Many people say it is crazy that people need two eight-passenger SUVs or pickup trucks that are able to carry six people and two-tons of stuff. They say the goal of affluent wealth should not be the 5000 square foot home.
Those are 50+ year trends. Those are the reality of the US, Australia and Canada markets.
Complaints can be made about people not needing SUVs. Maybe the electric cars eventually win completely. But GM is shutting down passenger car factories. Ford and GM, Fiat are all going more to SUVs and passenger trucks. Tesla will make electric SUVs and electric passenger trucks. Ford 150 to 450 series trucks crush the sales of the most popular passenger cars.
Go ahead and tell people they don’t want them or don’t need them. They won’t talk about it with you. But look at their driveway, into their garages or at parking lots around the Costco.
The general belief of environmentally aware people is that people should just want small cars or public transportation and not SUVs, Trucks and big houses. The same people tend to turn their nose up at things like business and marketing. This willful ignorance results in things like the Soviet planned economy and Lada’s.
You could watch the Ford, GM and other car dealerships. What are people driving off of the lot? What did they just lay down $40,000 to 100,000 to buy? What did they just lease for three to five years?
Tell people they do not need bigger houses. Over 40 years, the average square footage of homes is about double. Go ahead become a developer and make small shelters or tiny apartments. You will go bankrupt trying to move those things.
Even the high rises and skyscrapers in Hong Kong, Shanghai and other cities in Asia are trending to larger condos and apartments.
If you want smaller places, then you have to support building codes for high-rises. You have to be against two-story limits in residential areas. You have to be against 6 or 8 story limits in parts of San Francisco.
Smaller unit living has successful market examples in New York, Hong Kong, Budapest, Tokyo, and Taipei.
The first two or three floors are shops and restaurants. You have to be able to go down the elevator and get all of your groceries, restaurants and everything in the same block or at most one block away.
You do not have a big truck to go to Costco because you can buy better and cheaper at a pocket Trader Joes. You barely use your refrigerator.
A valid analysis and question is “can those successful markets, lifestyles and products be replicated or ported to other cities and markets?”
Making Money and Making Sense
It has to be more affordable and better for the people living there. There has to be the demand and the lifestyle and economics has to attract the people.
It has to more profitable for the developer to invest and change the existing housing stock.
The zoning change has to provide a big boost to density. The developer has to be able to buy six one-sixth of an acre residential properties or twelve or eighteen and then make something 5 or 8 stories tall.
You will not be able to shock the market with a massive drop in unit size. This would mean limiting your customers to Millenials who cannot afford a bigger place. Not everyone who is living in single-family detached would want to switch to a small condo. If they did they would be living in New York already.
Changing how people live is a real estate and city planning problem. I have done real estate on a small scale. I have lived in Hong Kong and Taipei. I lived in the suburbs of Canada and the USA. I have traveled around the world to many cities.
Changing what people drive is a public transportation and automotive marketing problem.
Changing the cities of the world and shifting people to different cars, transportation and houses is not a dictate of what people should be doing. If you do not understand real estate and all the “ugly” business-side, then you are following the path to the failed Soviet planned economy or the failed housing projects in the USA.
Plans and societal change cannot willfully deny what people want. This results in offering and forcing things based only upon what you would “ideally” think they should have.
Customer surveys, market studies, and focus groups are used for a reason. Companies spend billions working out product plans because if they make a mistake in reading the customers then they lose billions.
You have to understand the system which is the reality in which you exist. Business, property development, marketing, and zoning all matter. You also have to know who your customer is and you have to understand your customer.
You will not take people from A to Z, if you do not get your A right and no one follows you to B.
Not Just Capitalism VS Socialism VS Communism
It not just capitalism versus socialism versus communism. Capitalism has a bunch of processes, tools, and procedures that work better.
There is data-driven decision making at every part of the processes.
There are a product and program development processes. They start with customer research and surveys. There is testing all along the way. You do not assume you know. You ask and you test. Even the most experienced can still make mistakes with these processes. Think about New Coke. They had testing and surveys and they still screwed up.
There is A-B Market testing. You have two versions and they one key difference. You then see which is preferred.
The premise that people should not want SUVs and Trucks and should not want big houses is starting off with a position that you know better than the customer. It is starting with a declaration that you will ignore the reality of the entire market. It is broadcasting that you are willfully clueless. You are not just clueless. You have chosen to be clueless and living in a bubble of cluelessness. You are avoiding 99% of reality and evidence in current reality and in history which is screaming that your position is clueless. Your position is almost to the point of believing in unicorns and rainbow fairies.
Why is there no starting conversations between business people and many environmentalists? The environmental solutions tend to not accept any part of business reality. I recognize environmental issues and science. I have some understanding of the grid, utilities, power plants, business, politics, transportation, and industry. I do not know everything but I actively seek out the major forces and issues. I test my understanding and ideas all the time.
Forcing People to Do What They Do Not Want is Not Sustainable
It was not bad luck that the Soviet system collapsed. China did not just stumble upon success after switching from communism to a capitalist system led by what is still called the Communist party.
It was not just Russia not having hard currency to pay back debt for food to the British that brought the system down.
Listening to the customer and giving them what they want is more complicated. They are not just slogans. Selling and sales can be dirty but they have important functions and utility. You want to get people to do things that you want, then you have to sell them on it. They have to want to do it. People can be forced to do things for a time, but it is not sustainable.