There is nothing inevitable about suburbia. From Independence to President Lincoln’s time, the United States was rural and agrarian. From the Civil War and after, we industrialized, then, we urbanized. That phase in American development continued through World War Two. The post-war baby boom, Levittown and the Interstate Highway System gave rise to the American suburb as we now know it, and later the service economy. In this now post-industrial, information age, anticipating a post-boomer age, the U.S. may well re-urbanize and while the suburbs will not disappear, they may look very very different in a generation or two.
Home and Family Values
When they unleashed suburbia on post-war America, Levittown’s developers likely did not fully understand the social and economic changes they had wrought. Similarly, it is unclear if folks back then understood the vast wealth that was to be created for Americans who bought homes or sold real estate in the period 1948-1988. It is very clear though that for those who bought between 1988-2008, there has been less wealth generated amid greater volatility and risk. Now, we are being told by Robert Shiller of Standard & Poors’ Case-Shiller Index that “the price of suburban homes may not rebound in our lifetimes.” Concurrently, USA Today has reported on the end of exurban growth since 2006. Why? According to Shiller, it is our “changing values”…and all the market chaos of the past few years.
So what is changing? Mr. Shiller noted in a March 27th interview with the Associated Press that young people are shifting to renting and city living. He is backed up on this by a 2011 study authored by the real estate consultancy RCLCO that found that 77 percent of youth at age 22 plan to live in an urban core. Young people–the people who will move or not move the US housing market over the next 15-20 years–are delaying household formation: 14.2 percent are still with their parents, up from 11.8 percent in 2007. They are also having fewer children, and unlike their Generation X and Boomer predecessors, are choosing to rent and increasingly opting for urban living.
Young people are also less inclined to start driving. Between 1983 and 2008, the number of seventeen year- olds with driver’s licenses dropped by almost thirty percent. And those who do drive, drive less. By 2009, Americans age 16-34 drove 23 percent less than the same age group drove in 2001. Surveys show this may be increasingly a matter of choice as “twenty-somethings” opt to avoid commuting to work, are concerned about the cost of driving to society, and prefer public transit so they can safely use their electronic devices.
Buttressing the argument about changing home and family values, U.S. Census and H.U.D. data show that only 10 percent of the new households to be created between 2005 and 2025 will have even one child. To say it slightly differently, as America grows from 105 million households (2000) to 132 million households (2025), only 2.6 million of the 27 million new households formed will contain one or more children.
The National Association of Realtors–a Smart Growth America board member–has long taken note of these trends. In fact, they actively fund the dissemination of smart growth planning and practice information to gatherings of realtors across the United States. The fastest growing segment of the market for American homes is the multi-family dwelling in a mixed-use neighborhood.
Family size continues to shrink. More and more people will live in households with just one or two people and it is projected that by 2025, 72% of American homes will not contain even one child. So our families are changing and with it will change much of the America we have come to know.
In 2015, in demographic terms, almost 4.2 million 25 year-olds will anchor a household-forming cohort that will replace roughly 2.5 million over-80 year-olds. If anywhere near 77% of these young people do choose the urban core, they will start to trigger fundamental changes to a half-century of U.S. land use patterns, home types, locations and prices as they replace the oldest members of a generation that by and large have lived in suburbs and exurbs. If that trend holds, by 2035, America will be built along very different lines than it is now.
Of course, few trends advance in a purely linear fashion. Many 22 year-olds will find jobs in the suburbs while finding out that the price of urban core homes is too high. Certainly, if 77% of the nation’s 22 year-olds look for urban core housing, they will drive urban prices up.
What to Do
The big question increasingly being asked by realtors, builders, developers, planners and those who provide public and private infrastructure is how to prepare for these changes. Where should the next wave of investment take place? Home builders, even in 2005-2006, had forecast that the market for housing in livable, walkable communities would be the fastest growing part of their market, growing from 3% in 2000 to 32% in 2025. Today, in light of the Great Recession, the mortgage crisis and the evolving housing preferences of America’s next generation, some builders see that future market closer to 40 percent.
New York officials, local and state, and those who finance and build infrastructure are caught between perceived obligations to build the suburb-supportive infrastructure demanded over the last few decades and the more sustainable newly projected needs of a denser future.
The Governor’s Regional Economic Development Councils and the State’s NYWorks program can choose to embrace the demographic and social transformations that have already begun to unfold, to create a New York State for the population of today and tomorrow, rather than the continuance of infrastructure that fails to meet the needs of 20-somethings, the numerous New York households that do not want big house/big-lot suburbia, and for that matter much of the 60+ crowd. New Yorkers can vote with their feet, especially if it is other regions in the country or world that are providing the future by creating the livable and affordable places that are desired.
There is nothing inevitable about American suburbia. Home and family values are starting to prove it.
This article has been contributed by Peter B. Fleischer, Executive Director, Empire State Future.
The Featured Photo is courtesy Flickr, Seth Holladay