01 October 2005

House Guests and Big Cars.

It's fall cleaning time. House guests are arriving this weekend, so the dust and clutter must be banished in our less often used spaces to make room for them. As usual, this brings a familiar line of thinking to mind, which I'll recount below.

When I lived in the law club, dorms for law students in the law quadrangle at the University of Michigan Law School, they had a wonderful feature (well more than one actually, they also served steak in the law club dining hall every Friday and had wonderfully ornate architecture, and were on the route on the annual nude run through campus, but anyway . . .). Dorm rooms were too small to accomodate guests, but the law club had several guest rooms on the premises when people came to visit.

This is not a feature that most modern housing has available to it. When the kids move out of the house to go to college and then start their own lives, their parents, rather than downsizing to accomodate their reduced household size, usually either stay in their now oversized house, as my parents did, or actually move into some place larger, as my inlaws did. Why? Because parents who can afford it tend to evaluate their housing needs based on peak useage. They long for that 4,000 square foot house so that they can accomodate their married children and their grandchildren when they come to visit once or twice a year, in comfort. Of course, this means that most of the space in their house is wasted the fifty weeks of the year when there are no houseguests.

This isn't the only major purchase often made based on a fairly rare peak use. I don't know how many people I've heard justify their purchase of a large SUV or extended cab pickup truck with the line that they'll need it when they go camping in the mountains, or when they have to haul their gardening purchases in the spring. Like the extra guest rooms in an empty nest home, these needs arise predictably and only for a few days a year. The rest of the year, a more fuel efficient sedan would probably be perfectly adequate.

There is, of course, an obvious alternative in each case -- leasing. I've done it myself. When the entire family came for Thanksgiving to Denver one year, rather than trying to host the entire clan in my two bedroom bungalow, we rented a house in Brekenridge for a few days, leaving plenty of room for everyone. Likewise, if I really need a big vehicle for a trip, as I will with this particular group of house guests, one can do what we are doing, which is renting a van while they are here. One could similarly rent a pickup to carry the supplies purchased on a once a year spring gardening run, or a big load of lumber, or apartment to apartment move. Our local Home Depot, in Glendale, has a pickup available on a rental basis for just that purpose. My father sometimes remembers fondly the motor pools that the Army used when he was in the service. You got the vehicle you needed for the activities you planned on that day, and they were available for someone else when they needed it on another day.

Some people will never be convinced, but a rental market that functions well can eliminate a lot of waste in society by reducing the pressure to buy based on a rare, predictable, peak use. For example, many zoning codes buttressed by long standing corporate practice, locate rental car offices largely in areas adjacent to airports and central business districts, catering primarily to people who travel by air. But, as a handful of car rental companies are learning (including one whom I will not mention because I'm annoyed that they gave me a lemon when I rented a car while mine was in the shop the last time I had to do so), there are other times someone might want to rent a car as well.

Likewise, easing up zoning and other regulations of bed and breakfasts and guesthouses could be a great service to places like Washington Park and other older neighborhoods that have few places where you can put up out of town guests close to your own home that have more charm than a Motel 6 or generic "suite hotel". Particularly as insane housing prices persist in markets like Denver, Seattle, almost all of California, and much of the Northeast Corridor, the availability of guest houses close to home could make people more comfortable with buying a smaller, and hence more affordable home, knowing that their rare peak needs to put up guests can still be met. The exclusion of gain on the sale of a residence up to $500,000 for a married couple, under Section 121 of the Internal Revenue Code, which replaced a previous provision that allowed for tax free trade ups of a residence, but taxed cash out downsizing as a capital gain, has also taken away some of the pressure to continue a never ending quest for a larger house, even after it stops making sense for fifty weeks of the year.

None of this is terribly revolutionary or difficult to implement. But, unless you are thinking about issues like zoning from the perspective of how it will impact some seemingly unrelated issues like what kind of house people will think they need, and fuel efficiency, these issues could easily be overlooked in the process of establishing these policies on a local basis, to the deteriment of society as a whole.

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