When it comes to housing, more doesn't mean better

Housing starts are down, but that's not bad news

we can stimulate the economy by improving what we have, rather than adding to the market glut

May 23, 2011|By Nina Beth Cardin

April housing starts were down 10 percent from March, the Commerce Department tells us, hitting the lowest level since the 1940s. What is disturbing is the dire tone that accompanies this information — the oh-my-oh-my attitude of the business sector that is passed on compliantly by the news media.

New housing starts are falling for at least three good reasons, all brought to us courtesy of the despairing housing industry itself:

•There too many houses on the market because builders have over-built. The rule of thumb — so we are told — is that 1 million new homes a year would satisfy the market. But builders built (and bankers loaned money for) 2 million new homes a year for a good part of the past decade. So even conservatively speaking, we have a glut of 5 million-plus new homes on the market. Such is what happens when we build for greed instead of need.

Rather than lamenting the fact that we are not adding a fistful of new homes to an already over-stuffed market, shouldn't we be celebrating the fact that the "invisible hand" is doing its thing? Or does that only work when the hand gives and not when it takes?

•Not only do we have a glut of new homes, but thanks to the folks who brought us the recession by savaging the mortgage industry, we have too many existing homes on the market as well. When will the economists and market journalists recognize that too much is too much? Why claim that dumping more new homes on an over-saturated market with depressed prices is a good thing?

•The very people whom the bankers-and-builders want to buy their new homes are the very people whose investments, homes, jobs and financial security the bankers-and-builders destroyed. Talk about chutzpah: They build too much, bulk up the cost of the house, run a scam on the loan, crash a family's finances — and then complain when those same families aren't buying their new stock.

I know: We are told that, as in the past, we rely on the housing market to pull the economy out of its doldrums. If you buy a new house — likely the biggest purchase of your life — you also spend money on all that goes with it: appliances, furnishings, art, landscaping, and all that helps stimulate the marketplace.

But perhaps we can look toward economic recovery another way.

First, perhaps we can look at current home renovations rather than new home purchases. Remodeling and remaking existing homes can generate a broad swath of purchases and stimulate the economy with greater personalization and less environmental degradation and waste than the creation of new homes.

For the first time in decades, more people are settling in, staying put and renovating their houses to suit their long-deferred desires. That is, our houses are once again first being seen as our homes, the places that hold us close and bind us together, that offer us refuge and peace, that can be personalized to fit our desires and our ways of inhabiting place — and only secondarily being treated as commodities, objects of resale for some future buyer. This can be very good for our spirits, our neighborhoods, our local marketplace and our overall economy.

Second, perhaps during such renovations we can build greater efficiencies into our homes: more energy-saving devices, better insulation, triple-pane windows. I would bet that owners who expect to live in the homes they fashion will spend more money on such green amenities than builders who build, sell and walk away. Last month's dip in the new housing market can help cause a bump up in greener homes, an expansion of the green building market and decreased operating costs for homeowners.

Finally, perhaps any money we save by not buying new homes can be reinvested in other segments of our economy. We can begin to pay down our debts; buy greener, cleaner cars; pay those few extra pennies for healthier foods; give a bit more to charity; get those music lessons we've been wanting; schedule that visit to the doctor we've been putting off; take that class we thought we couldn't afford.

Low housing starts may not be the tragedy it is trumped up to be. Indeed, it may just be the green leading edge of economic and social recovery and revisioning. It is time economists and finance journalists break the orthodoxy and see — and help us create — the world anew.

Nina Beth Cardin is a local rabbi who works on economic sustainability issues and is writing a book, "The Art of Dwelling," about how people shape their spaces and are shaped by them. Her email is ncardin@comcast.net.

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