2008 March 08 Saturday
America To Reurbanize?

Writing in The Atlantic Christopher Leinberger argues the move to McMansions has peaked and affluent Americans want to move back into urban zones.

Arthur C. Nelson, director of the Metropolitan Institute at Virginia Tech, has looked carefully at trends in American demographics, construction, house prices, and consumer preferences. In 2006, using recent consumer research, housing supply data, and population growth rates, he modeled future demand for various types of housing. The results were bracing: Nelson forecasts a likely surplus of 22 million large-lot homes (houses built on a sixth of an acre or more) by 2025—that’s roughly 40 percent of the large-lot homes in existence today.

The retirement of the Baby Boomers will reduce the number of people in their households. On the other hand, immigration is pushing up the general demand for housing. However, poor and low skilled Mexican immigrants can't afford big suburban houses.

Leinberger points to relative prices to show the greater desirability of more densely populated and walkable neighborhoods.

Pent-up demand for urban living is evident in housing prices. Twenty years ago, urban housing was a bargain in most central cities. Today, it carries an enormous price premium. Per square foot, urban residential neighborhood space goes for 40 percent to 200 percent more than traditional suburban space in areas as diverse as New York City; Portland, Oregon; Seattle; and Washington, D.C.

It’s crucial to note that these premiums have arisen not only in central cities, but also in suburban towns that have walkable urban centers offering a mix of residential and commercial development. For instance, luxury single-family homes in suburban Westchester County, just north of New York City, sell for $375 a square foot. A luxury condo in downtown White Plains, the county’s biggest suburban city, can cost you $750 a square foot. This same pattern can be seen in the suburbs of Detroit, or outside Seattle. People are being drawn to the convenience and culture of walkable urban neighborhoods across the country—even when those neighborhoods are small.

Leinberger mentions energy efficiency as one of the advantages of urban living. People can walk rather than drive or drive shorter distances. Also, multi-unit dwellings share walls which reduce heat loss. If, as I expect, Peak Oil is upon us the energy efficiency advantage is about to become far more compelling. The need to reduce energy usage might become the biggest reason people shift back to high density living. Walkable neighborhoods could become all the rage.

Leinberger also fails to mention racial differences in crime rates. This topic is one of liberal America's many taboos and so his omission is not surprising. But to understand future American demographic changes one must pay attention to race and crime. White fear of black criminals, while only spoken about honestly by few writers, is the elephant in the room. Black-on-white crime causes whites (including liberal whites who deny this) to segregate themselves into white suburbs far from black urban areas. The white flight from crime was one of the reasons the suburbs grew after World War II in the first place. In areas with fewer blacks the whites can more easily urbanize without fear they'll become frequent targets of criminals.

White America has spent decades trying to make urban areas safe again by setting a world record for the rate of incarceration of criminals.

Washington, DC - 02/28/2008 - For the first time in history more than one in every 100 adults in America are in jail or prison—a fact that significantly impacts state budgets without delivering a clear return on public safety. According to a new report released today by the Pew Center on the States’ Public Safety Performance Project, at the start of 2008, 2,319,258 adults were held in American prisons or jails, or one in every 99.1 men and women, according to the study. During 2007, the prison population rose by more than 25,000 inmates. In addition to detailing state and regional prison growth rates, Pew’s report, One in 100: Behind Bars in America 2008, identifies how corrections spending compares to other state investments, why it has increased, and what some states are doing to limit growth in both prison populations and costs while maintaining public safety.

One in nine black males between the ages of 20 and 34 is behind bars.

A close examination of the most recent U.S. Department of Justice data (2006) found that while one in 30 men between the ages of 20 and 34 is behind bars, the figure is one in nine for black males in that age group. Men are still roughly 13 times more likely to be incarcerated, but the female population is expanding at a far brisker pace. For black women in their mid- to late-30s, the incarceration rate also has hit the one-in-100 mark. In addition, one in every 53 adults in their 20s is behind bars; the rate for those over 55 is one in 837.

From 1987 to 2007 America's prison population tripled and the US imprisons about 8 times as many people per 100,000 as Germany does. Curiously, prison spending by states in inflation adjusted terms grew by less than a tripling in this 20 year period from $19.38 billion to $44.06 billion.

Among men 18 and older the breakdown is 1 in 106 whites, 1 in 36 Hispanics, and 1 in 15 blacks. The middle figure poses the biggest problem for the promoters of reurbanization. Hispanics are a growing portion of the US population and their higher level of criminality will raise the cost of the imprisonment. Even adjusted for age Hispanic imprisonment rates are much higher than white rates (see table A-6, page 34 at the next link). For ages 18-19 1 per 107 whites are imprisoned. But for blacks it is 1 in 19 and for Hispanics 1 in 47. So the Hispanic incarceration rate is over double the white rate.

Will the ability to finance all these prisons put a limit on crime control measures and thereby limit the move back into cities? California so far has not backed off on imprisonment even during a severe budget crisis.

The economic picture is so dire in California, where a budget deficit of $14.5 billion is predicted for the coming fiscal year, that the Republican governor has proposed releasing more than 22,100 inmates before their terms are up. Eligibility would be limited to nonviolent, nonserious offenders, and the plan excludes sex offenders and those convicted of 25 other specific crimes. Governor Schwarzenegger says the state would save $1.1 billion through his proposal, but so far it has received a cool reception from both parties in the legislature.

Perhaps the biggest question about the future of crime control by imprisonment comes from the changing demographics of American voters. Will Hispanic voters show themselves as willing as white voters to lock up large numbers of criminals? Prisons are cheaper than paying for increasingly expensive gasoline to commute to distant safer suburbs. That $44 billion spent on incarceration saves far larger sums in transportation costs and in costs for guards on gated communities.

Urban spaces can also be made safer using other measures such as smarter methods of choosing who to parole, whose parole to revoke on violations, how to monitor and track parolees (e.g. drug testing and electronic tracking), and lots of cameras and other electronic sensors in public places. I am expecting the coming decline in oil production to increase the pressures on governments to make more densely populated areas safer as more demanding and influential higher class people move back toward higher density neighborhoods.

Update: 1 in 4 prisoners in the world are in US jails.

Susan Urahn, a senior Pew researcher, said the US now held one in four of the world’s prisoners. China was second, with 1.5m people behind bars. There are 82,000 people in jail in England and Wales, or roughly one in 500 adults. The proportion is similar in Scotland and Northern Ireland.

Why is this? I can see a few reasons. Some poor countries have ineffective police systems and can not afford to imprison a large number of people. Also, affluence tempts people to steal more since there's more to steal. Also, countries with only low crime ethnic groups (e.g. Japan and Finland) have populations disinclined to commit crimes.

Share |      By Randall Parker at 2008 March 08 10:47 AM  Economics Housing

JSBolton said at March 8, 2008 7:32 PM:

The problem with the prediction is that juvenile criminality in and around schools is not much affected by how many adults are in prison.
Driving further, building new suburbs more densely and so on, will resume as the demographic onslaught of low-quality immigration,
relentlessly savages ever larger numbers of school districts.
It may be observed how officials and others appear to take delight in the cornering
of the more civilized parts of the population;
there must be high hopes at stake.
Would these be hopes for money or power, though?

m said at March 9, 2008 7:45 AM:

There is no way I'd move back into the city. NO FRIGGIN WAY. I like feeling safe at night, I like seeing mostly white people when I run an errand, I like never being outnumbered at the grocery store by surly-looking youths with chips on their shoulder, I LOVE NOT SEEING GRAFFITTI marking this-or-that-gang's territory, and I like my affordable house.

The elite make real-estate very expensive by bringing in uber-zillions of low-quality immigration.........the banks love it no doubt because we have to bid up each other to live away from the third-world-hordes.

Dave Ings said at March 9, 2008 8:20 PM:

When I read the story in The Atlantic I was interested to see they mentioned White Plains, where I recently lived for three years. White Plains is an amazing success (urban turnaround) story and I regret that I didn't purchase a condo when I arrived as they nearly doubled in price by the time I left.

White Plains perfectly illustrates the article's point that suburban towns with a walkable, lively and (usually) dense core can be "happening" places that appeal to people that otherwise prefer city living. In my case while I would have preferred to have lived in Manhattan I came to really like the lifestyle the rejuvenated White Plains offered.

Foxbark said at March 10, 2008 5:28 AM:

I really hope no one takesthis the wrong way, or in any way shape or form thinks I agree with the sentiments, BUT, instances of 'genocide' of entire races have occurred periodically in human history.
Modern Americans throw their hands up in horror and cannot fathom the reason as to 'Why??.'
The piece above gives a partial explanation as to 'Why??'.

skot german said at March 15, 2008 4:56 PM:

One way to lower prison populations is to legalize drugs.

Bob Badour said at March 15, 2008 7:21 PM:

Another way is to decriminalize premeditated murder.

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