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The Housing Investment

[ 125 ] June 20, 2013 |

While this piece is perhaps a bit too condescending to middle-aged homeowners, it does get at a very real problem. The entire structure of the postwar housing market is extremely shaky. Not only the larger financial issues and housing bubbles creating by profiteering. There’s also a very deep generation divide that plays along two levels. First, the overwhelming debt loads of young people means that home buying is simply not a possibility for many. Were they earning enough on the job to make meaningful incursions into that debt, that might be one thing. Instead, they are offered unpaid internships and $9 an hour jobs that require a BA and 4 years of work experience. Second, many young people are uninterested in suburban living. They want diversity, walkability, public transportation, and nearby shops. The entire infrastructure of 20th century life does not provide them these things. But they are demanding it anyway and making decisions based upon these desires.

This hardly means the end of the suburbs. Continued growth in immigration could keep this system afloat. And obviously a large number of young people will indeed end up in the suburbs. But these changes, both economic and attitudinal, are real and will have impacts for decades. For older people, that means that it’s quite feasible that no one will buy their house, at least once the speculators realize that the dreamed of return to the market of the 2000s isn’t happening. Given the debt held by people entering retirement who may be relying on selling their house to stay afloat as they age, this could become a real crisis.

Comments (125)

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  1. TribalistMeathead says:

    To be honest, the primary reason I’m 34 and don’t own is that I’ve lived in DC since I was 22, and the housing bubble still hasn’t burst (once upon a time, real estate agents were advising buyers not to obtain their own inspection because it would make them look less desirable to the seller…). Tales of friends who bought before the bubble burst and a) lost all their equity or b) made nothing from the sale haven’t helped. But really, I look at renting as an insurance policy. I won’t make money renting, but it’s never going to cost me more than my rent payment to live somewhere. Dishwasher breaks? Landlord is responsible. A/C breaks? Landlord is responsible. Sink clogs? Landlord is responsible. On and on and on.

    • Erik Loomis says:

      I generally feel the same way. I’ve never owned. Could happen someday. Sure isn’t happening in the next couple of years. And I’m a decent bit older than you.

      • TribalistMeathead says:

        Seriously, my grandparents never owned in their entire lives. Meanwhile, my parents took a bath on the house they sold 6 years after it was built because it was in an area with tons of new construction going on, and it was built with siding that had been recalled. And they sold it 15 years ago. Forget that.

    • Linnaeus says:

      I’m 41, I’ve never owned, and I really don’t have any desire to (at least for the foreseeable future) for much the same reasons. Of course, I should point out that if I did want to own, I don’t have the money for it anyway.

    • Murc says:

      once upon a time, real estate agents were advising buyers not to obtain their own inspection because it would make them look less desirable to the seller…

      Isn’t that sort of thing de rigeur, tho?

      Real estate agents work for the seller, not the buyer. Of course they’re not gonna tell you to do things that make you look less desirable to the person on whom their commission depends.

      • TribalistMeathead says:

        I was talking about the agent for the buyer, not the seller.

      • agorabum says:

        Real estate agents work for the commission. They’ll always want you to offer more money, and to put less obstacles in the way of the sale closing.

    • joe from Lowell says:

      the housing bubble still hasn’t burst

      I don’t know about the DC market in particular, but the national Case-Shiller Index is back to where it was from the early 50s through the early 2000s.

      • The Dark Avenger says:

        There’s a lot of inventory that the banks haven’t put on the market, the bubble bursting(or prices going down) is a major reason they haven’t done so yet.

        • JoyfulA says:

          A lot of single-family houses have been bought by REITs and other types of investor groups with the intent of renting them for income. I can’t see how they can possibly make a profit, but they’ve bought thousands of houses.

    • Johnny Sack says:

      I went to graduate school in DC not too long ago, and in most nice neighborhoods I felt like I was getting DC at a New York price. Virginia was cheap though.

  2. Johnny Sack says:

    Which is why I like Forest Hills and this part of Queens so much just generally. Suburban feel in a bigger city.

    That said, as much as I love walk ability and public transportation, and don’t want to return to the boring ass burbs where I grew up, I could use a change.

    I’d like go move to an inner ring suburb. Maybe somewhere in North Jersey like in Bergen County.

    • Johnny Sack says:

      To continue talking to myself. If my job weren’t here I’d consider moving an hour or so upstate, around West Point. If I ever came into some serious money, I don’t know. I don’t have any expensive hobbies. I’d just buy a summer home in the Finger Lakes, maybe open a winery. I’m burned out from this city man.

    • TribalistMeathead says:

      That’s how I felt about Woodside. Great public transit links, yet not completely unfeasible to own a car.

      Bored the hell out of me, though.

      • Johnny Sack says:

        Yeah. Problem is this false dichotomy between suburb and city. I think the best middle ground is to find a city much smaller than New York that is pleasant to live in. My problem is that I like space.

        • ChrisTS says:

          This. I live on an ancient ‘farm’ that is rapidly becoming too much for us to keep up. I would like to have one (winter) residence in an interesting city and another (summer) one in a cool place. Spousal unit loves NYC, where we lived for awhile, but I just cannot take the congestion/pollution/prices. Boston is too cold, so I’m thinking Philly is a nice alternative.

          Uhh… not that anyone cared. :-)

          • Johnny Sack says:

            I could do Philly for the lower cost of living alone. You’ve got my wonderful home state right in your backyard too.

            • Western Dave says:

              I love Philly. I’ve lived here 14 years now. My wife is a buyer’s agent. She kills a lot deals and always gets her own inspection done. There are lots of bad real estate agents out there, but a lot fewer since 2008. The most important thing to her is to make sure her client is happy because then they will either a) use her again if they upgrade/move or b) recommend her. From her perspective her best sale ever was the cheapest house she ever did, helping some hippy Christians move out of the commune into a cheap home they could fix up. As other hippy Christians moved out of the commune they all used her. Plus they’ve been moving into our neighborhood which is always on the verge of collapsing into drug dealing hell so it’s great to have them as neighbors.

              • ChrisTS says:

                There are so many great Philly institutions and opportunities – not to mention the train/car accessible goodies.

                I really think Philly’s worst problem is its (apparently widespread0 inferiority complex. Heck, if Philly talked itself up half as much as many other East Coast cities, it would be doing far better than it is.

                • JoyfulA says:

                  I so wish I could afford to move back to Philly (and somehow talk my husband into going with me, which could be even harder than digging up the money).

                • N__B says:

                  Philly’s worst problem is being 90 miles form New York. All the air is sucked out of the room…which also explains why Jersey is so vacuous.

              • ChrisTS says:

                At this late/early hour, may I ask what neighborhood you have in mind?

            • ChrisTS says:

              In fact, right across the river, no?

  3. TribalistMeathead says:

    Also, this may be the first time millennials have ever been condescending to middle-aged people.

  4. joe from Lowell says:

    I doubt those old folks planning to sell their homes have anything to worry about. While the % of younger people who want to and can buy homes may be smaller, population growth means that the absolute numbers are still there.

    Where the real squeeze will come in is in the construction sector, which depends not on having enough demand for existing homes, but growing demand for more and more of them.

    But even then, the market will adjust. Suburbs need not be sprawl-burbs. New urbanist styles in new communities, and infill development in post-war suburbs, can turn the meaning of “suburb” back to what it was in the 1920s.

  5. mpowell says:

    Lots of anecdotes and personal opinion masquerading as data in that article. How many people plan on actually selling their house as their retirment plan anyways? You still need a house and reverse mortgages are a poor investment vehicle. Exurban housing has always been a crappy real estate investment because land value is close to nil. Inner ring suburbs are and will continue to be good investments in growing cities.

    • zombie rotten mcdonald says:

      This, I agree. We bought an urban house, circa 1904, before the boom. In the last 6 years, it’s lost value, but we took advantage of dirt cheap rates to refi a couple of times and paid the thing off, and it’s still worth 2 1/2 times the sale price right now.

      I think immigrants are also going to tend to favor the more urban areas, and I hope that fosters some continuing infill.

      • Mr Rogers says:

        1904? Damn but Zombies are masters of the “buy and hold” strategy!

        • Bill Murray says:

          that is the primary advantage of the undead. Well that and compound interest

          • ChrisTS says:

            Uh, my house was ‘here’ (oldest records) in 1720. And I am neither dead nor undead. Unless……. ?

            • zombie rotten mcdonald says:

              You bought a house built in 1720? Kind of a masochist, aren’t you?

              • ChrisTS says:

                To be clear, we bought a house the earliest record of which – if one does not wish to go to Xburg and search moldy records – was ‘here’ in 1720.

                And, ok, this might not have been the wisest purchase, but it was not masochistic.*

                * You dead, stinking thing.

                • ChrisTS says:

                  * You dead, stinking thing.

                  Said, as always, with the greatest respect and affection, Stinky.

          • zombie rotten mcdonald says:

            THREE primary advantages of zombies are buy and hold, compound interest, and an almost fanatical obssession with branes…

            FOUR primary advantages….wait, I’ll come in again.

    • ploeg says:

      Houses might not be a great retirement plan, but a lot of people don’t have a retirement plan apart from their house. Even for those that have a retirement plan, socks and bonds can get zapped in a market downturn. You can at least downgrade your home if you need to, or sell out entirely and rent.

    • snoey says:

      Sell the big house in the inner ring suburbs, buy smaller somewhere cheaper, add the difference to the retirement nest egg. Not a complete retirement plan, but a positive step.

      • snoey says:

        And why you had the big house in the inner ring was because you had kids and bought them a good school system along with the house.

      • mpowell says:

        That plan will still work though. If your big house is in the exurbs though, you may be in trouble. But that was already true regardless of what new home buyers were doing. Housing stock declines in value over time and the land value was never there to begin with.

    • sparks says:

      Yeah, I have an inner-ring suburb home, long long ago purchased, now mortgage-free. Area flourished the last 25 years in view of new teaching and children’s hospitals nearby and a light-rail stop put in 20 years ago. Now that the crisis is abating somewhat, there’s shocking amount of interest when one comes up for sale. Some of the houses are going for near pre-collapse prices, and all go quickly, a stunning change from just 3-5 years ago. I still think it’s silly, but the buyers here are paying more than the listing price lately. I just got a very pleasant female couple as my neighbors, though I think they paid much too much for the place.

      I don’t plan on selling until I am no longer able to physically negotiate the steep hill I live on or care for the house. My house is not a piggy bank, but I admit it’s there just in case of catastrophe. I hardly need all the space it has.

      • ChrisTS says:

        My house is not a piggy bank

        I both agree and disagree. At the very least, I can continue to live in my hose, whatever its value. Maybe I can sell it to my advantage/not disadvantage, at some point, but it is mine no matter what.

    • aimai says:

      Just speaking from looking around different classes did used to plan on selling their houses to finance their retirement. It all depends on your class and your other financial assets, of course. People used to sell their big old house and move to someplace warm with a lower cost of living–my in laws did that, selling out slowly and serially and moving full time to (gag) Florida. My grandparents did that, much to their sorrow, and were among the first buyers in Sun Valley. For some people the high cost of living in the NE and physical ailments make moving to a snowless place important. I read an article several years ago about how Texas doesn’t have much of a resale value for houses because people value what is new (Florida is like this) and simply throw up an entirely new gated community instead of buying an older house. Also the home building market is largely unregulated there and controlled by a terrible right wing family of cheaters so that the older houses are likely to be crummy and falling apart.

  6. ploeg says:

    One other factor that depresses home ownership is job permanence (or lack thereof). Maybe you’re lucky enough to keep your job for a few years so that you have build a little equity, or maybe you’re at least lucky enough to string together a number of jobs that are within tolerable commuting distance from your home. If you’re de facto semi-nomadic, though, why would you put yourself through the trouble of buying and selling homes as you move from job to job?

    • Erik Loomis says:

      Right–and if we are all being told that we are going to switch careers 3 times in our lives, how can we justify such an investment in permanence?

      • FMguru says:

        It also argues against purchasing much in the way of durable/household goods. The prospect of having to move across country three or four times in a lifetime really doesn’t incentivize me to buy nice furniture or a lawnmower or fancy dishes or nice art for the walls or any of the other material goods that usually go along with long-term housekeeping.

        • Erik Loomis says:

          Right. I’ve lived in 7 states in the last 17 years.

          • aimai says:

            I once lived in ten different places in ten years. People move a lot more even within a single year and a single city. When my aunt was at Yale, in Med school, in the sixties you “kept” your apartment even when you weren’t living there, like over a summer. When I was at Yale in Grad school I couldn’t afford to do that. I moved out and moved home for the summer months, or was on a grant and couldn’t afford the rent at the same time.

      • Johnny Sack says:

        I actually wish I could move-my career makes it very difficult, and the places I want to go aren’t exactly booming. If I could make a living as an author (yeah right!) I’d buy a small ranch style place around Santa Fe or something like that. I know the feeling of transience sucks, but a feeling of helpless permanence in a region/city you don’t care for too much isn’t better.

        That’s a complaint for a better economy though.

    • Cody says:

      Yes, I think I touched on this in an earlier thread where I whined about not trusting my employers to just cast me off.

      My wife and I really really really want a house. It doesn’t make sense though unless we both have jobs we love, because we may end up relocating. And neither of us do. Plus as 2-bedroom apt is gobs cheaper than a house on a month-to-month basis for a while into the future.

  7. burritoboy says:

    We could also talk about how American suburbia after WWII was explicitly designed as an anti-Communist utopia (joe from Lowell knows about this even more than I do). To the extent that post-War American suburbia has the above problems, many of those were intentional decisions made to fight Communism.

    • Erik Loomis says:

      That’s an argument that I think is too overstated. There were lots of reasons for the explosion in suburbia. Anticommunism may have played a role, as it did in most parts of American life in the Cold War. But to say that it’s the primary reason or that it played the major role in shaping the structure of suburbs, that’s hard to justify with the evidence.

      • burritoboy says:

        The question is not the explosion of suburbia – the UK had a similar, though smaller, expansion of suburbia as well (and continental Europe had one as well after the reconstruction of the cities after WWII). The question is more about how the suburbia was designed. Many of the design decisions for American suburbia was made, and openly announced as, anti-Communist measures. This is not only limited to Bill Levitt (though he was the most famous, most quoted, most explicit and most studied about this), but also included such major developers such as Mark Taper in Southern California, the Doelger Brothers in Northern California and multiple others.

        • zombie rotten mcdonald says:

          Many of the design decisions for American suburbia was made, and openly announced as, anti-Communist measures.

          I dispute this.

          There were lots of reasons for the post war suburban landscape:

          -reaction toward urban decay
          -popularization of the House Beautiful movement
          -expansion of house construction into small contractors, who were predisposed toward smaller buildings.
          -zoning changes that favored discrete uses over mixed uses
          -racism and white flight
          -the opening up of large amounts of greenfields adjacent to developed areas
          -cars and highways.
          -subisidzation of cars, highways, and widespread infrastructure
          -the development of a wide variety of free-standing house styles
          -industrialization providing for inexpensive building materials that allowed cheap new construction versus more costly reconstruction and infill in urban areas.
          - heavy investment in marketing The American Dream.

          Of which exactly none are an anti-communist manifesto. OK, MAYBE the American Dream part, but I don’t see that as being a huge anti-Red ploy either. Jane Jacobs really laid much of this out in her work. Certainly DESIGN decisions were not based in anti-communist ideology.

          In reality, post war suburban development in America took advantage of the returning veterans, newly elevated to middle class and their desire for a better life, to make a bunch of developers rich. Yeah, that is capitalistic vs. communistic, but the anti-communist part of it really wasn’t the guiding principles.

  8. OT: Regardless of what people end up doing with their houses, owned or rented, I really wish we suburban Americans would get over our fascination with lawns. The constant struggle of growing and discarding grass is fucking stupid.

    I’ve considered selling my house and buying or renting a managed condo/apartment/townhouse/whatever just because I’m sick of the fucking lawn. And I’m sick of my fucking neighbors judging me because I don’t care about my fucking lawn.

    I’m not an English lord with an estate. Get over it.

    • efgoldman says:

      I grew up in near-burb apartments (Brookline MA), so never did lawn. mrs efgoldman grew up in an 1840s farmhouse in a far burb, with more than 1/2 acre in the back. I told her when we got engaged (36 years ago) that I didn’t do dirt, and I never have. We hire a mower guy at $35/every two weeks; he mostly mows dandelions, weed, and clover. We don’t care, and if the neighbors do, they’ve kept it to themselves.

    • Hanspeter says:

      Which is why a 100 acre subdivision should not be split into 100 one acre plots, but into 100 quarter-acre (or smaller) plots with 75+ acres of nice common park area.

      • ChrisTS says:

        Unless the lots layout is quite different from most new subdivisions, this mean that (a) no can have both a bit of land to sit/walk on and a bit to grow X on and (b) no one has any privacy vis a vis their ‘backyard’ neighbors unless everyone puts in high fences/evergreens.

        • mds says:

          Well, it would have to be a quite different layout, wouldn’t it? And he’s still saying “quarter-acre lot,” albeit as a maximum. The only detached single-family home we owned was on a 0.21-acre lot, and that was actually on the large side. Keep the house close to the sidewalk, and there’s plenty of room for a decent backyard. Lots would have to be wisely partitioned, houses would need to remain a reasonable non-McMansion size, they’d have to be positioned properly on the lot, and in some cases they’d have to overcome town zoning regulations that require 1-acre lots (I’m looking at you, Mendon, NY), but … Okay, this is already going to take the collapse of our current civilization to enact, isn’t it?

    • ChrisTS says:

      As a landscape guy said, so nicely, to me a few years back, “Yeah, you don’t need it mowed that often. This is a farm lawn [pointing to ratio of weeds to grass] so you really shouldn’t worry about the length.”

    • sparks says:

      I am disenchanted with lawns. I want something else now. Rock garden, vegetable garden, trees, but no damn grass. My backyard is halfway to a being vegetable garden now. In California, growing anything is fairly simple.

      • DrS says:

        Yeah, I’m thinking along those lines too. Especially since its either me sweating out there once a week cutting the damn stuff or $90 a month. Quite frankly, that $90 a month is cheap at the price, cause these guys are awesome, but my grass is mostly stupid.

        I want a small patch in the back for my dogs and when my nieces and nephews come over, but I’m thinking less grass, more vegetables, flowers and comfortable outdoor seating areas.

        Also in California.

        • zombie rotten mcdonald says:

          we just expanded our deck with a small patio portion, reducing the amount of yard. Enough for the Orange Dog, but as time goes by, the lawn is being reduced, step by step….

    • cheap says:

      I had no idea Oregon work rules prohibited teenagers from mowing lawns for cash.

      • Neither did I.

        Cost isn’t the point — it’s just a waste. Here, spend lots of time and energy to get this fake “crop” just exactly right, and now cut it and throw it away. Every. Fucking. Week.

        But hey, yeah, if that’s your thing, neat-o for you.

    • zombie rotten mcdonald says:

      I’ve considered selling my house and buying or renting a managed condo/apartment/townhouse/whatever just because I’m sick of the fucking lawn. And I’m sick of my fucking neighbors judging me because I don’t care about my fucking lawn.

      Let’s redevelop your house lot into a multi-family property; duplex with granny flat or something like that. We can make a hardscaped courtyard rather than a lawn. It’s more usable. Bonus: we can make it look like a big middle finger raised toward your neighbors.

  9. cpinva says:

    I can dissect that article multiple ways from sunday. but, let’s start with the most obvious item: the complete absence of any mention of spouses and offspring entering into the equation. a single person might well be okay living in a 100sq.ft. space, I can almost guarantee two adults & 2 school-age children will those mighty tight quarters. I seem to recall an article commented on this here site just recently: hipsters moving to the suburbs, in new York, of all places!

    the suburbs were sold to mom, dad & 2,5 children, not singles, just barely out of school. between those millenials dating, mating & procreating, and new immigrants to our shores, I feel fairly confident the era of the suburbs is far, far from over. I’ve owned since I was a single, bought my first house in 81, and never looked back.

    a tax tip: renters are paying mortgage interest & real property taxes, in the form of rent. however, the landlord, not the renter, gets to deduct those items on their tax return, making it slightly cheaper to actually own vs renting. something to consider, when deciding whether to buy or rent.

    • burritoboy says:

      You get those deductions with a condominium as well (or urban townhouse). There’s no necessary need to connect those with a suburban house.

      • Immanuel Kant says:

        The original article, though, conflates the “buying/renting” dichotomy with the “big house in the suburbs/apartment or urban townhouse” dichotomy. I suppose that, in general, it’s not that common for people to be able to rent big houses in the suburbs. But it is certainly common for people to buy condos or urban townhouses.

        • joe from Lowell says:

          You can also build suburbs that are more like cities, the way suburbs were built between the Civil War and World War II. You can build them closer to the city and closer to transit; you can make them walkable and throw in some apartment houses and corner stores; and you can put those single-family homes on 4000-7500 square foot lots.

          Sure, the era of suburbs is far from over. Why, when Mrs. jfL and I found the condo in the mill too inconvenient with a baby, we moved out to a lovely suburban neighborhood. Sometimes it takes me ten whole minutes to mow my 1000 square foot lawn with the push mower.

          • Erik Loomis says:

            You certainly can build more walkable suburbs. The problem is where. You can build them way out on the exurban fringe. Which seems unlikely. Or you can rebuild the current suburbs. Which seems even more unlikely.

            • joe from Lowell says:

              If this shift in public opinion that the article discusses is real – and I think it is – then the rebuilding of existing suburbs becomes a whole lot more likely.

              Even more likely is the rebuilding of those “cities” that are actually just large tracts of suburbs, to add in an actual urban area.

              • ChrisTS says:

                Even more likely is the rebuilding of those “cities” that are actually just large tracts of suburbs, to add in an actual urban area.

                I don’t know if where I live is currently suburb, exurb, or (my preference) subrural. But, I figure if we pass it on to the kids, it will, in fact, be part of Philly in short order.

                • nixnutz says:

                  Speaking of exurban Pennsylvania, my mom grew up outside Reading and recently I was reading a profile of Taylor Swift that mentioned that she was from Wyomissing and described it as an upscale suburb. Now I know from my folks’ stories that that was the case 50+ years ago but back then it would have been a suburb of Reading and knowing what’s happened to that town I assume it must now be a suburb of Philly.

                  So does that raise the possibility of Reading being revived as a kind of urban suburb? If it could rise above shithole status it could maybe survive without a local economy of its own. I don’t know if hipsters would go for those bland row houses but I’m sure they’d love the pagoda.

                  Are there other examples of this? Not just sprawl eating smaller cities but particularly cities whose economic base has disappeared. I think Lowell and Lynn in MA are still dumps but they have fewer pig farms in between them and the big city.

                • JoyfulA says:

                  Reading isn’t all that close to Philly!

                • Walt says:

                  I recently met someone who said they were from Philadelphia. I asked them where, specifically, and they said Reading. But yeah, it’s not that close.

              • ChrisTS says:

                I think there are any number of unconsidered (?) factors in this article.

                Yes, I expect that the newest crop of ticky-tacky houses will lose significant value. On the other hand, they don’t seem to have much by way of lawns (or privacy). But any house that has, or appears to buyers to have, ‘character’ will do better on the market.

                Whatever the current preferences of the young, their preferences will change as they age/have kids/etc. There will always be people who like being ‘free’ of land and possessions. But, I suspect, there will always those who will value those things – even if they do not value them at age X.

            • Immanuel Kant says:

              There is certainly some rebuilding of current suburbs going on. My parents have been wailing about efforts to build density in their part of the Maryland suburbs of DC.

              • DN says:

                Oh, those are *your* parents?

                Seriously, we live in an inner MD suburb and can’t wait for the higher density plans to come to fruition (if they ever do). Some of our neighbors, though, rant and rave about them. Meanwhile, of course, they complain endlessly about the quality of local retail. The connection doesn’t seem to occur to them.

              • Gene says:

                Yes, and thank goodness for it. I’ve actually been really encouraged that our local government is offering tax incentives to build mixed use developments with plenty of affordable housing. People who want to can live right across from a metro station, and those of us already in the neighborhood will (hopefully) get better retail and restaurant options. Everybody wins! (I hope.)

              • joe from Lowell says:

                That goes back to Governor Paris Glendenning, who was way, way out in front on smart growth issues when he was in office.

                It’s good to hear that his vision is coming to fruition.

            • Quakes says:

              When you go to Rancho Cuacamonga to look at the the Chinatown house you can stop at Victoria Gardens if you want to see how ‘walkability’ is handled in the suburbs.

            • zombie rotten mcdonald says:

              With the New Urbanism movement, I’ve often thought: Why build a whole new fake town, when there are plenty of existing walkable developments with existing houses and such just waiting for people to move in?

              • Erik Loomis says:

                Is New Urbanism still an active thing? It feels very 2002. Or maybe that’s the last time I paid attention to it.

                • TribalistMeathead says:

                  Oh yeah – most of the new development in the areas around the Atlanta exurb where my parents live is some sort of mixed-use development. Granted, public transit is so minimal it’s practically non-existent, and you still need a car to get to any practical businesses, but.

              • N__B says:

                Control. Real towns may have unwritten social control (sundown towns being a horrible example) but fake towns can be as tightly controlled as your average enclosed mall.

                • The Wrath of Oliver Kahn says:

                  Not just that, but in some places, parking requirements and required infrastructure upgrades make infill development a lot more expensive.

          • cpinva says:

            “You can also build suburbs that are more like cities, the way suburbs were built between the Civil War and World War II.”

            been done already, 50 odd years ago. they’re known as “RPC’s”, Residential Planned Communities. there are two in the DC area, Columbia, MD (the first in the country), and Reston, VA, off of Rt. 28. they combine aspects of city/suburb: a mix of housing (single family detached, to apts.), retail business, office space, recreation, shopping, schools, churches, etc., all within a closely defined area. you never really have to leave, if you don’t want to. both within easy driving/bus distance from downtown DC, but definitely in the ‘burbs.

            • aimai says:

              Also: cohousing. I have a friend who lives in cohousing in Vancouver where skyrocketing prices have made affordable homes impossible. She also likes the cohousing features (somewhat) shared childcare possibilities (she has a child), shared communal rooms (if she had a social life). We have some cohousing in my town and its lovely. I often end up there during the political season becasue someone is always using the communal spaces for organizing. Its wonderful for older singles, older couples, and families with small children who want to stay in the city. But it takes a lot of planning and moxie and pull to make it happen, especially inside a city where you have to lay your hands on a fairly large parcel of land in the first place.

    • Linnaeus says:

      let’s start with the most obvious item: the complete absence of any mention of spouses and offspring entering into the equation.

      I immediately thought of that as well. A good example would be a couple of friends of mine who are a married couple. They’re in their early 30s (so borderline millenials/Xers, depending on where you draw the line) and they’re preparing to buy a house with a child on the way after renting for years.

    • Gone2Ground says:

      +1 on the space issue. Spouse and I had a very nice, small older home with walkability to shopping and so forth, but between one dog and a toddler, 1000 SF on two levels with a basement was just too tight, and let’s face it, one kid can mess up a 12′x10′ room in about ten minutes.

      The other issue is the school district “problem”. Many (not all, of course) but many urban school districts were not in good shape even before the Grifter Class of “School Reformers” showed up….and most people want their kids to go to suburban schools because they have better outcomes, nicer facilities, and fewer kids in poverty. It’s an unpleasant, bare fact, but there it is.

      We moved out to the burbs for that very reason, although our burbs are regular old 1980-1990 ramblers on over an acre, so we’re sort of “country” but there’s still a Costco near by and nobody can peek into my back yard. I work in construction, and the vast majority of people in know in construction live very much like I do – some every very rural. They like the “independent” lifestyle and the fishin’/huntin’/large animal type hobbies. You can’t really do that in the city without driving.

      OTOH, my cousin who is single and 40s and just going through a midlife career change has zero plans to buy anything – she has too much school debt.

      A School Debt Bailout would probably be a HUGE boost to the economy, but the People who Rule Us just can’t stand the idea of anybody not a Romney getting anything “extra”.

      • The Wrath of Oliver Kahn says:

        They like the “independent” lifestyle

        It’s hardly independent, though, since (depending on specifically where we’re talking about) so much of their infrastructure and public services costs are likely indirectly subsidized by the people living in the denser population centers.

    • Erik Loomis says:

      A good point, certainly. Worth noting the declining birth rate here, some of which I presume is connected to the other structural problems I mention in the OP.

    • shah8 says:

      It’s cheaper to own because you have the downside risks. When you rent, it’s the owner’s social capital that must exist and be spent (if you’re not poor and desperate, of course) on downside risks. You aren’t exposed to upside risks either, but let’s be frank, there are *mostly* downside risk in the current demographic and economic context.

  10. FridayNext says:

    Second, many young people are uninterested in suburban living.

    Hasn’t this always been the case though? Every middle-class cohort I can recall in my lifetime (I am almost 50) younger people gravitated toward densely packed urban areas and slowly moved out to the suburbs or less dense urban areas as they grow older, have kids, and generally slow down.

    Is this generation staying in cities AFTER starting families or further into middle-age?

    • Linnaeus says:

      This is, more or less, Joel Kotkin’s argument. I disagree with a lot of what he writes, but I don’t think he’s totally off base on that one.

    • Western Dave says:

      This is definitely the case in Center City Philly (though not Philly as a whole).

  11. FridayNext says:

    Was Kotkin’s article one of those links? I couldn’t find it. Off to Google Scholar and JStor.

  12. Major Kong says:

    I missed the whole housing bubble by being too lazy to move out of my starter-home.

  13. DrS says:

    We bought in 2005. Perfect timing, right at the top.

    Fortunately, we bought a small little house, well below what we could afford. Which is good, since I’ll be entering the ranks of the unemployed in August, so we should be able to muddle through for awhile.

    We’ve run a bunch of different numbers, including walking away and then either buying or renting. We’re kinda over a barrel, but the other barrels don’t look any better.

    Ahhh. The American Dream.

  14. ChrisTS says:

    So, at the risk of revealing myself as an old, dumb person, I submit this:

    1) We can leave our property to our kids, whatever its value. If we had never owned it, we would be able to leave nothing (so to speak: see below).

    2) Given the volatility of the markets, our land/house are more likely to be of some value than any of our cloud investments.

    3) At the very least, they can live in the house and use the land to grow food/raise goats/hunt/etc.

    4) In leaving our children artifacts of aesthetic and/or family value, we leave them objects that resist the vagaries of the ‘markets.’

    • DrS says:

      This all looks sound to me.

      And I can sure think of worse fates, but I really hope that I never have to live in either of my parents homes in exurban Houston.

  15. MacK says:

    This is an old article but an interesting one

  16. BarrY says:

    MacK, I read that a while ago; it’s good.

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