Money and You: Course Notes

What probably is the the center of most people’s “American dream” is a single-family home. A single-family home is what most people think of when we hear the term “house.” A single-family house is a singular building intended for one family unit. These houses are embedded in the property around them (can’t be easily moved). Single-family homes build to modern standards (“to code”) will have a kitchen with function appliances, at least one bathroom, a living space, and at least one bedroom separated from the living space.

Single-family homes come in a variety of shapes, styles, and purposes. Depending on a family’s preferences and needs, they may look at bungalows, cottages, ranches, split-levels, etc. as their home shape.

Single-family homes are great for families looking to have a solid structural building that offers at least a little distance from neighbors. They also generally provide private use of the property surrounding the building. However, since they take up more space than other types of properties, they are quite rare in city centers, meaning that they are not great options for people who do not like to commute into work.

While many people aim to live in a single-family home because of its comfort and privacy, there are downsides. Single-family homes are expensive. The sole owner of the house is responsible for all the necessary repairs and updates. Regular maintenance, such as lawn-mowing, gardening, painting, etc. is time-intensive and costly.

A multi-family home is a singular building that allows for two or more family units to reside in it without needing to share most of amenities. That is, it is a single building that can be “sectioned-off” where ever section has a kitchen, at least one bathroom, a living space, and at least one bedroom. Like a single-family home, a multi-family home will be embedded in the property surrounding it.

Multi-family homes are very common in New England, particularly in communities that used to be manufacturing centers. (e.g. Whip manufacturing in Westfield, paper milling in Holyoke, egg-carton production in Palmer.) They offer most of the same benefits as single-family homes. There also tend to be more multi-family homes in some city centers, allowing for easier transportation to work. One main downside is that the structure must be shared with at least one other family. Residents of a multi-family home will be separated only by a wall. Property usage must also be shared.

Multi-family homes can have a single owner or each sub-unit can be owned separately. In the case of multiple owners, the costs of structure and property repairs/upkeep are split among the owners. This can cause some conflicts when it comes to agreeing on how to jointly make property decisions. Generally, it is cheaper to live in a multiple-family home as compared to a single-family home.

Apartments are similar to multi-family homes in purpose. An apartment building is usually a very large structure that includes a large number of individual sub-units. (There could be as lows as two or up to hundreds.) Each sub-unit will allow for a family to live. In most modern apartments, each apartment unit will have kitchen amenities and a private bathroom. Some apartments do not have separate bedrooms (“studio” apartments), but most do. Often, there are multiple apartment buildings on one large parcel of land, which collectively are a “complex.” What appliances are available in an apartment varies greatly. Almost all will have ovens, but few have dishwashers or private laundry machines.

Apartments are generally cheaper housing options, on a per-month basis. Generally, residents do not own their individual units, which means the owner, rather than the residents, are responsible for most maintenance and upkeep. Given their inherent structural capacity to house a large number of families, apartments are very common in city centers, which can allow for easier transportation to work or other necessary amenities. They may even allow for life without needing a car. The downside of apartment living is the close-contact to neighbors and living space. Apartments can be too small for many families. It can also be difficult living with other families immediately beside, above, or below you, separated only by a wall. There may also be restrictions on what pets you can own.

Condominiums, or “condos,” are much like apartments, except that the residents are the owners of the individual sub-units. They come with the same benefits of apartments with the added benefit that ownership allows for stability in housing payments and security. They also come with all the same downsides as apartments with the added downside of “home-owners’ association” (HOA) fees. Because multiple people collectively own the large structure, each owner much “chip-in” for upkeep, repairs, and maintenance. This usually requires the condo owners to pay monthly fees into a pool of money to be used for such purposes. HOA fees can range from about $100 per month to hundreds per month.

Condos are good options for families looking to own their housing but have a smaller budget. Condos are also more common than single-family homes in larger cities. Condos may not be good options for larger families. Like apartments, the available amenities in condos can vary. Some may have laundry units, dishwashers, etc. Some may not. Also, HOA’s may limit what you can do to your unit. You may not be allowed to make major constructive changes. The HOA may also restrict things such as pet ownership, noise levels, etc.

Mobile homes are an interesting option. As the name implies, a mobile home is one that is meant to be somewhat mobile. (Not an R.V. though.) With minimal detachments, a mobile home can be lifted and transported elsewhere and re-hooked up to utilities.

Mobile homes are often owned by the occupants, similar to single-family homes. However, the land on which they sit are often owned by someone else and must be rented. Given their smaller size, usually larger parcels of land will house a large number of mobile homes. (“Trailer park.”) Each mobile home will sit on its own sub-parcel that the renter of said parcel will have private access to.

The main benefit of a mobile home is the cost. Compared to a single-family home, they are much cheaper to own. Mobile homes can come in a variety of shapes. Most are single-floor units, but they can function as studio-style places or can have a number of separate bedrooms. The downside of mobile homes include less privacy than single family homes (smaller land units), less structural soundness, and the fees to rent land. In particular, the cost to rent spaces in a “park” have been going up. Many parks are now charging $200-$600 per month. Also, mobile homes tend to be in more rural areas, making transportation more difficult.

One issue with housing is the wide-spread idea of good/bad. Many Americans interpret single-family houses as the “gold standard” of housing. Many people see apartment living as less-desirable living for inner-city populations and mobile homes as less-desirable living for rural populations. What you have to keep in mind is the historical context in which this arose and the influence of television and cinema. Historically, American families lived in homesteads, which had a variety of different shapes and functions. These were generally multi-generational homesteads housing three or four generations of families. There could be very large one-building homesteads, or homesteads with a few smaller single-family units. The main thing is that, for the majority of American history, single-family living wasn’t the gold standard.

From the 40’s to the 60’s, rich investors took on property development in which they bought large tracks of land, building housing, and sold that housing to families are apartment owners. This, coupled with the the rapid expansion of industry and transportation led many families to seek single-family houses and up-scale apartments. This movement became iconicized in media, representing such living as the only type represented. Think homes in shows such as “Leave It to Beaver” or “The Brady Bunch.” Or think up-scale apartments in shows such as “I Love Lucy.” Farms, trailer homes, condos, etc. were not really seen in media.

The important thing is that, what is most commonly seen is what Americans tend to consider as “solid, middle-class life.” However, there is much more diversity into what success looks like. If you find yourself looking down on the concept of apartment-living or a mobile home for no reason other than “it’s better” to live in a single-family home, you may be working under hefty society bias. Your housing choices should be influenced not just by finances, but also by your current life situation. Whether or not children are living with you, being able to physically get around the space, pet ownership, location and transportation needs. All these things should be considered when making a decision. There are many great reasons to choose an apartment over a single-family home for many families. Price, saved time on maintenance, close proximity to grocery stores and work, are all reasons anyone may prefer an apartment life, for example.

What I’m getting at is don’t measure your own success based on what your living space looks like.