Builders and developers in the United States should take note of the sudden demise of posh, oversized custom homes in Britain. You think planning regulations are too tough here? English lawmakers recently set a moratorium on permits for the building of "grand country manors." On the other hand, affordable housing projects will be allowed to go forward in the same rural areas. The move has infuriated architects, but the government argues that mansion-sized homes are "unsustainable," according to Independent Newspapers (UK).
To a lesser degree, what the popular press have labeled "megamansions" (ranging anywhere from about 6,000 square feet to 60,000 square feet) have begun to take heat in the United States. But the revolt against these projects is not being led, as one might guess, by working families who can't afford decent housing. Instead, it has been triggered (in part) from within--by other affluent elites, in efforts to protect their neighborhoods. Take ABC's "Nightline" host Ted Koppel, who challenged his neighbors in court in Potomac, Md., an upscale suburb of Washington. According to the Associated Press, Koppel claimed the community was ignoring an agreement to build no homes larger than 10,000 square feet. The developer responded by charging that Koppel's $2.7 million estate would then feature the only house in the neighborhood exceeding 10,000 square feet--a statement that the newscaster refuted.
Along with this inner circle NIMBYism, other sociological factors have come to bear on homeowners anxious to live like the robber barons of the late 1800s--not least the underlying weakness of the U.S. economy. Although downturns typically have little effect on the highest earners, Chris Cagan, an analyst with First American Real Estate, a research firm in Santa Ana, Calif., notes that, "A lot of times these huge houses don't follow the same dynamic as the rest of the economy. The high end of the market is slowing down because it's had the longest run of prosperity. At the same time, there are a lot of people who don't have as much ready cash to plop down."
It also looks bad for CEOs and tabloid newspaper publishers to be constructing what the Wall Street Journal terms "muscle houses," with square footage in the tens of thousands, when the same individuals are laying off tens of thousands of employees. Cagan adds, however, that guilt probably has less to do with any show of restraint than fears about market stability.
Another strike against megamansions: Recent sales prices show that their owners often pay far too little in property taxes (due to low assessments), then make a killing when the house sells. The Wall Street Journal and Experian, an Anaheim, Calif.-based research firm, looked at property tax records in the nation's wealthiest areas in 1997. They found that homes in Fairfax County, Va., that sold for more than $1 million were worth an average of 71 percent more than their assessed value. In Washington state, some homes were selling for 171 percent of their assessed value.
Yet another factor in the new antipathy toward big homes is that they're going up in older, established neighborhoods. Dwindling land supplies in prime locations have accelerated the teardown method of acquiring lots. As long-time residents express dismay at mushrooming property taxes, local politicians have begun to take action. In Denver, for example, new zoning says that homes can't exceed 4,600 square feet in size, with at least 62.5 percent of the lot kept as open space. Jerilynn Martinez, spokesperson for the Denver HBA, says her group is studying the situation but hasn't yet adopted a position on the issue. Similar rules have been created in Palo Alto, Calif., Wilmette, Ill., and Gulf Stream, Fla.