Real eState
Liberating Our Homes From the Real Estate–Industrial Complex
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For the last six years, I have been running the architecture blog McMansion Hell, which highlights the most ridiculous examples of bloated, nouveau riche residential architecture in the United States. When I began the blog in 2016, the Internet was rife with prime examples of genuinely weird specimens. However, in the last couple of years, particularly since the onset of the pandemic, it has become more and more difficult to find unique houses—houses with interiors that exhibit the true whimsy of people for whom money is no issue. In their place are empty, vast rooms painted gray, wood floors replaced by what’s already being recognized in social media circles as a new “landlord special” flooring type: beige-gray (greige) laminate. When there is furniture in these rooms, the furniture itself is white, gray, or greige. The rugs are white or extremely muted colors. Occasionally, you’ll see some pastels or other earth tones thrown in—or the obligatory HGTV “pop of color” in the form of a cushion or poster—but the trend is overwhelmingly gray. Some rooms are so colorless one wonders if the photograph itself is in grayscale.
Back in the day, there used to be more distinction between the aesthetics of the ruling class and those of everyone else. But much like how tech billionaires walk around wearing Patagonia vests and khakis instead of Hugo Boss suits, the modern manse isn’t so different from the midrange new construction offerings from mass builders like Ryan or Pulte Homes. In this architecture critic’s view, this is a shame, as aesthetic eccentricity is one of the only things that make wealthy people even remotely interesting. Of course, anyone who’s been house- or apartment-hunting recently knows that the greige problem extends far beyond the petite bourgeoisie. (Working-class listings still tend to have a great deal more variance; it costs significant time and money to purge one’s house of unique possessions and paint every wall the same color.) The problem is so extensive that if you were to take a prototypical McMansion Hell sample from Zillow’s results, i.e., any suburban county, sorted by price from high to low, you’d likely find that more than 60 percent of first-page results have been greigeified. The same could be said about any other form of lucrative real estate: condos in major cities, recently flipped apartments, and, of course, new construction. The greigification is so pervasive that it’s even become a meme. The question is: Why?
Greige is stubbornly difficult to historicize. A recent Guardian article on the color cites everything from the minimalist aesthetics of the tech industry, Goethe’s derision of bright colors in his 1810 Theory of Color, IKEA’s popularization of Scandinavian modernism, and Kim Kardashian as potential influences. The same article claims that popular shades of greige have topped paint color charts for at least 12 years. This places them at the beginning of the recovery from the 2008 recession, a time when gilded, pseudo-European interiors painted in earth tones like olive and beige were associated with mid-aughts excess. 2010 was also a time when the so-called “urban renaissance” picked up steam in cities around the world. Modernism made a comeback. Mad Men was on TV, followed, in 2013, by Fixer Upper, the Waco, Tex.–based hit reno show that ushered in the era of “farmhouse modernism,” clean, sparse, often gray interiors mixed with folksy rustic accents.
But I would posit that something more important than pop cultural fervor also began to take place: the reorganization of the real estate industry away from traditional vectors—television shows and magazines—toward the Internet. The industry’s platformification through outlets like Zillow and Redfin very quickly shifted home viewing away from in-person visitation toward online browsing. Prior to these listing aggregators, looking at real estate online required trawling through multiple listing services or visiting a realtor’s website directly. Both methods were clunky to use and not easily searchable or filtered. Start-ups like Zillow, which began by crawling these other websites and reposting listings to a central source, offered powerful tools for search and comparison. Mass aggregation of listings allowed potential buyers to compare properties from different brokers and firms side by side, granting them access to more listings than ever before. Realtors, in turn, made use of more detailed data about what exactly sells—among not only their own listings but also those of their competitors. If, for example, more neutrally styled houses were selling better among similar listings in the same area, it follows that realtors faced increased pressure to encourage sellers to neutralize their own houses.
This logic was already in place during the heyday of the aughts, when HGTV programmed show after show about how making simple changes like painting interiors and changing finishes added significant value to the selling price of a house. (Designed to Sell is an emblematic example.) It’s a realtor adage that a neutral interior with unobtrusive furniture allows buyers to imagine their own life in a space, whereas a highly customized, eccentric interior is a deterrent—after all, people have different tastes. All of this is a broader symptom of the increasing commodification of the very notion of a dwelling: The home is no longer seen as a space of personal expression or comfort, or as the backdrop of everyday life, but primarily as an investment and as an asset—meaning that enforcing one’s aesthetics is a financially detrimental decision. Those with the capital to become homeowners (already a diminishing segment of the public) conceive of their houses as being for selling before they even live a day in them. That financialization logically reached its apex in the 2000s-era transformation of houses into junk credit default swaps—literal, intangible illiquid capital—with devastating consequences. The often predatory practice of house and apartment flipping continues in the same vein, attended, in turn, by its own litany of pop culture enablers (Flip or Flop, Fixer Upper, etc.).
The shift away from in-person showings to online browsing only accelerated during the pandemic, along with another emerging phenomenon: virtual staging, the use of 3-D modeling to stage a house instead of stagers bringing in actual furniture. Virtual staging originated around 2008; however, advancements in modeling technology have only recently made it viable and popular. As a practice it creates uncanny-valley listings that hover on the border between the real and the contrived—more and more so as the technology improves—but also saves sellers thousands of dollars in staging fees. Necessary to the success of virtual staging is a certain type of real estate photography: high-res, over-lit, and HDR-heavy. HDR, or high dynamic range, combines multiple photos taken at different lighting settings into a composite image, creating pictures where different lighting sources are blended together—for example, the pendant lights over a kitchen island glow warmly at the same time as sunlight from the window forms a baseline layer of uniform light, thus creating a spacious-seeming room with few shadows. HDR is a photographic artifice distinct from how we see light and shadow in real life. These settings, plus other developments in post-production techniques—walls can be straightened despite the use of wide-angle lenses, colors enhanced, items removed—all serve to create abnormally uniform, smooth images. Sometimes these post-processing effects are so effective, it is almost impossible to distinguish virtually staged houses, usually sussed out by abnormal shadows or too-smooth fabric surfaces, from traditionally staged ones.
If you look at real estate photography blogs from the mid-2000s, more emphasis is placed on the composition of the photo, the positioning of the photographer in the room, the use of flash and physical reflectors to achieve desired changes in light, and little tricks like shelving away too-bold furniture that dominates a space above post-production techniques. This is partially because those techniques were still clunky at the time; think 2012 Instagram filters versus what’s possible now thanks to artificial intelligence and overall sheer computing power. Of course, there has always been a hint of exaggeration to real estate photography—and all photography, which is itself a creative simulacra of real life.
A unique twist central to the why of greigification is that the neutral gray colors are integral to this new post-digital kind of unreality. The more uniform the color, the easier it is to apply postproduction features without them looking contrived, and the easier it is to drop in virtual furniture, as the even, diffuse light enhanced by gray as a color helps soften the edges of the virtual furniture, blending them into “reality.” The light in these photos does not appear to come from any specific direction, so the weird shadows “cast” by 3-D furniture don’t seem too out of place. It is entirely possible thanks to the significant expenses saved by eliminating physical staging that greige might not be done with us, even though we seem to be done with it.
It makes sense that we’re experiencing greige fatigue because, well, it’s been 10 years or more of the stuff. Trends have a shelf life, and this one is no exception. A more interesting question is: What comes after greige? HGTV itself has gotten more bold in its latest offerings, the monotone interiors shifting more toward an eclectic mix of bohemian chic and mid-century modern, albeit still with white backsplashes, marble countertops, and gray floors. Elle Décor has had a soft spot for maximalism since I was last a subscriber in the mid 2010s. Even Marie Kondo has moved past minimalism.
However, if we really want to move past interior conformity, we have to think about housing and home in a radically different way. The house has a use value and an exchange value, and as long as capitalism has governed our world, the exchange value has reigned supreme, affecting everything from housing scarcity to aesthetic homogeneity in the pursuit of profit. The reality is, most of us don’t live in perfectly staged houses. We live in kinda shitty walk-up apartments stuffed to the gills with our own personalities. Those never make it on HGTV. If we as a society liberate our homes from the real estate–industrial complex, if we start viewing them not as investment assets but as canvases for creativity and self-expression—regardless of what others think about, say, lime green walls—then greige is definitely done for. When housing itself is seen as a human right, when it is freed from the tendrils of capital, then, and only then, will our walls and floors and kitchen countertops be free. And even then, you can still paint them greige if you really want to.
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Luxury home prices have been rising at a steady pace, and so far this year, values have hit a fresh record high. According to a new Q1 report by the real estate site Redfin, the cost of luxury residential properties—those estimated to be in the top 5 percent of their respective metro area—rose by 9 percent compared to last year and increased twice as fast as non-luxury homes. At the same time, high-end abodes sold for a median price of $1.22 million in the first quarter, a new benchmark from the $1.17 million set in the fourth quarter of 2023.
“People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise,” explained David Palmer, a Redfin Premier agent in the Seattle metro area, where the median sale price for luxury homes is a whopping $2.7 million. “They’re ready to buy with more optimism and less apprehension. It’s a similar sentiment on the selling side: prices continue to increase for high-end homes, so homeowners feel it’s a good time to cash in on their equity.”
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To that point, the number of sales of luxury homes saw a 2.1 percent uptick from the year prior. In January, luxury sales began seeing consistent, year-over-year increases for the first time since August 2021. Another notable trend is that buyers are shelling out all-cash offers. Per the report, 46.8 percent of high-end residences purchased between January and March 2024 were paid for in cash, a staggering 44.1 percent gain from last year and the highest percentage in a decade.
Redfin found that Providence, Rhode Island, had the biggest jump in luxury prices in Q1, with values rising to $1.4 million, a steep 16.2 percent gain. Next was New Brunswick, New Jersey, where the median sale price bounced up 15 percent to $1.9 million. On the flip side, there were eight metros where luxury home prices dipped. Leading that pack was New York City, where prices dropped 9.9 percent to $3.25 million, followed by Austin, Texas, with a 6.9 percent decline.
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David Siscoe has some advice for fellow renters across the country: get proof that your landlord is paying their taxes, or at least make sure you’ve got a property manager who’s responsible.
Mr. Siscoe is the Montreal tenant who was audited and assessed by Canada Revenue Agency in 2018 and ordered to pay six years’ worth of his non-resident landlord’s withholding taxes, as reported recently by the Globe and Mail. Mr. Siscoe says he did not know his landlady was a non-resident.
He also didn’t know that tenants renting from a non-resident are required to withhold and remit 25 per cent of their rent to CRA each month, unless they have a property manager doing it for them, or if the non-resident has made alternate arrangements to pay their taxes.
“How is there no onus on the CRA to make sure that tenants are aware of this?” he asks. “I didn’t have a clue.”
The CRA had been unable to collect from his overseas landlord. He was then assessed for the unpaid withholding taxes, as well as compounded interest and penalties that added up to about $80,000, he says. In March, 2023, he took the Minister of National Revenue to Tax Court and lost.
Foreign landlord fails to pay taxes, CRA goes after tenant
The only break he was given was a reduction in the number of years he owed for, from six to three. He says he now owes around $43,000, although he believes more interest and penalties have since accrued. And he’s already paid nearly double that amount in accounting and legal fees.
Mr. Siscoe and his wife were paying nearly $3,000 a month in rent at 501-4175 Rue Sainte Catherine ouest, in Westmount, Que., an enclave of Montreal. Mr. Siscoe is a 1988 Canadian Olympic athlete and two-time taekwondo world champion who owns a gym.
The 61-year-old said he still hasn’t settled his debt with CRA, and his lawyer told him that it’s unlikely they’ll be willing to negotiate.
“They were acting like a dog on a bone,” he says of his initial communications with the tax agency. “They proceeded to suggest that we were knowingly paying a non-Canadian resident money, and I was a little flabbergasted.”
“I said, ‘You are trying to suggest I knowingly paid her 100 per cent of the rent because I wanted to be burdened with her tax implications? Is that what you are trying to suggest?’ I felt like this is a joke somehow.” Mr. Siscoe explained that he had rented unit 501 for more than 20 years, going back to 1996. He says that in 2010, the landlord told him to start making the rent payments to his sister. The new lease agreement had a Montreal address on it, and he hadn’t paid attention to the fact that the new landlady had signed the document in Italy, he says. Mr. Siscoe said she visited the apartment a few times over the years, and it was only after he got audited that he discovered she was living in Italy. After he realized he was on the hook for her tax bill, he and his wife and their kids moved out of the unit a few months later.
Mr. Siscoe did not want to share his landlady’s contact information for this story, on advice of counsel.
After the Siscoe family moved out, they learned that the former landlady had put the condo on the market, and Mr. Siscoe notified the CRA that they had an opportunity to collect the taxes she owed. He never found out if they tried.
In court documents, Mr. Siscoe argued that his landlord had given a Canadian address on the deed of sale when she purchased the unit; she had a Canadian social insurance number; and his rent cheques were going to a TD Canada account in Montreal.
Also in court documents, the CRA provided evidence that showed the landlord hadn’t filed income tax returns; she didn’t have any links to property in Canada other than the rental unit; her phone number on the lease was an Italian phone number; she had used an Italian e-mail address to correspond with Mr. Siscoe; and she had told the CRA auditor she lived in Italy.
The withholding tax has been around for decades. The problem for tenants arises when a non-resident landlord doesn’t pay it. And non-resident owned properties represent a substantial share of the secondary rental market in Canada.
Considering the risk to tenants – amid a housing crisis – Mr. Siscoe wonders why CRA didn’t put a lien against the rental property, or at least act to collect on the debt when the property sold.
Mr. Siscoe’s lawyer, Mr. Luu, says that all the CRA must do is establish liability to collect on the debt, and he said there doesn’t appear to be a guideline on how they do that.
“Whether the CRA could have collected the rent in some other way does not impact his liability under the law. The CRA and the Tax Court have to apply the law as it is written.
“That’s why if we want any meaningful change, we need to change the law and it’s for the Department of Finance to intervene.”
In an e-mail response, Caroline Theriault, deputy spokesperson and media relations manager for the Department of Finance, said that the requirement for renters helps to ensure that CRA obtains information on rental income non-residents might be earning in Canada. It also “helps facilitate collection of the resulting tax,” she said.
“This does not cost renters anything,” said Ms. Thériault, adding that it is standard practice.
A CRA spokesperson said in an e-mail that they encourage non-resident landlords to hire property managers. Otherwise, tenants are required to withhold the amount and fill out a Form NR4.
“If the non-resident fails to remit, the tenant is responsible for the full amount,” said the statement.
CRA’s practice is to “make every effort” to assess the non-resident owner rather than the individual tenant.
The agency pointed to a legal website that offered tips on ways renters can protect themselves, including a land title search on the landlord, asking the landlord for a certificate of residency, writing an indemnity clause into the lease agreement, and being on the lookout for any requests to redirect rent payment to someone else.
Adam Chambers, Conservative shadow Minister for National Revenue, which oversees the CRA, took issue with the policy and called the CRA’s reaction “cruel measures in the tax code that unfairly punish renters who have done no wrong.”
Real estate lawyer Ron Usher, who is general counsel for the Society of Notaries Public of B.C., where a non-resident owns one in 10 new condos, says that for every sale by a nontax resident, a clearance certificate from CRA must be obtained.
“Until CRA provides it, the notary will retain the amount in trust.”
To prevent Mr. Siscoe’s situation, he suggests a system whereby CRA is notified of any non-tax-resident real estate purchases. At that point, CRA would send the purchaser notice of tax obligations and issue an individual tax number if they don’t qualify for a social insurance number.
Mr. Siscoe said he is doing his best not to dwell on the situation. But he wants Canadian renters to beware.
“Don’t get me wrong. If me being angry could change the outcome, yes, I would be angry. But I’m not going to let them take more from me than they’ve taken,” he says.
“As an athlete, I spent my career travelling around the world, holding my country’s flag … but your own country can say, ‘Let’s screw him over.’”
He and his wife are renting another place, but it’s different this time.
“Right away I said [to the landlord], ‘I need to know you are paying your Canadian taxes, and I need it in writing.’”
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A settlement that will rewrite the way many real estate agents are paid in the United States has received preliminary approval from a federal judge.
On Tuesday morning, Judge Stephen R. Bough, a United States district judge, signed off on an agreement between the National Association of Realtors and home sellers who sued the real estate trade group over its longstanding rules on commissions to agents that they say forced them to pay excessive fees.
The agreement is still subject to a hearing for final court approval, which is expected to be held on Nov. 22. But that hearing is largely a formality, and Judge Bough’s action in U.S. District Court for the Western District of Missouri now paves the way for N.A.R. to begin implementing the sweeping rule changes required by the deal. The changes will likely go into full effect among brokerages across the country by Sept. 16.
N.A.R., in a statement from spokesman Mantill Williams, welcomed the settlement’s preliminary approval.
“It has always been N.A.R.’s goal to resolve this litigation in a way that preserves consumer choice and protects our members to the greatest extent possible,” he said in an email. “There are strong grounds for the court to approve this settlement because it is in the best interests of all parties and class members.”
N.A.R. reached the agreement in March to settle the lawsuit, and a series of similar claims, by making the changes and paying $418 million in damages. Months earlier, in October, a jury had reached a verdict that would have required the organization to pay at least $1.8 billion in damages, agreeing with homeowners who argued that N.A.R.’s rules on agent commissions forced them to pay excessive fees when they sold their property.
The group, which is based in Chicago and has 1.5 million members, has wielded immense influence over the real estate industry for more than a century. But home sellers in Missouri, whose lawsuit against N.A.R. and several brokerages was followed by multiple copycat claims, successfully argued that the group’s rule that a seller’s agent must make an offer of commission to a buyer’s agent led to inflated fees, and that another rule requiring agents to list homes on databases controlled by N.A.R. affiliates stifled competition.
By mandating that commission be split between agents for the seller and buyer, N.A.R., and brokerages who required their agents to be members of N.A.R., violated antitrust laws, according to the lawsuits. Such rules led to an industrywide standard commission that hovers near 6 percent, the lawsuits said. Now, agents will be essentially blocked from making those commission offers, a shift that will, some industry analysts say, lower commissions across the board and eventually force down home prices as a result.
Real estate agents are bracing for pain.
“We are concerned for buyers and potentially how we will get paid for working with buyers moving forward,” said Karen Pagel Guerndt, a Realtor in Duluth, Minn. “There’s a lot of ambiguity.”
The preliminary approval of the settlement comes as the Justice Department reopens its own investigation into the trade group. Earlier this month, the U.S. Court of Appeals for the District of Columbia overturned a lower-court ruling from 2023 that had quashed the Justice Department’s request for information from N.A.R. about broker commissions and how real estate listings are marketed. They now have the green light to scrutinize those fees and other N.A.R. rules that have long confounded consumers.
“This is the first step in bringing about the long awaited change,” said Michael Ketchmark, the lawyer who represented the home sellers in the main lawsuit. “Later this summer, N.A.R. will begin changing the way that homes are bought and sold in our country and this will eventually lead to billions of dollars and savings for homeowners.”
Under the settlement, homeowners who sold homes in the last seven years could be eligible for a small piece of a consolidated class-action payout. Depending on how many homeowners file claims by the deadline of May 9, 2025, that could mean tens of millions of Americans.
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