Monthly Archives: November 2011

Forecast: US homeownership rate to hit low of 62% in 2015

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One forecast suggests that homeownership rates in the United States will drop to a low in 2015 before rising by 2025:

All this could push home ownership down to levels not seen at least since before the Census began tracking this data in 1963. Home ownership soared to 70 percent in 2005, but it could fall to 62 percent by 2015, according to the number crunchers at John Burns Real Estate Consulting. They suggest that the effect of foreclosures drops home ownership 5.6 percent, and cyclical trends, like poor consumer confidence, tightening mortgage credit and the weak economy drop it 3 percent. Positive demographic trends would only offset that by 0.7 percent…

Burns believes home ownership will return by 2025 to around 67 percent, as previously foreclosed borrowers return to the housing market, cyclical trends improve and positive demographics start to carry more weight.

This is quite an extended process that first requires foreclosed and underwater loans to get off the books before the homebuyers turn the numbers again. It is interesting that there is little political discussion about the length of this process – does it benefit any current politician to be forthright about how long it might take to turn the housing market around? Do people care that much about homeownership while issues like jobs and debt are also concerns?

If the process does take this much time, it could also lead to a long-term reassessment of real estate. I doubt that people will no longer value owning a home or that homeownership will disappear from the cultural image of the American Dream as some have hinted. However, there is less of a chance it will be considered an investment and people will be more careful with their purchases, particularly paying attention to being able to pay for it even in rough patches.

Would wealthy homeowners rather live in or next to a McMansion or modernist house?

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A short look at a Great Falls, Virginia modernist house got me thinking: would the typical wealthy homeowner rather live next to a McMansion or a modernist home? Here is how this house is described on Curbed (and there are lots of pictures as well):

A wealthy suburb of Washington, D.C., Great Falls, Va. is better known for it’s sprawling McMansions than its modernist masterpieces, but this glassy new construction in the woods is adding to the town’s architectural street cred. Distinguished by stark white walls and huge expanses of glass, the sleek home was designed by architect David Jameson and won the 2011 Washington DC AIA Award of Excellence. Thanks to the broad swaths of glass, the modern house achieves a connection to nature that would evade one of NoVa’s typical Italianate McMansions. Worthy of special note is the courtyard, which utilizes a frameless glass railing.

So what makes this modernist house more attractive than a McMansion? Several reasons are given here:

1. It has “architectural street cred.” Namely, it was designed by a known architect and won an award.

2. It is better connected to nature than McMansions.

3. It is not an Italianate facsimile of which the articles suggests there are too many. This house is unique.

But I would be interested in knowing how many suburban residents would choose to live in or live near this modernist house versus choosing a McMansion. The modernist style is not common in the suburbs; unless this house is in a unique neighborhood or has a really big lot, it may stick out from surrounding houses. For the average suburbanite, do the looks of this structure really invoke feelings of home? Might this be of architectural interest but not somewhere people could imagine living?

“City residents still yearn for the rural experience”?

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Beside a story about the declining rural areas of Iowa, a sociologist talks about the link between cities and rural areas:

Even city residents still yearn for the rural experience, says Paul Lasley, the Iowa State University sociologist who founded the Iowa Farm and Rural Life Poll. He describes a gradual cultural blurring of urban and rural Iowa: Cities are preserving rural culture as a reaction against the “massification” of recent decades.

Consider the boom in farmers markets, he says: 7,175 nationwide this year, a 17 percent jump over 2010, as measured by the U.S. Department of Agriculture. Iowa claims 237 markets.

A couple of thoughts come to mind:

1. The most noticeable place where the cities and rural areas blur is the suburbs. From the beginning, picturesque suburbs like Llewellyn Park, New Jersey had winding subdivision lanes and big lots that were meant to invoke country life. Even today, many suburbanites can fairly quickly drive to Forest Preserves or out to the metropolitan fringe where there are still some open fields.

2. Are farmers markets really the best evidence that city dwellers want more of the rural life? Don’t these simply make the rural life a caricature or another commodity that can be purchased? There have to be some other ways in which city dwellers really show an interest in rural life.

In the end, I wonder how much city residents really would want to live in rural areas or spend significant amounts of time there opposed to just visit. Surveys like the “2011 Community Preference Survey” show that roughly 30-40% of Americans would want to live in small towns or rural areas but we know more than 50% of Americans live in suburbs and 30% live in central cities (around 80% total). So if preferences don’t exactly match up with realities, what exactly do urban residents, urban or suburban, want from “the rural experience”?

The growing sales share of big box stores

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In recent years, big box stores have increased their share of overall retail sales:

In the past two decades, the share of sales going to the top general merchandise stores has soared from 47 percent annually to 73 percent, according to an analysis of census data by University of Oregon sociologist John Bellamy Foster and University of Illinois at Urbana-Champaign communications professor Robert McChesney…

“In pretty much every category, you’ll see that the biggest guys are a lot bigger today than they were 10 years or 20 years ago,” said Lawrence Ring, business professor at the College of William & Mary in Virginia.

The implications of retail consolidation are varied: lower prices for consumers, but also less energetic hiring of workers and a more streamlined economy overall…

Whatever the big stores are doing has been working: Walmart’s U.S. sales last year were $308 billion. Target’s were $78 billion; Costco’s, $59 billion; Sears, $35 billion; Macy’s, $25 billion; Kohl’s, $18 billion; and J.C. Penney, $18 billion.

More points of evidence in a long-running discussion about the value of big box stores in the United States.

Another way you can tell how powerful these stores are: how many communities will turn them down if a big box store wants to open in the community and provide jobs plus tax revenues?

Discussing the rise in suburban poverty in the Pittsburgh region

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After a recent report discussed the rise of poverty in the suburbs and the inability of many suburban governments to provide services for those in poverty, here is how this plays out in the Pittsburgh region:

In Western Pennsylvania, the increase of suburban poverty is not because poor people are moving into those areas. Instead, people living in the suburbs are becoming poor. Chris Briem, of the University of Pittsburgh’s Center for Social & Urban Research, said local areas with high rates of poverty are “not necessarily places that are poor because of out-migration from the city.”…

Alexandra Murphy has been living in Penn Hills for the past three years studying the suburban poor for a doctorate in sociology from Princeton University. She said the working class, which was “on the brink of making ends meet” before the recession, found itself what she termed “poor in place,” and needing access to food banks and help with bills just like the traditional poor in the cities.

Murphy said the difference between urban poverty and suburban poverty is that the latter “doesn’t have the infrastructure in place to meet the needs.”…

Mike Irwin, associate professor and chair of the Department of Sociology at Duquesne University, said that kind of a shift can result in “social disorganization” in some communities, which can lead to increased crime. The deterioration some communities have experienced over the past few decades could soon occur in more places, he said.

More and more suburban communities will encounter these issues. Considering the budget shortfalls faced by many municipalities and other units of local governments (school districts, park districts, etc.), how can they find money for social services?

If anything, this does provide an opportunity for religious congregations and organizations to step up and not only meet subsistence needs but also to think creatively about providing jobs and housing for the long term. Instead of just sending money to the inner city or overseas, wealthy suburban churches can now help out in their own backyards and help boost local economies.

Fighting over McMansions in Mission Hills

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In the wealth Kansas City suburb of Mission Hills (named earlier this year one of “America’s Most Affluent Neighborhoods“), residents have been fighting over whether McMansions should be allowed:

“There’s a group that wants to build whatever the hell they want,” says lawyer Ann Alexander, a Mission Hills resident who in 2009 sued a neighbor over lot setbacks, “and there’s a group that wants renovation and vibrancy, but who want to do that in the context of the community.”

Think of it as the property-rights set versus the Mission Hills traditionalists…

But what is Mission Hills? After failing to define that with regulations and zoning laws, the city last spring hired a Los Angeles planning consultant named David Sargent to define it.

The hope is that Sargent could help end the squabbling by coming up with a set of design guidelines that would allow for housing upgrades — both teardowns and add-ons — but preserve, as he puts it, “the pastoral, garden character of the community.”

Sargent’s first draft came out this month, and now some are waiting to see whether the recommendations, when they’re in final form next year, will bring peace and understanding in the extraordinary city.

Sounds like a typical standoff: residents who want to protect the historical character of the community versus those who want to live in a well-known location but in a new big house with all the modern amenities.

This planning consultant has his work cut out for him. However, many other communities have adopted guidelines or planbooks that at least offer some guidance to what new houses might look like. Without declaring neighborhoods historic districts (which are often the strictest option – see an example here), guidelines can help opponents and proponents of teardowns work with a common set of expectations as they try to decide what their neighborhood should look like in the future.

Thinking further about this, I wonder if anyone has done research on what suburban residents expect their neighborhood to be like in the future. I don’t think I’d be alone in expecting that many residents would want the neighborhood to stay about the same as when they moved in. I recently heard someone cite Mark Twain saying, “Everyone likes progress, but no one likes change.” Are things that could be changed in a neighborhood that a majority of residents would see as positive?

The shopping malls that track your shopping patterns

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Two shopping malls are starting a new program where they track the shopping patterns through shopper’s cell phone signals:

From Black Friday though to the end of the December, two malls in southern California and Richmond, Va., will be following shoppers by tracking their cell phone signals. When somebody walks out of the Gap, into the Starbucks, out through the Nordstrom and on to the Auntie Annes pretzel stand, the mall will be monitoring.

Creepy? Maybe. But the information is anonymous and won’t be used to target individual shoppers. Instead, it’s part of a quiet information revolution among retailers to figure out how crowds move, where they cluster, and what stores they ignore. Tracking crowds isn’t new. Tracking crowds through their cell phones is.

If you’ve got a problem with malls paying attention to your smart phone, you might want to stay away from the mall for, say, the rest of your life. The future of shopping, according to retail analysts I spoke with for a recent special report, is malls and phones talking to each other.

When I saw this story last week, my first thought was “what took so long?” This doesn’t sound too different than what is going on while you surf the Internet: there are a number of people very interested in the data generated by your browsing and shopping patterns. You the shopper/browser are in a closed system and you are a very valuable data point. This is also a reminder that shopping malls are not public spaces: just like large stores, retailers and mall operators want to funnel you in certain ways such as past the food court (good smells can be positive for spending money) and past a number of attractive displays, advertisements, and storefronts (all meant to get you to open your wallet and act upon unrecognized desires).

One other thought: I wonder how shoppers at a mall might fight back. How about turning off one’s cell phone while inside? How about walking in “unusual patterns,” whatever that might look like? How about boycotting malls that practice this? How about using this as another rallying point for shopping local – they can’t (or at least shouldn’t) track you while shopping on Main Street. How about forcing malls that do this to post signs about what exactly they are doing? If the shopper does indeed have valuable information and money, why not get some concessions from the mall operators who would like to have this data?

The still somewhat large and pricey “Not So Big” house in the Chicago suburbs

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Architect Sarah Susanka has become well-known for her idea of the “Not So Big House.” One of her homes has just been built in the Chicago suburb of Libertyville:

The showcase home, located at the 26-site SchoolStreet Homes development under construction a block east of downtown, is open for weekend tours until May 20. It and the rest of the homes, which are not open to the public, are Susanka’s and developer John McLinden’s take on new urbanism: smaller homes close together, with front porches, a sense of community and walking distance to shops, restaurants and services.

Don’t be fooled, though. When Susanka says not so big, she doesn’t mean small or cheap. The Libertyville home, at 2,450 square feet, won’t be priced until next year when it is put on the market, but other non-Susanka single-family homes on the block start at more than $500,000.

“A lot of builders are building smaller but cheaper,” Susanka said, standing in the furnished home just before it was opened to the public this month. “I believe people are ready for something that is smaller but better.”…

McLinden read Susanka’s books when they were first published and originally invited her to work on one of the houses as a marketing strategy to draw attention to the project. Now they are planning additional collaborations and have been contacted by three other communities about doing similar projects.

In an era where the McMansion is said to be dead and “tiny houses” are growing in popularity, Susanka’s houses stand out for two reasons I’ve noticed before and are also cited in this article. First, these houses are not small. On the spectrum between mansions and tiny houses, Susanka’s houses are very near the national average for the square footage of a new home. As she has said before, the article cites Susanka as saying the homes aren’t small but the space is used well and not wasted. Second, such homes may not be cheap. Perhaps the prices in this story are primarily being driven by being in Libertyville (with a median household income just over $100,000) but then again, Not So Big houses are likely to be built in communities like these.

The emphasis in Susanka’s homes are on two things beyond size and price: quality and fit with the homeowners. Neither of these things are cheap as the homes are not meant to be mass-produced (then they might fall perilously close to tract home or McMansion territory) and the features are customized to the activities and tastes of those who live there. Apparently, there is a market for this.

This could lead to an interesting question: are these primarily homes for educated, wealthy people who appreciate the design features and can afford the prices? Perhaps this shouldn’t be surprising as architects do need to make money and wealthier clients (and higher-end builders) could certainly help. Could Susanka help market her homes even further if she could create and market a smaller version that could be affordable (or in terms more palatable for many suburban communities, “workforce”) housing? Would she want to produce a lot of these homes or would these reduce the appeal of status of these architect-designed homes?

Shifting resources away from the “fringe suburb[s]”

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In an op-ed in the New York Times, an academic argues that “fringe suburb[s]” are dying and we should shift resources to communities that need reinvestment:

Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.

The shift is durable and lasting because of a major demographic event: the convergence of the two largest generations in American history, the baby boomers (born between 1946 and 1964) and the millennials (born between 1979 and 1996), which today represent half of the total population…

Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey. This lack of demand all but guarantees continued price declines. Boomers selling their fringe housing will only add to the glut. Nothing the federal government can do will reverse this…

For too long, we over-invested in the wrong places. Those retail centers and subdivisions will never be worth what they cost to build. We have to stop throwing good money after bad. It is time to instead build what the market wants: mixed-income, walkable cities and suburbs that will support the knowledge economy, promote environmental sustainability and create jobs.

This is not an unusual argument. Based on survey data, a number of commentators have suggested that the demand for the sprawling suburbs will shrink and builders and governments should get ahead of this shift. The suburban critiques delivered by academics and others since the post-World War II suburban boom may have finally gained some traction as the young and old seek out community over a big, cheap house. How much of this shift will be “durable and lasting” remains to be seen but it would certainly be helped if “the market” goes in this direction.

Two claims in the final sentence of this op-ed are intriguing. The argument that density = greener neighborhoods is common but the arguments about benefits for the knowledge economy and creating jobs is less common. A little more about each of these:

1. I assume the knowledge economy bit is tied to ideas like “the creative class” from Richard Florida. Younger adults, in particular, want to live in places with some culture and neighborhood life, not on the metropolitan fringe in bland neighborhoods. These places become centers of innovation and culture, attracting more residents and businesses.

2. The jobs claim is a bit less clear to me. If money was spent redeveloping older neighborhoods, this could create jobs – but so could building new balloon-frame homes in new subdivisions. Perhaps the creative cities will create so much innovation that this leads to job growth? Does Richard Florida have data that shows a link between the creative class and job expansion overall?

Overall, this is another voice calling for a new urban strategy where the government and businesses stop subsidizing sprawl and start providing money to promote denser, more New Urbanist type developments that some Americans desire.

The racial disparities in the Chicago blues scene

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An article in a series about the blues in Chicago explores how the white, downtown clubs are thriving while the older, black clubs on the south and west sides are struggling:

Two clubs, two worlds, one music: the blues. That’s how it goes in Chicago, a blues nexus crisply divided into separate, unequal halves. A sharp racial divide cuts through the blues landscape in Chicago, just as it does through so many other facets of life here, diminishing the music on either side of it.

The official Chicago blues scene — a magnet for tourists from around the globe — prospers downtown and on the North Side, catering to a predominantly white audience in a homogenized, unabashedly commercial setting. The unofficial scene — drawing mostly locals and a few foreign cognoscenti — barely flickers on the South and West sides, attracting a mostly black, older crowd to more homespun, decidedly less profitable locales.

Not all the grass-roots places are dying as quickly as the music room at the Water Hole. Some, such as Lee’s Unleaded Blues, on the South Side, attract a small but steady crowd on the three nights it’s open each week.

But how long can this go on? How long can a music that long flourished on the South and West sides — where the blues originators lived their lives and performed their songs — stay viable when most of the neighborhood clubs have expired? How long can a black musical art form remain dynamic when presented to a largely white audience in settings designed to replicate and merchandise the real thing?

Lots of interesting history. Additionally, the conversations about authenticity and tourism are intriguing: why doesn’t Chicago promote its music and culture more and would a major push in this direction water down the product?

It would probably be very interesting to talk to Chicago and suburban residents about blues music. How many of them know its an available option and if they do know this, how many would choose it over other entertainment activities? How many students in the region know that the blues has such a rich history in Chicago? How many colleges teach about American music (blues and jazz and their contributions to the development of rock ‘n’ roll) as opposed to classical music? How much does like for the blues cut across racial lines? Is the blues most acceptable to educated whites (in more sociological terms, cultural omnivores)?