Census and Experts Confirm Death of Sprawl in US

The United States has reached an historic moment. The exurban development explosion that defined national growth during the past two decades has come to a screeching halt, according to the latest US Census figures. Only 1 of the 100 highest-growth US communities of 2006—all of them in sprawled areas—reported a significant population gain in 2011, prompting Yale economist Robert Shiller to predict suburbs overall may not see growth “during our lifetimes.”

We are simultaneously witnessing the decline of the economic sectors enabled by hypergrowth development: strip malls and massive shopping centers, SUVs and McMansions.  The end of exurban population growth has been accompanied by steep economic decline in real estate value, triggering a loss of spending not only in construction, but also home improvement (Home Depot, Best Buy) and numerous associated retail sectors that were banking on the long-term rising fortunes of “Boomburbs.”

The fate of these communities has been so dire that for the first time in the United States suburbs now have greater poverty than cities.

In 2009, I attributed the financial crash in these car-based communities to economic factors perpetrated by the higher gas prices that had first started showing impacts in late 2006 and peaked in 2008. Others including The Brookings Institution’s Christopher Leinberger, and William Frey, along with NRDC’s Kaid Benfield have pointed to longer term demographic shifts and societal desires toward renting in denser mixed-use neighborhoods. The looming specter of excess greenhouse gases may also be playing a role in the marked reduction of driving among younger Americans (16-39 year olds), who increasingly prefer to live where they can walk or bike to their local store, school or café.

The “Death of Sprawl” chapter that I wrote, published by the Post Carbon Institute in 2009, (and in abridged form in the Post Carbon Reader in 2010), provided a case study on Victorville, California. Located 75 miles outside Los Angeles, Victorville’s rise and crash epitomized the hangover of the go-go sprawl era.

During the financial system’s Derivative Daze, Victorville grew from 64,000 in 2000 to more than 108,000 by 2005: no-money-down-housing developments and “liar loans” fueled speculative investments that pumped up the desert city’s average home value to almost $350,000. The large numbers of workers that moved to Victorville had to commute long hours before dawn and after dark to get to work in Los Angeles, without the benefit of local public transit. There are still few options for those who wish to walk or bicycle to stores, jobs, schools or local amenities, and the average near 100 degree summer temperatures make such endeavors foolhardy.

When gas prices began to go up in 2006, real estate sales in the region began to dry up as people ran for the exits. As the doors slammed shut, foreclosures in California’s Inland Empire (Victorville and other parts of California’s sprawling San Bernardino and Riverside counties), Las Vegas and Florida began to trigger a nationwide real estate meltdown. To stick with our illustration, Victorville houses plummeted from an average of nearly $350,000 in 2006 to $125,000 by late 2009. Likewise, new home permits in Victorville went from 7964 in 2004-06 down to 739 in 2008-10: a drop of more than tenfold! The average home sale now brings around $110,000, less than a third of 2005-2006 prices.

Institutional investors and homebuyers alike have avoided for the past five years the nation’s scores of Victorvilles; the new data and pronouncements by experts such as Shiller, author of The S&P/Case-Shiller Home Price Index, likely put the last nails in the coffin of speculative, auto-dependant sprawl.

Recent US Census data confirms that the future of the United States is no longer about an economy based on the false and dangerous pretenses of unfettered greenfield development, with its unhealthy and climate-destructive sprawl-scape of fast food, big box retail and freeway-bred exurbs. National policies and investments should strengthen and improve existing cities and suburbs, including transit infrastructure, building retrofitting, clean energy, walkability, bicycle networks and neighborhood redesign–all areas where quality local job and community engagement opportunities can flourish.

Chart Courtesy Brookings Institution

We’ve known for some time that planning for more sustainable metros, both cities and suburbs, makes better sense in terms of protecting local food, water and land resources, as well as in reducing pollution and carbon emissions. Now we know that such actions have been proven to make much better short-term economic sense, while acting as tangible investments for the long term.

Warren Karlenzig is president of Common Current, a global consultancy for sustainable urban planning and development.

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Death of Sprawl, Part 2: How Exurban Meltdown helped bring down the US Economy

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(photo copyright Los Angeles Times)

Evidence that speculative auto-dependant sprawl was one of the major factors behind the Great Recession is emerging through real estate market studies of major US metro areas, from Washington DC to Southern California.

Note the New York Times on November 6 (p.A13):

New research about the recession has also bolstered one of transit’s
central premises — that highway-driven sprawl is bad for a city’s
economic health. Recent studies at the University of Utah, for example, concluded that foreclosure rates in the Washington area were much lower in counties served by the Metro rail system,
compared with the next ring of counties farther out, and that home
prices in Phoenix had also fallen in direct proportion to the distance
from downtown. 

A new report I wrote for the Post Carbon Institute (link to pdf) includes the case of Victorville, California, a virtually 100 percent auto-dependent city of 107,000 that grew from 64,000 in 2000. Real estate prices started to crash in this Mojave desert community in 2006 when gas hit $2 a gallon. Victorville is now one of the foreclosure capitals of the nation, as home prices fell from an average of well over $325,000 in 2007 to under $125,000 in 2009.

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Source: City-data.com (11/09)

The market was so decimated that large new homes, some might call them
McMansions, were demolished in Victorville (see photo at beginning of post) earlier this year to free
the city from liability resulting from possible vandalism, crime and
fire danger.

As gas prices hit $3 and $4 a gallon, people couldn’t afford the thousands of dollars of extra gas expenses that were required to commute to the Los Angeles area, which is almost 100 miles away. As a result, home prices crashed, foreclosures proliferated, developers went bankrupt, and the city and the region are now suffering. At the same time, San Bernardino County was successfully sued by the California Attorney General’s office for allowing development in its communities, such as Victorville, with disregard for global climate change and regional air pollution.

Similar imploding exurban real estate prices started the 2007-2009 national foreclosure crisis, with these toxic assets setting off the derivatives financial meltdown and, you know the rest…

Victorville is by no means an isolated example. The amount of suburban and exurban development that occurred in the 1990s and early 2000s when fuel prices hit their historic low prices (see graph below) has created a massive expanse of excess houses and infrastructure requiring untold resources to build and maintain.

historicgasdoe.jpg 

Largely because of such sprawl, stimulated by inexpensive gas prices and a lack of local government controls, California’s main source of greenhouse gases come from the transportation sector.

Clearly it’s time for the focus on “green cities” to expand outward to greening the suburbs and the exurbs, because that’s where the majority of our nation’s population resides. Though 80 percent of the nation lives in urban (developed) areas, only 20 percent of those “urbanites” live in big cities. About 60 percent of US population lives in metro area ‘burbs of under 100,000. 
 
During the last three years, outer-suburban or exurban areas lost far more value than real estate in urban or suburban areas served by public transit with walkable, bikeable and mixed-use zoning options as my report and others, such as Prof. Arthur C. Nelson’s at the University of Utah, are demonstrating.

This is the first time in US history that sprawled low-density suburbs or exurbs have fallen faster in average value than city or inner-suburban areas; suddenly “Smart Growth” is more than a niche market or trend–it will be at the core of financially successful planning and development.

Greater density with non-auto mobility options is going to dominate development as long as we have climate change, volatile resource availability (particularly water) and high gas prices. In addition to economics, there are demographics. The nation’s dramatically aging population consists of more single people, retired couples and empty-nesters who want apartments or condos from which they can walk, bike and ride buses or use subways and light rail. 

The redesign of suburbs and exurbs will require some painful Victorville-type actions that may waste resources, such as tearing down certain neighborhoods or homes. There are other options, however. Ellen Dunham-Jones and June Williamson demonstrate design examples in their excellent 2009 book, Retrofitting Suburbia.

Not all future metro areas need to follow the hub-and-spoke format with central cities and their suburbs. Metro areas might consider, for instance, designing growth and transit corridors around multiple regional centers of economic activity, which was the aim of the Los Angeles area’s Compass Blueprint.

California’s anti-sprawl Senate Bill 375 is the nation’s first such statewide measure. It now is being guided by an official strategic growth process, which is being led by a council with modeling tools for preferred scenarios developed by Calthorpe Associates, transit-oriented development champion Peter Calthorpe’s Berkeley, CA firm.   

On a more granular level, cul-de-sacs, which are impediments to non-automotive mobility, can be re-engineered to accommodate more direct walking and biking access.

Some innovative buyers are devising ways to use the glut of unoccupied or unsold large homes for business or residential purposes other than single-family living. Based on major shifts in market demand, home builders are downsizing and are constructing more energy-efficiently.

The days of plowing productive agricultural areas under for suburban home tracts and strip malls may be coming to an end. A Denver suburban home developer is incorporating working agricultural land into unsold tract home land plots in numerous communities, in what is being billed as “Agriburbia.”

Clearly, energy efficiency, greenhouse gas emission reduction and resource conservation are becoming guiding factors for much more than regulatory and environmental compliance, they are beginning to dictate the very economies upon which our metro regions operate.

We must now rethink how to develop our communities so that sprawl does not re-emerge, and relegate it to history, as an oddity from the era when gas was cheap, the climate was forgiving and resources were seemingly endless. 

Warren Karlenzig is president of Common Current,
a consultancy based in San Anselmo, California with international
projects on urban sustainability strategy and metrics. He is a Fellow at the
Post-Carbon Institute and author of How Green is Your City?: The SustainLane US City Rankings.
 

 

 

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Urban Resilience: climate change, peaking resources, economic crash. Next?

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How do we put the pieces together to make our cities and metro areas stronger than they were before climate change, energy volatility and the Great Recession?

(See “*answer” at end of this post…)

That’s what I’ll be discussing tomorrow (Tuesday) night on a panel, “Urban Resilience in Post-Carbon World,” in Vancouver with Bill Rees, of Ecological Footprint fame, and Daniel Lerch, author of Post Carbon Cities: Planning for Energy and Climate Uncertainty.

The panel, sponsored by the Post Carbon Institute, will be open to the public and is part of a larger event on urban resilience bringing together local government leaders from Canada and the United States, as well as academics and practitioners in urban sustainability–er, resiliency–management.

Vancouver has been viewed for a decade as a success story in sustainable planning and programs. From the city’s emphasis on increased downtown density, bikability and green buildings, including its sponsorship of a “21 places for the 21st century” contest, to a city farmer program for exchanging surplus fruit, Vancouver is on the vanguard of urban resiliency innovation. It also is one of Canada’s most diverse cities, home to significant numbers of Asians from many countries, including India, as well as indigenous North Americans.

The rich offerings of the Resilient Cities event demonstrates that Vancouver is thinking ahead once more. Besides its Mayor Gregor Robertson, minions of regional and local government, non-governmental and business leaders will be putting on events, including:

  • The Vancouver Design Nerds and Open Space Network will be facilitating an urban agriculture ideas jam while another group of food system experts and producers will examine “Planning Metro Vancouver as if Food Matters.”
  • A local university campus (BCIT Burnaby Campus) will be having a design charette, led by Ecocities founder Richard Register, to reduce its ecological footprint by a factor of four.
  • City government and groups including TransFair Canada will examine how to invigorate local economic development through fair trade and sustainable purchasing.
  • The city’s “Greenest City Action Team” including the manager of the City of Vancouver Sustainability Group will share advice on engaging people in change.
  • BC hydro will lead an interactive session on sustainable community energy.
  • Provincial official will examine convening action throughout British Columbia (Vancouver’s province) that achieves settlement in balance with ecology.
  • Real estate experts including David Suzuki Foundation author Nicholas Heap will explain how climate change could impact the region’s real estate.
  • Other cities, from New York City, with former Sustainable South Bronx’s Majora Carter, (a Fellow at Post Carbon Institute along with Bill Rees and myself) to Berkeley, California, will have case studies presented. AAt in 

Key to a successful event will be how well presenters and activities engage systems approaches for resilient communities, rather than just repackaging siloed sustainability chestnuts under a new label.

Besides regional government organization Metro Vancouver‘s hosting of a session on “The Politics of Decision-Making for Sustainability,” Vancouver is making attempts at coordinating with Seattle and Portland on how to make the Cascadia region a more interconnected and better managed bioregional market. Cascadia forces helped push Amtrak to connect Portland and Vancouver for the first time without border fees, for instance.

Portland Mayor Sam Adams will be at the event with a contingent from that Oregon city, as will Jim Diers, author of Neighbor Power: Building Community the Seattle Way.

* The easy answer to my opening question, by the way, includes providing better regional
collaboration, particularly in the area of land use, planning and
transportation.

Unfettered growth in car-dependent sprawled communities proved during the past few years to be the biggest economic risk factor in real estate, endangering the whole US economy. Exurban Sun Belt homes and entire neighborhoods went from being hot properties to foreclosed or even largely abandoned, as rising gas price rises changed speculative economics from 2006-2009. 

Sprawl also has which has massive implications for higher average water, building and infrastructure energy use, increasing greenhouse gas production beyond tailpipes.

Which means that because of climate change, the issue of how to control and rethink sprawl on the regulatory and policy level should become a leading order of business in metro areas, states, nations and the world.

The unplanned sprawl that already exists will need to be re-engineered or “undone,” which means that the alternatives provided by the Vancouvers and Portlands–transit-oriented development, multi-model mobility (including walking and biking), regional energy and food production–will need to be applied at regional levels throughout North America.

The suburbs and exurbs are ground zero for change, particularly in the United States, where though most people live in urban areas (79% in 2000), they do not live in big cities. Only a quarter of US residents live in cities above 100,000 in population, so no matter how green cities become, we must think in terms of metros and their smaller cities if we really want to prepare for the future.

Warren Karlenzig is president of Common Current, an internationally active urban sustainability consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and co-author of a forthcoming book from the Post Carbon Institute on urban and societal resiliency     

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