In the Massachusetts suburbs, mansions are taking over
If you dream of having nine bathrooms, you’re not alone.
Michael Yankovski and his company, Saga Partners, are building a made-to-order home with a bathroom in each of the five bedrooms, two in the living area, one in the basement, and one in the attic. The home sits on the site of the family’s former home, which they tore down to start anew.
“For sure,” says Yankovski, a developer who works in Needham, Wellesley, and Newton, “people want bigger homes.”
In the Northeast, the percentage of homes topping 4,000-square-feet nearly tripled in just over two decades, to 14 percent in 2021 from under 5 percent in 1999, according to the Census. But builders are not stopping there. Homes of 7,500 and 10,000 square feet — more than six times the average size of a new home in 1980 — are going up in places like Lexington, Wellesley, and Weston.
It’s a trend that bodes ill for the state’s efforts to solve, or at least ease, its housing crisis. Bringing supply, demand, and prices back into line means increasing the stock of smaller homes that working middle-class families can afford.
But the incentives to build this type of housing are few. In fact, incentives often line up the other way. So houses are getting bigger. Much bigger.
And bathrooms? We love ‘em. In 1987, only eight percent of homes in the Northeast had three bathrooms or more, according to the Census. By 2023, it was 40 percent, even as the size of the average American household shrunk from 2.7 to 2.5 people.
So what’s going on here? A lot of it comes down to the rising land costs running into suburban zoning restrictions, said Katherine Levine Einstein, a professor of political science at Boston University. Builders might be able to cover land costs and make a profit by, say, building three townhouses on a lot, but that often isn’t an option because zoning restricts development to single-family homes.
So, when an old ranch or cape goes up for sale, it tends to get torn down and replaced with something double or triple the size that can sell at prices high enough to cover builders’ costs and profit margins.
“If I am a private developer who has purchased that land — and I know that there are buyers out there who have the resources to buy a 6,000 square foot mansion — and I have paid so much money for that land because land is expensive, I am going to build the highest and best use, from the perspective of my bottom line,” Einstein said.
In some ways, I’ve seen this movie before. When I was a kid, we visited my grandparents in southern California, and we often drove around Santa Monica, Brentwood, and Beverly Hills. Over the months and years, cute old houses were knocked down, in favor of houses that could barely be contained by the lot. I didn’t see anything like that back East.
That, Einstein said, is because land was much cheaper in Massachusetts in the 1980s and ‘90s. But so much money has flowed into the Boston area as technology, biotechnology, and related sectors have boomed that the trend of replacing older homes with mansions-on-steroids will keep happening.
Indeed, she argues, California’s housing crisis is about a decade ahead of ours. California boomed earlier and felt the squeeze earlier, which has led to aggressive policies such as allowing homeowners to build a second living space — an accessory dwelling unit (ADU) — on most single-family lots.
And unless we make big changes, such as relaxing or getting rid of single-family zoning rules, a California-like crisis will come for us.
But hasn’t that crisis already arrived? Aren’t people leaving Massachusetts, due to the lack of housing availability? How could there be so many people interested in 6,000 square foot homes?
The folks leaving are often young, middle class families. Those who can afford big houses tend to stay, said Einstein.
Yankovski knows there is huge demand for starter homes. And, he said, he used to make more money when he built less expensive homes. But the numbers just don’t add up anymore. Not only has the price of land surged, but material and labor costs have also increased considerably.
Plus, he said, both regulations and approval processes have gotten tougher.
“Even three or four years ago, it was one year from purchase to sale: buy a piece of land, get it approved, sell it. One year,” Yankovski said. “Now, it’s maybe six months extra of approval. The holding costs are a lot. So we have to pass it to the consumer.”
Allison Blank, a senior vice president at the real estate agency Compass, has seen home sizes skyrocket during the 20-plus years she’s been selling real estate. And they’re only getting larger.
At the high end of the market, she said, 5,000 square feet is no longer considered big. She said she advised a builder who was considering putting a 9,000 square foot home on a lot to keep it to 6,500 to 7,000 square feet and preserve a bigger yard.
“People want that, too,” she said. “Developers are not motivated to make smaller homes.”
Housing policy experts, economists, and business and political leaders hope the MBTA Communities law, designed to bump up the supply of homes, will change that motivation. But so far, the law, which requires denser development near transit, has run into resistance.
Yankovski, for example, said he snapped up two parcels of land in Newton that had been newly zoned for multifamily housing. He hoped to build three units on each parcel, but it soon became obvious that he wouldn’t be able to win approval for more than one or two.
“As you start digging into the rules and the regulations, the actual details,” he said. “It becomes obvious that three units are almost impossible.”
Incentives, then, have increasingly led developers to build mega-homes. Those homes frequently come complete with offices, gyms, movie theaters, and in-law suites, notes Blank, the real estate agent.
“A lot of people would be really happy if the reality was that somebody was going to come in and build a lot of great, normal houses that were affordable,” she said. “But I don’t see anybody making that decision, because the economics aren’t there.”
Follow Kara Miller @karaemiller.