Tearing Down The Wall Street Journal’s “Mansion”

Today’s cartoonishly twisted economic inequality has created a renaissance of “conspicuous consumption.” This was the term American sociologist Thorstein Veblen coined to describe the purchase of extravagant goods and services, not so much for the pleasure of consuming them but for their ability to signal affluence to others. For example, Forbes magazine’s Cost of Living Extremely Well Index tracks the price of “ultraluxe items” like quarter-million-dollar Russian sable fur coats, $55,000 private school tuition, and $16 million personal Sikorsky helicopters.

But the best place to turn for a peek at elite excess is definitely Mansion, the Friday Wall Street Journal supplement reviewing the wild extravagance of the hideously rich. Part advertising section, part ruling-class design review, part dangling inducement to middle managers to go on believing in the system, Mansion is a hilarious delight and everyone should read it to learn about the purposeless waste of the upper crust.

Sadly, the Journal’s aggressive paywall prevents many critical readers from peeking through the curtain to view the other side of our class-segregation system. Luckily Current Affairs has the keys! Brace yourself to find out where 30 years of tax cuts promised to create jobs have gone instead.

Reading Mansion quickly reveals the gigantic frigging sums wealthy people have seen fit to throw at their surroundings. From comfortless-looking glass tubs to specialized tequila freezers, the resources committed to these properties are staggering. Articles describe for us the cigar rooms, the $54,000 closet for a Beverly Hills teenager’s sports and drones, the enormous home theaters, the 4,700 square-foot gym with a climbing wall. In a review of big-ticket housing in Holland, a rich Dutch designer of elite household renovations laughs, “Sometimes I think I could live in that kitchen.” Another article finds real-world comps for super-hero movie mansions, which is easier than you might guess.

Rich-people housing embodies their rich-people diversions, including American car worship. A Miami tower grabbed attention in a crowded market by affiliating with Porsche and including a car elevator for residents, allowing them to park their chrome sport cars right in their chrome condos. An AOL co-founder’s house has an attached garage and a garage attached to the attached garage, with space for 30 cars. Oh, plus a dock for delivery trucks in one of the four kitchens. And while covering a Miami manse built on top of a seven-story parking structure, we learn the luxury garage includes a glass sculpture, 30-foot-high ceilings in places, and “sweeping views.” They hold weddings in it.

Many high-end city mansions have gone through a circuitous odyssey over the 20th century, often built as giant brownstones for tycoons in the unregulated, no-progressive-income-tax era of the Gilded Age, but then taken over for schools or split into apartments or offices. Yet as the New Deal era has been repealed in endless Republican tax cuts, these properties are widely returning to their original functions as opulent single-family homes. A New York real estate agent comments, “It’s like a return to the Gilded Age,” as the press reports that what has “put these mansions and townhouses back in play is the steady escalation of incredibly wealthy buyers” seeking more privacy than a conventional high-end condo can provide.

This kind of high-end marketing literature also teaches how class patterns endure in far more turbulent settings, even through the most cataclysmic events. Mansion describes the luxury market in Berlin, where waves of destruction and social reconstruction have crashed over the 20th century, while still preserving the architecture of class privilege. One high-end West Berlin residential complex was originally built to be “a high-end residential hotel” but “has had many lives over the decades, including as the Weimar Republic’s economics ministry in the 1920s and as a West Berlin finance office during the Cold War.” Now, it has returned to its luxury market origins as elite condos. It’s history in the form of douchebag trophy properties.

Likewise Japan, which at midcentury was firebombed and nuked to kingdom come (the culprit was never caught), saw an archetypal property bubble in the 1980s. These upheavals don’t erase old patterns of excessive privilege and power, and Mansion tells of Tokyo’s “most exclusive neighborhoods” where “luxury residential towers that cater to the city’s elite now sit where feudal lords once had their lavish villas.” Still, most Japanese domestic buyers “are more restrained in their definition of luxury. There is little demand for splashy interiors, or a gym or a swimming pool in the building.” Don’t these people know how to live!?

Of course, anyone familiar with real estate will know that often the appearance of age on a marketed property is homage rather than reality. Affectations of antiquity are a mainstay of real estate markets across class levels, including Tudor-era stonework and with fireplace “mantels salvaged from castles in France and England.” This reaches its apex in the clichéd tacky U.S. “McMansion,” as you can see for yourself on Kate Wagner’s incredibly entertaining blog, McMansion Hell. Without snobbishness, Wagner playfully laments today’s clumsy and planless use of half-recalled and feverishly jumbled Gothic or colonial architecture, leaving much of the modern high-end property inventory a shallow parody of grandeur.

The anachronistic tacky grotesque is truly on parade in Mansion’s real estate listings. One Beverly Hills mansion “was originally built to resemble ‘Le Petit Trianon,’ Marie Antoinette’s private chateau in Versailles,” and includes “a whiskey lounge, a wine cellar, a cinema, three elevators and a salon and spa.” A rich retired fashion industry tycoon and wife bought a former grain mill outside Madrid and remodeled the property into a mansion, including the portion formerly housing workers, with ill-fitting modern gadgets. We’re told whimsically that the owner has limited knowledge of what the place was and when it operated. The couple also owns an Italian vineyard, vacations on Ibiza and plans to ruin a derelict Valencian farmhouse next.

Since these properties are owned by such fantastically rich people, they’re often one property among many, and as the fourth or fifth or sixth house in the family they’re only occasionally visited. The business press reports that in elite urban neighborhoods, “the higher the price, the higher the concentration is likely to be of owners who spend only a few months, a few weeks or even just a few days each year in their apartments. This very costly form of desolation means that some of the city’s most expensive residential buildings stand mostly dark, lonesome and empty on the inside.” These “astonishingly wealthy people” survey markets globally, “looking for a safe place to put their money, as well as a trophy, and perhaps a second—or third or fourth or fifth—home while they’re at it.”

The naked waste isn’t limited to big-city condos either. A California real-estate investor complains about huge properties on California’s famous 17-mile drive, a gorgeous Pacific coast road originally developed by a railroad tycoon and today a course of multi-million-dollar homes. Regular Americans can drive it for just $10.25! Cash.

But here too, the ruling-class struggles—“Some residents complain that the drive can get clogged with tourists. And with so many neighbors dropping in for just a few weeks out of the year, some streets are rather unoccupied.” Yes, as California’s major cities struggle with even small gestures toward housing their swelling homeless populations, these giant homes filled with bedrooms sit silently through the night.

Or consider the game day mansion, where wealthy families buy an extra house near their alma mater campus for sports season. Not for the kids attending as legacies, but for visiting specifically on game days during collegiate sports season. A real-estate agent comments, “we’ve seen people buying places that, except for game times, are vacant.” Hundreds of thousands of dollars are spent buying and upgrading these properties, further tightening the notoriously tight housing markets in college towns, so that rich people who failed to move beyond their college days can enjoy games more conveniently. And to think those crazy socialists want to redistribute scarce resources!

Reading Mansion almost inevitably drives you to think about the housing crisis in U.S. cities. There’s a lot of discussion about this today, and almost reflexively the problem is attributed to burdensome government regulations. These make it harder to build real estate investments, we’re told, keeping today’s swelling urban populations from renting a place or buying a house. And layers of red tape are a reality—partly to protect the great investments already made in huge built environments like modern cities, and to help cope with the many externalities created by so many people living together in a somewhat civilized way.

However, many economic aspects of the situation are absent from most commentary on today’s goofily high rents and home prices. When you read Mansion, on the other hand, you’ll find out that “developers aim for the top end of the market” because “the promise of growth in the future is already priced in” for real estate markets, meaning land has a high price reflecting the great potential returns over the long run in major cities. “Once developers have paid top dollar for a parking lot or defunct warehouse, they often cannot build mid-market housing and still turn a profit.”

This is confirmed by other Journal reporting: “Even though construction of multifamily rental properties is running at the highest level in decades, the overwhelming majority of new units—more than 80% in the nation’s largest metropolitan areas—are luxury…Constructions costs are generally too high to justify building new complexes for low- and middle-income tenants…The difference in costs between installing granite countertops and stainless-steel appliances is so slight compared to buying land and installing elevators that economists say developing a luxury apartment and a mid-tier one comes out roughly the same.” So the housing crisis comes from market processes, meaning the opulent pads in Mansion have real economic ramifications for the rest of us, who are more likely to look at properties in the Cheap Studio Walk-Up by Garbage Incinerators section.

Several articles in the section describe the common elite settlement pattern, like the one on “The Luxury Homes Wal-Mart Built,” which describes the clustering of executives in rich enclaves around Little Rock, Arkansas. In this typical pattern, gated communities allow execs to be “in that bubble of your peers in the same socioeconomic group…They want that easy life.”

But by far my all-time favorite Mansion feature ever must be “Luxury in No Man’s Land,” on elite condos in poor neighborhoods. See, “many of today’s high-end buyers are less resistant to the harsher realities of urban living,” and can tolerate “less-gentrified” city sections. Folks, you would not believe the adversity these rich yuppies have to endure, from public drug consumption near your “upscale condo living,” to vagrants pooping on the construction sites.

But heroic developers see a lucrative unexploited market rather than humans in need, and the section gives a thoughtful economic explanation of how gentrification works, historically and today. In the past, “run-down urban neighborhoods have been transformed into luxury destinations,” but “Such transformations, however, usually happen gradually,” often set off by changes in city zoning and “first colonized by artists.” But in these new ritzy developments in gritty districts, “the difference…is the organic first phase—the colonization by artists and other real estate pioneers—is either brief or nonexistent. Instead, developers are creating new ‘up-and-coming’ neighborhoods out of whole cloth,” and “selling authenticity.”

So jumpy young financiers describe the neighborhoods as “frightening” while junior attorneys carry pepper-spray and avoid certain streets, and call themselves “pioneering investors” for gracing the neighborhood with their presence while driving out locals as rents rise. The section also notes grudgingly that “as required by New York City, Hudson Yards will build 460 low-income units, distributed by city lottery.”

Mansion is always pretty to look at, with its attractive color renderings of joyless Brutalist towers and drafty-ass McMansions (with sweeping views!). But for all its manicured style and tongue-in-cheek class cues, there’s one thing the section can’t make look good: The ocean of wasted resources poured into the purposeless layers of luxurious privilege that make up the betinseled homes of the world’s ruling class.

Capitalism vs. Freedom, Rob Larson’s latest book, is available now from Zero Books. Read the totally non-biased Current Affairs review of it here!