Future of Suburbia?

DRIVE through any number of outer-ring suburbs in America, and you’ll see boarded-up and vacant strip malls, surrounded by vast seas of empty parking spaces. These forlorn monuments to the real estate crash are not going to come back to life, even when the economy recovers. And that’s because the demand for the housing that once supported commercial activity in many exurbs isn’t coming back, either.

By now, nearly five years after the housing crash, most Americans understand that a mortgage meltdown was the catalyst for the Great Recession, facilitated by underregulation of finance and reckless risk-taking. Less understood is the divergence between center cities and inner-ring suburbs on one hand, and the suburban fringe on the other.

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An interesting article. Agree with many of its points, but think it overstates its case. For cities like the DC Metro area which is still growing, there will be still be demand for all types of housing, whether in the city, the inner suburbs or the outer suburbs. (And who is to say that Ashburn will really be an outer suburb if we get the metro along with the large job centers near Dulles, along route 28, route 7, and the toll road)

And while many people would like to live in or near the city, the reality is that as the economy and housing market recovers, the demand and therefore the cost of housing will increase in the city and inner suburbs forcing many folks to look futher afield. Like perhaps in Loudoun County. In spite of the housing crisis the population of the county is still increasing, I believe.

However, do agree that there are way too many little strip malls all having the same type of stores. Better to have a few big shopping / restaurant areas like a Brambleton Town Center or the Villages at Leesburg which attract a larger and broader range of customers.

 

The real estate bubble was a result of over regulation and the push for compliance with thr community reinvestment act of 1977. This, and the too big to fail mentality, lowered lending standards and incouraged malinvestment amd moral hazard.This was all the result of too much government.

 

"The transformation of suburbia can be seen in places like Arlington County, Va., Bellevue, Wash., and Pasadena, Calif., where strip malls have been bulldozed and replaced by higher-density mixed-use developments with good transit connections."

Couldn't pay me to live in Arlington. Pasadena CA? Are you kidding? LA is one big exurb. Downtown Pasadena used to be a crime ridden dump. Newspaper building was on the main drag - abandoned for years. Homeless used to hang out in the front and relieve themselves. Let's see, who made the money off that transformation? Does anyone really want to live around it still? No. Old money (and there is a lot of it in Pas) is away from downtown for a reason. I would love to live around the main drag: the kids and their uber tricked out Honda's with superb car stereos rattling my windows on a Friday night. How is mixed use working for downtown LA - sure...just don't leave your car parked there overnight.

"It was predominantly the collapse of the car-dependent suburban fringe that caused the mortgage collapse."

Based on what?

"Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town, according to a recent survey by the National Association of Realtors."

Really? Seniors want to live in a walkable urban downtown...like say Chicago? Very walkable but c'mon seniors? I would bet this is a very small percentage. My Mom bought a second house in a nice neighborhood in FL because she likes to play tennis. Seniors want to be someplace they can enjoy and/or be near the grandkids. Always nice to have quotes from the Realtors, one of the most powerful and well funded groups.

"Add the fact that the houses were built with cheap materials and methods to begin with, and you see why many fringe suburbs are turning into slums, with abandoned housing and rising crime."

Does this apply to Detroit? They had some good materials. No, because the above statement is based on an agenda. There are some houses with great building materials and methods in NE DC. I wonder if this guy ever paid to have one of these old quality houses rewired (gotta love cloth insulation) or insulated?

"Disclosure: I am the president of Locus, a coalition of real estate developers and investors and a project of Smart Growth America, which supports walkable neighborhoods and transit-oriented development."

No kidding.

Now, where is the most profit? People jammed together in mixed use apartments. Check out mixed use in the BAD neighborhoods around Paris sometime. They have quality materials methods and transportation. How about the south side of Chicago? Good houses and transportation there. Don't mind the cars on cinder blocks and broken glass all over the street...

 

Excellent Fox talking points from 2008. The CRA sounds like a great thing to blame, but it was a very small percentage of the overall amount.

The Financial Crisis Inquiry Commission reported in January 2011 that "the CRA was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of high-cost loans—a proxy for subprime loans—had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law."

 

Even Barney Frank admitted that having loans given to people that can't pay them was a mistake.