31 December 2007

End of Sprawl Debate

I am very skeptical of the triumphalism of Kunstler and others who see in our current mortgage crisis an end to sprawl. Nevertheless, I am drawn to their arguments, in a hopeful way. Could the combination of falling home prices and increasing oil costs stop suburban sprawl? I think in the short term, yes, at least as this relates to new-home construction.

Through my work, I happen to meet many homebuilders. Two of these men, both which are very successful single-family homebuilders, have independently asked me about opportunities in downtown Cincinnati. They know I live downtown, and that I have some experience in building here. They both have come to the conclusion that they cannot build a house for profit in the suburbs anymore.

These guys know how to build houses, and they are stymied. What should they do, when no one is buying? ...Look at other markets. They know they can't keep the same model of buying farms and subdividing, at least not the next year or two. Heck, they can't even sell the inventory they have know. These guys want to keep building, but they don't know how. The only problem is that as the suburban market sinks, so has the urban one, (although maybe not as badly). After all, many empty-nesters need to sell their suburban house before buying their city condo.

I met an empty-nester couple over the holidays. They have been living downtown for about a year. However, they are in a very tight situation, because their old house in Delhi has been on the market for over a year. On top of that, these people were in their 70's and, being a product of the depression, they were shocked by the condo fees they are paying (over $600/month). Fortunately for this couple, their house in Delhi is paid-off and they can afford to wait a bit to see if the market corrects.

However, it is a fact, that this sagging market will keep many people from moving.

Then there are the entry-level homebuyers, who are moving from rental to their first home or condo. They are more likely to buy in OTR anyway, as the empty nesters are going for places in the CBD or following Eric Kunzel to his new condo in Newport. I think the young, first-time homebuyer is key to keeping the market alive downtown, more so than the empty-nester. And these first-time homebuyers, oftentimes, young couples thinking of starting a family, are the object of this blog.

Anyway, all that is my introduction to an opinion piece in the Washington Post yesterday:

The End of Sprawl?

... the inexorable spreading out that has characterized American life since World War II might finally be coming to an end.
American sprawl was built on the twin pillars of low gas prices and a relentless demand for housing that, combined with the effects of restrictive zoning in existing suburbs, pushed new development outward toward cheap rural land. Middle-class Americans, not able to find housing they could afford in existing suburbs, kept driving farther out into the countryside until they did. Gridlock in the suburbs and the expense of providing municipal services to sparsely populated communities imposed their own limits on how far we could spread. As a result, the density of metropolitan areas, which fell steadily in the postwar years, had begun to creep back up in the 1990s. Despite these infrastructural restraints, however, the now-defunct housing boom and cheap gas kept exerting centrifugal pressure on living patterns, pushing the edge of new development farther out into rural America.
...during the present downturn, accompanied as it has been by high gas prices, homes close to urban centers or that have convenient access to transit seem to be holding their value better than houses in car-dependent communities at the urban edge.
The death of sprawl will present enormous challenges, chief among them the need to provide affordable middle-class housing in areas that are already built up. Accommodating a growing population in the era of high gas prices will mean increasing density and mixing land uses to enhance walkability and public transit. And this must happen not just in urban centers but in existing suburbs, where growth is stymied by parochial and exclusionary zoning laws. Overcoming low-density, single-use zoning mandates so as to fairly allocate the costs of increased density will require coordination at regional levels. This in turn will require overcoming the balkanization of America's metropolitan areas. This shift toward a more regional outlook will force broad rethinking of how we fund and deliver services provided by local governments, most obviously (and explosively) public education.

...We may discover that it's not so bad living closer to work, in transit- and pedestrian-friendly, diverse neighborhoods where we run into friends and neighbors as we walk to the store, school or the office. We may even find that we don't miss our cars and commutes, and the culture they created, nearly as much as we feared we would.


Anonymous said...

Mike, you have your finger on the pulse of this issue.

Up here in the rural north I notice two trends: young families that can't afford to live in higher-cost-of-living environments (a shared collective and supportive hardship by remaining in rural area) and lack of employment/higher energy costs driving others out of the State.

CityKin said...

I can imagine being a young couple in northern Michigan and thinking, gee, I could give up these winter heating bills, long commutes, give up my gas hog, and get an apartment in Chicago and still live by a large body of water, and probably get a better job to boot. Yes, States without a true city-living option will loose the young population, no doubt.

Anonymous said...

One would think that might be the rational thinking they would have, but the strong family bond, quality of environment and the acceptance of the boom-bust cycle seem to carry more weight in the decision making.

Most of the folks I know who have departed didn't leave for Chicago, but for Wyoming and other rural Western areas where the energy sector is allegedly paying large wages and the "news" from folks who made the journey is they are always looking for more labor. These relocations appear to be temporary until they can save enough to get back north.

There was a similar short term exodus to Texas in the early 1980's.

CityKin said...

^interesting observation. The anti-urban sentiment is extremely strong, and it will take much more than high gas prices to change minds.