Should There Be a "Furnace Guzzler" Tax?

Written by Posted On Monday, 24 October 2005 17:00

For a very long time the nation has been divided by a fundamental question: What do we do about large houses?

Truth is, we love 'em. While part of the population endorses the "small is beautiful" approach, huge numbers of folks adore elephantine houses.

Like our meals, today's homes have been super-sized. The National Association of Home Builders reports that the typical house in 1950 had 983 sq. ft. while in 2004 the average finished area was 2,349 sq. ft.

Compare today's dreadnoughts with past homes and the differences are quickly apparent. There are now more bedrooms, higher ceilings, grander baths, smaller living rooms, bigger kitchens, more garages -- but fewer people per house.

The Census Bureau says that in 1950 the average household had 3.37 people while in 2004 that same household typically had 2.60 residents .

Here's what the math says: In 1950 we had 291.69 sq. ft. of household space per resident, an average which rose to 903.46 sq. ft, in 2004.

Real estate leviathans are being created in response to several factors.

First, there is a public preference for larger homes, the idea that when it comes to square footage more is inherently better.

Second, zoning restrictions in major metro areas have made residential land more expensive to acquire and develop -- factors which virtually require the construction of larger homes. Snobby zoning rules have also created minimum lot and home sizes to assure that small houses are not erected.

Third, today's homes have a different feature set than in the past -- more stuff equals a higher price -- and more stuff needs more space.

Those who want less expensive homes are often out of luck. To overcome this problem, some jurisdictions are requiring builders to set aside some land for "affordable" housing.

Such rules are good news for the few who get the cheaper units. However, if a builder has 100 units and 10 must be townhouses or condos set aside as affordable housing, the cost for the remaining 90 single-family homes will increase if only because there are fewer market-rate units available.

There is now something of a revolt against larger homes, at least in the sense of replacement houses, an insurrection that seeks to ban McMansions from established communities where barn-like structures often loom over existing -- and smaller -- homes.

The claim is that such big houses are an "eyesore," something which owners obviously dispute. Happily, efforts to limit home size on the basis of aesthetics are doomed because real estate beauty, like beauty generally, is solely in the eye of the beholder.

But there is something about larger homes which is not debatable: Big houses -- especially those with 9 ft. and 10 ft. ceilings, two- and three-story open spaces and cathedral ceilings -- have vastly-more interior cubic volume than traditional homes and thus require more energy to heat and cool. The result is that larger homes disproportionately increase demand for natural gas and electrical energy -- and that excess demand raises utility costs even for those with the most-modest of homes.

It's not enough to say that the marketplace will impact the owners of large homes with bigger monthly utility costs. It must also be recognized that given limited supplies of energy, utility bills for everyone increase as a result of larger homes.

The idea of limiting home construction on the basis of mere size is repulsive because that should be a matter of individual choice. But the idea of taxing homes on the basis of energy consumption would do much to show the real cost of neighborhood whales; homes that like SUVs hurt an essential national interest, the need for energy independence.

While an SUV will be dumped in a decade or so, big houses will be with us for generations. Mega-homes are obsolete structures from the moment of construction and costly to us all in the search for reduced energy consumption. We already have a gas guzzler tax, so why not a "furnace guzzler" tax for homes? The purpose would be not just to collect money but also to make the point that we all pay for excess fuel consumption.

With a furnace guzzler tax every housing unit would be allotted so many calories of energy per year per resident. Use more energy than allowed and there would be an additional tax. The tax would be graduated so that the more excess energy used, the greater the penalty.

You can bet that with a furnace guzzler tax energy-efficient appliances would be trendy, insulation would be a big topic at parties and ultimately energy use would decline -- much to the benefit of everyone.

You can also bet that a lot of people would find work upgrading the nation's housing stock -- and that too is a benefit to everyone.

For more articles by Peter G. Miller, please press here .

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