McMansions migrate from 'burb to city

From her home in the Ponderosa development of Atlanta, Jo Hutto heard the growl of bulldozers, and dreaded the changes they were bringing to her neighborhood.

Around the outskirts of her Atlanta subdivision, split-level ranches were being plowed under to make room for grandiose homes that made the dream house of the 1960s appear shabby. The new homes skewed architectural scale and perspective and spun local property values into uncertainty.

"The overwhelming feeling was, I don't want to live in the shadow of these great houses," says Ms. Hutto, an organizer who led the effort to adopt new height restrictions in The Ponderosa to keep the big homes at bay.

While megahouses have been sprouting on converted farmland in the outer, leafy suburbs for more than a decade, the spread of McMansions to the fixed-supply property market of established and often working-class city neighborhoods such as Denver's Platt Park, Nashville's Belmont-Waverly, or Atlanta's Kirkwood is an emerging phenomenon, changing the look and feel of America's cities.

Tearing down older homes and building bigger ones is a natural and necessary evolution of the country's grizzled urban core, proponents say. But critics point to widespread revolt in neighborhoods like The Ponderosa as a sign that many homeowners are wary of the effect of grandiosity on their own piece of the American pie. At the heart of the urban McMansion movement lies a shift in how the value of city land is perceived, experts say.

"What's happening across cities is that land prices have increased really fast, so that the land becomes so expensive relative to structure that it makes sense to tear down the house and build bigger," says Morris Davis, an economist at the University of Wisconsin, who documented the trend in a paper for the federal reserve this summer. "If you pay $320,000 for a lot, you're not going to be happy with a 1,500-square-foot rambler built in 1950."

This shift in perception is based on a fairly rational confidence in the value of land, as the population grows and more people decide to move to the city, says Robert Lang, director of the Metropolitan Institute, an urban policy think tank in Alexandria, Va. The tear-down trend is being driven by families' desires for more space and shorter commutes to work, he says.

"It seems natural that we are in this position now with interest rates favorable and huge amounts of liquidity that we would be improving our infrastructure – it just seems an ideal time to do a do-over," says Brian Hickey, a tear-down developer in Chicago.

Preservationists say some 75,000 homes are being razed each year to make room for houses like the Atlanta White House. The private replica, which includes a Lincoln Library and Oval Office, required the demolition of three brick ranches. The National Trust for Historic Preservation is watching some 300 neighborhoods in 33 states that it says are in danger of being plowed under. Neighborhoods most at risk are well-kept, unique, and archetypal of a particular period, though not necessarily classified as historic.

Today, there are about 2,500 local review boards that allow individual neighborhoods to set height and scale requirements for new homes. But there's also a countervailing, libertarian movement afoot, promoting property rights. Arizona's Proposition 207, a homeowner protection referendum, will in January allow home sellers to petition the government if local zoning boards limit their ability to profit from the use of their land. (Similar initiatives failed in six other states.)

"You have a lot of neighborhoods that need to make a decision now about how much they care about the current density, light, stability, as opposed to it evolving into bigger houses and the turmoil and potential gains and losses that entails," says Peter Brink, a senior vice president with the National Trust for Historic Preservation in Washington.

Some experts say the big urban house is a fad that not only changes a neighborhood's character but also affects how Americans live and the resources they consume. The average house size has increased from 1,660 square feet in 1973 to 2,434 square feet in 2005, according to the Census Bureau.

"The bottom line is we're equating more space with more happiness," says Peter Miller, a real-estate columnist in Silver Spring, Md.

But some market observers welcome the new homes. In fact, cities like Atlanta are studded with the architecture – from Queen Annes to modest bungalows – of past booms and busts.

"This is a problem of wealth, not of poverty," says Mr. Lang at the Metropolitan Institute. "If someone wants to build a McMansion in your neighborhood, it's like winning the lottery. It means you've won."

Critics counter that the tear-down trend is an obvious sign of class warfare, as egalitarian city neighborhoods are razed in favor of more square footage.

Atlanta City Councilor Mary Norwood cites studies that show that homes right next to new buildings twice their size often fall in value – one reason why she will introduce in January a new height ordinance that would limit the distance from threshold to peak of new homes.

But Butch Sievers, who lives in a split-level ranch across from the Atlanta White House, is more ambivalent. "I hate to think of someone telling someone else what they can or can't do with their property," he says. "Still, pretty soon, it's these brick ranches that are going to look out of place amidst the mansions."