How Teardowns Are Reshaping Suburbia

Old houses are being torn down and replaced in suburbs all over the country. But not everyone, especially the people being priced out of once-affordable neighborhoods, is happy seeing the past obliterated.
by | December 2015
Housing stock from the 1950s and ’60s in Edina, Minn., is rapidly being replaced with homes that appeal to 21st-century tastes. (Photos by Alan Greenblatt)

Erica Hamilton’s street was a wreck this summer. All the asphalt was removed, leaving vehicles to churn up mud, as if the street were an off-road racetrack. Construction has become a given on Hamilton’s block in Edina, Minn., a suburb of Minneapolis. Modest homes constantly are being torn down and replaced with newer, larger, swankier houses.

Hamilton thinks it’s great. She views the hammering and mess as a short-term hassle well worth enduring in exchange for increased property values and a new set of neighbors. Hamilton has had two children since moving onto Halifax Avenue five years ago, and she loves the fact that other young families are buying here. “I’m seriously all for it,” she says. “I don’t think you could have this experience of families with young children, unless you drive far out.”

Residents of her block can easily walk to a shopping area called 50th and France, where there’s an arthouse movie theater, a cupcake boutique, a store selling “fresh handmade cosmetics” and a French bistro that has bestowed multiple fake awards on itself, including a jury prize for “most attractive frog legs.”

People may love the location, but they won’t settle for any old house. If Edina isn’t the teardown capital of the country, it’s certainly one of them. In a city of just under 50,000 residents, more than 550 homes were torn down and rebuilt between 2008 and 2014. A far greater number of homes have been remodeled, with new rooms added on. There are contractor trucks all over town. Much of Edina’s housing stock was built during its first population boom in the 1950s and 1960s, and it isn’t large enough or designed in an appealing way for prosperous 21st-century buyers. They tend to prefer a newer house with modern amenities, such as a bigger kitchen, more bathrooms and an open floor plan. If they have to rebuild in order to get what they want near the metropolitan center, they’re willing to do that.

It’s been a financial boon for the city, arguably Edina’s greatest windfall since the Southdale Center mall was built back in the 1950s. The average value of homes that have been torn down and replaced has spiked from $377,000 before reconstruction to more than $1 million afterward. In fact, the city collects three times as much property tax revenue just from recently rebuilt homes as it does from the shopping mall. “Our choice is to get denser or allow tax rates to go up,” says Scott Neal, Edina’s city manager. By allowing the former, “we’re able to keep the cost of running the city at a reasonable rate.”

Around the country, other suburban communities are seeing similar types of infill development. Many close-in suburbs are struggling, with poverty increasing and the housing stock and schools caught in a downward spiral. But some are thriving. Young city dwellers still often make the choice to move to the suburbs when they have kids, but many of them would like an updated house and don’t want a commute that’s 40 minutes long on a good day. So they look for a close-in suburb, buy an old house there, tear it down and build what they want.

It’s not quite the return of 1990s-style McMansions. But in the close-in suburbs of such cities as Atlanta, Boston and Washington, D.C., as well as Minnesota’s Twin Cities, old ramblers and bungalows and other postwar suburban homes are being taken down and replaced with something new, whether they’re big-footprint homes or townhouses. “The houses that are going out are shabbier, the houses that are going in are nicer,” says Robert Denk, senior economist with the National Association of Home Builders. “That’s good for the tax base, it’s good for the job market, it’s bringing money in.”

"I’m seriously all for it," says Edina resident Erica Hamilton. The new construction is "awesome for property values."

Edina has a lot going for it. It borders Minneapolis and is an easy jump to that city’s thriving downtown, as well as to the airport. Edina High School is frequently rated the best in Minnesota. A National Research Center survey of 500 Edina households this summer found that an astonishing 96 percent rated the community’s quality of life as “good” or “excellent,” with no one -- no one -- calling it “poor.”

The downside of Edina’s excellent “location attributes” (as real estate agents like to call them) is that they’re causing people to be priced out. Development always comes at a cost. Every time a 1950s bungalow is replaced by something much larger, that’s one less starter home for young people who can’t count on hefty financial support from their parents. And even though the survey found that quality of life is good, it also showed that Edina residents consider housing, including the wave of teardowns, to be the city’s most pressing problem.

But what can be done? Over the past five years, Edina has revamped its building code, adopting stricter rules regarding height limitations and setback requirements. But that hasn’t brought development to a halt. That was tried in neighboring Minneapolis last year, when the city council passed a moratorium on new construction in five hot neighborhoods (near Edina, in fact). They had to pull the plug on the idea less than a month later in the face of widespread complaints.

It’s a difficult issue, as Edina Mayor James Hovland concedes. The level of investment that new residents are willing to make in Edina is a very valuable thing, but it’s hard to maintain a balance so that people who can’t afford a million-dollar home can still find a place to live. “You’ve got to have affordable housing, which means the smaller houses,” says Joyce Mellom, an attorney who lives in Edina. “We are losing that mix and that’s a concern for a lot of people here.”

And not everyone has Erica Hamilton’s forbearance when it comes to construction noise and port-a-potties. People who have lived in Edina for 30 years or more feel the character of the town is being changed, and not necessarily for the better. People like to call the planning office, says Kris Aaker, an assistant planner for the city, and complain that every new home going up is “too tall, too wide, too everything. I’ll usually hear from at least one person on each project that comes through, because people don’t like change.”

"Nobody likes change," says Dave Fisher, Edina's chief building official, "but there's all kinds of positives to this."

Actually, Aaker fields fewer complaint calls than she used to. It’s not that the calls don’t come in, but Edina has come up with a novel way to handle them. Back in 2012, seeing that construction was starting to pick up again in a big way, the city increased the cost of a demolition permit from $250 to $1,500. It devoted the extra money to hiring a full-time teardown specialist -- perhaps the only one in the nation.

Cindy Larson’s title is “residential redevelopment coordinator,” but she’s really the 311 call center for complaints. Builders are constantly seeking loopholes. Even when they do their jobs properly, there’s almost inevitably grousing from neighbors worried about drainage issues or damage to trees or just the volume level on a contractor’s radio.

Previously people wouldn’t know which department to call. Now everyone in town seems to know to call Larson, who offers a counselor’s ear to those who are upset. “I don’t hear so often from the people who are happy about it,” she says. “It just makes good sense to try to streamline the process so that people calling in, who are already frustrated, aren’t becoming further frustrated because they don’t know who to talk to about their situation.”

Of course, the new single point of contact for complaints hasn’t magically made the problems go away. It doesn’t matter how closely building crews follow the rules or how respectful they are about parking and noise. Residents in the parts of town where it always seems to be construction season are fed up. Traffic has gotten worse, with hundreds of homes that used to be filled with 1.9 occupants (on average) now housing 3.2 people.

Great schools -- along with an arthouse movie theater, cupcake boutique and a variety of restaurants -- are part of the mix attracting people to Edina.

And lots of people don’t like watching their city morph into something else. What used to be front-porch neighborhood streets, with kids running around outside, have turned into rows of mini-fortresses. The interiors of many of the new homes are cut off from the street by multicar garages. Maria, a resident of Minneapolis who preferred only to be identified by her first name, says she decided not to buy in Edina because of the “inflated prices” caused by the wave of teardowns. Her sister, she says, sold her house in Edina to a physician who tore it down and replaced it with a “monstrosity.”

“It was already a gorgeous home worth many hundreds of thousands of dollars, and they tore it down,” Maria says. “You’re really affecting the character of the neighborhood.”

It seems to happen block by block. A builder comes in, makes a deal with a homeowner, then tears down the house and looks for another opportunity next door or across the street. In some parts of town, any home that’s still reasonably priced is more likely than not to be torn down. The lot is worth more than the house. Neighbors in the remaining three-bedroom, one-bathroom ramblers and bungalows wonder if they should just go ahead and sell. They receive a steady stream of fliers encouraging them to do so.

Until recently, builders generally went ahead with the teardown and put up a new house without even having a commitment from a buyer. They mostly built homes with open interiors, lots of bedrooms and big gables out front. Lately, though, the process has been changing: Builders are waiting to tear down and rebuild until they have a buyer in hand.

Aaker, the assistant city planner, recalls that an area known as Rolling Green turned over a decade or so ago. There was a good deal of turmoil at the time, with people calling for more of the existing structures to be preserved to maintain the neighborhood’s feel. At this point, however, there are only two or three of the old ramblers left. Enough time has passed that people who couldn’t envision an established neighborhood being rebuilt from scratch now can’t remember what it used to be like. The existing lots, it turned out, could readily accommodate more house than they’d previously had on them. “It did totally change the character of the neighborhood,” Aaker says. “All these years later, do I hear anything more about it? Absolutely not.”

Scott Busyn can stand in front of a perfectly sturdy, attractive old house and tell you everything that’s wrong with it. It lacks a mud room or a place to set up an office. The kitchen’s too small and the stairs are too narrow. The living room is wasted space and there aren’t enough closets. Nowadays, it seems, people simply cannot live without granite countertops. “There’s really nothing in these older homes that today’s families want or are looking for,” he says.

Busyn owns a construction company modestly called Great Neighborhood Homes. He mostly remodels existing structures, but he fought a five-year battle to tear down a home in Edina’s Country Club District. The foundation was in bad shape, but the house was in a neighborhood where preservation rules strictly apply. “A neighborhood that has been touted by the city of Edina as historic should have been preserved, and it wasn’t,” complains Mellom, the attorney who lives across the street from Busyn’s project. The house that Busyn is putting up will have an exterior essentially identical to what was there before.

"We’re just trying to keep the housing stock viable for the next century," says builder Scott Busyn.

A house in the Country Club District will set you back at least $1.5 million, even though the lots are so small that Skip Thomas, a local real estate agent, quips that you can shake hands with your neighbor while you go to the bathroom. If you head farther to the south and west, where the lots are bigger, the remaining 1950s homes are intermingled with sprawling houses that seem to hug the hills forever. One has a 12-car garage, which turned out to be too much even for its owner. (Possession reverted to the bank.) “Change is going to happen, but I never dreamed it would be like this,” Thomas says.

Thomas, a lifelong resident, recalls delivering Meals on Wheels to older folks in neighborhoods that now have lots of new homes and new residents. Along Drew Avenue, one longtime resident recalls the days when apple orchards grew nearby. “It makes me a little sad to see the older homes going,” she says. “It’s ruining the neighborhood.”

As almost anyone at Edina City Hall will tell you, no one likes change. The reality, however, is that most suburbs would love to have Edina’s problems. Inner-ring suburbs have to make their housing stock more attractive to people who want more space. In Edina, the newcomers are able to afford a great deal more space.

Since its farmland days, the suburb has drawn affluent residents. A local history published in 1988 explains that the town’s “hilly, lake-dotted terrain was more suited to lower density, higher value development.” There was a time when Edina’s high school athletes got taunted by rivals as “cake eaters.” Now, Edina attracts doctors, professional hockey players and tech wizards who are glad to have a quick drive to the corporate headquarters of Target or Best Buy.

Not everyone can afford to live in Edina, but those who can are benefiting substantially from the rising property values. In May, residents easily approved a $125 million plan to renovate all the schools and expand the high school. Minnesota is a “tax capacity” state, so when the city of Edina decides how much to tax, it spreads the cost among homeowners on a prorated basis. If your neighbor’s property goes up in value due to reconstruction, that can sometimes bring your tax bill down. “Redevelopment benefits everybody in town,” says Neal, the city manager.

And the neighborhood, while altered, is fresher, if maybe less charming, for having a brand-new house in place of a 70-year-old bungalow. “I mean,” Aaker says, “I would love to live in one of those homes.”