Slowdown in exurban growth

New estimates from the US Census suggest that growth in the exurbs has slowed in recent years:

The annual rate of growth in American cities and surrounding urban areas has now surpassed that of exurbs for the first time in at least 20 years, spanning the most recent era of sprawling suburban development…

“The heyday of exurbs may well be behind us,” Yale University economist Robert J. Shiller said. Shiller, co-creator of a Standard & Poor’s housing index, is perhaps best known for identifying the risks of a U.S. housing bubble before it actually burst in 2006-2007. Examining the current market, he believes America is now at a turning point, shifting away from faraway suburbs to cities amid persistently high gasoline prices…

About 10.6 million Americans reside in the nation’s exurbs, just 5 percent of the number in large metropolitan areas. That number for exurbs represents annual growth of just 0.4 percent from 2010 to 2011, smaller than the 0.8 percent rate for cities and their surrounding urban areas. Still, it also represents the largest one-year growth drop for exurbs in at least 20 years…

In all, 99 of the 100 fastest-growing exurbs and outer suburbs saw slower or no growth in 2011 compared with the mid-decade housing peak – the exception being Spotsylvania County, Va., located south of the Washington, D.C., metropolitan area, which has boomed even in the downturn. Nearly three-fourths of the top 100 outer suburban areas also saw slower growth compared with 2010, hurt by $3-a-gallon gasoline last year that has since climbed higher.

Translation: growth on the metropolitan fringes slowed in 2010. This doesn’t mean that suburban growth overall slowed but growth on the edges has slowed. I don’t think we should be too surprised by this: the housing market is in bad shape, gas prices are up, and the number of both residential and commercial projects in the suburbs has dropped. If the economy was good, the exurbs would be where growth tends to happen as there is available land (cheaper to build here than to redevelop existing suburban properties or tackle some small infill projects) and people would have money for transportation to job centers (whether these are edge cities or big cities).

I think the real question is whether the exurban growth picks up when the economy improves or at least if gas becomes cheaper. Even if exurban growth essentially stops today, many metropolitan regions could tolerate some more dense land use in their suburbs.

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