanding the single-family home. affordable housing crisis without first understanding the single-family home. So the rise of the single-family home in America begins in the aftermath of World War II.

16,112,566. In the mid-1940s, millions of American soldiers began coming back to the U.S. That's how many there were of us in the armed forces. Before the war, most of these men were living out in rural farmhouses or in densely packed apartments in cities. And amenities were scarce. Only about half of all American homes had hot water, a toilet, and a bathtub. But after the war, many Americans began imagining something totally different for themselves and their families.

What every one of those men had uppermost in his mind while he was away in the service many Americans began imagining something totally different for themselves and their families. What every one of those men had uppermost in his mind while he was away in the service, all 15 or 16 million of them, they were thinking of home. There'd been so much sacrifice, so much death, and they wanted to put that all behind them and move into a state of abundance. And that really found its greatest expression in their desire for houses we wanted the real mccoy a place of our own not just any old place though but a place of which every average man could proudly say this is my home there was just one problem. For every million dreams and urgent need for housing, only a thousand new homes were being built.

The country didn't have enough of them. Building had basically ground to a halt during the Great Depression. Then after the war, there was this baby boom, which meant there was a lot more people who needed to be housed. And as developers and urban planners looked for a solution, they found themselves asking a question. Why not mass produce the elements that go to make up a house, just as the auto industry does with the parts that go into a new car? Why not build houses, one after another, the way you'd build something in a factory. And so, the modern suburbs were born. Five years ago, this was a vast checkerboard of potato farms on New York's Long Island. Today, a community of 60,000 persons living in 15,000

homes, all built by one firm. This was an epic building boom. In 1944, home builders built 114,000 new homes. Just six years later, in 1950, they built 1.7 million. The federal government was giving out loans to war veterans, tax breaks for homeowners. Suddenly, millions of Americans, mostly middle-income white Americans, had their own single-family homes. So here's the home that cost its happy owners just $9,000. mostly middle-income white Americans, had their own single-family homes.

So here's the home that cost its happy owners just $9,000. And this created an entirely new vision of American life. A two-way fireplace, a finished room in the attic, and even a washing machine. Yes, that old potato patch has come to a good end. Oh darling, it's going to be just perfect. What was your name again? Margie. M-A-R-G-I-E.

Margie Coates' family was part of that vision. And Margie, I have to do this, but how old are you? 79. 79. She was a teenager when her family bought their first house. This was 1955. My dad was in the Navy. He was born in Illinois, but we lived all over the United States while he was in the Navy.

Margie's dad, who had moved around the country as an aeronautical engineer, was ready to settle down in San Diego. So one weekend he drove Margie, her three sisters, and her mom out to a new subdivision in the city that was called Claremont Villas. The streets were in and it was just dirt. And a salesman was waiting there to show them around what would eventually be a brand new neighborhood. The models for this place were down on Claremont Drive. And then they were able to walk through these model homes. And then they said, okay, here's where we're going to build them. Which were these ranch style houses, each with a covered patio, a double garage and brand new appliances in the kitchen.

There were four models and my parents picked that model. And pretty soon the family had a new address, 5120 Baxter Street. And my dad would stop by every day on his way home from work, And my dad would stop by every day on his way home from work, look at the forms, check the cement. He was so proud of it that he could, you know, buy that house, as everybody was. I mean, it was kind of the American dream to buy a house. And how much did you say they paid, $13,000? $13,250. How much?

$13,250. And why do you remember that so well? Because it's so bizarre today. And when Marty's family did eventually move in to 5120 Baxter Street. I mean, nobody locked their doors. It was even better than they imagined. There's a man next door, worked for the dry cleaners. The guy next to me now, well, he's not there now, but he was a milkman.

Then you walled their neighbors. My parents had the biggest yard. So that was where everybody congregated on the weekends. And they'd host barbecues in their big backyard. It was just kind of a low-key, kind of Happy Days, Ritchie Cunningham kind of neighborhood. It was this, like, quintessential suburban life. And this was the life that a lot more Americans, not just Margie's family, were enjoying.

Across the country, people were seeking out neighborhoods just like Claremont. It was almost like a suburban movement. And California was just the absolute forefront of this. The state had a ton of land, great weather, beautiful views, and the population just exploded. It went from about 7 million people in 1940 to close to 16 million in 1960, so more than doubled. But... One subdivision after another leapfrogs across the landscape, competing for valuable land space.

As more and more people flooded into the state... Man with his modern machines is consuming land at a frightening rate. Some of that initial excitement began to wear off. And in the following decades, building in the state started to slow down pretty dramatically, and that's for a few reasons. First, Californians became increasingly concerned that all this construction was ruining the natural beauty that led them to California in the first place. In the 1960s, they cut down 13,000 acres of trees a year,

1,000 redwoods a day. So starting in the 60s, the environmental movement as we know it today really started to take hold. A day set aside for a nationwide outpouring of mankind seeking its own survival. The first Earth Day happened in 1970, and membership exploded in environmental groups like the Sierra Club. We have planned a society with too little reference to the laws of nature.

What are we doing about all of this? And these groups worked to protect land and wildlife in California, in part by fighting against new development. Today, we're either going to clean up our own mess or become its victims. All this activism eventually led to the creation of a bunch of new environmental laws in the state. And these laws became extremely important in slowing down the building boom. Developers now had to conduct these really lengthy, like year-long studies on the impact their projects

would have on the environment before they could build anything. And at the same time, homeowners were really emboldened by this. I think what has to be done is people getting together on a political basis to make the necessary provisions for future development in the area. There's this whole new class of single-family homeowners,

and their home is their single biggest investment, and they want to protect it. And it really started to create this new political identity, the NIMBY, which stands for Not In My Backyard. Without any restrictions on the number of homes in any given area, the character will change. Families start leaving. That, of course, affects the value

of your home. This goes on to become like this catch-all phrase for anybody who opposes new development near them. And there are different ways that NIMBYs go about stopping things. Often, they're leaning on these new environmental laws to petition against new construction. But another big focus is zoning. People that moved into this piece of property moved in on the basis of the existing zoning of the property. Zoning, of course, are the rules that say what can be built in a city and where.

And throughout America at this point, a lot of new neighborhoods were zoned for single-family homes and nothing else. So you could, in a lot of these neighborhoods, tear down a single-family home and put up a bigger one. But you could not build, say, a duplex or a triplex or any sort of denser housing that might accommodate more people. In essence, single-family neighborhoods became a kind of default. Let's take a look at what some of the goals are today.

And many homeowners really wanted to keep it that way. Safe, healthy neighborhoods which protect our middle-income families. So zoning protections for single-family residences. They said single-family neighborhoods had more character. They said that they were more safe. We bought our homes with the idea of having a place to raise our families in a setting where we have playmates for our children and people with common interests for us. And I should say here that often the subtext of this was that they wanted to keep certain people out of them,

people who weren't white or middle class. So if environmental laws bring the power of delay, that is to say they make it harder to build new housing, zoning kind of adds on a layer of inflexibility. Not only could you not build new housing, but you also really couldn't build anything besides single-family homes. You put all this together, and it meant that California was building way fewer homes than it had been. The problem was people were still moving there, so the supply of homes just could not keep up with the demand. And you can see how this plays out, how it gets harder

and harder for people to buy their own homes. If you go back to 5120 Baxter Street, because after several happy years, Margie Coates' family sold the house. And in 1976, a new family moved in, the Reeses. So tell me, when did you move in? Tell me a little bit about it. Okay, so my father was retired from the Navy. He was a retired Master Chief. Patricia Reese's story starts off pretty much how Margie's did. Her dad was in the Navy, and her parents were looking for a place to raise their family. They had lived in a small trailer in the Palm Avenue trailer park. And when they moved into Baxter Street,

they were thrilled. It had the most beautiful bougainvillea bush that grew up right over the kitchen window. And my mom was in love with that. Patricia's family knew they were lucky to get the house on Baxter Street. Okay, this is the American dream, right? It's 1976 and we're buying a house with a yard,

and my mother even had him put in a white picket fence. Oh, wow. They bought it for $51,000 at a time when home prices in California were just exploding. By 1978, the average price of a single-family home was around $70,000. Two years later, it had already jumped to about $100,000.

By the 1990s, Patricia was an adult, and she's married with her own family. And she and her husband decided they wanted to buy a house in the same neighborhood in Claremont. We were trying to look for a house in that neighborhood, and one of the houses it was selling was $117,000. And we were like, $117,000? That's a little bit outside of our price range.

At the time, it was a little too expensive for them. So they came up with a plan. They'd move out of state and live in a trailer for a few years, just like Patricia's parents did. And this would allow them to save enough money so they could eventually move back to California and get a house. We go to Pennsylvania. While we're there for two years, the price on that $117,000 house

goes up to $162,000. But no matter how much money they saved, their savings just couldn't keep pace with how home prices were rising in California. So you're basically moving around the country to some extent to sort of try to get back to the California dream. Yes, exactly. We were young and that's what we were trying to do. So what was initially meant to be just a few years living out of state basically turns into decades. And at every juncture, she's really just sort of working towards this idea of owning a single family home like her parents did.

Eventually, she ends up back in San Diego. But it's not because she finally saved up enough money for a house. It's because her dad got sick. My father lived there until the day he died, which was in November of 2019. When Patricia's father died, she inherited 5120 Baxter Street.

And at first, it seemed like a bittersweet blessing. She could keep the home and the family. But by this point... The house is starting to have some problems. The roof keep the home and the family. But by this point, the house is starting to have some problems, like the roof needed to be redone completely. The house is 60 years old. It's worn down a little bit, and Patricia didn't have enough money to repair it and make it livable. My children, I had three of them, they would not have been able to financially get independent and

purchase their own home. And as she looked around, she could see that the cost of living in California is now way beyond what it was when she first left. We looked at every possible outcome, and we were like, given the condition of the problem... And so she realized, as much as she wanted to stay in Claremont, as much as this had been her goal, this thing she'd been working for pretty much her whole life. The other option is we sell the house. We sold it for about $700,000. It makes a lot more sense for her family to just leave. So she did what a lot of Californians are doing.

She sold her home and moved to Texas, where the cost of living is lower. And it wasn't long after that that 5120 Baxter Street became the center of the next big change in California housing. We'll be right back. We'll be right back. Just about the time Patricia was selling the house on Backstreet, California was in the process of dramatically rethinking its housing policies. By now, the housing shortage is so dire that it's become a full-blown crisis. You look at any poll, and housing and homelessness are by far the biggest concern of California voters.

So legislators realized they have to do something. And they start talking about rolling back a lot of these regulations that made housing so difficult to build in California in the first place. The thing is, all these environmental laws and all these zoning laws are some of the most cherished rules for homeowners in the state. It became a huge fight. Senator, where do you make your next bill? One of the most contentious battles happened in 2018. Colleagues, I'll now bring up SB 827. When a state senator named Scott Rayner proposed a bill that would just pulverize single-family zoning.

This bill addresses California's massive housing shortage in a meaningful way by allowing more housing near public transportation. We are talking about four- and five-story small apartment buildings, the kind that we used to build quite a bit of but got banned in many places when we downzoned in the 70s and the 80s.

But this thing got extreme blowback. This is a bad bill. This is a horrible bill. in many places when we downzoned in the 70s and the 80s. But this thing got extreme blowback. This is a bad bill. This is a horrible bill. I think this is the craziest bill I've ever seen. People were angry because it was going to take power away from local communities to decide what to do with their land. SB 827 is undemocratic. It's a power grab.

We're going into dictatorship land. People said there was no guarantee that it would make housing more affordable. This bill is a massive giveaway to real estate developers. It incentivizes luxury development. It's a developer's dream. That it would be bad for the environment. What we're not hearing very much about is the environmental apocalypse that this would bring upon us. You're losing open space. You're losing solar power generation. You're depleting the, you're losing solar power generation, you're depleting the aquifer. That it would change neighborhoods. We will lose

our beautiful neighborhoods. It will be devastating to single-family home neighborhoods. It will also destroy our single-family neighborhoods. And that it would take away single-family homes. We know now that Scott Wiener who wrote the bill, that his idea of creating Wiener World, it's not a place any of us want a ticket to. I think you should think about when you meet your maker if you pass this. Thank you. And so. Call the roll, please. Senator Bell. No. Bell, no. Cannella. No. Cannella, no. Allen. The bill fell. Allen, no. Dodd. Dodd, no. Gaines? And it was repackaged, only to fail again. But as all this was playing out, Senate Bill 1069 by Senator Wykowski and accolading to land use, some smaller things were happening, and they were happening a lot more quietly.

Madam President and members, the housing shortage here in California... Another senator named Bob Wykowski proposed a much smaller solution to the housing crisis. ADUs are better known as granny flats. And they're one of the important parts, not the entire part, but one of the important solutions to our housing shortage. Sometimes it's when the garage or basement of a single-family home is converted into an apartment. Other times, it's a whole separate house that people build in the backyard for friends or family or sometimes a renter. This is a really quick way to build new units almost invisibly.

So while getting rid of single-family zoning feels like this existential threat for a lot of homeowners, what Senator Wieckowski was proposing was effectively a workaround. It's a more palatable way of convincing homeowners to build new housing, but without it feeling like it's disrupting the neighborhood. And with that, I urge an aye vote. Thank you, Senator Wykowski. Mr. Secretary, please call the roll. Allen. Aye. Aye. Anderson. Aye.

Aye. Bates. So Senator Wykowski's bill manages to pass. And over the next few years, a whole bunch of other little ADU bills are passed. And then that effect of all this is that it becomes way, way easier to build an ADU in your backyard. So that's how, three years later, Recently sold. This is selling right now actively on market. 5120 Baxter Street ended up in the hands of a developer named Christian Spicer. These are under construction. These are the ADUs on each property.

So basically we have one, two... I met Christian last summer. He's a San Diego native. He originally got into development by flipping foreclosed homes during the Great Recession. I would knock on the door and just say, hey, you know, we bought the property from the court steps. I'm the new landlord. And as we drove around the city. I mean, I have no problem telling you about it. He told me how he eventually focused his business on ADUs.

Yeah. OK. So then you're doing flips. Yeah. And then, you're doing flips. Yeah. And then what happens is... It started off with what was supposed to be just a regular house flip. The job was stalled because it was taking a long time to get city permits.

But while he was there, he noticed something. Well, there was a garage that had sewer lines, water lines already running to it, everything. There was a garage on the property that already had plumbing,

which meant he could just build it into another unit. So he asked an engineer he was working with, Can I convert this to ADU? And she was like, yeah. And I was like, how much more time will it add? She's like, none. It'll actually go faster if you do this route. And he discovered that he could easily convert the detached garage into an ADU.

Because the state had passed all these new laws, there weren't as many legal or environmental hoops to jump through, and the results were going to be super profitable because you had a whole new unit on the property. The business plan is trying to maximize the amount of value to each property. So over the next few years,

Christian built dozens of ADUs all over San Diego, including in Claremont, the neighborhood where Margie Coates and Patricia Reese had grown up. And in 2020, he bought 5120 Baxter from Patricia. Okay, cool. We go through here? Christian actually took me to see it

as it was under construction. How many square feet is it? 1,200. The main house, the house that Margie and Patricia both grew up in, had been gut-renovated and split into two apartments. Basically fridge, stove, dishwasher, sink. And in the backyard, that big green backyard where Margie and Patricia spent their childhoods,

a construction crew had built a whole separate building in the back. It looks a little more appealing than just the standard little box, you know? It looks a little more appealing than just the standard little box, you know? So that's how, over seven decades, 5120 Baxter Street went from being a classic single-family home that was owned by the people living in it, to what is now basically a small apartment complex. Christian bought the original house for $700,000. He resold it as three units for $2 million. More and more single-family homes in California are being transformed the same way 5120 Baxter Street was. Across the state, the number of ADUs is exploding.

From 2018 to 2020, nearly 34,000 permits for ADUs were issued in California, and nearly 23,000 were added to the state's housing supply. And I should acknowledge here, not every ADU is going to be built by a developer. In my reporting, I've met a lot of single-family homeowners who are building their own units in the backyard, either to rent out for extra income or for friends and family. And many of them told me it's their way of keeping their loved ones from being priced out of the neighborhood. ADUs are just the first crack

in ending the domination of single-family homes in California. Last fall, Governor Gavin Newsom signed into law SB9, a bill that allows people to subdivide single-family lots into duplexes. In other words, to turn one home into two. When you put all these laws together, California has paved the way for some 2.5 million new housing units to be built in existing single-family neighborhoods. That's a huge number.

The state currently builds only about 100,000 new units a year total. But there's still a lot of questions about how effective all this is going to be at mitigating the affordable housing crisis. It helps to have more units. But who's going to be able to afford them? The people most in need? And who's really going to be gaining from all this new construction if developers like Christian are flipping these buildings for big profits or just reaping the rewards in rent? Christian is actually the one who introduced me to Margie Coates. There.

Yeah? Yeah. Yeah. What's going on? The woman whose family had been the first to own the house. She hadn't moved far after her family sold 5120 Baxter. To this day, she lives across the street. So I asked her how she felt about the changes Christian was making to the property

and what this meant for the neighborhood's future. How do you feel about seeing a house go in there now? Well, I know there's a housing shortage in San Diego. I don't know who Chris has in mind or who he's going to rent to. But as long as they're nice people and don't cause a problem in the neighborhood, I don't really care who lives in there. In fact, I don't really even know too many people on the street anymore. I see them come and go, but that's about it. So they, I guess what I'm thinking in my head, like as I'm talking to you, is like this idea, like here's this yard.

And during your time. It was a fun place. Yeah. And now it's like. Commercial place. Yeah. And I mean, to some extent, that's OK, because we need the housing. But on the other hand, it represents the closing of something.

Well, it is. I mean, it's not it's just not like it was. I mean, the whole Claremont isn't what it was. Nothing is really what it was 50 years ago. I mean, it just it would be stupid if it was. I mean, we'd have no progress at all. No, and I'm not trying to elicit you saying you mind. I'm more just saying it's just a change. It is a change, but then life is change.

I mean, things have changed a lot in my lifetime. Men have gone to the moon. Margie's response was kind of surprising to me. Thank you. She's lived in the same neighborhood in San Diego for 65 years. And I could understand if she didn't want it to change.

And as you drove away from Baxter Street, even Christian talked about this. To her, she grew up in that house across the street. And now it's completely changing her history on the property. Which is kind of interesting if you really think about it. What do you find interesting about it? Well, it's just that, like, she's literally watching me completely change every aspect of her childhood. It's just different. We spend a lot of time talking about the housing shortage.

And it's real. But the thing Christian was acknowledging is that this goes a lot deeper than supply and demand. It's putting my thought in the perspective of how different I look at it compared to what the other people do. Just talk about that a little bit more. Well, to me, I'm helping out this problem obviously it's a business so there's always money to be made in it but like if somebody went and remodeled my grandpa's house right after purchasing it i'd probably have a heart attack you know what i mean just because i have

this like emotional connection with it just like she does from across the street. And now I'm completely changing it. You see what I'm saying? Oh, yeah. I'm taking this suburbia area that people have memories of growing up and almost turning it into a multifamily, dense neighborhood. And in a way, I'm helping some people out, but I'm also hurting others. In a way, I'm helping some people out, but I'm also hurting others. Christian was echoing a feeling that I hear from a lot of people when they talk about new development, which is this sense of loss.

Loss of that picture of the single-family home neighborhood. It's a vision that has dominated America for over a half century now. In a lot of ways, it's become central to the American identity. For a lot of people, wherever they come from, the American dream is to have a single-family home, or at least the possibility of owning one someday. There's this quote I love from the historian Kenneth Jackson, who wrote a seminal history of the suburbs. The quote goes,

no society can be fully understood apart from the residences of its members. And what he's saying there is something I always keep in the back of my head when I'm writing about housing, which is that how we build housing is pretty much how we lay out our society. And because of that,

solving the housing crisis won't just mean building more housing. It'll mean re-envisioning what our neighborhoods look like, which means re-envisioning who we are. This spring, the Biden administration took steps to increase the country's supply of affordable housing. The administration announced a plan that will, among other things, offer incentives for cities and towns to change their zoning laws to allow more housing to be built. The plan also offers incentives for builders to construct homes that can accommodate more people, including ADUs, duplexes, and multifamily buildings. We'll be right back.

Here's what else you should know today. Russia unleashed a massive series of missile strikes across Ukraine on Monday, the broadest and most devastating attack since the war began. The missiles slammed into civilian areas during the morning commute in nearly every region of the country, including the capital, Kiev. They knocked out power networks and other critical pieces of infrastructure. At least 14 people were killed and 97 wounded. Russian President Vladimir Putin said in a televised address

that the strikes were in response to a blast that hit a key Russian bridge over the weekend. The bridge connects Russia to Crimea, the Ukrainian peninsula that Putin seized in 2014. The bridge is critical to Russia's ability to resupply its soldiers in southern Ukraine. Putin threatened further strikes if Ukraine continued to hit Russian targets. The strikes drew furious international condemnation. President Biden condemned the, quote, utter brutality of Mr. Putin's illegal war.

And India and China, two powers that have offered Russia some relief in the face of Western sanctions, called for an immediate de-escalation. Today's episode was produced by Stella Tan, with help from Luke Vanderplug, Caitlin Roberts, and Will Reed. Thank you. and Marion Lozano. It was engineered by Marion Lozano, too. Our theme music is by Jim Brunberg and Ben Lansford of Wonderly. That's it for The Daily. I'm Sabrina Tavernisi. We'll see you tomorrow.