How big is too big for a house?
This is a question I’ve asked myself often, especially as I watch all sorts of fancy, new homes pop up amid Colorado’s housing crisis. But do we really need all that space?
The short answer is no, most of us don’t. What we need are more starter homes.
A starter home is defined as the first home someone can afford. It’s not perfect. It may need TLC. It is often smaller than average and lacks bells and whistles. It’s not fancy and features simple cabinetry, fixtures and floor plans. It’s not usually one’s home for forever, but rather one to build equity and ease into the larger market.
But such starter homes have become a rarity nationwide, particularly in states like Colorado that already see a larger than average home size and higher price per square foot. Long gone are the modest two-bedroom, one-bath homes. Now, it’s sprawling suburb after sprawling suburb of big boxes with high-end granite, soaring windows, vaulted ceilings and unruly HOAs. It’s far more than anyone needs, especially as a first-time homebuyer.
According to experts, the U.S. lacks over 320,000 starter homes nationwide, and median-income earners can now afford only 23% of the homes on the market. In a healthy housing economy, those same buyers should be able to access 51% of the housing stock. Combine this with high interest rates and the result is chaos for young families and individuals.
I’ve experienced this housing frenzy firsthand. As a single-income household, I’ve tried to buy in Colorado for years to no avail. As I haven’t qualified for low-income housing, those properties are out. But I also don’t make enough to break into the normal market and have been repeatedly bested by cash buyers or encountered luxury homes far out of my budget. It’s a frustrating sweet spot that leaves me and countless others in endless renting limbo.
But the thing is, I’m not looking for anything fancy. Just a small slice of land with a safe and functional structure I can call my own. Yet finding a starter home in Colorado feels like finding a needle in a haystack, and when the pickings are slim, what few needles can be found are snatched up quickly and for well more than they’re worth. It’s a dangerous game.
The lack of entry-level homes is particularly problematic for women. As the gender pay gap and pink tax have yet to close, women are more vulnerable to missing out on building equity. This includes longer struggles to save comparable down payments and being less able to qualify for high-end mortgages in expensive markets. And even when single women do buy — and they do at rates just above single men — studies show that they pay more for properties worth less, largely because they’re forced to compete for the lower end of a scarce market.
The long-term impact of early loss in home equity is staggering. One recent study found that “overall, gender differences in housing explain up to 30 percent of the gender gap in wealth accumulation,” and the results are especially true for women of color. Taken with the fact that it was only in the 1960s and 70s that laws were passed to allow fair gender access to credit lines and mortgages, it should come as no surprise that, on average, housing is still far more of a women’s issue than men’s.
It’s for all these reasons and more that Colorado should start building more starter homes for median-income earners in addition to traditional affordable housing programs. This, in combination with current efforts to increase accessory-dwelling units and eliminate restrictive occupancy limits, would drive down overall demand and prices, and open up even more rental units. It would also boost equity for younger women by helping them break into the market earlier and more often without overpaying.
Of course, incentivizing builders to lean toward smaller and simpler builds — and therefore smaller profits — isn’t easy. But there are levers we might pull, such as increasing tax rates on larger new homes, decreasing tax rates for smaller ones or modifying zoning and building laws to favor smaller builds.
One way or another, it’s time to get back to basics and prioritize function and affordability over large and fancy. Bigger isn’t always better.
Trish Zornio is a scientist, lecturer and writer who has worked at some of the nation’s top universities and hospitals. She’s an avid rock climber and was a 2020 candidate for the U.S. Senate in Colorado. Trish can be found on Twitter @trish_zornio
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