Now, the No-Frills House

Thanks to inflation and the continuing energy shortage, the compact car seems here to stay. Now, with driveway ready, comes the compact house. In suburban areas around the country, builders are turning out no-frills houses that sell for prices ranging in most areas from about $20,000 to $36,000. Aimed primarily at buyers who would not otherwise be able to afford a home of their own in today's market, the small houses in some areas are breaking sales records in a recession-dogged industry.

The "affordable" houses, as a Texas land developer calls them, are cheaper to maintain and run than standard-size homes. They are particularly suited to young couples, who can later add a floor to most models or convert a carport if they need more space for growing children. Smaller homes also make sense for older couples. Dr. Joseph Murphy, a retired physician, and his wife, whose three daughters are grown, recently sold their $62,500 house in a Dallas suburb to move into a $23,500, three-bedroom compact outside the city. Says Dr. Murphy: "I've always wanted a small house that was quite large." Other buyers agree that the minihouse's minilot is actually an advantage: they need to spend less time working on the lawn. Another gain: small-homeowners can save substantially on fuel costs.

The smaller-is-better trend is apparent at Woodlands, a fashionable country-club development north of Houston where houses sell for up to $150,000; the bestselling models now are priced between $30,900 and $34,900. The houses (1,085 sq. ft. to 1,275 sq. ft. in area) have three bedrooms and two baths and, their realtor boasts, "no unusable space." After a down payment of roughly $1,500, the owner pays about $300 a month on his mortgage. Fox & Jacobs, an aggressive building firm, sells its slightly bigger Dallas-area homes (1,230 sq. ft. to 1,407 sq. ft.) at prices ranging from $20,450 to $24,750; they also have three bedrooms and two baths, and the large family room-dining area-kitchen combination in each has a fireplace. The house is designed to take one-fourth as much energy to heat and cool as a standard 2,800-sq.-ft. house.

Lack of Privacy. The price of a back-to-basics dwelling is still determined by land costs and zoning regulations. Pittsburgh's Ryan Homes Inc. sells its two-bedroom Dundee model for $24,500 in Columbus, Ohio; the same house costs $40,000 in suburban Washington, D.C. In Florida, where suburban real estate is still relatively low, Deltona Corp. is building compacts (654 sq. ft. to 1,300 sq. ft.) ranging from $18,000 to $32,000 in eight different developments. Its smallest model, a one-bedroom, one-bath, air-conditioned house, sells for $17,980.

Some builders achieve savings by eliminating many luxuries home buyers have taken for granted: picture windows, sliding glass doors, cathedral ceilings and, frequently, appliances. Some developers build the houses in clusters, saving on labor costs as well as land. They also economize by using aluminum or formica siding, and leaving the lot bare.

Though some of the houses are smaller than many apartments, buyers do not seem to mind the lack of privacy. Indeed, though no-frills houses were originally planned as an answer to high prices, some builders predict that they may ultimately account for 80% of the market. Says Frank E. Mackle Jr., president of Florida's Deltona Corp.: "It's just like people driving smaller cars and drinking beer instead of Scotch."

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