Sprawl Hits A Dead End

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Last week, Fannie Mae (via MarketWatch) reported that Americans were warming
up to the idea of homeownership
for the first time in years. After a
behemoth of a housing crisis, 73 percent of Americans now believe that it’s a
good time to buy a home. If the housing market is ready for a turnaround,
prices will only go up, and Americans seem ready to embrace a return to
normalcy.

There’s just one problem:
there’s a good chance it won’t matter. Aside from the fact that polls like this
can be very misleading (last April, Gallup came up
with very
similar numbers
), the housing market faces a demographic problem that isn’t
likely to go away any time soon.

Since 2006, exurbs and
outer-ring suburbs have been losing residents as families move into large
cities in greater and greater numbers. This is first time in decades that many
suburban counties have seen a loss in
population
, reports Urbanland.
Part of this has been the housing crisis. Exurbs dotted with subprime developments
have been hemorrhaging residents for years, but this won’t go on forever. A
greater problem, says John K. McIlwain of the Urban Land Institute, comes as boomers retire. Baby boomers created
the strongest demand for housing in American history, but their offspring are
not likely to do the same. Generation X is far too small to make a similar
impact, and Millennials (the echo boom) so far don’t seem all that interested
in homeownership, or suburban living. This means that, even if the housing
market gets going again, there’s no chance for demand to reach pre-recession
levels.

The larger issue is that
suburbanization as a social and cultural process is designed for a bygone era.
The postwar years were a deeply unequal period of American history, and suburbanization
reflected that, especially in terms of race. Redlining–segregating
neighborhoods based on race–was federal policy through most of the postwar
boom, and segregation remains
a serious problem
in many areas. But the 1950s and 1960s was also a time
when the environmental impact of development was not really a consideration. With
more
and more people
and local
governments
interested in transit, cycling, and walkability, car-dependent
suburbs seem increasingly out of place.  

But what’s really
interesting about this trend is that it’s not the result of any actual federal
policy. Since the end of World War II, federal dollars planned, created, and
maintained suburbia, through public highways, home mortgage insurance, tax
deductions for homeowners, and other incentives. As John D. Fairfield points
out in 2010’s fascinating The Public and
Its Possibilities
, in the years following World War II, federal money made
suburban homeownership actually cheaper than renting in large cities–at least
for the white middle class.

And since then, the
fundamentals haven’t changed all that much. The FHA still subsidizes suburban
homeownership (albeit more equally), and federal highways and infrastructure still
make suburban life possible. Obama has signaled that he’d like to rethink
some of these policies
, including getting rid of Fannie and Freddie and reducing
mortgage subsidies for new buyers, but actual changes are not likely soon. In
the meantime, we may see even more people defy government incentives to settle
away from urban centers–young people, especially. If these trends continue,
cities could look very different over the next generation. Homeownership may
remain an American Dream, but suburbs may not.

Sources: MarketWatch,
Gallup,
Urbanland,
the
Society Pages
, Treehugger,
The
Atlantic
, the Public and Its Possibilities, Huffington.

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