The Hidden Costs of Suburban Housing

 

By Dom Nozzi

November 25, 2018

People understandably assign value to being proximate to things they desire or need. Walkscore.com shows this quite well, as does the real estate values seen in central cities such as Manhattan. Not only do the per square foot costs of real estate tend to be higher due to proximity, but centrally-located real estate also tends to be more resilient in economic downturns. We saw that clearly in the 2007-8 housing crash, where land in the burbs crashed significantly and many in-town properties were hardly affected at all.

Therefore, the burbs offer a “false economy” in many cases. Lower per square foot costs means you can typically buy a lot more house in the burbs than in a town center. But there are many (mostly hidden) trade-off costs. You tend to pay less in the burbs for your home, but in exchange you must pay the costs of less convenience, less free time (due to longer times needed to get to places), less “social capital” (in other words, less interaction with others), poorer health (due to your not biking or walking as much in the burbs), much higher travel costs due to the need for a household to own more cars and use cars more often, and much more aggravation due to the inability to escape traffic congestion. In my mind, all of these mostly hidden costs in the burbs far outweigh per square foot savings for suburban homes.

In a well-functioning economy, buyers of suburban homes would clearly see the above-listed costs, which would reduce the (artificially high) demand for suburban housing. Likewise, there would be higher demand for town center homes if the mostly hidden benefits of such housing were easier to see.

Fortunately for our society, the younger generations are placing more value on town center living and less value on suburban living. Unfortunately, America has spent several decades mostly building suburban housing (partly due to artificially high demand), which means that pretty much all US cities now have far too much drivable suburban housing and far too little town center housing. This inflates the per square foot cost for town center housing. Therefore, American cities need to devote a lot of effort toward better balancing the supply and demand of walkable town center housing by building a lot more of it — partly by incrementally making a lot of suburban housing more compact and walkable. Increasing the supply of town center housing will eventually reduce the per square foot cost of it. This will be a major task in the coming decades. Plenty of demolition and renovation jobs are on the horizon.

I am not saying suburban housing will disappear or that no one will want it or that it should be prohibited. There are likely to always be people in our society who greatly value a lifestyle featuring a lot of driving, a lot of social isolation, large private greenspaces, large homes, etc. (they place so much value on such things that they compensate for the downside costs). For the sake of equity, however, such a lifestyle must be better coupled with suburban homeowners paying higher fees to compensate for the higher detrimental societal impacts their lifestyle imposes on the community.

It needs to be noted, too, that suburban development tends to be a Ponzi Scheme for cities. That is, their initial costs look attractive to elected officials, but cities tend to experience unaffordable, rising costs that suburban housing delivers over the long term — costs that are much higher than the relatively meager tax revenues that such lower-density housing produces. This helps explain why so many cities are severely suffering financially with things like road and bridge maintenance.

https://www.strongtowns.org/the-growth-ponzi-scheme/

Communities need to grow the number of “YIMBYs” they have (YES in my backyard). That generally means the community needs a higher percentage of people who love cities (rather than drivable suburbs). This will be a slow process and take a lot of time, as cities have spent several decades cultivating and encouraging the values of suburbia. Therefore, even many who live in town centers are, oddly, holding suburban values.

Over time these suburban values will decline as such values have very little sustainable staying power (such a lifestyle is growing increasingly expensive, for example, for households and cities), and younger people with walkable values will constitute a growing percentage of the population.

Officials and staff can nudge communities to more quickly move toward having a higher percentage of citizens with walkable values by electing leaders who are willing and able to see to it that “on the ground” models of high quality walkable developments are created in the community. That allows people to “see with their own eyes and ears” how pleasant walkable design can be.

That can persuade a larger number of community residents to be amendable to walkable design, which then encourages developers to take advantage of that growing market by building more walkable developments. And gives elected officials more political courage to adopt walkable development regulations.

Elected folks can also show leadership by tweaking “price signals.” For example, leaders can adopt or increase parking fees, increase the gas tax, add a toll to roads, increase suburban impact fees, or adopt a land value tax. https://en.wikipedia.org/wiki/Land_value_tax

Currently, almost all of our price signals are nudging people toward suburban lifestyles and value systems — mostly by pampering motorists and not having motorists pay their own way.

 

 

 

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Filed under Bicycling, Economics, Politics, Sprawl, Suburbia, Transportation, Urban Design, Walking

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