‘Rolls-Royce’ Tracts Exhibit Trend to Costly Houses in U.S.

With a few jabs at a built-in computer screen, Luanne Nave can set the precise climate for every room of her $1.8-million house.

One temperature can be set for the dining room, with its black marble table and marble and oak inlaid floor. Another is for the game room, with cherrywood bar and paneling and oak pool table. A third setting can be made for the master bedroom, with adjacent hot tub (one of three in the house) overlooking the pool, gazebo and golf course in back.

In an earlier time, a 6,000-square-foot mansion in country French manor style might have seemed an odd extravagance, setting the Naves apart from their neighbors.

But in the new Blackhawk subdivision of 2,400 houses, most of which are worth more than $500,000, grandeur has become commonplace. To some, the development signals a jarring discrepancy in American society and the U.S. housing industry--at a time when millions search unsuccessfully for modest housing, American builders are putting up bigger and more expensive houses.

“I would rather build a Rolls-Royce than a Ford,” said Ernie Altmann, the 40-year-old developer who built the award-winning Nave house and is helping erect, essentially from scratch, a new Beverly Hills on these barren, grassy hills east of San Francisco Bay.

Bigger and Bigger

The construction statistics division of the U.S. Census Bureau reports that the average new single-family house in 1987 had 1,905 square feet of floor space, an 11.4% increase over the average new house five years before. Places such as the Nave mansion, Altmann’s own 9,000-square-foot house with four-car-and-one-golf-cart garage and the enormous 56,500-square-foot residence of television producer Aaron Spelling in Los Angeles’ Holmby Hills may be far above average, but their numbers are increasing.

Rick McAlexander, vice president of Landmark Designs Inc., which regularly surveys housing trends, said he has recently visited six or seven new West Coast developments such as Blackhawk. Others are sprouting around the country, and they provide a visible sign of the rapid growth of the American upper class in the 1980s.

U.S. census figures show that in 1980 only 378,000 American families, or 0.6%, had annual incomes higher than $100,000. By 1986, their number had grown to 1.79 million, or 2.8%, partly because of inflation but largely the result of a sharp rise in real affluence.

Altmann describes his clients as hard-working people--doctors, lawyers and real estate developers--who have bought large, expensive houses not for snob value but because “they care about where they live and want something good for their money.”

On the other end of the scale, the search for affordable housing has inspired genuine desperation and emotional political battles over the economic factors and environmental and zoning restrictions that have made low-cost housing so difficult to build.

The California Assn. of Realtors has concluded that only one of five Los Angeles County families earns enough to afford a house at the median price of $182,364. But 90% of Americans surveyed in 1986 for the National Assn. of Realtors said owning a home was more important than having a happy marriage or an interesting job.

Gerry McMurray, staff director for the House banking, finance and urban affairs subcommittee on housing and community development, said the housing industry--with some help from the government--once devoted itself “to supplying lower- and moderate-income people with their first house.” Now, with few GI loans or other forms of government assistance and with soaring land prices, “the housing market has shifted to the upper-income end of the scale.”

Tax Reform Effect

In one more proof of the law of unintended consequences, Washington has accelerated the shift through its recent passion for tax reform. Many traditional tax shelters for the wealthy were eliminated in 1986, but the deduction for interest paid on mortgages--a favorite of middle-class voters--was not touched. Since the deduction applies to mortgages up to $1.1 million, it has encouraged affluent Americans with heavy tax obligations to put their money in mansions.

Altmann, who began as a laborer and apprentice carpenter, and his wife, Judi, a former nurse, have spent 10 years building Altmann Construction Inc., now devoted exclusively to luxury mansions. They emphasize craftsmanship, including careful handwork on miles of wood paneling and astute advice to clients uncertain about financing. “People who have money are becoming increasingly nervous about the stock market and investment schemes,” Altmann said.

He relentlessly promotes the virtues of new houses over old. “You can count on the latest amenities in a new house,” he said. “The older one may have a kitchen that’s functionally obsolete and a bath that is two sizes too small.”

His multimillion-dollar creations offer hand-made, triple-layered moldings on doorways and room trim, polished pure granite fireplace hearths and bar countertops. There are leaded-glass windows in 18-foot entry halls, huge kitchens with bread-warming drawers, built-in electric can-openers and toasters, gold-plated bathroom fixtures and a single computer screen controlling lights, temperature, audio, sprinkling and security.

Points of Interest

When Luanne Nave and her husband, Paul, a real estate developer, first looked at the four-bedroom, four-bathroom house on Blackhawk Drive, most of the other visitors were crowded around the computer screen. But what she liked, she recalls, was “the look of the rooms--they were so sunny and cheerful.”

The Naves, with their 9-year-old daughter, Echo, and their white Samoyed, Lady, came to enjoy the gadgets and other comforts also. The computer starts the coffee-maker for Paul, an early riser, every day at 5 a.m. In summer, it keeps unoccupied rooms at 72 degrees and the rest of the house at 68 degrees, to combat the East Bay heat.

The million-dollar-plus homes are selling as rapidly as everything else in the superheated California real estate market. As the empty lots at Blackhawk fill and the small maples, pines, palms and willows grow to maturity, Altmann estimates that values will double or triple.

Analysts like McAlexander do not deny the lure of such places. His company’s most recent national survey of 1,500 home buyers found that people longed for extras like guest cottages, libraries and wine cellars, as well as larger kitchens, family rooms, garages and master bedrooms.

But when mansions climb beyond the 10,000-square-foot mark, as has happened in several high-income Southern California neighborhoods, McAlexander said, he begins to feel uncomfortable.

100 Guests for Dinner

“Unless you know 100 people you might want to invite to dinner, you don’t need 1,200-square-foot dining halls,” he said. Designers who have spent their lives pondering the most economical use of space can see only waste in such places. “Anything larger than 10,000 square feet is not a house, it’s a structure,” he said.

McMurray said he fears that “we are developing a serious gap in our society between those who have and those who cannot afford any kind of housing.”

Altmann said he sees the same problem, which can be solved, in his view, only by local governments easing expensive restrictions and inspection requirements on modern builders. Meeting high standards costs money and “means you have to get a high price for that lot,” he said.

Paul and Luanne Nave said they were willing to pay well for a house they could enjoy for many years. The two-story, octagonal library with domed ceiling, the rare cherrywood staircase and the book-lined game room gave them a sense of privacy and space worth the price. Paul Nave said he would not have minded if the place had been even bigger.

“I deal with a lot of people on a day-to-day basis,” he said. “When I go home, I like to get away from them.”