One more problem arising from the sub-prime loan mess ...
"It's entirely possible that in the future buying a house that is ... ultramodern ... could add an extra fee to your mortgage for what banks perceive as added risk.
Now mortgage bankers may begin to include in their assessment of your riskiness the size of your down payment, your employment history, the house's history and anything else that might affect repayment of the loan. Going on the theory that only the less financially responsible would purchase ... ultramodern houses ..., they could charge higher up-front fees or interest rates for those too.
I think typically it would deal less with idea of a modern design more about the perceived "riskiness" of being cutting edge. This is where new technologies , building systems, and possible performance issues have not been tested and therefore considered untested consequently having the bank ( notoriously risk adverse ) to reconsider lending, if they don't have too.
No real surprise! However, I think that one could make the argument on the sustainable/ green building design side that if you didn't or hadn't considered green building strategies that you were also being a "risk" by not considering future costs of energy, materials, and resources in general.
Nothing really new here. A lot more people would be less afraid to step outside the norm if fear of hurting their resale potential didn't hold them back. In a lot of neighborhoods you're already a pariah if you don't do granite countertops, stainless steel appliances, or whatever else HGTV, home depot, and your local realtors say is cool right now.
what more disturbing to me than the general public being uneducated about modernism, is more the quality of craftsmanship in cookie cutter new construction. i think we're already beginning to see the effects of disrepair with all of the 'plastic boxes'. i would be interested to see some data on how much $$ people are spending on these types of houses are starting to age, at the 15/20 yr mark.
You could expend a lot of energy trying to explain to the average American why this is "bad design." And, chances are, they still wouldn't believe you. They'd still buy this house.
exactly farwest, which why our rhetoric should have less to do with design in the dwell magazine sense and speak more to the tectonics of construction.
this has been an issue for some time...the banks know (or at least think that they know) that it will be harder to sell a modern house than a cookie-cutter one. In a way they probably know exactly what a house will sell for when they can see what the 37 other ones on the block that look just the same sold for
which brings up an interesting point of the chicken and egg relationship btw banks and actual demand. when i did multi-family, banks would qualify the loan based on bedroom count, discounting square footage entirely. suddenly a two bedroom apartment with 150 sq foot living room (UN-livable to me) was worth much more than a 1 bed big enough to fit your couch in. the bank assumes that what's immediately obvious on paper trumps everything. but are they just responding to the consumer?
That terrible tract home pictured above is the result of a failure of architectural education. I bet that architect did awesome deconstructivist projects at a prestigeous university but couldnt master the art of well proportioned simple wood frame construction
i totally agree with the fact that the house has "bad" design features, but how does the architectural community at large convince an entire population of people who feel this is what houses should look like?
lets face it people like this stuff, they look at their neighboors and want what they have, and this is what they have, this is what the builders can do for their money, any deviations towards actually producing "good" design cause a significant spike in the cost. and this is from the builders, not the bank
The relationship of that left window to the line of the underside of the porch: sheer poetry. And the "hinges" on the garage door - that's some added curb appeal!
In my experience with clients seeking contstruciton loans, the ones going for modern design have a strong case for adding value to a non-traditional aesthetic *if* they are working with an architect. I've sent colored renderings to banks to help make the client's case and never had a problem.
i like that left window...it's odd location implies that there is probably a staircase behind the wall.
i also like the room hovering over the entry...if only it were cantilevered instead of resting on columns. then i would still leave the drain pipe such that the appearance is that the drain is holding up a corner of the building...that'd be amusing to me.
which is why we as architects have a responsibility to discuss and make architecture that is modern in the way it operates, not simply in the way it looks.
"Some of us like quality, whether it's modern or traditional."
Quality?
I always love it when I am asked to check out a spec building that someone I know is buying. It's hilarious. I love it when they hook the toilet supply up to the hot water. Or the HVAC unit is 2/3 the tonnage that it should be. And the design... don't get me started.
What is quality? My point is that most people and even writers about design and architecture know little or nothing other than clichés about architecture.
Dwell is a huge offender in my opinion and there are others. I saw Paul Goldberger speak last week and I don't think he understands much either.
So when someone thinks that I don't know what quality is, I suggest you explain what quality is and give examples.
Most homebuyers don't give a crap about quality. With a $300k housing budget most people would choose 3000 sf at $100/sf over 1000 sf at $300/sf. Our profession has failed pretty miserably at convincing them why they would want to do otherwise.
regardless of the style politics, i would be curious to hear if any architects have really come across this where a project was challenged for funding because of its style. this story sounds like a lot of speculation to me.
I dunno, I think it largely depends on markets. Some places would rather finance modern/contemporary projects if that market targets the semi-affluent yuppies. For retirement communities, it'd probably be a tough sell.
The other thing is big=bad, or at least that is the direction it is going (FINALLY!!!). With oil hovering around $130 with no signs of stopping, actually more predicting $150-200, 4000-5000 McMansions with poor construction and no energy saving elements start to look like really bad investments.
SUV resale values are dropping, which is the first wave, imho. Homes will follow as there are alternatives that are energy efficient and unique. I think it will be like the Prius - it is 'cool' to drive one and 'cool' sells.
Could be wrong, but that's what I am seeing. I just hope the SUV and McMansion value drops don't adversely affect the overall economy too much.
As much as I dislike much of the Repub's rhetoric, I do think that free market economic conditions (which I am admittedly very naive about the theories) will help architecture and the environment.
trace, before you get too enamored with laissez faire capitalism and the free market, i might suggest reading a little john maynard keynes and john kenneth galbraith to temper your enthusiasm. particularly if obama can pull off a win in the fall, i think we'll see a return to a more keynesian form of economics in this country. not at all a bad direction in my view.
now that is justification for the AIA or any architectural association/organisation...matters like that. The perceived notions of modern design is not new or uncommon, raising its ugly head every couple of years, most notably with the eames housing
and it also happens with the insurers as well.
our arch associations have to with the aid of a competent legal structure challenge biased criticism that threaten the development of architecture
i wrote an email to CNN's money magazine portion after seeing this yesterday. what is interesting is that i haven't been able to find any other corroborating evidence of these types of evaluations of "risk" increasing mortgage rates. sadly articles like this tend to spread half-truths....and many people buy it.
one thing i have been fascinated by for some time is the direct correlation between taxation and financial risk assessment policies and their direct manifestation in the built landscape. there is a reason why we are heavily dependent on cars in this country, there is a reason why we are highly suburban, there is a reason why developer buildings look the way they do....and sadly most of these things are shaped first by the economic policies that were set up post-WWII in this country and haven't been funadmentally assessed since then. we are currently running on a 60 year old set of logic in this country.
On the contrary - The[http://en.wikipedia.org/wiki/Community_Reinvestment_Act]Community Reinvestment Act[/url] actualy mandated that banks supply loans in certain quatas to the least able to repay them. So really the ARM is the invention of a way to meet terrible public policy makers' attempt at "wealth redistribution".
whether there are reports or not, futureboy, the anecdotal evidence from local people at banks IS there - at least with regard to new modern construction.
buying a pre-existing modern house seems slightly less of an issue but financing a custom modern house raises red flags for loan officers - at least according to loan officers.
and i don't know that it has to do with just modern work... it's about whether to get behind something for which the collateral might be something no one else wants. custom design in general can get very personally specific - sometimes too the point of eccentricity.
i did a project adding a 1500sf pipe organ room to a 1500sf house. the owners could do it because they won an honorary $$$ award from the governor for their involvement in music performance and education. the house is now exactly what they want but, probably too their kids' chagrine, not likely to be easy to sell. a mortgage lender's nightmare...
sw, have you really seen a client attempt to get funding for a modern-style project and been rejected for that reason? i've often heard this, but have yet to meet anyone that has actually gone through this. i still don't buy it. if anything, having the architect's credentials on these types of jobs has only helped in the effort to get funding.
and that's the other point, i think made above, that most people who can afford an architect-designed modern house are probably not going to a bank for funding.
after thinking about it a bit, i can think of one large civic project in alabama where funding was threatened and the architect fired because of the style of the architecture; though i think this had far more to do with the whims of an influential politician rather than any bank financing policy.
jafidler, i don't have it handy but there was an article in metropolis magazine about that from maybe 5-6 years ago. basically the author (who may or may not have been an architect) explained his experience in attempting to finance a modest sized home in a modern style. i think he was in the greater new york area. i don't recall it was outright rejection from the banks or not. the issue may have just revolved around the rate he would have to pay as a premium to have a modern style house.
the trouble is that banks are in the money business and they have little interest in managing any property should the loan default. to them, the risk is that a modern style house becomes more difficult to quickly resell and hence they need to account for that in their pricing of the loan. and as steven ward points out, it's not just a modern style that can cast a house as an odd duckling...anything out of the ordinary can actually create difficulty. a pipe organ room would do it, but even less benign things can create issues. a swimming pool would seem to be an obvious luxury but especially in a northern climate (such as michigan) where it has limited seasonal use it can often be viewed as more of a liability and may even slightly devalue the property.
of course, this is all kind of a mute point. mortgages & financing are primarily for the poor and middle-class (while maybe not the poor any more with the subprime meltdown) and they don't generally have any interest in modern architecture let alone working with an architect when a local contractor can deliver them everything they want. architects are for rich people...and rich people have the money to build whatever they want whether it's modern looking or literally some old castle.
i remember that article in metropolis or dwell or wherever. as i recall, it was a young couple who were diy-ers trying to get financing for their modern house. i'm not even sure either of them was a licensed architect or had an architect working on the project. hell, i would have doubts about giving them a loan;)
evilp, interesting point. while i do agree that excess policy (although well-intentioned) usually proves to be a disaster, you do have to follow the money trail. it would make sense that someone smelled opportunity into an untapped market and then wall street got involved.
however, at the end of day, the buyer was responsible for signing at the dotted line for a house they couldn't afford. it was their job to crunch the numbers and know that the option arm was going to kick in down the road. i can't tell you the number of people (who now can't afford their mortgages) who were encouraging me to buy a house right after school and 'see their fantastic broker'. LOL.
Financing "Modern Design"
One more problem arising from the sub-prime loan mess ...
"It's entirely possible that in the future buying a house that is ... ultramodern ... could add an extra fee to your mortgage for what banks perceive as added risk.
Now mortgage bankers may begin to include in their assessment of your riskiness the size of your down payment, your employment history, the house's history and anything else that might affect repayment of the loan. Going on the theory that only the less financially responsible would purchase ... ultramodern houses ..., they could charge higher up-front fees or interest rates for those too.
Excerpted from this Money Magazine article: The new mortgage rate calculus
Discuss ...
Ummm...
Really? Is this because the idea is that the average American won't want to buy a modern residence?
I mean if so, what about recent multi-million dollar sales of early modern houses (ie; Kaufmann etc).
People are willing to pay exorbitant prices, if only some..
I suspect we're talking "mainstream" here !
There's always a small market for "art" ... people who can afford "art" probably don't need mortgages.
I think typically it would deal less with idea of a modern design more about the perceived "riskiness" of being cutting edge. This is where new technologies , building systems, and possible performance issues have not been tested and therefore considered untested consequently having the bank ( notoriously risk adverse ) to reconsider lending, if they don't have too.
No real surprise! However, I think that one could make the argument on the sustainable/ green building design side that if you didn't or hadn't considered green building strategies that you were also being a "risk" by not considering future costs of energy, materials, and resources in general.
i dunno if i consider all modern design art, albeit the kaufmann residence is.
and why all of the sudden do banks care? for years they shelled out coin for shoddy loans...
how anyonce can dwell in these abortions is beyond me...
maybe if suburban houses had jagged lines like that, they'd be a lot more interesting to me!
Nothing really new here. A lot more people would be less afraid to step outside the norm if fear of hurting their resale potential didn't hold them back. In a lot of neighborhoods you're already a pariah if you don't do granite countertops, stainless steel appliances, or whatever else HGTV, home depot, and your local realtors say is cool right now.
what more disturbing to me than the general public being uneducated about modernism, is more the quality of craftsmanship in cookie cutter new construction. i think we're already beginning to see the effects of disrepair with all of the 'plastic boxes'. i would be interested to see some data on how much $$ people are spending on these types of houses are starting to age, at the 15/20 yr mark.
I like large quasi-colonial residences with only three windows, thin brick on the face and a dead lawn.
Makes me feel all cosy.
You could expend a lot of energy trying to explain to the average American why this is "bad design." And, chances are, they still wouldn't believe you. They'd still buy this house.
exactly farwest, which why our rhetoric should have less to do with design in the dwell magazine sense and speak more to the tectonics of construction.
this has been an issue for some time...the banks know (or at least think that they know) that it will be harder to sell a modern house than a cookie-cutter one. In a way they probably know exactly what a house will sell for when they can see what the 37 other ones on the block that look just the same sold for
which brings up an interesting point of the chicken and egg relationship btw banks and actual demand. when i did multi-family, banks would qualify the loan based on bedroom count, discounting square footage entirely. suddenly a two bedroom apartment with 150 sq foot living room (UN-livable to me) was worth much more than a 1 bed big enough to fit your couch in. the bank assumes that what's immediately obvious on paper trumps everything. but are they just responding to the consumer?
holz, just wondering, are you a home owner? if you dont mind me asking, not to get too personal
That terrible tract home pictured above is the result of a failure of architectural education. I bet that architect did awesome deconstructivist projects at a prestigeous university but couldnt master the art of well proportioned simple wood frame construction
I disagree. It's the fault of bad architects, bad clients, bad developers, and bad contractors.
It's everyone's fault. It's the culture's fault. Architects are only a small and relatively impotent part of the problem. (No offense.)
i totally agree with the fact that the house has "bad" design features, but how does the architectural community at large convince an entire population of people who feel this is what houses should look like?
lets face it people like this stuff, they look at their neighboors and want what they have, and this is what they have, this is what the builders can do for their money, any deviations towards actually producing "good" design cause a significant spike in the cost. and this is from the builders, not the bank
what to do?
you're assuming there was an architect involved?
however, i agree, as important as the avant garde is, there's something to be said for addressing how to build any type of project WELL.
No builder would hang a room out over the entry like that ever
The relationship of that left window to the line of the underside of the porch: sheer poetry. And the "hinges" on the garage door - that's some added curb appeal!
In my experience with clients seeking contstruciton loans, the ones going for modern design have a strong case for adding value to a non-traditional aesthetic *if* they are working with an architect. I've sent colored renderings to banks to help make the client's case and never had a problem.
Developers have foisted cheap crap on American homeowners. America is a country governed by the bottom dollar, and fixed in its delusions.
They'll pay extra for a behemoth of a car, such as an Excursion, but not for a quality house.
We have to undergo a shift in our thinking.
i like that left window...it's odd location implies that there is probably a staircase behind the wall.
i also like the room hovering over the entry...if only it were cantilevered instead of resting on columns. then i would still leave the drain pipe such that the appearance is that the drain is holding up a corner of the building...that'd be amusing to me.
If that same house were covered in white stucco, had metal casement windows, a flat roof, and a steel and glass garage door you'd all love it.
No. it would still look cheap.
If it were a nicer house, we'd love it.
"If that same house were covered in white stucco, had metal casement windows, a flat roof, and a steel and glass garage door you'd all love it."
Then it would be in dwell and everyone would say that it was "midcentury."
And I would vomit
which is why we as architects have a responsibility to discuss and make architecture that is modern in the way it operates, not simply in the way it looks.
We're not all as shallow as 4arch and makeArchitecture imply.
Some of us like quality, whether it's modern or traditional.
throwing a casement window on a project and calling it modern is as offensive as putting brick veneer on a house and calling it colonial.
"Some of us like quality, whether it's modern or traditional."
Quality?
I always love it when I am asked to check out a spec building that someone I know is buying. It's hilarious. I love it when they hook the toilet supply up to the hot water. Or the HVAC unit is 2/3 the tonnage that it should be. And the design... don't get me started.
What is quality? My point is that most people and even writers about design and architecture know little or nothing other than clichés about architecture.
Dwell is a huge offender in my opinion and there are others. I saw Paul Goldberger speak last week and I don't think he understands much either.
So when someone thinks that I don't know what quality is, I suggest you explain what quality is and give examples.
Most homebuyers don't give a crap about quality. With a $300k housing budget most people would choose 3000 sf at $100/sf over 1000 sf at $300/sf. Our profession has failed pretty miserably at convincing them why they would want to do otherwise.
BIGGER IS BETTER
"BIGGER IS BETTER"
Is that the bad news your girlfriend gives you?
;-)
Seeriously though,
That is pretty much the problem. One would have to introduce a "price" differential for bigger. Either regulatory or other.
Until such time, size doesn't really matter. Everyone expects/wants above. Those that don't can afford to not. Generally.
regardless of the style politics, i would be curious to hear if any architects have really come across this where a project was challenged for funding because of its style. this story sounds like a lot of speculation to me.
I dunno, I think it largely depends on markets. Some places would rather finance modern/contemporary projects if that market targets the semi-affluent yuppies. For retirement communities, it'd probably be a tough sell.
The other thing is big=bad, or at least that is the direction it is going (FINALLY!!!). With oil hovering around $130 with no signs of stopping, actually more predicting $150-200, 4000-5000 McMansions with poor construction and no energy saving elements start to look like really bad investments.
SUV resale values are dropping, which is the first wave, imho. Homes will follow as there are alternatives that are energy efficient and unique. I think it will be like the Prius - it is 'cool' to drive one and 'cool' sells.
Could be wrong, but that's what I am seeing. I just hope the SUV and McMansion value drops don't adversely affect the overall economy too much.
As much as I dislike much of the Repub's rhetoric, I do think that free market economic conditions (which I am admittedly very naive about the theories) will help architecture and the environment.
Money makes things happen.
but that's not a function of free market because the market was manipulated to unload tons of SUVs in the first place...
I can't argue the details, but many things have some kind of subsidization, whether it be taxes or refunds (like with solar).
Trust me, I've had my issues with SUVs being categorized as trucks from day one, but most Americans never knew they were unsafe, cheap, etc., etc.
I was more referring to the fact that it is economic reasons that are changing things, not social or environmental.
trace, before you get too enamored with laissez faire capitalism and the free market, i might suggest reading a little john maynard keynes and john kenneth galbraith to temper your enthusiasm. particularly if obama can pull off a win in the fall, i think we'll see a return to a more keynesian form of economics in this country. not at all a bad direction in my view.
now that is justification for the AIA or any architectural association/organisation...matters like that. The perceived notions of modern design is not new or uncommon, raising its ugly head every couple of years, most notably with the eames housing
and it also happens with the insurers as well.
our arch associations have to with the aid of a competent legal structure challenge biased criticism that threaten the development of architecture
jafid - look how well kenysian economics did for Michigan! Way to go Big Gov!
evilp, and look at what a complete lack of regulation in the credit industry has done to our national and global economies. hmmm...
i wrote an email to CNN's money magazine portion after seeing this yesterday. what is interesting is that i haven't been able to find any other corroborating evidence of these types of evaluations of "risk" increasing mortgage rates. sadly articles like this tend to spread half-truths....and many people buy it.
one thing i have been fascinated by for some time is the direct correlation between taxation and financial risk assessment policies and their direct manifestation in the built landscape. there is a reason why we are heavily dependent on cars in this country, there is a reason why we are highly suburban, there is a reason why developer buildings look the way they do....and sadly most of these things are shaped first by the economic policies that were set up post-WWII in this country and haven't been funadmentally assessed since then. we are currently running on a 60 year old set of logic in this country.
On the contrary - The[http://en.wikipedia.org/wiki/Community_Reinvestment_Act]Community Reinvestment Act[/url] actualy mandated that banks supply loans in certain quatas to the least able to repay them. So really the ARM is the invention of a way to meet terrible public policy makers' attempt at "wealth redistribution".
Big Govenment is awesome!
link
whether there are reports or not, futureboy, the anecdotal evidence from local people at banks IS there - at least with regard to new modern construction.
buying a pre-existing modern house seems slightly less of an issue but financing a custom modern house raises red flags for loan officers - at least according to loan officers.
and i don't know that it has to do with just modern work... it's about whether to get behind something for which the collateral might be something no one else wants. custom design in general can get very personally specific - sometimes too the point of eccentricity.
i did a project adding a 1500sf pipe organ room to a 1500sf house. the owners could do it because they won an honorary $$$ award from the governor for their involvement in music performance and education. the house is now exactly what they want but, probably too their kids' chagrine, not likely to be easy to sell. a mortgage lender's nightmare...
sw, have you really seen a client attempt to get funding for a modern-style project and been rejected for that reason? i've often heard this, but have yet to meet anyone that has actually gone through this. i still don't buy it. if anything, having the architect's credentials on these types of jobs has only helped in the effort to get funding.
my own clients, no. for whatever reason, the few residential clients i've had have not had bank-financed projects.
and that's the other point, i think made above, that most people who can afford an architect-designed modern house are probably not going to a bank for funding.
after thinking about it a bit, i can think of one large civic project in alabama where funding was threatened and the architect fired because of the style of the architecture; though i think this had far more to do with the whims of an influential politician rather than any bank financing policy.
jafidler, i don't have it handy but there was an article in metropolis magazine about that from maybe 5-6 years ago. basically the author (who may or may not have been an architect) explained his experience in attempting to finance a modest sized home in a modern style. i think he was in the greater new york area. i don't recall it was outright rejection from the banks or not. the issue may have just revolved around the rate he would have to pay as a premium to have a modern style house.
the trouble is that banks are in the money business and they have little interest in managing any property should the loan default. to them, the risk is that a modern style house becomes more difficult to quickly resell and hence they need to account for that in their pricing of the loan. and as steven ward points out, it's not just a modern style that can cast a house as an odd duckling...anything out of the ordinary can actually create difficulty. a pipe organ room would do it, but even less benign things can create issues. a swimming pool would seem to be an obvious luxury but especially in a northern climate (such as michigan) where it has limited seasonal use it can often be viewed as more of a liability and may even slightly devalue the property.
of course, this is all kind of a mute point. mortgages & financing are primarily for the poor and middle-class (while maybe not the poor any more with the subprime meltdown) and they don't generally have any interest in modern architecture let alone working with an architect when a local contractor can deliver them everything they want. architects are for rich people...and rich people have the money to build whatever they want whether it's modern looking or literally some old castle.
i remember that article in metropolis or dwell or wherever. as i recall, it was a young couple who were diy-ers trying to get financing for their modern house. i'm not even sure either of them was a licensed architect or had an architect working on the project. hell, i would have doubts about giving them a loan;)
evilp, interesting point. while i do agree that excess policy (although well-intentioned) usually proves to be a disaster, you do have to follow the money trail. it would make sense that someone smelled opportunity into an untapped market and then wall street got involved.
however, at the end of day, the buyer was responsible for signing at the dotted line for a house they couldn't afford. it was their job to crunch the numbers and know that the option arm was going to kick in down the road. i can't tell you the number of people (who now can't afford their mortgages) who were encouraging me to buy a house right after school and 'see their fantastic broker'. LOL.
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