Will an aging population, more childless families, and high gasoline prices push affluent people into the cities and drive poor folks out into exurban communities?
Recent market research indicates that up to 40 percent of households surveyed in selected metropolitan areas want to live in walkable urban areas, said Leinberger. The desire is also substantiated by real estate prices for urban residential space, which are 40 to 200 percent higher than in traditional suburban neighborhoods -- this price variation can be found both in cities and small communities equipped with walkable infrastructure, he said.
The result is an oversupply of depreciating suburban housing and a pent-up demand for walkable urban space, which is unlikely to be met for a number of years.
Developers can put up condos and apartment buildings in cities pretty quickly. So I do not see why this demand will be unmet for years unless city zoning prevents new construction.
Will McMansions get converted into multi-family dwellings for the poor?
But as the market catches up to the demand for more mixed use communities, the United States could see a notable structural transformation in the way its population lives -- Arthur C. Nelson, director of Virginia Tech's Metropolitan Institute, estimates, for example, that half of the real-estate development built by 2025 will not have existed in 2000.
Yet Nelson also estimates that in 2025 there will be a surplus of 22 million large-lot homes that will not be left vacant in a suburban wasteland but instead occupied by lower classes who have been driven out of their once affordable inner-city apartments and houses.
The so-called McMansion, he said, will become the new multi-family home for the poor.
I am not convinced by this argument. The most distant suburbs could become residences for those who can telecommute and those who control their own business locations. Developers could build office space in areas where housing is cheap so that companies can site offices where the workers can afford to live. Also, long distant commuters can trade up to compact hybrids and diesels.
But the poor have to wind up somewhere. Seems to me it makes the most sense for the poor to gravitate toward the most run-down inner suburbs while the upper class take over some city cores and other inner suburbs. Some inner suburbs could be built up into higher density housing for the poor with light rail lines to bring them to city jobs.
Sky-high gasoline prices aren't just raising the cost of Eugene Marino's 120-mile (193-kilometer) round-trip to his job in the Washington area. They're reducing his wealth, too.
House prices in his rural subdivision beyond the Blue Ridge Mountains in Charles Town, West Virginia, have plunged as commuting expenses have soared. A four-bedroom home down the street from his is listed for $239,000, after selling new for $360,000 five years ago.
High gasoline prices are nature's way of telling you to not do that.
In the Franklin Reserve neighborhood of Elk Grove, California, south of Sacramento, the houses are nicer than those at Windy Ridge—many once sold for well over $500,000—but the phenomenon is the same. At the height of the boom, 10,000 new homes were built there in just four years. Now many are empty; renters of dubious character occupy others. Graffiti, broken windows, and other markers of decay have multiplied. Susan McDonald, president of the local residents’ association and an executive at a local bank, told the Associated Press, “There’s been gang activity. Things have really been changing, the last few years.”
In the first half of last year, residential burglaries rose by 35 percent and robberies by 58 percent in suburban Lee County, Florida, where one in four houses stands empty. Charlotte’s crime rates have stayed flat overall in recent years—but from 2003 to 2006, in the 10 suburbs of the city that have experienced the highest foreclosure rates, crime rose 33 percent. Civic organizations in some suburbs have begun to mow the lawns around empty houses to keep up the appearance of stability. Police departments are mapping foreclosures in an effort to identify emerging criminal hot spots.
Price drops were especially steep in far-flung suburbs. The median price fell 38% in Lancaster and 42% in Palmdale, compared with 23% in Los Angeles County overall.
San Bernardino County saw prices drop by 31%, but it was worse in the remote town of Victorville, where values declined 43%.
Bargains are to be had for those who can telecommute.
|Share |||By Randall Parker at 2008 June 21 12:41 PM Economics Housing|