School of Financial Freedom

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Dense about Housing

Before you read this: how much square footage do you have? Take the square footage of your home and divide by number of people living there. That’s your housing density.

The biggest slice of any budget is housing. How much housing is enough? What would be an intolerably small amount of living space to you?

Notice that the square footage. From 1975 to 2016, housing density dropped 58%, from 450 sq ft per person to 930 sq ft per person. Also notice the real cost went up 78%. People are paying more than ever for more housing.

Let’s go a little further back in history: According to the National Association of Home Builders, the average size of a new single-family American residence in 1950 was 983 square feet and the average family size was 3.54, meaning a family who could buy a new house lived 278 square feet per person. That was 70 years ago.

Could you live in 278 square feet per person?

I got curious so I did some research. The New York Tenement Museum tells stories of immigrants who lived in the Lower East Side at the turn of last century.

The Levines operated a garment workshop in their tiny apartment at 97 Orchard in 1892. Harris Levine, the patriarch, hired three workers and worked long 15-hour days, stopping only to observe the Sabbath each Saturday. A family of six, the Levines managed to raise their children and compete with other garment shops for 13 years — and all within a 325-square-foot apartment.

The Levines lived six people in 325 square foot, three-room (room, not bedroom) apartment, or 54 square feet per person. While using their own home as a workshop for 90 hours a week. And they were the owners. Don’t know what the standard of living was for their workers.

The Rogarshevkys faced a similar living challenge in 1908. With six children, the Rogarshevskys creatively squeezed into their tiny three-room apartment at 97 Orchard Street. The patriarch, Abraham, earned a living as a garment presser in one of the neighborhood shops. It was a job that would take a tremendous toll both on Abraham and his family.

The Rogarshevkeys lived 8 people in the same three-room apartment, or 41 square feet per person.

The Rogarshevkeys in the early 1900s. Photo credit: Tenement Museum.

What was it like for rural America? White Coat Investor, a doctor who hit financial independence in his 30s with his family writes about talking to his grandmother here.

Katie and I worked hard to become educated, make good financial decisions, grow a business, and help as many people as we could. But we didn’t work as hard as what we’ve been blessed with. By no objective measure can we claim to deserve this level of financial success. I recently had the opportunity to discuss my grandfather’s life with my mother. She was one of twelve children raised on a 200-acre farm in Eastern Utah that was purchased about the time of her birth. (Prior to that point, this grandfather, like my other grandfather, was a miner.) There was a one bedroom house on the farm. The girls got the bedroom (3-4 in the bed), my grandparents slept in the front room (there were only two rooms total in the house), and the boys slept in the barn. They primarily ate bread along with potatoes, carrots, and onions raised in the large garden. The farm grew wheat, barley, and hay and there were 15-20 cows to milk each day and about 200 sheep. Nearly the entire production of the farm was consumed by the family. The only “cash crops” were the cream from the milk and the wool from the sheep.

In addition, starting when my mother was young, my grandfather took a job pumping gas at the service station all night. He would return from work, sleep for a few hours, farm for a few hours during the heat of the day, sleep a few more hours, and go back to work. Needless to say, the children had to take care of most of the farm chores. My grandfather busted his butt for his entire life just to keep food on the table. By contrast, I’m 43, never have to work again, and can afford to buy just about anything my heart desires. Given technological change, my privilege, wealth, opportunity, and health are beyond that of the vast majority of kings that have ever lived on this planet.

14 people to a bedroom house, with a barn. 100 hour workweeks. Square footage per person? Hahaha.

Housing is a prime example of the “hedonic treadmill,” which means we emotionally adapt to the material improvements we make in our lives, resulting in the ongoing need to get still more. Our houses are getting bigger and when they do, we want them to get bigger still.

My house is 850 square feet and I rent out my second bedroom, so I’m at 425 square feet for me. “Why do you rent out the second bedroom if you’re financially independent, Douglas? I could never live with someone else, I need my privacy to decompress/feel sane/re-energize.” First, the rent from the second bedroom and the basement apartment is my financial independence; that income is enough for me to live on. Second, living with others has philosophical and spiritual impacts on how we relate to others as humans. The amount of space between us creates the way we think of ourselves and the others. It’s increasingly easier to disconnect from other humans in the name of being an “individual.” The purpose of the suburbs was to promote the idea of living as a “nuclear family” and buying “single-family homes.” It meant we no longer lived with our larger extended family, meaning we needed more homes, jump-starting the housing boom of the 1950s.

As you can see in the numbers, that trend has accelerated. There’s a large literature about how capitalism needs people to feel like “individuals” to enable consumerism. Our need for square footage, metastizising all the time, is a symptom of the hedonic treadmill of our increasing individualism, and our increasing civic isolation and loneliness.

My point here isn’t to make you feel guilty of how much housing you have. I do want you to think about two things in relation to the hedonic treadmill, however. First, it’s the human tendency to want more (and more of what). The act of remembering what it was like before is the work of gratitude. Second, it’s good to question your limits, as a thought exercise, with the discipline of history in mind. What’s the tolerable limit of housing density for you? (Bonus: photo essay on Hong Kong apartments where families live in 100 square foot apartments, scroll to bottom.)

At what point, in a concrete quantitative level, do you “not have enough space” for yourself? And by needing more and more space, how much is it costing you and what are you losing?