BUILD Maryland: Death of the Suburbs Part V

Death of the Suburbs

Part V: The Great Inversion

Suburbia began with the best of intentions. The dream was to be an antidote to city life. As the industrial revolution gained steam during the nineteenth century, cities were not very pleasant places to live. They were noisy, crowded, and polluted. As industrial enterprises grew, they required increasingly large factories serviced by armies of workers who needed to live nearby, often in deplorable conditions, to get to work. So what was the answer to the ills of the city? Well, there was the city and then there was the country with its promise of a more bucolic life.

As early as 1860, the first of the romantically designed suburbs appeared. The first of these was Llewellyn Park , twelve miles from Manhattan in West Orange, New Jersey. The romantic suburb responded to the desire for a better and more comfortable way of life. Llewellyn featured curvilinear roads in lieu of a grid pattern and community open space (known as The Ramble) - both novel for the time. Then around the turn of the 20th century, the street car suburb arose, ushered in by the first electric powered street cars and suburban communities began to spring up along the lines and near the stations.

The growth of the suburbs gathered momentum during the 1920s but was interrupted by the Great Depression and World War II. Immediately after the war, suburbia as we know it was born. The influx of returning soldiers and the lack of new housing constructed during the war years created a tremendous demand . The payoff to the returning GIs was an affordable home in the country. The first of the great post-war communities was Levittown on Long Island, built by William Levitt who is widely considered the father of modern suburbia. Levitt adapted assembly line production techniques to home construction and at its peak, Levittown was delivering a new home every 16 minutes. From the 1950s through the 1970s, suburbia boomed and by 1970, more Americans were living in the suburbs than in the cities. There was also a reorientation of the American dream which was once the prospect of endless opportunity to that of owning a home in the country with a yard and a white picket fence.

But the cities suffered as those who could afford it moved to the better life in the suburbs. Of course, offices and shops followed further draining the cities. With residential life so spread out, the car became a necessity and American industrial might rose to the challenge churning out millions. There are now more cars registered in America than there are drivers. However, suburbia was a false promise of life in the country because it was not real country. It had no real connection to fields, streams, agriculture or any of the other attractions of the countryside - nor did it have the amenities of the city either.

The Great Inversion

Very subtly, a change began to take place - a Great Inversion. For the past century the affluent have moved to the suburbs leaving the poor and their problems behind, but a remarkable transformation is now under way. Owning a single-family detached home with a yard is no longer the dream of many homeowners. Almost without our noticing it, the US is experiencing a fundamental shift; the cities are growing at the expense of the suburbs. Consider the following: in 2010 and 2011 cities and inner suburbs grew twice as fast as the outer suburbs marking the first time in 20 years that city growth surpassed that of the exurbs. This is the first time since the invention of the automobile that outward migration patterns have reversed.

In his book, The Great Inversion and the Future of the American City, Alan Ehrenhalt noted, “The late 20th century, was the age of poor inner cities and wealthy suburbs; the 21st century is emerging as an age of affluent inner neighborhoods and [the poor] settling on the outside.” The US is shifting to a more European way of life where the affluent live in city centers surrounded by poorer suburbs. For the first time in recent history, the United States is now experiencing enormous demand for residential growth in urban areas.

The Catalysts

So what has caused this great reversal? Of course, one cause is the bursting of the housing bubble. Low interest rates and easy money after 9/11 caused housing prices to skyrocket - rising nearly 200% between 1995 and 2000. The homebuilding industry consequently surged, building an all-time high of 1.7 million new homes in 2006 and the rate of homeownership rose from 64% where it had been consistent for decades to 69.4%. We know how it ended - in a titanic collapse from which we have still not fully recovered. But perhaps the most significant cause of the decline of the burbs and the rise of cities is that consumer preferences have changed in fundamental ways - especially among the Baby Boom and Millennial generations.

Boomers and their parents were largely responsible for populating the suburbs but now with high gas prices, long commutes, the kids grown and too much house to maintain, they are seeking a different lifestyle. Older adults are selling their homes in the suburbs and flocking to the cities where they like the proximity of entertainment, culture, dining, and shopping.

A recent article in The Washington Post noted: “A major trend in the metro area last year was the number of non-family buyers…the group we call mature couples, who are 45 and older without any kids age 18 and younger at home, represented the biggest group of buyers, with 23 percent of the market share …[for] home sales.”

Then there are the Millennials, with their smart phones and Starbucks Chai Tea Lattes in eco-friendly, recyclable cups. Having grown up in the burbs, Millennials now crave the vitality of city life. This generation of recent college graduates and would-be first time home buyers also differs from prior generations in the way they interact with their peers and community. Living in suburbia where connecting with others and accessing retail and entertainment requires a car is no longer so desirable. In fact, the Millennials seem to hate cars and prefer work and amenities to be a walk or bike ride away. Vibrant urban centers have become the stars of the housing scene for them.

Additionally, of course, the Millennials are burdened with crippling student debt – on average $28,400.00 - and often cannot qualify for mortgages under today’s standards. Millennials are living with their parents longer, getting married later (and less often), and are having children later than any other generation in history. Without new family formation, the market for starter homes, previously a staple of the American suburb, has declined. In addition, Millennials are much more transient than their forebears . While it was once common for someone to work with the same company for an entire career, Millennials are more mobile and typically job hop every few years- making a permanent residence less desirable.

There are those who predict that once Millennials finally settle down, marry, and have kids they too will want to live in the suburbs just like the generations before them . We think not. This is not to say that everyone will want to live in the city; schools are still a critical factor in the home buying decision. Surely many people will still seek a single family house on a tree-lined street in the suburbs, but our point is that our once most popular way of life is on the wane and that there has been a profound shift in lifestyle preferences. Many Americans are now looking for a different kind of home and lifestyle in the urban areas. Homebuilders who wish to prosper in the future should prepare.

This article was featured in BUILD Maryland magazine Sept./Oct. 2015 and is a piece of a six-part series chronicalling the contributing factors to the recent decline of the suburbs. Be sure to follow the Death of the Suburbs article series, coauthored by David S. Thaler, PE and Victoria Ballestero, EIT in BUILD's bimonthly magazine publications!