Yesterday the Commerce Department released that housing starts in the U.S. had dropped 10.6% in the month of October from the previous month. Cast in a predictably negative light, the markets responded with downward movement due to rising fears of a slow pace for our economic recovery. I find myself in the minority that sees this as long term good news, a market condition we should be embracing as we take a rare economic opportunity to try and move our jobs base from our historical model of unlimited growth to one of sustainable capitalism.
Traditionally, housing starts are seen as a leading indicator of economic health as they represent fuel for the construction industry which contributes 4-5% of our national GDP according to the Bureau of Economic Analysis. Building and purchasing new homes is one of the quickest ways for Americans to spend money—which is one of the things we do best. But not only is there no reason for us to be building more homes right now, but we should not emerge into a new economy built on the foundations of an outmoded concept of creating square footage ad infinitum.
If one were to forget the economic assumption that more housing starts is always positive, it is easy to see the number of reasons why we have no need for more housing right now. The recession has left us with an excess of homes. An article in the Wall Street Journal notes that “the number of homes listed for sale was 3.63 million in September according to the National Association of Realtors. That is enough to last about eight months at the current rate of sales.” The article also points out that foreclosures are still on the rise, leaving more property in the hands of banks (and even the FDIC) that want, and need, to unload them at bargain values, only further pressuring prices. We do not need more of a product that is in declining demand from a consumer that cannot afford to purchase it.
Furthermore, the NRDC’s Kaid Benfield pointed out last month that aging baby boomers are estimated to begin unloading their suburban homes at a rate of 5% per year between 2010 and 2030, only adding to the glut of available space.
Suburban homes are also not where we should be focusing our money and efforts when it comes to new living space. The financial crisis offered an opportunity to finally rein an expansion of suburban sprawl that has gone on for decades. New homes farther away from town and city centers bring with them more utilities, more emergency services and more energy wasted in commuting. We should be bolstering our urban centers and drawing people back to their inherent efficiencies of living. To have our government working on a carbon bill while we are using more farmland and natural landscape to prop up developer homes is ridiculous. It is the difference between the image of sustainability and the nature of sustainability—the latter is an encompassing system that affects a lifestyle in its entirety.
If Americans are serious about creating a more sustainable economy, then eventually we need to move away from a system where our barometer of success is continuous growth. It is possible for our country to be healthy without building an increasing number of new homes each month. Of course, it means asking those annoying questions like “What happens when there is no more acreage left to develop?” or “How many people can our country feasibly support indefinitely?” The easiest way to avoid the answers is to begin changing our trajectory now. Instead of new home construction we can be focusing on building retrofits, restoration and deconstruction. These practices use less energy, produce less waste and improve upon the building stock that we already have to make it better instead of tearing it down. One can imagine a combination of virgin building, recycling and upcycling that could bring us much closer to a level of construction stasis.
Construction is only one of the areas where we need to re-align our practices to change our economic growth expectations. Transit, energy production and distribution and water infrastructure all are viewed as continuously growing commodities and can all be curbed into regenerative social practices.
Photo Credit: Flickr movers_4u