Sixty years ago, cheap gas and new highways helped fuel suburbia's rapid rise, creating a new American utopia. But as CBS News correspondent Ben Tracy reports, the triple threat of falling home values, empty nesters returning to the city and sky-high gas prices is driving suburbia to the brink.
Some developments are left half built while other homes look abandoned. Demand for suburban housing is dropping so fast that a recent study predicts that by 2025 there will be a surplus of 22 million large-lot homes in suburban areas.
Of course people are not going to want to believe that the dream of suburbia is over. One argument is that it's not primarily gas prices forcing people to abandon their houses at the moment, it's the credit collapse. People who can't get home loans don't need much credit to get into apartments, and there are plenty of apartments in closer-in suburbs and the city itself. And of course it's not really accurate to make predictions while artificially extending present economic conditions into the indefinite future. We have to assume that the market will bottom out and begin to recover at some point. The question then is if it will ever recover to its highest point.
But does this mean that the decline of the suburbs will stop, or reverse? Certainly not. The decline of the suburban model of living did not begin with the subprime crisis. An article that gives us a much better look at what's going on is this from The Atlantic.
Demographic changes in the United States also are working against conventional suburban growth, and are likely to further weaken preferences for car-based suburban living. When the Baby Boomers were young, families with children made up more than half of all households; by 2000, they were only a third of households; and by 2025, they will be closer to a quarter. Young people are starting families later than earlier generations did, and having fewer children. The Boomers themselves are becoming empty-nesters, and many have voiced a preference for urban living. By 2025, the U.S. will contain about as many single-person households as families with children.
And the author predicts a grim future for much of suburbia:
The experience of cities during the 1950s through the ’80s suggests that the fate of many single-family homes on the metropolitan fringes will be resale, at rock-bottom prices, to lower-income families—and in all likelihood, eventual conversion to apartments.
In other words, the suburbs become slums. But I can see we're still asking why. Why is this happening? I'm not sure there's any one reason that explains it. Here's a column basically arguing that re-urbanization is all about making better use of time and space (not in a Star Trek way!), which is a decent enough argument. We don't want to spend two hours a day in traffic anymore. That's a good enough reason for me, and that's why I live 15 minutes from work. And of course, we all get tired of having to drive to wherever the entertainment is. I live close to work but there's nowhere to go after 9 o'clock in this city except for the Wal-Marts and a couple of restaurants.
Of course this trend is being accelerated right now by three factors: the sub-prime mortgage crisis, oil prices, and the long-term decline of the middle-class. The mortgage situation is just one small part of the overall credit crisis, which has been building for a couple of decades now. Even if things get turned around fairly soon, we're not going to see a return to the easy credit of the past decade, which means home buying is going to be permanently stunted as long as middle-class wages don't grow by leaps and bounds in the coming years, which, much as we'd like to see that, won't happen. Oil prices are simply one part of rising energy costs and despite assurances to the contrary from people who don't believe in peak oil, they're not going to go down. We've seen oil prices fall for three weeks now and prices are still higher than we would have ever believed pre-Katrina. High gas prices discourage people from living an hour and a half from work. Higher credit requirements mean they can't get the huge houses developers can build an hour and a half from the city, and they don't get paid enough anymore to pay in cash. The circle is closed.
Does this mean that in the next 25 years we're going to see a complete reversion to urban living? Naw, probably not. For one thing, nobody is going to move into cities if the cities are like they used to be before suburban living: crowded, dirty, and poor. People want urban living that is spacious and suburbanites moving in aren't going to be as tolerant of the homeless wandering around, or of overly crowded, dirty streets. New urban centers aren't likely to be copies of old ones. If the future development of such areas can be extrapolated from current developments in places like Dallas, it'll be an urban area made to appeal to suburbanites.
On the other hand, you're always going to have the suburbs. The wealthy have, of course, the wherewithal to choose to live in far flung colonies without having to worry about things like the price of gas or cost of road construction. And they can live in the really snazzy urban areas if they want. While new urbanism is driven by those with money, suburbanism will never die as long as there are folks with money who want to live far, far away from the city. And there pretty much always will be those. And of course we're not talking about the decline of all suburbs. Lots of cities have substantial single-family residential housing within a reasonable distance of the urban center. Irving is one example, but most of the cities immediately surrounding Dallas provide similar circumstances. Of course these days that's almost as urban as living in Dallas itself. But of course, the notable difference between those and the exurbs the articles talk about is distance.
The age of the "American Dream" of having a house, two cars, two kids, and a lawn to call your own may be coming to a close. That doesn't mean we won't still live nicely, just that we won't all live like the incredibly wealthy we love to emulate. Some day we'll all be used to it and people will look back and think how incredibly wasteful and foolish we used to be to base our entire lifestyle on everybody having a car.