If millennials prefer suburbs, what could lead to suburban decline?

Joel Kotkin argues that millennials would rather live in suburbs than big cities:

It has been often asserted that millennials (defined as the generation born between 1982 and 2002) do not want to buy homes or live in suburbia; Fast Company, saw this as “an evolution of consciousness.” The Guardian declares that millennials are refusing to accept “the economic status quo” while Wall Street looked forward to profiting from the idea that millennials will be satisfied to live within a “rentership society” (PDF)…

Meanwhile, the much mocked suburbs have continued to dominate population trends, including among millennials. As people age, they tend, economist Jed Kolko notes, to move out of core cities to suburban locations. Although younger millennials have tended toward core cities more than previous generations had, the website FiveThirtyEight notes that as they age they actually move to suburban locations at a still higher clip than those their age have in the past. We have already passed, in the words of USC demographer Dowell Myers, “peak millennial,” and are seeing the birth of a new suburban wave (PDF).

To some extent, the meme about millennials and cities never quite fit reality outside of that observed by journalists in media centers like New York, D.C., and San Francisco. More than 80 percent of 25- to 34-year-olds in major metropolitan areas already live in suburbs and exurbs, according to the latest data—a share that is little changed from 2010 or 2000.

Suburban tastes remain predominant with 4 in 5 people under 45 preferring the single-family detached houses most often in suburban locales (PDF). Surveys such as those from the Conference Board and Neilson consistently find that most millennials see suburbs as the ideal place to live in the long run (PDF). According to a recent National Homebuilders Association report, more than 2 in 3 millennials, including most of those living in cities, would prefer a house in the suburbs.

If these trends continue, the suburbs will live on for quite a while in the United States.

This raises a question that I occasionally think about: what exactly would it take for millennials and other Americans to give up on suburbs? A few possibilities:

  1. Significantly higher gas prices. Apparently, getting up to $3-4 a gallon was not enough.
  2. Ecological disasters in the suburbs. Since there isn’t likely something that would affect all suburban areas at once (and not urban or rural areas), perhaps this would involve incidents in a number of major metropolitan areas.
  3. Another burst housing bubble. If housing it not more attractive in suburbs, this might change a lot of minds.
  4. All major employers move to big cities. I’m not sure why they would all do this is a significant number of workers are still in the suburbs but perhaps many employers needing educated workers would moving to cities, leaving suburban residents with low-wage, low-skill jobs.

Even with one of these scenarios, it would take significant time to see the suburbs on the whole decline and wealthier pockets would hold on for quite a while. Overturning the association between the American Dream and suburban life will be hard to reverse.

“[T]he federal government has backed away from subsidizing homeownership as a pathway to the “American Dream.”

The recent changes to the American tax code signal a shift toward homeownership:

It may be a few years before experts can accurately assess how the new tax reform law will affect each city’s individual housing market, but one thing is clear: For the first time in a century, the federal government has backed away from subsidizing homeownership as a pathway to the “American Dream.”…

“It’s very hard to come up with how this is helpful to housing,” said Jonathan Miller, President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm “It’s either neutral or negative; there’s no positive, at least that we’re aware of at the moment. All this does is make everything more expensive, at least in high-cost housing markets.”

As a result of the bill, Moody’s Analytics estimates that housing prices will drop about 4 percent nationwide relative to projections in which the law doesn’t exist, and those drops are more pronounced in high-cost housing markets.

A lower sale price is good news, though, right? Not necessarily. Average home prices will drop because of the lowered cap on the MID (from $1 million to $750,000), and a new cap on SALT deductions. These two tax deductions were baked into the price of homes-for-sale, so without them, prices will seem lower. But homeowners and buyers could end up with less mortgage interest to deduct, and a potentially astronomical property tax bill. Previously, there was no cap at all on property tax deductions.

Several things to keep in mind:

  1. The context – the specific address of the residence – matters a lot for this bill. And, local communities and states can respond uniquely to how the changes affect local homeowners.
  2. A lot of urbanists have criticized the subsidies from the federal government for single-family homes and suburbanization. Might these tax code changes help encourage more density in certain locales (and these high-price/high-tax locations are also ones where affordable housing is sorely needed)? Of course, since context matters here, some of those who prefer more sprawl could move to cheaper states where the disappearing SALT deductions matter less. But, isn’t this good for limiting Americans deducting mortgage interest?
  3. Could this help some communities move away from such reliance on property taxes? As one example, some have argued for decades that school funding needs to be more equitable and this is directly tied to property values and taxes: wealthier communities can draw in more tax revenue. (I would argue this is a red herring to as there are bigger issues at work.) Could these federal tax changes encourage more revenue sharing within counties, regions, and states?

Perhaps the best thing to keep in mind is the first sentence of the article quoted above: it could take years to see how this all plays out.

Suburban family downsizes to 1,000 square feet…and then upsizes 412 days later

Downsizing and tiny houses are supposedly all the rage but they may actually be difficult to pull off as one suburban family attests:

I’d like to say that we had thought about what it would be like to live a tiny life before we downsized from our 4,000-square-foot home, but we fell in love with our little cottage in McKinney, Texas, and had grown tired of living large. Somewhere between the quest for more living space, we lost ourselves in exchange for higher utility bills and weekends spent dusting…

By the standards of tiny living — formally anything under 500 square feet — our move was not a tiny one. But when you consider that we are a family of five (plus a dog), you can see why we called our life “tiny.”…

Every day we learned more about each other and grew less tethered by the norms of privacy. But still, we all secretly longed for a sliver of it, for a private moment where tears could run without an audience, for the chance of living an embarrassing moment on your own, and for conversations that are secret, almost hidden, from the buzz of daily life. It was the togetherness that championed our tiny life, but it was the lack of privacy that also had us questioning it….

All of this joy for 400 extra square feet plus the 12 it takes to house the vacuum. Everyone has a room, everyone has personal space, and no one has to look at the vacuum unless they are using it. We could have added more space, but we purposely kept it small to maintain the togetherness of tiny living and the added bonus of smaller utility bills.

The overriding thought in the decision to add a bit more square footage seems to be privacy: 1,000 square feet was simply not enough. That comes out to about 200 square feet per person but the family desired more. It would be interesting to compare this figure – certainly far below what many Americans have in their dwellings – to global figures as well as to how Americans define and prize privacy. The American Dream with its single-family home is in significant part about having space away from others.

Two other factors in this particular story also strike me as unique. First, the family lives in a warmer climate where being outside is easier. If residents need a little more space, especially kids, going outside is an option. (Granted, being outside in Texas summer may not be pleasant but it is certainly preferable to freezing cold.) Second, the family lives in a suburb that regularly is ranked among the best places to live in the United States. The family does not say much about this in the article but the amenities of such a suburb could ameliorate having a smaller house.

Don’t forget that American residents can collectively help decide what houses mean for Americans

Kate Wagner of McMansion Hell ends a commentary piece several months ago by arguing Americans need to redefine the meaning of the home:

We need a cultural re-examination of what a home should do for us. Are we building our homes to cater to the communal needs of a family or to accommodate items or signifiers that will impress others? Will a home inspire its inhabitants to spend time with one another or isolate themselves in myriad rooms? Are we building a home to live in, or are we preoccupied with the idea of selling it even before the first brick is laid? Do we want to remodel or redecorate, or do we feel we have to because we’re constantly flooded with content that makes us feel inadequate if we don’t?

It’s time we as space-inhabiters break this unsustainable, unnecessary, and wasteful cultural cycle of consumption and reclaim our homes as our proverbial rocks, the spaces that make us feel safe and content. Who gave industry-funded media like HGTV or Houzz the right to dictate the proper and best ways to inhabit our spaces, to ridicule or diagnose as wrong those of us who lack the desire or the means to constantly consume in precisely way they want us to? A home isn’t an investment vehicle where cash goes in and more cash comes out, or the “After” segment of a television show. A home is, above all, an intimate, personal place; a haven where our intricate lives as human beings unfold. Grey paint be damned.

This names several actors who are defining what Americans want in homes. This includes:

-Media like HGTV.

-The housing industry.

Both certainly have power and influence. The housing industry through the National Association of Home Builders has a powerful lobbying presence. Just see their actions in the latest debates over the mortgage interest deduction. For decades, various media outlets have pushed the image of single-family homes filled with consumer goods; they needs advertisers after all. HGTV has a limited audience but their viewers may be the same upper-middle class Americans that feel like they are not doing well and are very vocal about this.

But these are not the only actors influencing what Americans think of homes. This list should also include:

-The government.

-American residents.

Histories of how the American suburbs developed in addition to overviews of federal housing policy (see this recent example) suggest that federal government in the last century or so is set up to help people obtain homes in the suburbs.

Often missing in these analyses is the role of American residents themselves. What kinds of homes do they truly want? More Marxist analyses suggest Americans have been duped or led into wanting large homes in a capitalist system. Thus, we should help Americans find homes that truly fit their needs rather than mindlessly giving in to what the housing industry and government want them to have. (Wagner’s paragraphs above sound very similar to Sarah Susanka arguments in The Not-So-Big House.) “Re-claim our homes” could involve fighting back against the capitalist system that insists our homes are true markers of who we are (and distracts us from the real issues at hand). In contrast, historian Jon Teaford suggests these sorts of homes are what Americans do truly want because they highly value freedom and individualism. Others like Joel Kotkin have made similar arguments: Americans keep moving to the suburbs because they like them, not because they are forced into them or are not smart enough to fight the system.

Regardless of where these ideas about homes came from (and it includes a mix of institutions as well as ideologies), American residents still have the ability to reject the typical narratives about single-family homes. They do often have options available to them. What kind of home they chose is a very consequential decision. And, perhaps even better, this does not have to be an individual effort or solely about personal empowerment: Americans could collectively vote for candidates and parties that would have a different image of housing. But, oddly enough, housing rarely comes up in national politics and local politics seems full of zoning and housing disputes but few large-scale efforts to provide alternatives. If Americans want housing options to change, they do not have to just turn off HGTV; at both the federal and local level, they should vote accordingly and/or insist that political candidates talk about these issues.

Ideologies and behaviors regarding housing do not just happen: they develop over time and involve a multitude of actors. To have a new vision of housing in America will likely take decades of sustained effort within multiple structures and institutions. These are not new issues; those opposed to McMansions today are related to those opposed to the mass suburbs of the 1950s and to the social reformers of the early decades of the 1900s who promoted public housing. The efforts can be top-down – changes need to be made at the highest levels – but could be more effective if they start at the bottom – with average voters – who demand change of businesses and governments.

Closing the blinds when showing home interiors on HGTV

I watch my fair share of shows on HGTV and I recently noticed something: many of blinds or shades are closed when the interior of the homes are shown. This could be for multiple reasons:

  1. Lighting issues. Windows can produce glare either from interior or exterior lighting.
  2. The shows may be filming at night. Looking out into blackness is not that appealing.
  3. Blocking off the windows means the show can emphasize the interior and perhaps particularly show new window treatments.

These are good reasons to cover the windows. Yet, it strikes me that taking this action means the private nature of the home is emphasized even more. HGTV homes tend to emphasize the actions of the nuclear family inside the new home. Sometimes, the yard is really important to the homebuyers or homeowners but even then, the exterior is far less important than the interior spaces where it is presumed the family will spend more time.

Additionally, blocking off what is outside the windows ignores one of the most important features of homes: location, location, location. HGTV shows spend little time showing the neighborhood. Again, even when the characters are really tied to a location or neighborhood, this is primarily conveyed verbally and then the rest of the show focuses on interiors. Thus, not only do we not see much of the neighborhood, we also do not always see what the homeowners would see out their own windows.

All of this makes more sense when it is placed into the larger context of the American ideal of a single-family home on its own plot of land inhabited by a nuclear family. This is a powerful ideal, particularly for HGTV’s target demographic.



“[American] Dream Hoarders”

A Brookings Institution scholar examines the upper-middle class and how their choices separate themselves from the middle class:

A great, short book by Richard V. Reeves of the Brookings Institution helps to flesh out why these stories provoke such rage. In Dream Hoarders, released this week, Reeves agrees that the 20 percent are not the one percent: The higher you go up the income or wealth distribution, the bigger the gains made in the past three or four decades. Still, the top quintile of earners—those making more than roughly $112,000 a year—have been big beneficiaries of the country’s growth. To make matters worse, this group of Americans engages in a variety of practices that don’t just help their families, but harm the other 80 percent of Americans…

The book traces the way that the upper-middle class has pulled away from the middle class and the poor on five dimensions: income and wealth, educational attainment, family structure, geography, and health and longevity. The top 20 percent of earners might not have seen the kinds of income gains made by the top one percent and America’s billionaires. Still, their wage and investment increases have proven sizable. They dominate the country’s top colleges, sequester themselves in wealthy neighborhoods with excellent public schools and public services, and enjoy healthy bodies and long lives. “It would be an exaggeration to say that the upper-middle class is full of gluten-avoiding, normal-BMI joggers who are only marginally more likely to smoke a cigarette than to hit their children,” Reeves writes. “But it would be just that—an exaggeration, not a fiction.”

They then pass those advantages onto their children, with parents placing a “glass floor” under their kids. They ensure they grow up in nice zip codes, provide social connections that make a difference when entering the labor force, help with internships, aid with tuition and home-buying, and schmooze with college admissions officers. All the while, they support policies and practices that protect their economic position and prevent poorer kids from climbing the income ladder: legacy admissions, the preferential tax treatment of investment income, 529 college savings plans, exclusionary zoning, occupational licensing, and restrictions on the immigration of white-collar professionals.

As a result, America is becoming a class-based society, more like fin-de-siècle England than most would care to admit, Reeves argues. Higher income kids stay up at the sticky top of the income distribution. Lower income kids stay down at the bottom. The one percent have well and truly trounced the 99 percent, but the 20 percent have done their part to immiserate the 80 percent, as well—an arguably more relevant but less recognized class distinction.

The anxiety of being upper middle class: never quite wealthy enough to have all the goods and experiences of the highest group and always striving to stay above the normal/middle people.

Four quick thoughts:

  1. There is a certain lifestyle to be had here. See, my post a few days ago about a healthy lifestyle may have had some merit…
  2. As described here, many of the efforts appear aimed at avoiding downward mobility. In other words, there is some point in income, education, and lifestyle that cannot be crossed going the wrong way. But, there must be people who have this happen through events like losing a job or a major illness. What happens to them? For the “average” upper middle class person, what really are the odds that they would fall down a rung?
  3. There is a suggestion from the author that Americans shouldn’t and/or can’t just ask the 1% to sacrifice; the top 20% need to sacrifice as well. To put it mildly, this would not go over well. Given their anxieties as well as their tendencies to pull up the bridge after crossing the moat, efforts like affordable housing or school integration or significant increases in taxes will be met with opposition. They would use the rhetoric of the middle class – “we worked hard to get here – anyone could do it” – while pushing hard to protect their own status.
  4. Is the ultimate goal of this group to become truly wealthy? Most of them won’t have that opportunity and must know it. Or, is the goal is to simply not be middle class and have some more advantages than most people? Perhaps it really is about the children: is this the group that more than any other tries to give their kids every advantage as a supposed act of sacrifice?

Closing on a house feels like…

Based on my limited experience and scholarly interests, here are some possibilities for what closing on a house can be:

Fulfilling the American Dream of homeownership. On the positive side, owning your own property and providing space for a family. On the less positive side, establishing your class status.

-Agreeing to a sizable debt to a large financial institution. On one hand, you probably couldn’t buy that home without a long mortgage (thank goodness for the 30 year loan). On the other hand, you don’t really own your property for a long time and those mortgage payments just keep coming. Overall, a home is going to be the single largest investment/outlay of money for many.

-The end of a complicated process. I’ve seen several surveys suggesting many Americans dislike applying for mortgages (here is one example). It is one of those things in life many people don’t do more than a few times and it often requires a lot of paperwork (both to submit and to read).

-The start of a new era. (1) Even with the mobility of Americans and our relatively low attachment to places, we get used to the physical structures in which we live. (2) A new home often means new social arrangements as we navigate changing families and new neighborhoods and communities.

-Keeping another house occupied. Obviously, no one wants a lot of vacant properties – with lots of discussions of this in recent years involving foreclosures and particular locations like Detroit – but we can push the idea further: just how long will American homes last? Will post-war suburban homes be worth rehabbing when they hit 40-80 years of existence?

-Helping a community continue to exist. With your home purchase, you are making a commitment, if not socially (you could just retreat to the private world of your new home), then at least through your taxes. Even if we put too much emphasis on high population growth as a sign of success, communities can’t afford to lose too many residents and taxpayers.