Suburban sprawl, that seemingly inexorable, inevitable spreading of the population to the outer edges of metropolitan areas, may well be over in the United States. If so, this would be one of the few positive results of the recent Great Recession and the housing crash.
An analysis by USA Today of recent Census data suggests that current population growth is occurring in the more central, closer-in counties of metropolitan regions while many outer edge counties have been losing population since 2006. This is a startling turnaround and the first time this has occurred since the end of World War II more than six decades ago. .
What this analysis shows in Census numbers reinforces what is being observed anecdotally around the country. The two types of neighborhoods most affected by the housing crash and the blight of foreclosures have consistently been outer-ring developments and low-income inner city neighborhoods.
Until the housing crash, the outer edges were where most new development was occurring and where families were moving into homes, all too often using sub-prime or otherwise toxic financing. The crash resulted in stalled, half-completed new developments leaving acres of empty lots; uncompleted roads, sewers and water lines; and houses either rented out by banks or investors or left vacant.
No new development is occurring at these sites, and it is unclear when, or even if, these developments will ever be completed. Nor is there clarity about who will buy the bank- and investor-owned homes, much less any new homes that would be built on the now-empty lots.
Even if housing values bottom-out and stabilize this year or next year, there is little expectation that there will be a return to a strong housing market until the latter part of this decade, at the earliest. This means that these outer-ring developments will remain in a state of stasis for years to come.
But does the analysis by USA Today simply show an anomaly caused by the recession, or does it point to a fundamental shift in the direction of metropolitan growth? The answer is that there is good reason to believe that the suburban paradigm, in fact, has shifted.
Development is driven by market trends, and what studies are consistently showing is that the two major demographic groups, the aging baby boomers (boomers) and their kids, the echo boomers or generation Y (Gen Y), have a growing preference for more urban living. The boomers made their move to the suburbs years ago and they will either stay there, aging in place; move to another suburb; or move to the city. They will not be in the market for a home even further out from the city.
Gen Y, the largest generation in U.S. history, now in their twenties and early thirties, would under other circumstances provide strong support for suburban housing development as first-time homebuyers. Due to the recession, however, their homeownership rate is falling. There are a mix of factors behind this including their bleak job prospects, the overwhelming student debt they carry, and a sensible desire on their part not to buy a home while they remain uncertain about where they will find jobs.
What about the move-up generation, those in their late thirties or early forties? This is generation X (Gen X), and for the first time in 70 years this generation is smaller than the one preceding it. The significance of this for housing markets has been largely overlooked; it means that demand for suburban homes would be soft even if there were no housing recession.
In short, there is no large demographic group that can be expected to drive suburban housing demand for a number of years. There are those, in fact, who argue that there are already enough homes in suburban cul-de-sacs to meet the demand for these homes for years to come. The low rate of single-family home production of the past several years may be a reflection of more than just the housing crash.
Geography also suggests that even when housing markets recover there will be less pressure to develop into the next ring of agricultural land beyond the current suburbs. There is already a lot of undeveloped land woven into the last ring of existing developments on the outer edges. It will take many, many years to fill in these areas as well as to finish stalled outer-ring developments.
Government finances are another constraint to sprawl. Outer-ring counties are financially strapped; there are no funds for more roads or for other infrastructure development. This has been causing a shift in planning in these counties as they begin to look for more compact and sustainable development that has a smaller effect on their budgets.
Finally, and by no means the least of the reasons to anticipate that the current decline in outer-ring growth is the start of a long-term trend, is that the bloom is off the rose. Whether the concern is the price of gasoline, the loss of time to commuting, or the bleakness of living surrounded by foreclosed homes and vacant lots, the glitz is gone from outer-ring suburbs. The only people buying in the outer-rings today are those attracted by their rock-bottom prices. Sadly, they will discover that what they thought were savings will be eaten up by the higher cost of living on the outer edges with no nearby jobs, stores or services. And, when the time comes to sell their homes, these owners will find that there has been little appreciation and that they have made penny-wise and pound-foolish choices.
Disasters and tough times seem to accelerate existing trends, and the recession and housing crash are no exceptions. The shift to more urban housing development has been growing slowly during the past couple of decades and thanks to the recession and housing crash, this trend has accelerated. It is probable that the trends that the USA Today analysis points to are the precursors to a long-term shift in suburban development resulting in more in-fill, close-in development and far less growth on the outer edges of metropolitan areas. It is increasingly clear that just as the past century was the century of suburbanization, this is the century of urbanization for the United States.