Sick suburbs, expiring exurbs

Good article, Mark. Your conclusions are consistent with national studies that suggest the demand for future of housing will be strongest in closer-in cities. A 2009 study by EPA found that home values were strongest through the recession in central cities and suburban town centers and weakest in the outer suburbs and poor inner city neighborhoods. Economic, social and demographic trends suggest this will continue. Older baby boomers (55 to 64), are 26 million strong, work longer, are healthier and more energetic. They are no longer moving to outer ring suburbs but away from them. They want to be closer to amenities, work opportunities and grandchildren. Younger boomers (46 to 54) are 53 million strong, and many are now trapped in outer suburbs with “underwater mortgages”. They are more fiscally challenged than older boomers, but likewise are attracted to the amenities and variety of cities. Gen Y (late teens to early 30’s), are 83 million strong. They are the largest, best educated, and greenest generation ever, but also carry the largest school debt ever. They delay marriage, household formation, and first time home buying, partly from necessity, partly by choice. They will rent for longer than prior generations, create a big pent-up demand for apartments, and are very attracted to transit choices, “third places” like coffee houses, bars, and low cost entertainment. The boomers and Gen Y together constitute 162 million Americans whose housing preferences and needs, for a variety of reasons, will increasingly be found in cities. Significantly, this doesn't just mean central cities like Seattle, but also first tier suburban cities that every year become more dense, diverse, and offer more of what these folks want.

Nice analysis, but I still believe that America is about choice, personal choice.

If the Gen (pickone) wants to live cheek by jowl, fine by me, but I like a yard, a garden and well, the rooster that crows each morning from across the street here in unincorporated Lynnwood.

I have another nominee for (an absurd oxymoron of land use terminology). How about "low density residential", like the 60 friggin houses they are going to build next door, on 10 acres that was skinned to earth. Low density my rosy-red patoot! A peek at Google earth will show the magnificent stand of 100 year old firs that used to stand there. This is on the shoulder of a TOD, that they can't fill the first wave of apartments on, and which additional development will threaten a huge wetland--the aptly named Swamp Creek swamp.

The Geezer has spaketh, hard by the Swamp Creek swamp.

Live where you want, just quit trying to dictate that people living in rural cities should have the same density and developemnt rules that Seattle has.

Good article, very interesting. After the Boeing Bust of 1969-70 I think similar patterns of dramatic value reduction at the fringes of suburbia, with attendant foreclosures, housing abandonment, etc. showed up. Close-in areas faired much better. I think one reason for is that the older developments had a history of transactions, that tended to confirm valuation. When a housing development in rural Snohomish County or Maple Valley is first marketed the value is largely picked out of the air by the developer and his financiers. It is probably only after a few cycles of ownership that a reliable pattern of value is established, maybe up, maybe down. Your "short sales" comparisons between King, Snohomish and Pierce Counties would be more convincing if you had listed total new dwelling units (which is where the foreclosures, short sales, etc. occur, right?). By the way, I don't live in a suburban area but I think suburbs have enormous appeal and are likely to be with us for a long time.

One thing that made the suburbs attractive to people with children was that there was a free ride to school. The shift is coming quick where people will have pay for their choice of where they locate. The money is drying up to send the welfare bus out to the hinterlands. Purchasing a house in a walkable distance to a school will be a future trend.

In an article like this it is hard to draw the line between objective analysis and the author's desires to social engineer where people live. Furthermore, predictions made during a decade-long housing bust are likely to be as equally flawed as those made during the boom.

It is probably a given that American suburbs and the corresponding inner regions of urban decay cannot both expand forever. Something has to change in terms of revitalizing urban cores. However, it seems strange to predict that people will want to live increasingly close together in large cities at the same time as digital connectivity allows many educated people to fill their work obligations wherever they like.

I think there are huge advantages to living in compact cities, towns or villages but frankly there is very little evidence that the US or this region is heading quickly in that direction. Developments in remote areas may be in trouble but so for the time being are the developers' dreams of many urban concentrations such as those planned for Northgate. The younger generation may be delaying marriage and children but it is doubtful they will give them up altogether. With the exception of our kid-free downtown, the expensiveness and desirability of a Seattle neighborhood (or sections of neighborhoods if you think of places like Queen Anne) are still inversely correlated with the proximity of amenities. Nearly, all municipalities still require wide streets and large set backs so that single family homes make use of only about half the available space.

Regardless of whether they could afford them, people were eager to buy the houses and accompanying life style. So despite the author's preference for higher density housing and a more urban lifestyle, it is clear the market existed and I suspect it will continue to exist once we come out of the current recession.

Unfortunately, planning has never been a prominent word in Snohomish County. It's always seemed it's been more about if you've got the money, go ahead and build it. Granted, the permitting process may have been more cumbersome and the Master Builders Council and friends may have kicked the slash-and-burn frenzy up a notch during the "Call now for your 1% APR no-money-down home loan" era. Easy money fueled demand for more housing.

I live in the - ostensibly - 9th best place in America, Mukilteo. While I don't live anywhere with water views or in what's known as Old Town (the original settlement with the ferry crossing to Whidbey Island), it is a reasonable suburb though poorly organized by planning standards and it is, without question, car-driven, if you will.

Moreover, here's the rub on the theory of inner-ring suburbs and city living for Gen Y. Eventually they will find themselves in the family formation phase. When that occurs, will they have enough money stashed for children, their education and the rest of the good things in life? They will begin to focus on schools, home size and lot space. This will likely generate a next wave of migration to better public schools and a resurgence in all things suburban.

Snohomish County spec building may have gone on a tear, but the fundamental law of gravity forces anything that goes up to eventually come down. Money followed the path of least resistance in the housing loan boom and people talked themselves into uber-debt. Now we are all paying the price, but the woes of Snohomish County - at this point at least - do not spell the end of days for the housing market.

While many will always prefer houses, the planets might never align to make houses as easy. Suburbia grew for decades with the help of new freeways and cheap gas. Anyone expect either one to return, ever?

Speaking of social engineering: Anyone who likes freedom is against today's predominant suburban zoning, with its forced separation of uses, right?

America adds approx 3,000,000 new people per year and there is a steady exodus from rust belt cities such as Detroit, Cleveland, St. Louis, Pittsburg, Buffalo, etc. The exodus does not desire a watercloset studio apartment in Belltown. Over time, the suburbs will fill up the vacant housing tracts and continue to grow. Even Phoenix and Las Vegas will surge beyond their 4,000,000 and 2,000,000 metro area populations. While Seattle has 50,000 more people today than its 563,000 in 1960, King and Snohomish counties have added more than 1,200,000 in the same time period. Happy sprawling to all!!

Interesting commentary on sad and notable trend for sure. However, it seems to me there's one important element to this equation that Hinshaw has not considered. The dense, urban neighborhoods that have seen fewer foreclosures also are and were far more pricey. So even at the height of the real-estate frenzy, those SnoCo developments were far more affordable to families who never had the opportunity to own, or wanted to get out of starter homes. When I worked in an office on First Hill, all the managers and supervisors lived in-city. The much less well-compensated admins and other staffers all lived in the suburbs, many in places like Lake Stevens, where they could afford to own homes.

Hate to break this to you, but the 2010 Census shoots your premise down in flames--suburban areas grew and big cities shrunk (Houston and Phialdelphia being notable exceptions). Seattle especially showed this.

That there were more foreclosures on the edges resulted from more sub-prime mortgages in those areas. Yes, they may become the new slums, but that would be the result of the affluent driving people out of traditionally poor neighborhoods, e.g. Seattle's Central Area.

Mr. Hinshaw, your smugness is unbecoming. Get over yourself.

Mark says Tim said: “These subdivisions had high costs for the families that bought the lots, the nearby farms and forests, and the environment. It is unfortunate, but not surprising, that these high costs have led to a high level of foreclosures,”

I'd be willing to bet that if Snohomish County had been able to divide excessive, federally-stimulated, industry-accommodated urban construction between luxury highrise condos and townhouse clusters on "unit lots," aka "six packs," as was done in Seattle, the attributed foreclosure rate of that county would be about the same as that of King County.

If one bothers to look at the very public and downward assessments of said Seattle townhouses, all of these buyers are under-water as well, with the possible exception of those few who bought the exceptions possible to unload in a downturn. http://www.kingcounty.gov/operations/GIS/PropResearch/ParcelViewer.aspx

I assume these facts were not explored and included because the distinctions included might well disappear.

Granted, when affordable home-ownership is at issue, "eager builders" have been able to easily persuade officials ANYWHERE to allow "wholesale removal of trees, clearing of land, rapid approvals," to rebuff "standard development practices that have been used to good effect" in cities for years, to cleverly disguise codes "to sound noble," and that the effects of all this are of tragically high cost to buyers, their surrounding neighborhoods, and the environment, to say nothing of the physical and economic potential expended.

"Turns out some people should have never gotten behind the wheel to begin with" —let'um eat cake!

Trends since the census continue to bear out what the article says. Inner Seattle districts are having an apartment boom (due to low vacancies and rising rents), while suburbs and outer Seattle neighborhoods have much less housing being built. If my building is a good example, condos seem to be filling rapidly at least where they've lowered prices.

orino, FYI, the census count looks at 2010 and implies changes since 2000. It doesn't break out anything into shorter durations, or relate in any way to the yearly census estimates. So it doesn't clarify the effects of the rise in gas prices, or the effects of the economy. It's inaccurate to claim that it's anything other than a snapshot of 2010. Of course, the Census Dept. itself will tell you there's a significant margin of error, particularly among non-English speakers, people in secure buildings, etc.

As for Seattle, it grew substantially from 2000 to 2010, and continues to have very high prices per square foot vs. our own suburbs. If you want to draw conclusions...it's working.

Mark probably jumps to a comfortable point too quickly.

Income levels at the edge are the biggest driver of failed mortgages at the edge.

Gentrified people have generally done well during this record breaking downturn. People on the edge have suffered so much more.

That's probably the real story here - and the practical reality. Times are tough for people in less well off neighborhoods, and not so different for the rest.

The way to pay your mortgage for most people is to have a decent job. There have not been enough of those for a very long time.

Growth management has nearly nothing to do with it.

But if that's your dream, you find ways to feed it.

Income is only part of it. Distant suburbs have been hurt in part due to gas prices, because that's a disincentive for all but the highest income levels, and by traffic, particularly during/since the last boom period.

I don't have a source, but there have been reports that in-city prices have done better at the lower price levels too.

You could argue that desire for proximity isn't the same as loving cities. Then again, I'll argue that "driving til you qualify" didn't always equate to liking suburbs either.

It's pretty remarkable that the vast majority of apartment construction locally is close-in. That's related to rents being high enough relative to development cost. But clearly demand is higher, relative to supply, in Seattle than elsewhere.

orino, yup, all the trends point to shrinkage in metro areas. the remaining residents are older and wealthier. New York has seen a huge drop in 21 to 34 year olds over the last 10 years. after majoring in architecture/planning for 3 years I gave up on the moon unit/new age philosophies and switched to industrial design. the only dicipline more out of touch with reality then urban planning is economics.

James Kunstler has been talking about this for quite some time. Readers can watch him skewer suburbia here:

http://www.ted.com/talks/james_howard_kunstler_dissects_suburbia.html

I can hardly imagine anyplace more dreary than most of those "rural clusters." Cheapo, stapled together strand board. Future slums? More like instant slums I'd say. There won't be much to salvage from them, and one thing they will never be is photogenic ruins. Just a pile of sheetrock dust and a few tile fragments. Maybe the occasional granite countertop, or pieces of one, where the "high end" ones were.

Once the prices normalize, the exurbs will become the new Seattles.

As the demographer for the Central Puget Sound Research Report, I feel I should comment on Mark Hinshaw’s “Sick suburbs, expiring exurbs”. The main problem is that he extrapolates dramatically and wishfully from short-term recession and rising class inequality trends to fundamental change in the nature of American settlement. As some commenters pointed out, much of the specific problem suburbs (short sales, foreclosures) are a consequence of dubious financial practices, amplified by the recession which concentrates the damage on the lower and middle classes, many families with children. It is not surprising that the well off, with discretionary funds, took advantage of lower of lower prices for quality older housing closer in. But it is simply not the case, in Seattle or anywhere else, that the American population is generating fewer families with children, or that people’s preferences have in any way changed. There will be ample demand both for inner denser housing and for suburban housing into the future, Seattle has a rather high share of young childless professionals who drive the growth of more central and often rental housing, but this does not contradict the continuing long term popularity of suburban and of single-family housing, including by many of those young professionals after they marry and have kids. And many poorer households are being displaced out to the suburbs by gentrification of the urban core, which is now unaffordable to the less affluent majority.

I find the title here rather offensive. In reply to Snoqualman above, I can easily imagine a place more dreary than most of those "rural clusters", the Central District, much of Capital Hill. They aren't even future slums. Much of them have already made it to that place. The idea that Mr Hinshaw is so much superior to other people that he is able to judge that some areas are "sick", as opposed to the Puget Sound Metropolitan Region real estate market is laughable.

I don't find the Central District or Capitol Hill the slightest bit dreary. Dingy, maybe, in places, but not dreary.

Well Mr Snoqualman, to each his (her) own. Doesn't bother me any. Which seems to be the opposite of this article.