Loss of housing wealth hits black suburbanites hard

The housing and economic crisis of the last decade has hit black suburbanites particular hard:

But today, the nation’s highest-income majority-black county stands out for a different reason — its residents have lost far more wealth than families in neighboring, majority-white suburbs. And while every one of these surrounding counties is enjoying a strong rebound in housing prices and their economies, Prince George’s is lagging far behind, and local economists say a full recovery appears unlikely anytime soon…

The recession and tepid recovery have erased two decades of African American wealth gains. Nationally, the net worth of the typical African American family declined by one-third between 2010 and 2013, according to a Washington Post analysis of the Federal Reserve’s Survey of Consumer Finances, a drop far greater than that of whites or Hispanics…

Not only is African American wealth down, but the chances of a quick comeback seem bleak. Just over a decade ago, homeownership — the single biggest engine of wealth creation for most Americans — reached a historic high for African Americans, nearly 50?percent. Now the black homeownership rate has dipped under 43?percent, and the homeownership gap separating blacks and whites is at levels not seen in a century, according to Boston University researcher Robert A. Margo…

Many researchers say the biggest portion of the wealth gap results from the strikingly different experiences blacks and whites typically have with homeownership. Most whites live in largely white neighborhoods, where homes often prove to be a better investment because people of all races want to live there. Predominantly black communities tend to attract a narrower group of mainly black buyers, dampening demand and prices, they say…

Scholars who have studied this dynamic and real estate professionals who have lived it say the price differences go beyond those that might be dictated by the perceived quality of schools, or the public and commercial investment made in particular neighborhoods. The big difference maker, they say, is race.

In other words, simply promoting homeownership – a key part of the ideal of the American Dream and also something taken as a sign that various groups have made it – is not the complete answer for thinking about equality among different groups. What homes people own and where they are located also matter. Decades of research in urban sociology and related areas shows that blacks and other minorities often don’t live in the same suburban settings as white suburbanites. Their homes tend to be located in poorer neighborhoods and neighborhoods that have higher non-white populations. This is due to a variety of reasons including long-term white wealth that gives whites better opportunities to move to wealthier and whiter places, zoning practices in wealthier communities that tend to limit cheaper or affordable housing (examples here and here), mobility patterns among whites that show they leave neighborhoods and communities as they become more non-white (the process of “white flight” continues in some suburban areas), and patterns of mortgage lending as well as renting that tend to take advantage of poorer and non-white residents. Tackling the issue of residential segregation still matters today even as more minorities and poor residents move to the suburbs.

 

New survey suggests 66% of millennials (who want homes) still prefer suburbs

Perhaps that generational shift back to the city will take some time: a new survey shows a majority of millennials would prefer to live in suburbs.

Some demographers and economists argue that the preference of millennials, also called Generation Y, for city living will remain long lasting. And surveys of these young urban residents have tended to show that they don’t mind small living quarters as long as they have access to mass transit and are close to entertainment, dining and their workplaces.

But a survey released Wednesday by the National Association of Home Builders, a trade group, suggested otherwise. The survey, based on responses from 1,506 people born since 1977, found that most want to live in single-family homes outside of the urban center, even if they now reside in the city…

The survey, which was released at the association’s convention in Las Vegas, found that 66% want to live in the suburbs, 24% want to live in rural areas and 10% want to live in a city center. One of the main reasons people want to relocate from the city center, she said, is that they “want to live in more space than they have now.” The survey showed 81% want three or more bedrooms in their home…

The survey results, though, could be skewed because they included only millennials who first answered that they bought a home within the past three years or intended to do so in the next three years. That excluded young people who intend to rent for many more years, which is a large and growing group, in part because of hefty student debt and the tight mortgage-lending standards of recent years.

Interesting twist there at the end – of those who have or intend to buy homes, the suburbs are still the place (and only 10% wanted to live in a city center) to go.

I do wonder at the three categories presented: city center, suburbs, and rural areas. While the last one is pretty easy to define, what is the boundary between the city center and suburbs? If I’m thinking about Chicago, does living in the city center include every part of the city of Chicago (which has a lot of neighborhoods of single-family homes) or does it refer to living in the denser Loop and right nearby?

Happenings since Canadian National purchased the EJ&E tracks in 2008

Here is a recap of what has happened since the 2008 purchase of the EJ&E railroad tracks by Canadian National:

In December 2008, the Surface Transportation Board approved CN’s request to buy the smaller EJ&E, which extended in a half-circle from Waukegan to Joliet. Suburbs traversed by the EJ&E fought the plan, citing extra freight train traffic. The board agreed with CN that the purchase would reduce regional freight congestion but imposed numerous conditions on the railroad as a result and included a period of federal oversight until Jan. 23, 2015.

Last month, the STB extended the monitoring period until Jan. 23, 2017, citing concerns about additional freight traffic in the region.

Mongeau said the railroad’s acquisition of the EJ&E “gave CN what it was looking for — a route around Chicago,” that has a trickle-down effect on other railroads by taking its trains off other crowded tracks.

The railroad has spent $700 million on upgrades and safety improvements since 2008.

Twenty-eight out of 33 towns affected by the merger signed mitigation deals with CN, Mongeau noted. Holdouts included Aurora and Barrington, which fought against the merger and campaigned to extend the monitoring period.

In October 2014, there were 1,620 blocked railway crossings lasting 10 minutes or more on the EJ&E. In October 2009, early in the acquisition phase, there were just nine, according to CN data….

On tracks between Lake Zurich, Barrington and Hanover Park, traffic on the EJ&E grew from about five daily trains prior to the merger to 17 in October 2014.

This was a big issue for a number of suburban communities in the mid-2000s as they wondered how the purchase would affect freight traffic as well as block crossings, create more noise, and potentially harm property values. It sounds like the monitoring is intended to keep tabs on these changes and help ensure the railroad and communities work together. Yet, it is still important to keep the big picture in mind: moving traffic onto the EJ&E tracks can help alleviate freight traffic elsewhere, addressing the problem of the railroad bottleneck in the Chicago region. This sort of issue makes the case for metropolitanization where communities and government could come together and solve problems facing numerous municipalities.

Academics summing up the evils of suburbia

In looking at the new book Global Suburbs: Urban Sprawl from the Rio Grande to Rio de Janeiro, I was struck by the opening statement by the series editor, sociologist Sharon Zukin. Here is her opening (page ix):

In Global Suburbs: From the Rio Grande to Rio de Janeiro, Lawrence Herzog exposes the dystopian underside of the suburban American dream. A house of one’s own, on a little plot of land, is no longer a place of domestic comfort, spiritual renewal, and communion with the green space and clear air of nature. Instead, the mass suburban habitat that Americans pioneered features oversized McMansions stuffed with giant TVs and electronic gadgets, to which their owners commute in gas-guzzling SUVs, enduring stressful journeys on traffic-clogged roads, leaving neither space nor time for pleasure.

This human habitat, Herzog warns, is neither a happy nor a healthy place. It is, instead, a treadmill of over-consumption that burdens our bodies, our spirits, and the natural environment. Obesity, anxiety, toxic air: how can we think this is a good life?

Most important, the suburban dream that Herzog describes now spreads throughout North and South America…Every metropolitan area in the Western hemisphere bears a tragic cost: Overbuilding reduces the water supply, destroys the trees and insects on which all life depends, and creates an eco-disaster.

Naming these issues can be important as many suburban residents don’t consider the implications of consumption, their impact on the surrounding ecology (particularly if the rest of the world consumed at similar levels), and whether such a suburban life truly offers the be-all-end-all of existence. Yet, this description tends toward the over-the-top suburban critique that has been leveled for decades. Here we have another citing of McMansions and SUVs together – key symbols of excessive consumption – even though many suburbanites have neither. How anxious and stressed are these suburbanites – if the milieu is so toxic, why did they keep moving there for decades? (They are either dupes tricked by someone or have misplaced priorities.) Was there once a golden age of suburbs that wasn’t about over-consumption and truly was about “domestic comfort, spiritual renewal, and communion with the green space and clear air of nature”? (There is evidence of this but it tended to be limited to the wealthy, provided limited opportunities for women, and also had a view of a certain kind of nature.)

On to the rest of the book…

Suburbs join together to find takers for vacant Dominick’s stores

Filling a big retail space can be difficult once the original tenant leaves so six DuPage County suburbs are working together to fill spaces left behind by Dominick’s:

Bartlett, Bensenville, Glen Ellyn, Naperville, Wheaton and Woodridge are combining forces to recruit potential new grocers or other large retailers that don’t already have a presence in the suburbs. The thinking behind the marketing coalition, which formed in December, is that centralizing information about several vacant Dominick’s stores could help a new business make the decision to open here.

“Since communities have different regulations and processes for business openings, that can be a deterrent to a new retailer looking to enter the market,” said Jason Zawila, a planner who coordinates economic development efforts for the village of Woodridge. “By combining our resources, we can conveniently offer the information needed for their market assessment.”

Nine of the 31 former Dominick’s that are still vacant in Chicago or the suburbs are within DuPage County. Seven are within the communities that are working together to market the sites, while the remaining two in DuPage are in Carol Stream and Glendale Heights. The stores are large — between 61,000 square feet and 77,000 square feet. And they often anchor strip malls such as Baker Hill in Glen Ellyn, Riverbrook Center and Wheatland Marketplace in Naperville or Danada Square in Wheaton.

“The concentration of remaining stores in the DuPage County area presents a unique opportunity for a new grocer to enter the Chicago market,” Zawila said.

An interesting strategy as communities can spend years trying to fill such spots (see the recent case of the empty Dominick’s at the northeast corner of North Avenue and Route 59 in West Chicago). Do the suburbs offer similar enough demographics to make the same pitch to one company? Think of the possible comparisons between, say, Bensenville and Naperville. Also, are there enough firms, particularly grocers, to take on six or more new stores at once in the Chicago region?

What happens to this coalition if a firm wants four of the six locations? I assume those four communities would accept but it could lead to some interesting relationships between suburbs.

Finding residential segregation in the Long Island suburbs

Long Island might be suburban New York but there are sharp racial divides across suburban communities:

Two villages, Hempstead and Garden City, lie adjacent to one another in Nassau County. Hempstead has a medium household income of $52,000. Garden City’s is $150,000. Hempstead, in parts, resembles an inner city—with bodegas, laundromats, low-rise apartment buildings. Garden City is a suburban idyll, with tree-lined streets, gourmet grocery stores, and large colonial-style homes. Garden City is 88 percent white; Hempstead is 92 percent black and Hispanic (split about evenly). The transition between the two villages occurs within one block, a visual whiplash. See for yourself. Travel up North Franklin Street on Google maps.

“Long Island is becoming more diverse, Nassau County is becoming more diverse,” says John Logan, a Brown University sociologist who has been studying demographics since the 1970s. “But within Nassau County there’s been hardly any change in the degree of segregation. The predominantly minority areas are becoming more minority. And the predominantly white areas are staying mostly white.”

That demographic story of Nassau County, Long Island, is the story of the nation’s suburbs at large. Zoom way out, and it looks like the suburbs are becoming more diverse—a welcomed reversal of the racist housing policies of the last century that kept minorities in the cities. But zoom in, block by block, and you see that within those suburbs, stark segregational divides like the one between Hempstead and Garden City still exist…

Here’s the one data point to make that case: When Logan controls for income, he finds that blacks and Hispanics who earn over $75,000 a year live in areas with higher poverty rates than whites who make less than $40,000.

This is an old and ongoing story. As numerous scholars have pointed out, one of the first mass suburbs in the United States, the Levittown on Long Island, refused to have black residents for years. And, even as more minorities have moved to the suburbs in recent decades, whites and minorities don’t always live in the same places.

Read more about sociologist John Logan’s findings regarding Separate and Unequal in Suburbia here.

“How solar power and electric cars could make suburban living a bargain”

New technologies may help the American suburbs live on for decades:

[A] new National Bureau of Economic Research working paper by Magali A. Delmas and two colleagues from the UCLA Institute of the Environment suggests that recent technologies may help to eradicate this suburban energy use problem. The paper contemplates the possibility that suburbanites — including politically conservative ones — may increasingly become “accidental environmentalists,” simply because of the growing consumer appeal of two green products that are even greener together: electric vehicles and solar panels…

Installing solar panels on the roof of your suburban home means that you’re generating your own electricity — and paying a lot less (or maybe nothing at all) to a utility company as a result. At the same time, if you are able to someday generate enough energy from solar and that energy is also used to power your electric car, well then you might also be able to knock out your gasoline bill. The car would, in effect, run “on sunshine,” as GreenTechMedia puts it.

A trend of bundling together solar and “EVs,” as they’re called, is already apparent in California. And if it continues, notes the paper, then the “suburban carbon curve would bend such that the differential in carbon production between city center residents and suburban residents would shrink.”…

The reason is that, especially as technologies continue to improve, the solar-EV combo may just be too good for suburbanites to pass up — no matter their political ideology. Strikingly, the new paper estimates that for a household that buys an electric vehicle and also owns a solar panel system generating enough power for both the home and the electric car, the monthly cost might be just $89 per month — compared with $255 per month for a household driving a regular car without any solar panels.

Read on for the discussion of how both solar panels and electric cars are becoming cheaper to purchase and operate. Yet, I’m sure environmentalists and critics of sprawl would argue these costs aren’t the only ones incurred by suburban life. Other factors include using more land, spreading out services (from police to shopping centers), the resources needed to build and maintain individual properties, and the loss of community life.

This is another piece of evidence that the suburban based lives, the space where a majority of Americans live, is not likely to disappear anytime soon.

Quick Review: Suburbia (the board game)

I study suburbs so it was appropriate that I received the board game Suburbia for Christmas. Here is my review of the game after three playings:

1. The game is built around constructing five different kinds of land: residential zones, commercial zones, industrial zones, civic zones, and lakes. You purchase hex pieces and your suburb grows as each zone gives you different abilities such as a growing income, a growing reputation (which increases your population), and more money. Because it is hex based, it is kind of like a cross between Catan and Carcassone where the hexes allow you do things but you have choices of what you build.

2. Like in real suburbs, zoning definitely matters. You have to keep certain properties away from each other. For example, industrial zones usually decrease the reputation of adjacent residential or civic zones. One residential zone, housing projects, have to be the most removed as they decrease your reputation if placed near residential, commercial, or civic zones. Because of these different zoning rules, you tend to have clusters of different properties. The one thing that can help break up the clusters? Lakes.

3. It is interesting that you have to reduce your income and reputation each time you cross a certain population size. As the game goes along, you have to find ways to keep your income and reputation up because as you grow, these go down. As the game suggests, quality of life is hard to maintain as your suburb grows larger. Thus, having a growing population is a kind of penalty even though you need the biggest population to win.

4. Getting a Casino and a PR Firm can really help you win – if you can afford them. They don’t come along until later in the game but they stop you from losing reputation/population (Casino) and income (PR Firm) when you cross each population threshold. These would be harder to obtain in a four player game but in a two player game where one player had both, they made for an easy win.

5. One nice twist of the game is that the players look at four common goals and then each player has an individual goal (unknown to the other players). Winning each goal (and ties do not count) leads to a population bonus so your planning and zoning is affected by these different goals. This helps vary the gameplay quite a bit.

6. One oddity: each player is building a borough and all of the boroughs constitute suburbia. The terminology for the level below suburbs as a whole likely reflects regional terminology. But, why not use municipality? Community? Just call each player’s board a separate suburb? Players actions can affect those of others so it makes some sense that each board is not a suburb but I found the word choice interesting.

As a suburban scholar, I think this game does a nice job simulating some of the broad aspects of suburban life. As noted above, zoning matters but a winning outcome also likely requires a mix of zones as a community needs population, income, and reputation to get ahead. Finding the right balance can differ from game to game given the goals.

When Christmas lights and decorations violate the moral minimalism of the suburbs

I’ve seen lots of stories this year about Christmas lights and decorations on people’s houses. The biggest displays. The ugliest displays. Those that synced up their decorations to a hot song. The traffic generated, both on the street and online.

Such stories tend to contain some reaction from neighbors. Most seem either slightly amused with their excessively festive neighbors (“if they want to pay that kind of electric bill, that’s their choice”) or resigned to their fate. But, the variety of reactions illustrate one of the key pieces that holds suburbia together: the moral minimalism where residents tend to leave each other alone. In other words, suburbanites get along by not rocking the boat too much and not adversely affecting each other through their actions.

Christmas lights and decorations can cross these lines. They pit two opposing trends against each other: the moral minimalism of suburbs versus the excessive consumption and cheer of Christmas time in America. This is the one time of year that people can enhance their bland exteriors – often regulated by homeowner’s associations – and truly show their individuality. Large SUVs and garish homes illustrate bad or excessive taste at all times but Christmas means you can buy all sorts of things. It’s Christmas, after all. Yet, such displays threaten to decrease the quality of life of others and even lower property values (this is what some neighbors claim). What if your good cheer irritates your neighbors?

Hence, most people settle for limited decorations. This might be due to their own muted cheer or good taste but it also depends on the social control of the neighbors. Too much means that we may have violated the suburban trust. Such situations can get ugly. Best to display our Christmas cheer in ways that keep the suburban neighbors happy or at least indifferent.

Some Chicago suburbs welcome luxury apartments

A number of Chicago suburbs have new or recently approved luxury apartment complexes:

Suburbs that have long thought of themselves as bucolic communities filled with houses and families are warmly embracing the very type of residence that used to make them leery: the apartment.

Just don’t call them rentals, a word that conjures up an image different from the projects that municipal governments are selling to their constituents. Almost 4,000 apartments in well-appointed, amenity-filled buildings with rents to match are under construction or proposed in suburbs throughout the Chicago area. They are designed to attract young professionals and empty nesters with roots in the suburbs…

Some, but certainly not all the projects are transit-oriented, constructed near suburban downtowns and train stations or they are being used to create a downtown where there never was one before. But as they move forward, communities are grappling with concerns about density and traffic congestion, and affordable housing advocates worry that low and moderate-income residents who rely more heavily on public transportation don’t have the option of living near it…

“Many of them equated rental housing with low-income property,” Strosberg said. “It’s more recent that they’ve appreciated that rental comes in all different forms. There’s market-rate housing that appeals to a significant portion of their residents who don’t want to make a commitment to buying a place today.”

In wealthier suburbs, apartments often prompt images of transient residents who don’t care much about the community, lower-income residents, traffic, and large properties in communities proud of nice single-family homes. But, luxury apartments help reduce the perceived issues of social class and can bring money into the city (perhaps they can even help boost property values, residents spend money at nearby businesses, etc.). In other words, luxury apartments don’t create the same kind of issues, particularly if seen as part of reviving an area like a downtown. These communities may not go crazy approving such developments all over the place but I suspect many mature Chicago suburbs will continue to approve apartments that do contribute to higher densities but project a higher-end image.