Rising Fuel Costs Fundamentally Change the Economics of Suburban Housing
The collapse of housing bubble, the credit crisis, and rising energy costs are calling greater national attention to the benefits of smart growth.
John Norquist, head of the Congress for the New Urbanism (CNU), was featured on CNN’s “Issue #1” discussing the numerous benefits of mixed-use, walkable urbanism.
Christopher Leinberger of the Brookings Institution and Arcadia Land Company and an expert on real estate and housing issues. He has been tapped for comments for comment in numerous articles across the country (from the NY Times to the Morning Call) following the publication of an article in The Atlantic Monthly entitled “The Next Slum?”.
Forbes and the Wall Street Journal are starting to take notice as well:
Forbes recently profiled the 10 most fuel-efficient neighborhoods across the country.
The Wall Street Journal article, “Suburbs a Mile too Far for Some: Demographic Changes, Higher Gasoline Prices may Hasten Demand for Urban Living,” is an indication that they are slowly getting on board.
While high gas prices are a boon to New Urbanism and other “smart-growth” planning concepts, in practice such mixed-use projects often are harder to execute — from acquiring local approval to securing Wall Street financing — than the traditional suburban tract-housing model. The challenges for cities are considerable, from investing in public-transportation systems to creating incentives for developers to accommodate the new urban housing demand.
While zoning and subdivision ordinances have provided (and still do in many cases) disincentives for mixed-use walkable development, a recent report produced for Standard and Poor’s indicates that progress is being made on the financing front. The report concludes with the following statement:
So, even as overall sales volume drops, relatively stronger demand for housing will limit price declines in neighborhoods with shorter workcommutes, better schools, and easier access to parks, recreation, and retail centers. Because of sharp increases in gasoline prices, living closer to work has become an even more important consideration in the location decisions of homebuyers. When combined with large inventories of unsold housing on the edges of urban areas, this shift in preferences will mean that prices for homes in outlying neighborhoods will continue their more rapid decline and will be slower to rebound when housing markets finally start to recover.
These articles are a small sampling of the increasing light that current energy, credit and housing troubles are shining on the causes and symptoms of sprawling development.