I have made no secret that I am not a fan of the McMansion. I have yet to figure out why many Americans feel the need to have enormous homes on tiny lots in the middle of nowhere. Even more confusing are the prices that folks are willing to pay. A friend of ours purchased such a home 10 years ago for nearly $750,000 – 10 years ago! Since then, prices have skyrocketed for the McMansion – in more ways than one. Our friend has since replaced many of the “features” of the home that were not as advertised. But in a sea of sameness, the developer cared more about volume than quality.
Owning that home may get even more expensive if Michigan Representative John Dingell gets his way. He is proposing a new law to eliminate the mortgage interest deduction for homes larger than 3,000 square feet. Approximately 10.4 million homes in America measure more than 3,000 square feet or about 15% of the total U.S. housing stock.
Dingell claims that these large homes waste energy and contribute to climate change. And of course, as previously discussed, tax is really all about driving policy.
Dingell isn’t the only force driving a potential scurry from the McMansion. The free market is doing its share. Existing home sales have slumped to their lowest rate in 5 years (don’t I know it, as my house is currently on the market!). The prior increase in home sales has been attributed to low mortgage rates and subprime lending.
While I don’t necessarily agree with Dingell, I definitely don’t agree with Bill Killmer, a policy advisor to the Washington-based National Association of Home Builders, who stated “Home size is not a good indicator of the amount of energy a household would use.” He suggested that the number and types of appliances affected overall energy use. True. But, I don’t care how many Energy-Star washers you buy, it costs more – generally – to heat a 5000 square ft home than it does a 1500 square ft home.
The mortgage deduction costs US taxpayers U.S. Treasury an estimated $100 billion per year. That’s huge. And the elimination of the deduction is not a novel idea. In 2005, a Bush administration panel recommended a similar proposal which was tabled after an outcry by the housing industry. But that industry doesn’t have the clout it once did. Maybe the times are a-changing?
Sympathetic rant from the Antipodes. It’s not just Americans, Kelly. And it’s not just the energy consumption, although that is serious enough. One of the saddest things that has happened in Australian cities is the building of these monstrosities. As one who grew up in the old days of backyards big enough to have a game of backyard cricket, or pitch a tent and play camping, I wonder why people are surprised when kids stay indoors all the time, watching the television or at the computer, getting overeweight etc etc. Forget about having a swing on the branch of a big tree in the backyard. Forget about kids inviting their mates around for a play in the backyard. And of course there is no room left for the trees that used to soften the environment of many suburbs in Australian cities – and keep the air cleaner. Rant ends.