House of cards: an economy built on housing starts
December 13, 2005
My parents live 10 miles up Main Elk Creek outside of New Castle, and as we drove up the valley recently, we were stunned by all the new houses built in Castle Valley Ranch and at Lakota, the new golf course subdivision there.At a time when natural gas prices rose 7 percent in one day, we’re still building stick-frame houses with no passive solar gain, no energy-rated windows and doors, poor insulation, and forget the radical idea of placing active solar electricity-generating panels on the roofs.It literally ought to be illegal to build housing like this.According to my friend Dan Brumbaugh, a Ph.D. economist, housing and related industries make up about 50 percent of our nation’s economy. The destruction of farms and meadows is mandated as part of our national economic strategy, and without feeding the insatiable monster of real estate development, our economy would go into a major tailspin.Our nation’s population is rapidly approaching 300 million people and is projected to grow even more in the next three or four decades. Furthermore, the estimates of 11 million illegal aliens in this country are laughable, in my opinion. I think there may be at least 30 million.If you cringe every time you drive from El Jebel to Glenwood and you think it’s a pity that the valley floor is becoming one big interconnected subdivision, then think what it’s going to look like with another 6,600 homes in it, which are the units that have already been approved but have not yet been built.And if you think it’s only happening here, you’re wrong. We host guests from all over the country, and they report that this phenomenon is happening everywhere. Preservation of open space is the one political issue that finds the greatest unanimity among Americans of all political persuasions – close to 90 percent of Americans agree that preserving open space is very important to them. Americans want government to protect them from themselves, even as they snap up housing in the latest meadow-cum-subdivision. Preservation of open space is the most impossible of all political goals, because real estate developers contribute so lavishly to politicians of all stripes. As we watch the hayfields disappear around us, economists crow about signs of a robust economy, expressed in terms of housing starts. Yet those housing starts are a net drain on the treasury, as a significant percentage of the infrastructure necessary to serve ever-sprawling neighborhoods is subsidized by the government. At the same time, this land of great natural resources and opportunity, the breadbasket of the world, is coming ever closer to becoming a net food importer.Haven’t you noticed that the avocados and grapes in the grocery store are from Chile, the oranges from Brazil, the tomatoes from Mexico, the wine from Australia? Didn’t we once grow all these things? Yes, but all those fields and orchards and vineyards are now subdivisions.When you complain about avocados that cost two bucks each, think of that snarling morass of highways serving subdivisions in California that used to be orange and avocado groves, and remember that most of the cost of that avocado is the diesel fuel needed to ship it halfway around the world. Did you know that the majority of our apples come from China?Dan plays the devil’s advocate, arguing that if, because of globalization, an American farm economy is no longer tenable, then we’re freeing that landowner to realize a profit from his greatest asset, his farm, and creating wealth through subdivisions.You can’t argue against that point. The wealthiest people I’ve ever met, and there have been lots of ’em, made their money in real estate development. However, I’ve never met a farmer who was glad to see his property carved up.As our quality of life deteriorates around us, we revel in the fruits of this destruction. Yeah, you. Probably 60 percent of the jobs in the Roaring Fork Valley revolve around construction, development and growth, growth, growth.And the fat cats in Aspen over Christmas and New Year’s are the worst offenders of anyone, burning energy with 10,000-square-foot mansions, Lear jets, limousines and heated driveways.So how long can we go on this way?If energy prices are any indication, not long. We can’t keep on building single-family castles like those up on Red Mountain and feed 3-inch natural gas lines into them. In 1995, energy prices spiked to $4.50 per million BTUs, which was considered terrifically expensive at the time. Today natural gas is $15 per million BTUs. People with six-bedroom homes and 45-mile commutes in their SUVs are complaining about natural gas and gasoline prices. Even if you’re a billionaire, you’ll still flinch when you get a $20,000 monthly utility bill for your single-family hotel in Aspen.If you think the war in Iraq is about spreading democracy in the Middle East, then I wish we all could sit in at a Halliburton board meeting.What is the solution? Leadership.If we had spent the political and economic capital on alternative energy sources that we have spent on the war in Iraq, we’d have some tangible results. There should be national mandates that every new house has to pay its own way in infrastructure costs. Every new house should either provide its own energy generation through solar electrical panels or wind turbines, or pay a hefty penalty. Insulated panel construction is far stronger, more energy-efficient and in every way superior to outdated stick-frame construction. We should switch over our economy and improve our existing housing by retrofitting with active solar, better insulation and windows, and wean our national economy off the ultimately unsustainable developer’s teat.Merry Christmas.Gary Hubbell heats his 1,800-square-foot house built from structural insulated panels with a Phase III EPA-approved wood stove with a catalytic converter. He and his wife, Doris, live in Marble, where the menu includes elk and venison from the surrounding wilderness and organic apples and peaches from Hotchkiss.