According to this article, the market forces behind large home construction are alive and well. In a process of suburban gentrification, developers purchase older, smaller homes and build "McMansions" in their place.
Downtown may be hip, but the large suburban home is still worth its weight. Looking to build and sell new upscale homes, developers have labeled older suburban homes "'functionally obsolete' - the kitchens are enclosed, the ceilings are low, closets and windows are too small."
The continuing appeal of suburbia plays a role: "Builders, lured to locations where land is more valuable than the aging housing stock, are transforming communities outside of major employment hubs to take advantage of demand for real estate where schools are decent and commutes are short."
This kind of development has prompted much debate. "Supporters say builders are removing deteriorating structures and putting up more energy-efficient houses that add to the tax base. But some residents complain that construction of big and boxy 'McMansions' undermine the character of neighborhoods, causing the destruction of trees and the constant buzz of machinery in their ears."
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City of Albany
UCLA Lewis Center for Regional Policy Studies
Mpact (formerly Rail~Volution)
Chaddick Institute at DePaul University
City of Piedmont, CA
Great Falls Development Authority, Inc.
HUDs Office of Policy Development and Research