Shifting the Suburban Paradigm by Allison Arieff

Now that the housing market has bottomed out, what’s next? New ways of thinking about “home” are overdue.

Is there anything made in America that’s less innovative than the single-family home? While we obsess over the new in terms of what we keep in our houses — the ever-increasing speed and functionality of our Smartphones, entertainment options built into refrigerators, sophisticated devices that monitor, analyze and report on our sleep cycles, even the superior technology of the running shoes we put on before heading out the flimsy fiberboard door — we’re incredibly undemanding of the houses themselves. These continue to be built the same way they have for over a century, and usually not as well. Walls and windows are thin, materials cheap, design (and I use the term loosely) not well-considered. The building process is a protracted affair, taking far too long and creating embarrassing amounts of building waste (over 50 percent of all waste produced in the United States, in fact).

But the lack of innovation extends beyond the high-tech. Not so long ago homes were designed to make the most of their surrounding climate and terrain. Vernacular forms like the shotgun, in places like New Orleans, served a purpose that went far beyond aesthetics — they encouraged natural cooling by improving cross-ventilation. In Texas and New Mexico, thick adobe walls similarly kept heat in during the winter, and out during the summer. Houses were sited and windows placed to maximize or minimize sun exposure as needed.

No longer. Today, it’s essentially the same floor plan, sheetrock and construction that’s used coast to coast. Glossy brochures with stock images of smiling families advertise “Spanish Gothic” or “Tuscan Villa,” but what’s really on offer is the same dumb box with a stage set of a façade tacked onto the front. The reasons behind the advertised vernacular styles have long since disappeared, their function surrendered to ornament.

It’s not that the means don’t exist for better building. There have been significant advances in homebuilding: smarter, safer, more sustainable materials that contribute to healthier and more energy-efficient structures (less expensive to heat and cool); precision building technologies that reduce construction time and waste; and more enlightened planning principles that recognize the social, economic and health benefits of building homes within denser, more walkable neighborhoods (important as sprawl is associated with high levels of driving, which contributes to air pollution, and air pollution leads to morbidity and mortality).

Why? The reasons are complicated. Incentives received by commercial builders for doing the right thing are not extended to residential builders. But it’s also true that the homebuilding industry isn’t interested in risk or change, despite (in spite of?) dramatic slowdowns in residential construction, an anticipated surplus of thousands of homes, a market besieged by foreclosures and still-dropping home values. Even though there’s increasing demand for more diverse housing — especially smaller, more energy-efficient homes and multifamily units in more walkable communities — too many homebuilders are inexplicably committed to the status quo.

For many in the homebuilding industry, the current scenario is seen not as a call to action but as a temporary problem of the market (I found the same thing to be true in the world of shopping-center builders, who pine for — and fully expect the return of — a go-go consumer culture that is likely gone for good). To address current market realities, they don’t look to innovation but rather to an easier fallback strategy: a new marketing plan.

Five years ago, at the crest of the housing boom, I worked on a team consulting with a master planned-community developer who had asked us to help “revolutionize the way our homes are sold.” The developer had little interest in the work we proposed — namely, to revolutionize the way their homes were designed and built. That company, like most of its competitors, laid off nearly half its work force the following year, and ended or delayed most of its future development projects. Devoting energy to how best to market its inventory hadn’t been the most forward-thinking strategy for them then — nor would it be now.

But that’s what most developers continue to do. I read just last month about Fulton Homes, a homebuilding company that seems to be weathering the housing market better than its peers by selling homes the same way they’d sell clothing or computers, like any other retail product. In Builder online, Fulton’s vice president of operations, Dennis Webb, said, “If the buyer wants it, give it to him.”

Fulton hasn’t really changed anything about the homes they produce, regardless of what has happened over the last several years. They’ve simply hired more sales guys. No doubt you can “like” them on Facebook. In the short term, this has been a prudent move … but what about next year? The year after that?

Blu HomesDedicating millions to creating a better consumer experience for purchasing high-end single-family homes (like this one by Blu Homes) doesn’t help address the real crisis in housing the U.S. is facing.

Then there’s a company like Blu Homes, which has demonstrated a clear commitment to merging housing and high tech — to the tune of a $25 million investment, in fact. They recognized the tremendous inefficiencies in home-building and have developed 3D technology that allows for personal customization (clients can click a mouse to alter floor plans, choose green features and select finishes), as well as a proprietary building process and innovative steel-framing technology that allows their homes, as their Web site explains, “to be built to the highest aesthetic and environmental standards and be delivered quickly and economically nationwide.”

But following a long line of V.C. types dabbling in housing, Blu has set its sights on a small slice of an already niche market — high-end modern prefab, which accounts for maybe half of a percent of the less than 5 percent of architect-designed homes in the country. Devoting this much R&D and software development to so few homes feels akin to installing a $250,000 solar array on a garden shed. Why not devote that energy to transforming cookie-cutter developer homes?

Lake FlatoWith Lake Flato’s partially prefabricated Porch House, traditional vernacular architecture is more about functionality, less about decoration.

I like what Texas’s Lake Flato is doing in this arena, combining vernacular style with precision building technology for their Porch House. Though the firm is building custom one-offs, they are also working on a number of larger projects — one, in Louisiana, involves building nine homes on two blocks of infill property in a historic Baton Rouge neighborhood. The concept is centered around making better use of backyards (less lawn, more sustainable garden) and using the traditional architecture vernacular for that area — the “shotgun” house.

Lake FlatoThinking about how homes work together is key to the future of suburban communities. How can these neighborhoods become denser, more walkable and less resource-intensive?

And even more promising in terms of scale is KB Home’s announcement of the ZeroHouse 2.0, a greener version of the company’s standard home, which is expected to eliminate monthly electricity charges for homeowners. Model homes featuring the ZeroHouse 2.0 package (it should be but isn’t yet standard) open this month in Tampa, San Antonio and Austin. (Now, if KB would just start talking with the architects at Lake Flato.)

KB HomesKB Homes’ new ZeroHouse 2.0 is a step in the right direction on sustainability. But energy efficiency should be standard, not part of a home-design options package.

Even more prudently, a company like Blu could be directing all that R&D to multi-family housing, currently identified as the only bright spot in residential architecture and, to my mind, the only real path to truly sustainable housing.

As architectural designer Aron Chang discusses in one of the more intellectually rigorous and thoughtful pieces on suburbia that I’ve read of late, which appeared in Places journal last month, it’s time we focus on “suburbia’s essential component” — the freestanding single-family house.

Chang writes, “The disconnection between the rising diversity of housing needs and the monotony of housing production speaks to the tenacity of the postwar American dream — the enduring allure of the detached house with front lawn and backyard patio — as well as to the profitability of catering to these aspirations.”

Chang sees this moment — with millions of houses now in foreclosure, many deteriorating or abandoned — as one to seize, and I couldn’t agree more. It is possible, he considers, that once the economy revives we will simply return to home-building-as-usual:


But right now we have an opportunity to rethink suburban housing: to make it responsive not to dated demographics and wishful economics but rather to the actual needs of a diversifying and dynamic population — not only to the so-called traditional households but also to the growing ranks of those who prefer to rent rather than buy, who either can’t afford or don’t want a 2,000-square-foot-plus detached house, who are retired and living on fixed incomes and maybe driving less, who want granny or nanny flats, who want to pay less for utilities and reduce their carbon footprint, and so on.

Housing can’t be equated with high-tech: a home is, or was, a long-term investment not beholden to the dizzying speeds of change and innovation that drive say, Apple, which must continually reinvent and redefine its product to meet consumer demand. But housing is woefully behind the times, and now it needs to see opportunity in crisis, not wait it out by launching pop-up shops and interactive Web sites that empower consumers to such revolutionary things as customizing bathroom tile and kitchen backsplashes.

I don’t care if we’re talking Le Corbusier, Cape Cods or Corinthian columns, we can’t make any progress in housing until we stop thinking about the home as decorative object and begin considering it as part of a larger whole. How does it work on the street? In the neighborhood? How is it served by transit? Is it adaptable, allowing for the housing of extended families or the hosting of an entrepreneurial endeavor? Can the owner build an accessory dwelling (a.k.a. granny flat) to do so? (Most zoning, homeowners’ associations and CCRs don’t allow for it currently.) What needs to happen to zoning, to financing, to our very notions of resale value to change the suburban condition — and by extension, the American Dream as we know it?

We’re beyond the point of a fresh coat of paint and a new sales pitch. If we’re going to continue to hold on to the single-family home, we need to transform it. There is a demand for smaller, more energy-efficient homes in less car-dependent neighborhoods; all aspects of the industry, from designers to lenders to planners to consumers, should meet it. In this era of anti-government fervor, subsidizing the American Dream isn’t an option; transforming it is the only one we’ve got.

Can the World Feed Itself?

By BRIAN M. CARNEY
Vevey, Switzerland

As befits the chairman of the world's largest food-production company, Peter Brabeck-Letmathe is counting calories. But it's not his diet that the chairman and former CEO of Nestlé is worried about. It's all the food that the U.S. and Europe are converting into fuel while the world's poor get hungrier.

"Politicians," Mr. Brabeck-Letmathe says, "do not understand that between the food market and the energy market, there is a close link." That link is the calorie.

The energy stored in a bushel of corn can fuel a car or feed a person. And increasingly, thanks to ethanol mandates and subsidies in the U.S. and biofuel incentives in Europe, crops formerly grown for food or livestock feed are being grown for fuel. The U.S. Department of Agriculture's most recent estimate predicts that this year, for the first time, American farmers will harvest more corn for ethanol than for feed. In Europe some 50% of the rapeseed crop is going into biofuel production, according to Mr. Brabeck-Letmathe, while "world-wide about 18% of sugar is being used for biofuel today."

In one sense, this is a remarkable achievement—five decades ago, when the global population was half what it is today, catastrophists like Paul Ehrlich were warning that the world faced mass starvation on a biblical scale. Today, with nearly seven billion mouths to feed, we produce so much food that we think nothing of burning tons of it for fuel.

Or at least we think nothing of it in the West. If the price of our breakfast cereal goes up because we're diverting agricultural production to ethanol or biodiesel, it's an annoyance. But if the price of corn or flour doubles or triples in the Third World, where according to Mr. Brabeck-Letmathe people "are spending 80% of [their] disposable income on food," hundreds of millions of people go hungry. Sometimes, as in the Middle East earlier this year, they revolt.

"What we call today the Arab Spring," Mr. Brabeck-Letmathe says over lunch at Nestle's world headquarters, "really started as a protest against ever-increasing food prices."

Mr. Brabeck-Letmathe has extensive experience at the intersection of food, politics and development. He spent most of his first two decades at Nestlé in Latin America. In 1970, he was posted to Chile, where Salvador Allende's socialist government was threatening to nationalize milk production, and Nestlé's Chilean operations along with it. He knows that most of the world is not as fortunate as we are.

"There is a huge difference," he says, "between how we live this crisis and what the reality of today is for hundreds of millions of people, who we have been pushing back into extreme poverty with wrong policy making." First there's the biofuels craze, driven by concerns over energy independence, oil supplies, global warming and, ironically, Mideast political stability.

Add to that, especially in Europe, a paralyzing fear of genetically modified crops, or GMOs. This refusal to use "available technology" in agriculture, Mr. Brabeck-Letmathe contends, has halted the multi-decade rise in agricultural productivity that has allowed us, so far, to feed more mouths than many people believed was possible.

Then there is demographics. Recent decades have seen "the creation of more than a billion new consumers in the world who have had the opportunity to move from extreme poverty into what we would call today a moderate middle class," thanks to economic growth in places like China and India. This means a billion people who have "access to meat" for the first time, Mr. Brabeck-Letmathe says.

"And the demand for meat," he says, "has a multiplier effect of 10. You need 10 times as much land, 10 times as much [feed], 10 times as much water to produce one calorie of meat as you do to have one calorie of vegetables or grain." Even so, we are capable of satisfying this increased demand—if we choose to. "If politicians of this world really want to tackle food security," Mr. Brabeck-Letmathe says, "there's only one decision they have to make: No food for fuel. . . . They just have to say 'No food for fuel,' and supply and demand would balance again."


If we don't do that, we can never hope to square the drive for biofuels with the world's food needs. The calories don't add up. "The energy market," Mr. Brabeck-Letmathe argues, "is 20 times as big, in calories, as the food market." So "when politicians say, 'We want to replace 20% of the energy market through the food market,'" this means "we would have to triple food production" to meet that goal—and that's before we eat the first kernel of what we've grown.

Even if we could pull this off, we will never get there by turning our backs on genetically modified crops and holding up "organic" food as the new gold standard of safety, purity and health. Organic production is all the rage in the rich West, but we can't "feed the world with this stuff," he says. Agricultural productivity with organics is too low.

"If you look at those countries that have introduced GMOs," Mr. Brabeck-Letmathe says, "you will see that the yield per hectare has increased by about 30% over the past few years. Whereas the yields for non-GMO crops are flat to slightly declining." And that gap, he says, "is a voluntary gap. . . . It's just a political decision."

And it's one thing for rich, well-fed Europe to say, as Mr. Brabeck-Letmathe puts it, "I don't want to produce GMO [crops] because frankly speaking I don't want to produce so much food." That, he says, he can understand.

What's harder for him to understand is that Europe's policies effectively forbid poor countries in places like Africa from using genetically modified seed. These countries, he says, urgently need the technology to increase yields and productivity in their backward agricultural sectors. But if they plant GMOs, then under Europe's rules the EU "will not allow you to export anything—anything. Not just the [crop] that has GMO—anything," because of European fears about cross-contamination and almost impossibly strict purity standards. The European fear of genetically modified crops is, he says, "purely emotional. It's becoming almost a religious belief."

This makes Mr. Brabeck-Letmathe, a jovial man with a quick smile, get emotional himself. "How many people," he asks with a touch of irritation, "have died from food contamination from organic products, and how many people have died from GMO products?" He answers his own question: "None from GMO. And I don't have to ask too long how many people have died just recently from organic," he adds, referring to the e. coli outbreak earlier this year in Europe.

Nestlé itself has at times been painted as an enemy of the world's poor—for 30 years it has contended with a sporadic boycott movement over the sale and marketing of infant formula in the Third World, a push that some rich Westerners find unethical. On the other hand, under Mr. Brabeck-Letmathe, Nestlé's corporate strategy has emphasized that all food markets are intensely local. Americans may increasingly buy all drinks by the gallon and chocolate bars by the pound, but in many parts of the world a trip to the store might yield a single Maggi cube—the Nestlé-made bullion cubes that are ubiquitous in many countries. In these countries, single servings of many products are sold in little foil packets to allow people to match their spending to their cash flow.

This is, Mr. Brabeck-Letmathe contends, an extension of Nestlé's original reason for being. Nestlé exists, Mr. Brabeck-Letmathe says, because as Europe's population "urbanized," as people moved to the cities and traded their ploughshares for time cards, "somebody had to ensure that people" who worked 12 hours a day in a factory could feed themselves. For the first time in history, "you need[ed] a food industry. You need[ed] somebody who takes a product, who treats it so that its shelf life allows it to be transported, to be brought into the consumption center. That's why we have canning, that's why we have pasteurization, that's why we have all these things."

The vast majority of us would have no idea any longer how to feed ourselves if we turned up one day to find the supermarket empty. We rely on industrialized food production, distribution, preservation and storage to make our urban lifestyles, our very lives, possible. And "it was not the state that took care of this thing. It was private initiative." Today, Nestlé employs some 300,000 people, takes in some $100 billion a year in revenue—and yet represents just 1.5% of a global food industry that feeds billions.

But for private initiative to work that kind of miracle, you need a market. Mr. Brabeck-Letmathe even worries about the absence of a functioning market for water. Some 98.5% of the fresh water the world uses every year goes to agricultural or industrial use. And in most cases, there is no market for how that water is allocated and used. The result is waste, overuse and misuse of the water we have. If we don't do something about that, Mr. Brabeck-Letmathe fears, we will soon run ourselves dry.

Up to now, he says, our response to water shortages has focused "on the supply-side": We build another dam, or a canal to bring water from one place to another. But "the big issue," he contends, "is on the demand side," and the "best regulator" of demand is prices.

"If oil becomes scarce," he notes, "the oil price goes up. But if water does, well, we still pump the same amount. It doesn't matter because it doesn't cost. It has no value." He drives this point home by connecting it back to biofuels: "We would never have had a biofuel policy—never," he contends, "if we would have given water any value." It takes, Mr. Brabeck-Letmathe says, "9,100 liters of water to produce one liter of biodiesel. You can only do that because water has no price."

He cites Spain as an example of an agricultural sector in need of adjustment. "The total [output] of the Spanish agricultural system," he says, "is less in value than the subsidies they receive between the Common Agricultural Policy, the subsidies for tax relief, the subsidies for water."


'Take away the emotion of the water issue," Mr. Brabeck-Letmathe argues. "Give the 1.5% of the water [that we use to drink and wash with], make it a human right. But give me a market for the 98.5% so the market forces are able to react, and they will be the best guidance that you can have. Because if the market forces are there the investments are going to be made."

The world's population is projected to hit nine billion by mid-century, up from 6.7 billion today. So, can we feed all those people? Mr. Brabeck-Letmathe doesn't hesitate. "We can feed nine billion people," he says, with a wave of the hand. And we can provide them with water and fuel. But only if we let the market do its thing.

Mr. Carney is editorial page editor of The Wall Street Journal Europe and coauthor of "Freedom, Inc.," (Crown Business, 2009).

The Best Legislature Money Can Buy

BY CARL HIAASEN
CHIAASEN@MIAMIHERALD.COM

I once referred to a past Legislature as a festival of whores, which in retrospect was a vile insult to the world’s oldest profession. Today’s lackluster assemblage in Tallahassee is possibly the worst in modern times, and cannot fairly be
compared to anything except a rodeo of phonies and pimps. It’s impossible to remember a governor and lawmakers who were more virulently anti-consumer, and more slavishly submissive to big business.

The list of who’s getting screwed in the state budget battle is long and sadly familiar: the schools,college students, foster children, the poor, the elderly, the sick and the jobless. The happiest faces, of course. belong to lobbyists for corporations, insurance companies and utilities, who are getting almost everything they want. It’s astounding that so many voters were suckered into thinking that this new generation of Republicans was going to fight for the common man instead of the fats cats and their special interests.

What a joke. The so-called leadership was plainly bought and paid for by the time their shoes hit the steps of the Capitol. The House is swiftly moving to deregulate 20 different types of business, including intrastate movers and telemarketers — two occupations that aren’t exactly famous for being scrupulous and undeceptive.
Deregulation is estimated to cost the state about $6 million in revenue (and who knows how much it will cost consumers in rip-offs), but just think of all the terrific new jobs it will create. That’s what supporters claim. Seriously.
Just what Florida needs — more telemarketers!

Bills are also sailing through the House and Senate that will allow Florida Power & Light to raise your electric rates for the next five years while at the same time giving the utility a controlling grip on the state’s future solar energy market.
GOP leaders who otherwise love to cheer free-market capitalism have already voiced support of the monopolistic bill, which gives FPL and four other major utilities exclusive rights to develop solar projects, eliminating pesky bids from smaller firms.

FPL achieved this coup the old-fashioned way, by hiring 30 lobbyists and donating about $4 million in campaign contributions to certain lawmakers and candidates for governor. Renewable energy would be good for Florida, but competition among providers would actually hold down electric rates. Not happening.

More bad news: If your home is one of 1.3 million insured by Citizens — the state-run pool that was established after Hurricane Andrew — your premiums could soon rise by as much as 25 percent.

A Senate subcommittee last week voted to let Citizens jack up its rates and start dumping policies on homes valued at more than $1 million. The idea is to eventually close down Citizens and shunt all Floridians back into the private insurance market.
That would be a swell idea except for the many thousands of residents who live in coastal areas where private insurance companies will not offer coverage, or will provide it only at outlandishly high rates. Citizens is indisputably a mess, but if the Senate bill becomes law, many Floridians could be facing a future hurricane season with no homeowners’ insurance, and with their mortgage companies breathing
down their necks.

You might be wondering what the new Legislature has accomplished so far for the greater public good. The answer is not much. But to benefit themselves, lawmakers resurrected and decriminalized a scummy little gimmick called “leadership funds,” which allow special interest groups to give gobs of money to special campaign
accounts controlled by the leaders of both political parties, who can spread it around as they see fit. Outlawed by a long-ago Legislature, leadership funds are simply a sanitized way of buying votes, slightly less sleazy than taking cash in a paper bag.

This time around, donors to the politicians will be listed by name, which is supposed to make us all feel not quite so betrayed. However, there has been at least one instance this spring when the issue of ethics raised its timid little head in Tallahassee. Sen. Mike Fasano of New Port Richey introduced a bill that would have toughened penalties for crooked officeholders and public officials. However, the measure was quickly snuffed in the Rules Committee by Fasano’s fellow Republicans and Democrat Gary Siplin of Orlando, who all felt that the current laws are quite stern enough to discourage corrupt behavior.

It’s hard to know whether to laugh or vomit. On a faintly positive note, at least one terrible scheme that took seed in the Legislature will not become law, at least for now. A few weeks ago, Sen. John Thrasher of St. Augustine and Rep. Pat Rooney of West Palm Beach launched legislation that would have let Jack Nicklaus build golf courses in several state parks, starting with the beautiful Jonathan Dickinson tract near Stuart. No one is a bigger Nicklaus fan than I am, but this truly was one of the nuttiest ideas of all time.

Naturally, Gov. Rick Scott loved it.

Florida already has more than 1,000 golf courses, many of them losing business. Meanwhile our state park system draws 16 million visitors annually and is recognized as one of the country’s finest, a reputation that would disintegrate with the intrusion of driving ranges, fertilized fairways and golf carts(not to mention hotels, which the bill idiotically allowed). The outcry was loud and instant, and within days both Rooney and Thrasher bailed. The golf-in-theparks bill got shelved.

In such dreary political times, it’s good that Floridians can still come together and make themselves heard. The shocker is that they weren’t ignored.