McMansion to McCottage: Why Smaller Houses Are Smarter

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According to US census data, the size of the average American home in the 1950s was a modest 1,000 square feet. Today, the square footage has more than doubled to nearly 2,500. If our families are getting smaller and our objects are getting more compact and portable, why do we need all this space? As the recession of 2008 continues to grind away at our lifestyles well into 2011, maybe it’s time we slay that final sacred cow of "bigger is better" — our homes. Here are just nine advantages of small houses.

1. They Fight Clutter

Smaller homes force us to consider what items we own and why we own them. It’s easy to fill up large homes, and often it seems like our personal inventories balloon to fit the spaces we’re in. The first step in becoming a minimalist may be to minimize your square footage. (See also: Small Space Survival Strategies)

2. They Promote Energy Efficiency

Don’t get me wrong, great rooms are lovely, but I can’t help but think about those heating and cooling bills. Cathedral ceilings are dramatic and wonderful — if there’s a corresponding cathedral-sized congregation to pass the collection plate to. A smaller physical footprint means smaller bills, and a house that’s well designed and well-insulated will always win the numbers game.

3. They Rein in Taxes

Our property taxes are determined by assessed property value, and value is partly determined by square footage. Though a number of other important factors also affect assessed value, all things being equal, smaller homes equal cheaper property taxes.

4. They Encourage Social Interaction

It’s easy to get lost in a big house, or at least be isolated from the rest of your family. When I was a kid, my brother and I shared a bedroom until my parents bought a larger home when I began high school. Though I might have argued the point at age 11 or 12, the memory of falling asleep with by big brother nearby is a cherished one. I think part of the reason we enjoy a strong bond now is due, in part, to all those years as "roomies."

5. They Promote Good Design

In much the same way that small homes compel us to be conscious of clutter, they also encourage smart design. Space limitations challenge our creativity and drive innovation. Small homes designed for versatility are filled with clever surprises: A staircase is built to house a reading nook underneath; a stainless steel utility table is a kitchen countertop on wheels, a home office, and kids' craft area.

6. They Reduce Maintenance Costs

Larger homes also carry larger price tags for general maintenance like re-roofing, painting, new windows, etc. A commitment to going small also means a commitment to reduced expenses over the life of your home — and a greater chance of affording those "uh-oh" unforeseen expenses.

7. They Create Better Neighborhoods

Have you ever noticed how different it feels to walk through a modest pre-war neighborhood vs. any subdivision built after the 1980s? The pre-war neighborhood probably has smaller single-story homes that are built close to the sidewalk. They may feature broad front porches, garages tucked away in the back, and dense canopies of trees. By contrast, newer homes are imposing, set back like stately mansions on lots that are barren, deep, and narrow. The garages are more prominent and designed for small fleets of cars, bikes, and lawn implements. A stroll though a pre-war neighborhood becomes a jog in a newer subdivision.

8. They're Cheaper to Build

Smaller homes are often significantly cheaper to build. A conscious attention to detail can lead to lower materials costs and the option of using higher-grade materials. There’s less foundation to pour, less floor to lay, and less roof to cover.

9. They Encourage Outdoor Activity

Homes are meant to shelter us from the outside, not to be a substitute for it. Often larger homes can meet all of our needs so completely that we forget there’s a yard around all of those walls. Sometimes feeling compelled to "get out of the house" isn’t necessarily a bad thing. Small homes can inspire us to garden, to get to know our neighbors, and explore other neighborhoods.

Television and movies suggest we aspire to micro-estates with nothing less than three-car garages, media rooms, and America’s newest enigma — man-caves. But were the homes we all grew up in so bad? What’s lost in the bargain we’re making to constantly move on and move up? Do we have more time, more money, or more freedom? Or are we simply wandering around our big houses looking for one another?

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Guest's picture
Lenora

After living in a 1,000sf bungalow with a family of four we were bursting at the seams. We bought a 3,100 sf house and we were lost in it. All the things you mentioned are right on. We sold it and bought a 1,300 sf house and it's just right. Finding what feels right is an individual thing. I love simple and basic, and that's what I have now.

Guest's picture
kate

we are a family of five (plus one dog!) living in a 1050sqft home and we too feel we are bursting at the seams! :) We are hoping that building a master suite addition onto our existing home will give everyone the perfect little bit of extra breathing room we are currently missing :)

Meg Favreau's picture

I can heartily agree with your first point, Kentin. Like Lenora who commented above, I went from small to big to small (a studio apartment to a four-story rowhome, and then back to a studio). When I lived in the rowhome, I amassed much more stuff than I needed (I ate by myself most of the time -- why did I need to take my parents' old set of eight coffee mugs and saucers?). Moving back into a studio was great because it forced me to figure out what I really wanted, so now I mostly own things I actually use.

Guest's picture
Guest

My favorite part of our small home is how easy it is to clean and find things. It takes only 1-2 hours for my husband and I to clean the entire place even after a party. If I lose something, there are only a very few places to look for it.

Guest's picture
Susie

I totally agree. We live in a resort town where real estate is very expensive, so we have always lived in a small home - and now I'd never have it any other way. It's so easy to heat in the winter, and it's so easy to clean. I told someone the other day that if I ever live in a home that would require me to unplug the vacuum cord in order to reach the entire floor, it would be time to downsize. Simple is great.

Guest's picture

One only needs a big house because they amass a lot of little things throughout their lives. Once they unclutter their closets, garages, etc it is easier to see why they don't need more space. Also buying a bigger house increases overhead cost of the house like carpeting or hardwood floors and maintenance. Of course the upkeep of the entire home also requires more time & money.

Also with a smaller home you are probably more inclined to partake in DIY projects like upgrading the roof rather than hiring a contractor to do the work.

Guest's picture

If history is any indication - give it a few years and a debate will brew about the detrimental features and "cookie-cutter" looks of the "McCottage".

Guest's picture
lostAnnfound

Bought a 950 square foot home 20 years ago, added on about 8 years ago - 440 square foot family room. All the other rooms are smaller (the house is about 100 years old, so rooms were not that bag). The family room get used a lot. We all hang out together there (two adults, two teens & one dog). I wouldn't want a bigger house. It's not too big, not too small, it's just right!

Guest's picture
Guest

I second the benefits of less time spent cleaning. In 2 hours or less, I can get my house spic & span. We also have a small yard, and I love being able to have the entire lawn mowed, front & back, in under 45 minutes. Space is overrated.

I'm not sure that the cost of construction and/or renovations is substantially lower, since IME most contractors charge more per square foot for small projects to ensure their fixed costs are covered.

Guest's picture

Happy to see someone pointing out the merits of smaller homes. How much is too much? If your using an entire bedroom for storage you have too much stuff. Simplistic living is not only better for environment, it's easier on your stress. Thanks for the great article!

Guest's picture
Travis

My family of 5 is down to basically a van load of belongings. I have groan to loathe stuff, if it means I have to spend any time or money to manage it - pack it, carry it, ship it, unpack it, place it, screw it! What's the point?

Shortly after we got married, my wife and I moved to Banff Alberta; I was a chef and I was given a cooking position in a boutique hotel. It was great, all our ‘stuff’ (like George Carlin would call it) fit inside one pick up truck and we set off from Toronto to Banff. After a year, a bigger and better Executive Chef position in Whistler called and we made our way there...but the ‘stuff’ had propagated! Now, we had 2 pick up truck loads and, therefore, made 2 trips - twice the time and money. We had a small place and we lived in it for 2 years, had 2 children and the growth of ‘stuff’ increased exponentially. We moved to Victoria B.C. and, wow, by then we had a 5 tonne truck load of ‘stuff.’ So much time, energy and money to manage it all....and for what?

By this point, we had a ‘big place,’ a condo of 1700 square feet and so much more time to clean and arrange ‘stuff,’ so we started to purge. I sold it all! Or, at least most of it. I used Craigs List and Kijiji and literally sold it all. What an amazing loss I took! ‘Stuff’ is not an investment, and it will never provide a return. I managed to squeeze $8000 out of the ‘stuff’ and felt pretty good about it. I am amazed at what people bought; I sold 2 used garbage cans for 5 bucks each!

Now I work online and live in furnished apartments wherever we feel like living. It's international, it's educational, and it’s energizing. We're free from flub, uber flexible with one bill a month - power, water, heat, phone and internet are all included in our rent. I don't care about houses. I like Robert Kiyosaki's book and how it basically says rent until you have 10 times the price tag of the house in cash. All the talk of building equity through homes is banker speak to sell mortgages - equity takes more forms than just houses. I was buying gold when it was $300 an ounce. I was buying silver bullion at $4 and today it's over $30!

So, if we're looking at the benefits of owning things that are small, I say forget houses entirely. They're worse than cars unless there's a debt-fueled super bubble and a tonne of hype from government and the media. Here's a hint; if it's popular and all over the T.V., sell it. If nobody even knows it exists or people at cocktail parties laugh at you for discussing it, think about buying it! Remember Ed McMahon and MC Hammer at the Super Bowl telling us to sell our gold? hmmmm......

Guest's picture
Mary

What a great article! I have always been a fan of small homes. I just sold my 2,000 sq ft home that my ex-husband really wanted (because he has so much stuff). Well I got rid of the husband and his studff, and I'm now renting a 1,100 sq ft home that works great for me and my two kids. When I am in the position to buy again I don't want to purchase a home that's more than 1,500 sq ft, anything bigger than that is too big. Small homes are much cozier!

Andrea Karim's picture

I agree that small homes are generally great, but trust me, small homes don't always encourage good design! Good architects encourage good design!

Guest's picture

There are definitely poorly designed small houses out there. Plus, these days, people want kitchens connected to eating areas and family rooms. In many small older houses, the kitchen is tucked away.

Guest's picture
John

I couldn't agree more! I especially like the benefits to community and neighborhood life that you highlighted in this piece. Our stuff can become a substitute for our personal relationships - and it's time to reverse that trend.

Guest's picture

9. is a great point, although they are also useful notes. i currently would like to live in a small house with a large-ish garden so i could grow lots of things and keep chickens. inner-hippy is dreaming!

Guest's picture
frederick wills

good article. consumerism is putting undue pressure on everyone. here in Oz the housing estates are promoting bigger homes than ever yet our families are smaller. plus people collect stuff to fill these mega caverns. my wife and three adult children are happy in our modest home. we enjoy walking our dog along the beach rather thatn admiring overpriced junk from a store perched next to a tv. keep it simple is a great philosophy.

Guest's picture
CG

I agree with all but the 4th point - my sister and I shared a room for 9 years and we are anything but close.

It would be nice to be able to purchase these small homes that Kentin lauds. I own a 1,500 sq ft home on a 7,000 sq ft lot, built in 1986. Is that too much house for one person and two cats? Absolutely. I would have loved to purchase a 1,000-1,100 sq ft home when I bought mine 12 years ago, but here in So. Cal. if you want something that size in a decent area, you have to buy a condo/townhome, or buy an old beach house that's twice the price because of the proximity to the ocean and has two-story monstrosities that have been recently built out to the property limits next door.

I detest common walls - ohhhh, the horror stories I can tell of the 8 years when I owned a condo - if I have any choice at all I will never live in anything other than a detached home again. Besides, I love to garden, and having a dozen fruit trees and all sorts of veggies in that huge back yard makes it worth the upkeep of the house. Two more months and I won't be buying fruit unil December, and I'm already harvesting my oranges, lettuce and snap peas.

In another 25 years when the homeowner's association dissolves, perhaps I'll be able to raze the house, build something smaller and keep my yard - for now, I'm stuck with the "look" approved by the HOA (including the incredibly wasteful vaulted ceiling in the living room...).

Guest's picture
MoneyIsTheRoot

Many good points in this article, but Im torn on the part about creating better neighborhoods. I live in the metro Detroit area, and I tend to find the older neighborhoods are in poverty stricken areas. Granted this isnt the case across the country, and we still have many subdivisions with smaller homes, but the suburb I live in is predominantly filled with larger homes, 2000+ sq ft. Not to mention that the housing market here is very depressed, and when home prices gain, the larger more expensive homes will create a larger capital gain when you sell it.

www.moneyistheroot.com

Guest's picture

(1) Cathedral ceilings actually save money in hot climates, as hot air rises up and cool air stays down.
(2) "A house shoudl not be a substitute for outdoor life." May work in San Francisco, San Diego, or even Seattle, but in a Texas or Florida summer? In a Minnesota winter? Get real. Like the Beltway denizens condemning Texans and Floridans for not walking everywhere (try it in July in Houston :-()

Guest's picture
Nick

While the 1950's homes might have been 1,000 sf on average, my 1924 home is 2500 sf. Those 1950's homes were quickly built to accommodate the large number of men returning from the war who needed affordable housing. As their families grew, so did the square footage of their homes. As they amassed wealth and the economy grew, so did the size of our homes.

Guest's picture
kelley

I love my 1300 sf ranch. With 2 adults, 2 kids and a big dog, we can't help but spend time together and you're right on with "clutter control" and deciding what to own & why. It's a little small for all the "kid stuff" right now, and I've spent a lot of time purging what we don't need. Too bad husby doesn't share my view about what's needed - the result has been an overabundance of his stuff! LOL

Guest's picture
Shilpan

Indeed, never buy a house bigger than your need. Bigger leads to more stress and worries. And, after 2008, we know that real estate is not always the best investment.

Guest's picture
Robin

We bought a 2300 sq ft house on a 5800 sq ft lot and I couldn't be happier. It's the perfect size for our family of three plus two dogs and a cat. I wouldn't change a thing, when we bought it we knew it was a house we could be in for a long time (13 years and counting) and so it has proven.
If we lived in a 1000-1500 sq ft house I'd probably be going crazy at the end of each day - especially with my active toddler to take care of!

Guest's picture

Love this article! I think everyone is so obsessed with having these dream mansions that house so many rooms. They aren't necessary though!! You can be just as happy in a small comfortable size house, you don't need a home gym, 3 guest bedrooms, and an office...its ridiculous! Run outside for your exercise, it'll give you a chance to get some fresh air!

Guest's picture

Smaller houses are less expensive to buy and maintain? This is shocking news! I own a 5000 sq foot home and my property taxes are $14k. My roof will cost more to replace, it costs more to heat and cool, but these are obvious.

The issue shouldn't be to move into a smaller home because its cheaper, then try to justify it by saying it will "promote good design". If you need to move into a smaller home to save money, then just say it. We still go outdoors and interact with each other.

We should strive to provide our families with a home that suits and fits our needs, regardless of anything above.

I'm no finance expert, but I am a self-made millionaire at age 34.

Guest's picture
Norman

I grew up in a 1000 sq ft house and my mom sure encouraged outdoor activity. In the warm months, my mom would say "you kids go outside and play". We hardly spent any time at all indoors in the summer months. Without air conditioning, its no wonder. We didn't even come inside for water, we got it from the water hose. As an adult, I've never owned a house more that 1500 sq ft and have always been fond of smaller homes.

Guest's picture
WR

We started in a 'starter' home back in 2000 when all of my peers and friends were going McMansion and swimming in the glory days of dot-com wonderfulness.

What is interesting about our story is that the house we started out in was a tiny cape cod in a historic town built near the end of the great depression. It has beams taken from tow barges and seems to be built to withstand a direct hit by a nuke.

We have since moved to a slightly larger home ( a bank owned foreclosure...could not pass it up) and actually miss some of the 'smallness' and intimacy of our old place. We still own it and consider moving back from time to time whenever a tenant moves out.

EVERYTHING is cheaper and easier in a small home. I wrote about this in my book, The Hero's Journey to Financial Independence:

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Return of the Starter Home
It once was that young families would work hard to save their money and put a down payment on a small, inexpensive property. This one act would allow them to more quickly pay off their mortgage and offered a whole bunch of additional benefits. Two major benefits of starter homes are that they cost you less and aid your frugality. Here is some more detail on these benefits:
Starter Homes Cost Less
1. Lower purchase price: A decent small house in a nice neighborhood costs less to buy and you’ll pay much less in interest over the life of the loan.
2. Lower taxes & Insurance: These are based primarily on property value; lower value = lower taxes & insurance.
3. Maintenance joy: Less paint, fewer shingles and less time doing both activities makes home maintenance an enjoyable activity.
4. Green Machine: A small home is cheaper to initially insulate and a well-insulated small house continues to be cheaper to heat and cool.
Starter Homes Aid Stylish Frugality
1. Smart decisions: Less storage space actually forces good decisions about what is important. A big home is notorious for its ability to hide things from its owners. A small home pushes you to make smarter decisions about what to keep and what to donate.
2. Nice Furniture & Amenities: Small space living encourages you to buy less frequently and with greater consideration of high-quality and long-lasting items. Beautiful wood flooring & granite countertops can be had for a fraction of the cost when you have fewer rooms and less square footage to cover.
Starter homes enhance the quality of life
All of these little things add up to a huge boost in the one thing that is thought to improve overall quality of life in recent years. Time. When you trade down to wealth in regards to choosing to live in a slightly smaller, more affordable home you reap all kinds of time-related benefits. You spend less time cleaning the house, less time working to pay the mortgage, utilities and taxes and less time and money on maintenance. Having more time freed up to pursue education, run a small side business and play with your kids cannot be underestimated.
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Don't Quit Your Day Job's picture

Well, in the Bay Area you've got to shell out considerable dough to match 2,500 square feet (and we don't have basements), but a lot of those things apply to houses here. A 1,000 - 1,200 foot ranch is probably the norm in a lot of towns. The house we bought is ~ 2,000 square feet and has a cathedral ceiling - but I think it may have been because we both grew up in larger houses with, you guessed it, vaulted living rooms.

I think there is one benefit I hope we don't go back on... multiple bathrooms. For the most part we've eliminated the long bathroom line in the morning!

Guest's picture
Emily

I love this! And I think the most positive part would be to retire early. My DH and I have changed our tax strategy for saving due in part to financial guru http://jvarniebarker.com/ and his new book New Rules for Homeownership in the 21st Century. There's a lot to learn from going lean to reach our goals.

Guest's picture
Guest

Our family of three just bought a 1000 square foot house and couldn't be happier. It has three bedrooms, two bathrooms, a fairly open layout, SEVEN CLOSETS, and cupboards galore. The house was a flip and the builders truly used every inch of space they had. I have empty drawers and cabinets - that feels amazing! And we don't even have a basement! It definitely encourages the purging and avoiding of clutter. And it makes you super neat, because there's nowhere to stash the mess away!

Guest's picture
Guest

Your thinking is correct, now take it to the next step buy a Mororhome, best decision we have made in 40 years. Screw Property Tax, Lawn Mowing, Painting it's all BS. I pity the fools in the Southwest and Midwest assuming Climate change is for real. Being mobile is the only way to go.

Guest's picture
Marsi

I now own the house I grew up in (850 sq ft duplex with 2bd and 1 bath). My parents lived there for 55 years and I am amazed at the amount of stuff that was stashed away. My mother had packing and storing down to an art form!! I am currently going thru all the "stuff" I call it the "big dig"! Found some amazing things but also have discovered that I obviously don't need the majority of the stuff that is stored away since it has been in boxes in a closet for over a year and I have had no need for it! Have given away a great deal, have quite a bit more to give away. I like to think of all the stuff that was once here has now found new homes and is being used on a daily basis.

Guest's picture
MotherLodeBeth

One thing a financial advisor told us is if you have a big home and are not using ALL the rooms a lot, or have rooms that never get used, then your mortgage payment if you have one, but also your property taxes are paying for unused space.