Is the McMansion era over? How the recession is changing the size of American dream homes

Published: Monday, Aug. 27 2012 5:00 p.m. MDT

This large bedroom is part of a 7,401-square-foot home designed by Ezra Lee. The house is in Lehi.

Laura Seitz, Deseret News

LIBERTYVILLE, Ill. — School Street was going to be the pride of Libertyville, Ill. For about three decades, the village government bought up and tore down homes surrounding an old elementary school downtown with the long-term goal of revitalizing the area.

The location was great for redevelopment: it sat just off the town's main drag, which was filled with nice shops, and a library and park — featuring a columned mansion and a gazebo — were within walking distance. A commuter rail station stood just down the street, giving commuters a nice 67-minute trip to Chicago.

It must have seemed like the perfect place for a new luxury townhome development. But 2007 just wasn't the perfect time.

The recession and the housing bubble hit the fledgling development like a ton of foreclosed bricks. The realities of the economic downturn reverberated not just in Libertyville but also around the country. In July 2007, there were 1,208,000 new housing units completed in the United States. Two years later, the number of new housing units completed had dropped to 797,000. Developments were abandoned — dubbed "redfields" because of builders' finances going into the red.

Developers couldn't continue with their plans. The burst of the housing bubble hadn't just changed the underlying economics; it also began to change the needs of people who were looking for new homes.

Five years later, some of those changes have begun to take effect. The lingering recession has changed the way homes are designed — in many cases, today's homes are smaller, more efficient and less expensive. Other changes have been brought on by fear of the future and the possibilities of other family members moving in. Some experts hope the pressures caused by the failed housing market will have a positive and permanent effect on how people will live in the future.

But until recently, there was little to be optimistic about School Street. The sound of hammers and circular saws fell silent as the project went into foreclosure in 2009. Only four townhouses had been sold, with a fifth built on speculation, out of 31 that had been planned. If someone had predicted the future of the project — now a redfield — it wouldn’t have looked good.

New imagination and downsizing

After the bankruptcy of the Libertyville development, if you stood at the west end of School Street and looked east you would see five lonely brownstones staring back at you from the other end of the block. The elementary school, built in 1939, sits like an abandoned orphanage on the north side of the street near the brownstones. Everything else is weeds and dirt — awash in broken dreams, a testament to a housing market gone bad.

But developer John McLinden saw something else: the chance to do something new and innovative.

McLinden is the president of StreetScape Development, a "design/ development/construction" company, and has worked for almost three decades on building urban residences in the Chicago area. He is a big fan of popular architect Sarah Susanka's "Not So Big House" books that advocate downsizing homes and using better design to match the way many people now live thanks to the recession. So when McLinden saw the redfield in downtown Libertyville, he saw an opportunity.

The original plan for the project was to build 31 million-dollar townhouses and convert the old school on the block into a dozen loft-style condominiums. Because that plan didn't work, McLinden decided to try something different. He acquired the development and kept the 26 remaining planned home sites at their original 29-foot widths, but decided to make single-family homes with large front porches instead of townhomes. Building homes so close together on such narrow lots was unheard of in the suburbs. And so was building small.

It was exactly the sort of philosophy Susanka pushed in 1998 in her first book, "The Not So Big House." She wanted her ideas to create a trend toward smaller and better-designed homes.

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