Where Have All The Small Homes Gone?

By Frank G. Feeley III - columnist
October 27, 2022

Many Concordians, both newer residents and those who have lived here for years, note the loss of smaller homes, particularly those built after World War II. These homes enabled skilled tradesmen and young professionals from emerging technology companies like Digital Equipment Corp. to buy a home in Concord.

Few could do so now, unless they have already accumulated substantial capital through inheritance, or a share in the ownership of a successful new company.

The problem is not just the escalation in real estate values, but the destruction of smaller homes in order to create large houses costing much more than the homes they replace. Between 2008 and 2020, over 300 homes — approximately 7 percent of the single family homes in Concord — were torn down. They had an average of 1,473 sq. feet of floor space and sold for an average of $591,000. These homes were replaced with structures averaging 3,917 square feet and selling for an average of $1,460,000. All this before the pandemic induced a surge in demand for suburban homes

The economic factors behind this radical change in housing stock are quite easy to understand. As explained in a recent New York Times article, this phenomenon is being seen in desirable suburbs throughout the country.

Concord’s history and amenities make it a popular place to live. There is little vacant land to build on because we have been successful in preserving open space and historic structures. This land shortage alone would drive up prices, but the economics of development compound the problem. In general, the more space a developer builds, the more he can profit. The cost of the land is offset by the profits of building large. As long as demand is strong, developers will build 5,000 square foot single family structures containing home entertainment centers and multiple bathrooms big enough to bowl in. They will be built whether the ultimate purchaser has a family of Victorian size, or the more typical one or two children.

Concord fought this trend with a local “demolition delay” ordinance. Unless the structure is historic, or the town has the funds to buy the home, the small home is eventually lost. After the required delay, developers tear down these homes and replace them with much larger structures.

Preventing an owner or developer from tearing down a structure just
to keep it affordable would almost certainly be contested in court. The town would likely lose the challenge on the grounds that it had “taken” the additional value created by using the lot for a larger home. In that case, the town could be required to pay the owner or developer for this loss of value.

The town’s options in preserving smaller existing homes are limited:

The town could purchase the house. The Concord Housing Development Corporation or a private developer could update the home as necessary and sell to new owners with an income restriction that would keep the building affordable. This will require substantial public outlay for each unit saved. A small home on Main Street in West Concord was recently purchased with funds from the town and the Concord Housing Foundation. The property was then turned over to Habitat for Humanity, which rehabilitated the structure and created two units since purchased by qualifying low income families.

Those with smaller homes (perhaps inherited from a parent) could give them to the town, or sell them at a price below the prevailing market. This happens with open space and agricultural easements, where the seller receives a tax deduction for the value “contributed” by restricting development. Donating homes or selling at a discount for affordable housing should qualify for such deductions as well. Funds from the Concord Municipal Housing Trust could then be used to update the home, which could be rented below market or sold with a deed restriction requiring that any resale be to a lower income family.

In one and two acre single-family zones, permit more than one housing unit in a single structure if it is no bigger than the large single family homes now being built — perhaps 5,000 square feet. Even if the structure requires a septic system, it need not be much more extensive than what is now required for a multi-bedroom, multi-bathroom single family home. In addition to meeting sewage or septic requirements, the structure would have to meet all other applicable zoning and environmental regulations — minimum setbacks, maximum height, historic preservation, wetlands protection, etc. Spreading land costs over three or four condominium units in a single structure, it might be possible to sell the resulting units for $600,000 or so.

These will not be the affordable homes of the 1950’s, but better than what is occurring in Concord now.