Progress

What separates a trend from a fad? We pondered this question as we dug through 25 years of anecdotes and experience, looking for the building industry's most momentous changes.

Many of those changes tie directly to new technology. Air conditioning has drastically increased population in southern states. Homes everywhere have become tighter and more energy efficient— less forgiving.

America's changing social fabric has wrought other changes. Many more women entered the workplace. Baby boomers grew older and wealthier, moving into ever larger homes. Interest in traditional neighborhoods re-emerged.

Through all of these changes, builders had enormous influence. If "the past is necessarily inferior to the future," as one Italian futurist suggested back in 1911, imagine the surprises likely in the next 25 years.

Here to Stay

Decades ago no one had yet heard the words traditional neighborhood development (TND) strung together like a developer's rosary.

The scene: 1981. As the prime rate approached credit card levels, buzz started to spread within the development community over a picturesque new town in the Florida panhandle. Seaside— its traditional home designs, porches, and easy walks to neighborhood stores— an icon for a new way of life in new-home communities.

The Walton County, Fla., resort, planned and designed by Andres Duany and Elizabeth Plater-Zybeck, became a poster child for the neo-traditional design movement and served as the inspiration for hundreds of similar neighborhoods during the next 20 years.

TNDs spurred formation of the Congress for New Urbanism (CNU), the San Francisco-based nonprofit founded in 1993. CNU works with architects, developers, and planning professionals. It teaches them how to implement the principles of new urbanism, which include coherent regional planning, walkable neighborhoods, and attractive, accommodating civic spaces.

New communities large and small hoisted the TND banner— mind if they actually exercised principles of pedestrian scale. Alleyways, narrow streets, sidewalks, and accessory apartments became prized community features. Planning officials jumped on the bandwagon, sometimes writing new rules to allow TNDs, sometimes just making exceptions.

Harbortown, a traditional neighborhood developed by Henry Turley in Memphis, Tenn., in the early '90s, proved the power of the concept. When architects Looney Ricks Kiss had previously sought approvals for similar projects, officials wouldn't budge. But they allowed them in Harbortown, which became one of the most widely celebrated projects of the last decade.

Seaside prospered in the face of parody as the set for the movie "The Truman Show." By the mid-'90s, Cooper Robertson & Partners and Robert A. M. Stern led a team of architects, including Cesar Pelli, who planned and designed the Disneyland of TNDs, Celebration (one of America's few TNDs with enough tourists to float retail).

TNDs answered the boomers' desire for variety in housing design and smaller neighborhoods. Yet, the broad consumer response critical to successful TND commercial centers has proved elusive.

Variable rate mortgage? What's that? Few knew in 1978.

When BUILDER began publishing in 1978, America's standard mortgage was the fixed rate/fixed 25- or 30-year term. U.S. Census tallies showed 2,020,300 housing starts that year, a record high never since equaled, as baby boomers rushed to their home buying destinies. In the face of this demand, interest rates rose to 8.5 percent, provoking alarm among parents (with 5 percent mortgages) worried their children were in over their heads. But the worst was yet to come.

The economy was about to experience "stag-flation." By 1981, housing went into a tail spin; starts fell by almost half to just 1,084,200. Inflation raged, and the prime rate hit a staggering 20 percent; FHA/VA mortgage rates ratcheted up to 17.5 percent.

Something had to be done. That something was the 1982 introduction of the variable (also called adjustable) rate mortgage, which saved the day for home builders back then, and has evened out economic cycles several times since. Today, adjustable rate mortgages (ARMs) continue to provide a valuable hedge against a run-up in mortgage interest rates.

To quell borrower fears, rates on ARMs then and now could only rise (or fall) a certain amount each year. Terms were the same as conventional loans but rates were capped to stay within 2.5 percent to 3 percent over the original interest rate over the life of the loan. The lower rates allowed many more buyers to qualify.

ARMs, coupled with the emergence of a secondary market in which mortgage loans could be packaged in groups and sold to investors, literally saved the housing market. Today, the secondary loan market is just a normal part of the way lenders do business, and ARMs are among the menu of loan types from which borrowers can choose.

Even with present rates at their lowest in several generations, ARMs are here to stay. The Mortgage Bankers Association of America says the share of ARMs was 17 percent in 2002; it expects them to be 15 percent in 2003.

1978 was very much a man's world. Women working outside the home and two-income households were exceptions.

Twenty-five years ago, America had lots of nurses, secretaries, and teachers, and most of these were women. But few female attorneys, doctors, architects, or MBAs existed.

Many women considered employment temporary until they married— a career. Employers routinely refused to hire or fired pregnant women. Without a spouse, a woman found it difficult to obtain credit, much less a mortgage.

Numbers from the U.S. Census tell part of the story. In 1970, just over 43 percent of women 16 years and over worked full- or part-time. By 1978, 50 percent worked. By 2001 the number of employed women was 60.2 percent. Unfortunately, the Census doesn't tell us how many women moved from part- to full-time work or how the jobs they hold now compare to those held in the past.

Nevertheless, as women of the baby boomer generation, born between 1946 and 1964, fought up to the glass ceiling in the early '80s, the world of housing changed. Dual incomes bought more house. Homes beefed up from an average 1,750 to 2,253 square feet.

Two full-time incomes meant less free time and greater demand for conveniences and services. A lot had to happen during the few hours modern families— mom, working dad, and latchkey kids— together. Microwave ovens became ubiquitous. The living kitchen, a combination kitchen and family room, grew. Entire service industries developed to provide house cleaning, fast food, and ready-to-eat meals.

In the mid to late '80s, the doors to mortgage finance finally opened to single women. Then the formerly unthinkable happened; lots of women bought houses all by themselves and demanded those houses matched their needs. The world is so different today that Generation X and Y women need fiction to comprehend their own mothers' lives.

Tighter Houses

An oil crisis and a tax credit led to more energy-efficient houses.

The industry's quest to build energy-conserving housing can be traced back to a single auspicious event, the Arab oil embargo of 1978 to 1979, which focused nationwide attention on our dependence on foreign oil. That episode fostered long lines at gas stations and prices that eventually reached a then-unheard-of $1.38 per gallon in April 1981, according to AAA. In today's dollars, the price would be equivalent to $2.60 a gallon. The crisis led to the creation of the National Energy Act.

The act in turn established an energy tax credit that sparked a brief romance with active solar energy systems. It also accelerated more than 20 years of government research and demonstration programs into photovoltaics, trombe walls, and phase change materials. And it led to the development of more stringent energy standards for new-homes.

Many of these early technologies never reached maturity, but sales of insulation have skyrocketed since the early '80s. The makers of windows, realizing they were the weak link in the building envelope, began to experiment with gasses and glazing that dramatically improved the performance of their products. According to Leonard Greenberger, spokesperson for the National Fenestration Rating Council, approximately half the residential windows sold now are low-E coated.

Today, nearly every major component used to build a house carries some kind of energy rating. Even new homes are measured by whether they meet or exceed the model energy code.

All Teched Up

Long advocated yet long ignored, the Internet did what the Smart House initiative couldn't— homes for the 21st century.

Intelligent homes have been a long time coming. The NAHB launched a Smart House Consortium in 1984 that strove to automate houses through their subsystems—, lighting, entertainment, heating, cooling, and more. Problems ensued with developing common platforms through which systems and their parts could communicate.

In the '80s, builders and home buyers were just not all that impressed with a coffee pot that knew when to wake-up. Plus, cell phones and computers weren't cheap back then. And few people knew their way around computers before Microsoft and Intel made PCs affordable. A big boost came with the launch of Windows 95.

But something snuck up in the mid-'90s— Internet access. At first, builders thought it might be a passing fad. But then everyone got a taste of what e-mail could do for communications and what the Web could do for data searches. Suddenly, computer clubs were all the rage at places like Del Webb Sun Cities. Soon, regular folks surpassed the geeks when it came to using the Web.

The Internet did what no amount of marketing smart houses had accomplished. People wanted access to the Web and that meant they needed computers and the proper wiring. Cheap computers led to multiple computers. Mom and dad did not want to share their computer with the kids, but they wanted all the computers networked to one printer.

Wireless and wired are now duking it out for control of the house, but cable television and telephone also figure into the equation. Tech wiring has taken hold. Around 40 percent of builders (depending on whose survey you examine) offer structured wiring as standard.

Change of Plan

Ceilings up, living rooms gone, kitchens bigger, flexible rooms— have changed a lot.

Frank Lloyd Wright claimed to have killed the dining room when he designed his Usonian Houses in the '50s. But it came back. Now the living room appears to be a goner, trumped by gracious great rooms. Will it too make a return?

Twenty-five years ago, the typical house averaged 1,750 square feet with an 8-foot plate height, three bedrooms, and one and a half bathrooms. There might be a master bathroom, though it was often a three-quarter bathroom with shower, and it wasn't very big.

Then came the '80s and houses began to grow with the desire to make them look even bigger than they were&#1519-foot plate height debuted in the '80s becoming a new standard in the mid-'90s. For a while in the '80s arched windows were big. Now, three-car garages are gaining ground.

On two-story houses, the owner's suite began its move downstairs. Today, 52 percent of shoppers surveyed by the NAHB want the suite downstairs. The private suite's bathroom grew bigger, with compartments for fixtures, a whirlpool bathtub, a separate shower, and two lavatories.

And the number of bedrooms grew even as the number of housing occupants decreased. Architects refer to this "more space" as "flex space," and it is big. Sometimes the spare bedroom is simply a room in which to hide clutter, especially in parts of the country where attics and garages are too hot and basements non-existent.

Courtyard Counts

Courtyards and other semi-enclosed outdoor living spaces make every inch count.

A quarter of a century ago, if builders even thought about outdoor living spaces, they might offer a swimming pool, a built-in barbecue grill, and maybe a cabana near the pool. Today, no building plan is complete without a review of relationships between indoor and outdoor spaces.

Trade-up homes today often feature more than one outdoor living space or room. These may start with a front yard that's been transformed into a courtyard. In multifamily houses, paved or cobbled motor courts often do double duty as courtyard space and driveway.

The courtyard may be partly roofed or trellised; it may also have a fountain or a fireplace. Outdoor areas off bedrooms may feature spas. And the main outdoor entertaining area, likely to be in the backyard, will be graced with more than just a grill— there is a summer kitchen replete with refrigerator, built-in outdoor range (a barbecue plus), and a sink.

If there is a swimming pool, it is likely to have a negative edge or a waterfall. New codes also require safety features, such as a pool cover, fencing, or special latches on doors accessing the pool area to keep small children well away from danger.

Landscape is also more maintenance free; and irrigation systems, which were not widely available 25 years ago, are now a standard feature.

Rules now outlawed kept minorities from homeownership.

In 1978, redlining was a big nasty word. It referred to the practice of refusing to make home loans to people of certain ethnic backgrounds and on homes in certain neighborhoods. In some more blatant cases, lenders were caught with maps that actually outlined the no-loan areas in red. In 1978 the Community Reinvestment Act was passed, ostensibly reducing redlining.

Even so, today minority homeownership levels are nowhere near as high as the levels for Caucasians. But the issues aren't as much discrimination as they are affordability and the ability to save enough for a down payment.

Another negative mortgage financing issue to rear its ugly head in the late '90s was predatory lending. Predatory lenders at their worst sought out minorities and senior citizens, many of whom owed little or nothing on their mortgages. Hidden fees, exorbitant closing costs, and mis-stated interest rates forced many of these borrowers out of their homes. State regulators have cracked down hard on predators and fostered programs to educate the vulnerable about the dangers of such loans.

The rise of the South and the settlement of the West relied on cool indoor air.

Many attribute the growth of the South and Southwest to air conditioning. Nevada, Arizona, Florida, California's Inland Empire— are among the fastest growing regions in the nation.

In 1978, only 24 percent of existing homes and 71 percent of new homes had central air conditioning. Today, it's rare to find any new homes built without air conditioning, even in more temperate climates: 85 percent of new homes and 57 percent of existing homes include central air.

And air conditioning installed today is three times as efficient. In 1978, though units did not yet receive seasonal energy efficient ratings (SEER), they would have achieved a rating of 5 to 8. The rating system came into play in the '80s, and SEER ratings for today's systems hit 14 to 16.

Smaller and Bigger

Houses may be bigger, but the lots are smaller.

Decades ago it was not at all unusual for a modest home to occupy a half- or full-acre lot. But the average size of a lot has shrunk by 1,762 square feet over the last 25 years, while the size of the house that is on that lot has increased by 503 square feet— that doesn't include the garage.

Consider these numbers: In 1978, the median lot size for all housing types was 9,790 square feet, average lot size was 18,760 square feet. (In 1978, lot-size included multifamily, so statistics likely understate lot size for single-family homes.) By 2000, the most recent year data is available, median lot size "excluding condos" was 8,930 square feet and average lot size was 16,998 square feet. Median house size was 1,650 square feet in 1978; today it's 2,077. Average house size was 1,750 square feet and is 2,253 square feet today.

In other words, the average lot size has shrunk by 1,762 square feet. That doesn't seem like much until you consider the houses being put on those lots are 503 square feet larger.