Tag Archives: housing

Quick Review: The End of the Suburbs

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I recently read The End of the Suburbs, written by Fortune journalist Leigh Gallagher. On one hand, the book does a nice job describing some recent trends involving, but, on the other hand, the book is mistitled and I think she misses some key points about suburbs.

1. If I could title the book, I would name it something like “The End of the Sprawling Suburbs” or perhaps “The End of Sprawl.” Neither title is as sexy but she is not arguing that the American suburbs will disappear, rather that demographics and other factors are shifting toward cities. There is a big difference between ending suburbs and seeing them “grow up,” as one cited expert puts it.

2. Some of the key trends she highlights: the costs of driving (the whole oil industry, maintenance/gas/insurance/stress for owners, paying for roads/infrastructure), a changing family structure with more single-person and no-children households, changes among millennials and baby boomers who may be looking to get out of the suburbs in large numbers, a push toward New Urbanism in new suburban developments to increase density and strengthen community, and builders and developers, like Toll Brothers, are looking to build denser and more urban developments with more mixed-uses and smaller houses.

3. But, here are some big areas that I think Gallagher misses:

a. While she highlights the benefits of New Urbanism, does this lead to more affordable housing? In fact, the need for more affordable housing is rarely mentioned. As certain areas become more popular, such as urban neighborhoods that attract the creative class, this raises prices and pushes certain people out.

b. The main focus in the book is on big cities in the Northeast and Midwest. While she mentions some Sunbelt cities, like Las Vegas and Los Angeles, there is a lot more to explore here. There are particular patterns in Northern cities compared to newer, more sprawling Sunbelt cities. And in a book talking about the end of sprawl, how could she not mention Portland’s fight against urban sprawl in the last few decades?

c. It is an intriguing idea that cities and suburbs are starting to blend together. But, some of the examples are strange. For example, she talk about how there is increased poverty in the suburbs, which then could make cities more attractive again. There are still some major differences between the two sets of places, particularly the cultural mindsets as well as the settlement patterns.

d. She highlights thriving urban cores – but what about the rest of big cities? While Manhattan and Chicago’s Loop might be doing all right, what about the poorer parts of those cities? The recent mayoral race in NYC involved this issue and many have complained in Chicago that most of the neighborhoods experience little government help. In other words, these thriving urban and suburban developments often benefit the wealthier in society who can take advantage of them.

e. It isn’t until the last chapter that she highlights some defenders of sprawl – people like Joel Kotkin or Robert Bruegmann – but doesn’t spend much time with their ideas. Indeed, the book reads as if these trends are all inevitably moving toward cities and defenders of suburbs would argue critics of suburbs have been making these arguments for decades.

4. Two questions inspired by the book:

a. Just how much should the American economy rely on the housing industry? Gallagher suggests housing is a sign of a good economy based in other areas rather than one of the leading industries. Sprawl can lead to boom times for the construction and housing industries but it can also face tough times. Perhaps our efforts would be better spent trying to build up other industries.

b. Is the century of sprawl in America (roughly 1910 to today – there were suburbs before this but their mass development based around cars and mass housing really began in the 1920s) an aberration in our history or is it a deeper mentality and period? Gallagher suggests we are at the end of an era but others could argue the suburbs are deeply culturally engrained in American life and have a longer past and future.

Overall, this is an interesting read summarizing some important trends but I also think Gallagher misses some major suburban trends.

A rise in cooperative housing in the United States

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More American adults are living with strangers in order to make ends meet:

Two million Americans over the age of 30 now live with a housemate or roommate, and shared households make up 18 percent of U.S. households – a 17 percent increase since 2007.

One group of women sold their homes and bought a house together in Mount Lebanon, Pa., after they all got divorced…

McQuillin, Louise Machinist and Karen Bush call their home a “cooperative household.” Each woman has her own bedroom and bathroom, and they share the common areas of the house, chores and expenses…

In some co-housing communities, families buy smaller homes built around a common building that the entire community shares. Some include communal kitchens and recreation space.

There are more than 100 of the special developments across the nation. Some co-housing operations share housework and childcare duties.

This is a different approach than Going Solo – single-person households have been on the rise in the United States for years now. But, living with other people has benefits including economic sharing.

It would be interesting to ask those who are living in cooperative households if they would choose to do so if they had more economic resources. In other words, is money trumping common American concerns about individualism and privacy?

Highlights from the “Illinois’s 33%” poverty report

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A new report from the Social Impact Research Center, “Illinois’s 33%,”  looks at poverty in Illinois. Here are a few highlights:

1. Something I did not realize: the preamble to the Illinois Constitution mentions “eliminat[ing] poverty” (p.1).

“We, the People of the State of Illinois…in order to provide for the health, safety and welfare of the people; maintain a representative and orderly government; eliminate poverty and inequality; assure legal, social and economic justice; provide opportunity for the fullest development of the individual; ensure domestic tranquility; provide for the common defense; and secure the blessings of freedom and liberty to ourselves and our posterity—do ordain and establish this Constitution for the State of Illinois.”

2. The report is not just about poverty; it is also about people in near-poverty. The income thresholds for this are here (p.5):

This methodology of measuring people with low incomes or near poverty seems to be growing. The Census reports the median household income in Illinois is $56,576.

3. There is definitely some geographic disparity in these figures. Here are the numbers for the Chicago region which clearly shows wealthier and less wealthy counties and Chicago neighborhoods (p.7):

I did not see any calls for metropolitan approaches to poverty. In the Chicago region, it would be difficult to deal with a particular problem, say affordable housing, in just Chicago or a few of its neighborhoods without cooperation and input from others in the region.

4. The report has more figures and possible solutions in five areas that could help people move out of poverty: employment, education, housing, health & nutrition, and assets (p.3-4, 15-17).

American housing reacts to changes in family and household structures

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After looking at some data about how much American families and households have changed in recent decades, Kaid Benfield asks an interesting question about how American housing might change to meet these realities:

So, as many of us connect with families in one way or another on Thanksgiving, I can’t help but observe that there really is no “typical” American family living under the same roof these days, if there ever was.  Rather, we have a diverse and changing array of household types and circumstances that smart planners and businesses will seek to accommodate.  The census data show that the growing parts of the housing market are nonfamily households, smaller households including people living alone, unmarried couples, single-parent households with kids, and older households.  The declining parts of the market are larger families, married couples, two-parent households, and couples with only one breadwinner, though each of these categories clings to a significant share of the total.

Interesting stuff, and mostly good for those of us who would like to see less sprawl and more walkable neighborhoods.  But also a bit complex.

The typical answer I’ve seen online to this question is to point to indicators that suggest younger (see here and here) and older adults (see here) will be seeking out denser housing. This may be true. I think we could also argue that American housing has already shifted to these realities in recent decades through several new options.

1. The rise of townhouses, particularly in the suburbs. These have the advantages of allowing for single-family home ownership, the ability to pay an association to maintain the housing as well as help protect property values, and denser housing which frees up more open space.

2. The rise of condos in both suburbs in cities. In suburbs, this has similar benefits to townhouses. In cities, this has been a boon for redevelopment and the movement of people with money into urban cores.

3. New housing products for older Americans beyond group homes including developments like the Del Webb communities and retirement complexes that include owned units (whether more like condos or detached single-family units).

4. More interest in tiny houses and tiny apartments (see this latest example from San Francisco).

5. Some New Urbanist communities and neighborhoods that allow for denser housing.

Perhaps the argument here about housing is about a matter of degrees; there have been changes in American housing in recent decades but it hasn’t necessarily been mostly anti-sprawl.

Note: I’ve been following some of these trends about changing family and household composition. For example, check out these posts (here and here) about more Americans living in single-person households.

More builders looking to offer multigenerational homes

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More builders are constructing multigenerational homes:

To be sure, multigenerational living is nothing new. For years people have found creative ways to make space in their house for a friend or relative. The concept is a mainstay in many parts of the world, especially in places where housing is expensive. In the U.S., multigenerational living was relatively common until a suburban building boom helped make housing more affordable.

The Pew Research Center said the trend is on the upswing. Last year almost 17 percent of Americans lived in multigenerational households, including households with parents and adult children, as well as skipped generations with grandparents and grandchildren. That’s up from 12 percent in 1980.

The primary driver in recent years is economic. The recession forced many families to double up to save money, and a tough job market meant that many college grads had to move home. The Pew report showed that the trend actually helped reduce the poverty rate. There’s been a cultural shift, too, in the way of new entrants to the U.S. who are more accustomed to such arrangements.

Stephen Melman, director of Economic Services for the National Association of Home Builders, called it an “underserved market,” and said that a significant portion of these households have the buying power to choose high-quality housing that specifically meets their needs. Future growth of multigenerational households largely depends on the direction of the economy, he said.

Several thoughts on this:

1a. The article hints that the American preference for houses solely for immediate families is an American cultural value (perhaps also helped by relative economic prosperity) as immigrants might be more interested in multigenerational homes. Americans have a tendency toward mobility and weaker extended family ties.

1b. In recent decades, there have been numerous skirmishes in suburbs about how many people can live in a household. Such complaints are commonly directed at immigrants and minorities. So now this would be okay or even desirable if the homeowners are middle- to upper-class whites?

2. The houses mentioned in this article are still quite expensive and cost over $500,000. A multigenerational home might be desirable but how many could afford a new multigenerational home with over 3,500 square feet?

3. It is interesting to note that this article mentions nothing about the possibility of renting out space to people instead of only accommodating family members. Buying a home could be a more attractive prospect if renters helped pay the mortgage. I suspect this is where many suburban neighborhoods would draw the line: family can be trusted but renting out space to people then becomes too much like multi-family housing. Suburban residents think this is linked to transience, a lack of care for the neighborhood, and more unseemly activity.

One expanding housing market: upscale, off-campus college housing

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Several builders are preparing for an area of the housing market that is set to expand: upscale, off-campus housing for college students.

These days the companies have begun to build upscale houses with bedrooms clustered around gourmet kitchens and access to amenity-filled clubhouses. Known as cottage-style housing, the relatively new product is becoming popular with operators and students.

Nationwide, there are 35 cottage communities with nearly 19,000 beds. Another 18 are under way or in the works, with roughly 12,000 beds, said Wes Rogers, chief executive of Landmark Properties Inc., which has built roughly one-third of the cottages in the U.S. While cottage-style housing represents a small percentage of the nearly 500,000 beds controlled by the sector’s top companies, industry watchers expect the bed count to increase as the product catches on…

Developers are building these properties to house an expanding student population: More than three million high-school students are expected to graduate annually until the 2018-19 academic year, well above the roughly 2.5 million graduating in 1993-1994, according to the Department of Education.

Moreover, universities don’t have enough beds and much of the current supply, tall towers with communal bathrooms, has lost favor among the McMansion generation. Schools, many struggling with budget cuts, can’t afford to build new dorms.

It’s not college, it’s luxury living! Or at least a small approximation of it.

A few thoughts about this:

1. Assuming this off-campus housing expansion continues, does this mean colleges will have to engage in an arms race for housing to keep dorms occupied? In other words, these nicer off-campus opportunities might impede campus cash flows if more students are drawn out of dorms.

2. The article doesn’t talk about this but could this lead to more of a have vs. have-not attitude on campus? Not everyone can access this kind of living quarters.

3. I wonder if better housing has any positive effect on student learning and development. Do students act differently if the (off-campus) housing is nicer?

Response to economic crisis: Irish government cutting support of homeownership

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A conference on housing in Ireland suggests the Irish government is reversing course and will no longer be supporting homeownership:

STATE SUPPORT for the principle of home ownership is at an end after almost 100 years, a national housing conference has heard.

Encouraging people to buy their homes had been seen by the State as a social good, as well as an economic one, but there was now a definite shift in policy, UCD sociology professor Tony Fahey said.

Tenant purchase schemes were dying out and local authorities were no longer offering loans to private buyers. The policy now is households need to be assisted by the State if they can’t afford to rent, not if they can’t afford to buy.

“It had been an article of faith for almost 100 years that home ownership was a social good and should be supported by the State . . . The historic roll the State played in putting up capital for housing won’t be repeated.”

Americans tend to think we are a nation of homeowners but there are several countries that have higher rates of homeownership. Ireland is one such country:

The highest home ownership is in Romania (96pc), followed by Lithuania (91pc), Hungary (89pc), Slovakia (89pc), Estonia (87pc), Latvia (87pc), Bulgaria (87pc), Norway (85pc), Iceland (84pc), Spain (83pc), Slovenia (81pc), Malta (79pc), Czech Republic (77pc) and Greece (76pc).

Ireland comes in at 73.7pc, while 70pc of people in the UK own their own homes.

Irish home ownership levels have dropped from a high of 79pc in the 1990s to just short of 74pc at the start of this century, according to a new book on the economy, ‘Sins Of The Father’ by Conor McCabe.

Ireland is now facing the consequences of a burst housing bubble in the last few years.

While Ireland is facing their own issues, I wonder if the US government might make a similar shift or at least pull back from supporting homeownership through public policy and government rhetoric. Thus far, it doesn’t look like this has happened much. But, if the mortgage interest deduction disappears and/or younger Americans continued to avoid buying homes, perhaps things could change quite a bit here as well.

However, even if the policies changed, this doesn’t necessarily mean the cultural value of homeownership will change quickly.

Director of embattled DuPage Housing Authority let go

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A leader brought in to reform the DuPage Housing Authority has been let go after eight months:

[David] Hoicka, who had served in senior management for housing agencies in Texas, Louisiana, and Hawaii, was hired in January as part of ongoing efforts to overhaul the Wheaton-based agency that once mismanaged more than $10 million in federal funding.

He replaced John Day, who was forced to resign last year after the U.S. Office of Inspector General released two audits critical of the agency. A third audit concluded the agency improperly spent more than $5.8 million in federal money and failed to adequately document another $4.7 million.

Hoicka took the reins of the agency after the board conducted a nationwide search for an executive director. At the time he was hired, officials said Hoicka’s background made him an ideal choice.

In addition to publishing three handbooks on HUD housing programs, Hoicka served as an adviser for public housing groups in Southeast Asia and Bahrain in the Persian Gulf.

This organization has clearly had its problems (see an earlier post). Unfortunately, I think stories like these distract from the real issues facing the Authority and DuPage County: how to truly tackle issues like affordable housing and housing discrimination in a relatively wealthy county that is also facing demographic change.

While it is not clear here why Hoicka was fired, I have to wonder why he didn’t work out in DuPage County. From an earlier post, here is a longer list of his experience before taking this job:

Hoicka has served as chief operating officer for the housing authority in El Paso, Texas, worked as an adviser to the housing ministry in Bahrain, managed the New Orleans housing authority, and worked as branch chief for Hawaii’s Housing and Community Development Corp. He has written three manuals on HUD regulations.

DuPage County is unique in some ways but Hoicka had a wide range of experience that would seem to be helpful.

 

Are McMansions about maximizing exchange value?

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A commentator takes a look at a new, oversized condominium building and discusses use value versus exchange value:

The house on this lot was rebuilt into two large condominiums.  Each is about 3,000 s.f. and priced at $849,000.  It’s a way to maximize the return for the property owner.  I can’t say the building is very attractive, but it is one block from the forthcoming Monroe and Market Street development adjacent to the Brookland Metro Station, and is two blocks from the Metro.

It’s too bad buildings such as this are oversized for the lot in a manner that degrades the visual qualities of the rest of the block.  Use values, including aesthetics, are subsidiary to the exchange value of place (maximizing financial return) in this instance.

To complete the circle about use value, one could also look at the experience of the homebuyers. Are these large housing units worth the money? Even if these big homes don’t quite fit in the neighborhood, they could be nice places to live. As noted above, they are spacious, located near desirable mass transit stops, and are probably have some nice interior features (surely granite countertops, stainless steel appliances, and hardwood floors!). Even the New Urbanists that wrote Suburban Nation admit that Americans have superior private realms in our homes. (Of course, there are others, like Sarah Susanka and Winifred Gallagher who suggest these spacious, comfortable homes may not be good fits after all.)

Lurking behind this analysis is Marx’s discussion of use value, exchange value, and capitalism. In a capitalistic system, much can be commodified: Twitter followers, positive online reviews, and houses. Particularly during the 20th century, American homes became more than just shelters: they were expected to increase in value and become investment vehicles. (One could look at some data to see if these oversized housing units are flipped more quickly than other kinds of housing as owners look to make money.) Builders and developers can make even bigger money on houses. One very influential idea in urban sociology in the last few decades is the growth machine model, the idea that boosters, business leaders, politicians, and developers work together to make profits by transforming open land into valuable land. From the early days of the American suburbs when streetcar operators built their lines into the countryside and then offered free rides to the end of the line to show people lots and potential to McMansions today, much development, aesthetically pleasing or not (actually, aesthetics may indeed just help increase the value!), is about making money. Commodifying the home can move the discussion away from other important aspects f purchasing and owning a home like community life, environmental responsibility, and providing affordable housing.

How will American culture change since Millennials want to buy the newest smartphones rather than cars and houses?

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Here is part of a fascinating article about what Millennials want to purchase and how this differs from the consumption of previous generations:

Needless to say, the Great Recession is responsible for some of the decline. But it’s highly possible that a perfect storm of economic and demographic factors—from high gas prices, to re-­urbanization, to stagnating wages, to new technologies enabling a different kind of consumption—has fundamentally changed the game for Millennials. The largest generation in American history might never spend as lavishly as its parents did—nor on the same things. Since the end of World War II, new cars and suburban houses have powered the world’s largest economy and propelled our most impressive recoveries. Millennials may have lost interest in both…Subaru’s publicist Doug O’Reilly told us, “The Millennial wants to tell people not just ‘I’ve made it,’ but also ‘I’m a tech person.’?” Smartphones compete against cars for young people’s big-ticket dollars, since the cost of a good phone and data plan can exceed $1,000 a year. But they also provide some of the same psychic benefits—opening new vistas and carrying us far from the physical space in which we reside. “You no longer need to feel connected to your friends with a car when you have this technology that’s so ubiquitous, it transcends time and space,” Connelly said.

In other words, mobile technology has empowered more than just car-sharing. It has empowered friendships that can be maintained from a distance. The upshot could be a continuing shift from automobiles to mobile technology, and a big reduction in spending…

In some respects, Millennials’ residential aspirations appear to be changing just as significantly as their driving habits—indeed, the two may be related. The old cul-de-sacs of Revolutionary Road and Desperate Housewives have fallen out of favor with Generation Y. Rising instead are both city centers and what some developers call “urban light”—denser suburbs that revolve around a walkable town center. “People are very eager to create a life that blends the best features of the American suburb—schools still being the primary, although not the only, draw—and urbanity,” says Adam Ducker, a managing director at the real-estate consultancy RCLCO. These are places like Culver City, California, and Evanston, Illinois, where residents can stroll among shops and restaurants or hop on public transportation. Such small cities and town centers lend themselves to tighter, smaller housing developments, whether apartments in the middle of town, or small houses a five-minute drive away. An RCLCO survey from 2007 found that 43 percent of Gen?Yers would prefer to live in a close-in suburb, where both the houses and the need for a car are smaller.

This article is primarily about the economic impacts of these shifting patterns but I think there is another important side to this: how does this affect American culture? A few ideas…

1. What makes up the American Dream will likely shift. We have gone almost 100 years with this combination: a house of one’s own and a car (or multiple cars in recent decades). The content of this dream will change and the pace to which people pursue it. Newest additions to the Dream: can I get a smartphone with an unthrottled data plan? How about a living arrangement that is exciting in terms of having nearby cultural and social opportunities but doesn’t tie one down financially?

2. As fewer teenagers see getting a driver’s license as the same sort of initiation into adulthood and freedom as previous generations, perhaps we have a new marker of adulthood: getting the first smartphone (with at least texting capabilities and perhaps also data).

3. As I’ve discussed before, the possible new kinds of suburbia we might see in the coming decades would be a remarkable shift away from completely auto-dependent developments. This will lead to some interesting consequences for housing. New Urbanism may just explode in popularity (as long as such developments are reasonably priced).

4. The car is no longer an important status symbol but rather more like a tool that is used to get from Point A to Point B. Tools may have some fun features but the number one concern is that that they function consistently. In contrast, the phone (and what one can do with it) becomes a status symbol.

5. As we’ve seen in recent years, announcements of new technologies and smartphones will garner increasing levels of attention. Just look at what happens when we get close to an Apple announcement for the newer iPhone (or iPad). Cars and houses will have to fight even harder for your attention. How this changes the ratio and content of commercials will be interesting to watch.

6. When are we going to see television shows and movies that truly reflect plugged in and online worlds? We have plenty of examples where characters use these devices but precious few that show what it is like to consistently operate in the online and offline worlds. The movie Catfish comes to mind. While most online users won’t go to the lengths the characters do in this movie, at least it depicts people living out real relationships in the online sphere.

7. A growing push for cheaper, faster, perhaps even free Internet access everywhere. To be disconnected will be viewed as more and more undesirable.

8. Revamping existing housing stock will require some imagination and creativity in marketing, construction, and financing.

9. Building off Richard Florida’s ideas about the creative class, what happens when this group becomes too big and unwieldy and is no longer “select,” there are not enough places that meet their requirements (not everywhere can be Austin), and not enough jobs for people with their education and interests? Obviously, shifts can take place but these won’t necessarily be easy.