Poverty comes to the suburbs

September 4, 2013 admin

Abraham Levitt, the mastermind behind America’s first truly mass-produced subdivisions, must be fulminating in his grave. Levittown Long Island in New York was widely considered the archetype for suburban sprawl in post-war America.

It was a hallmark of one’s success to move to the suburbs with 2.5 children, a Jeep Cherokee and a golden retriever. The schools were good, the neighborhoods safe, and cookie-cutter homes and retail chains abounded.

Someone must have forgotten to slam the gilded gate shut.

The Joneses are moving out. Poverty is moving in.

The fastest-growing enclaves of poor U.S. residents are agglomerating in suburbia. Turns out this trend dates back to the 1980s when the growth rate among suburban poor started outpacing urban and rural areas. It has only accelerated in subsequent decades. The decline in manufacturing jobs and the subprime housing crisis are but two elements driving this resettlement of the impoverished.

The “white flight” from inner cities decades ago that resulted in lily-white suburbs is also being upended. Research from the Brookings Institution and the American Communities Project at American University has documented that the suburbs are becoming more ethnically diverse and politically democratic.

The problem with being poor in suburbia is expense. Many suburbs have little or no mass transit. That means an automobile is required — and perhaps several if you have two working adults, or teenagers in need of mobility. This partially explains why the average age of autos on U.S. roads is at an all-time high. That study, conducted by Polk, found the average age of vehicles has climbed to 11.4 years. And then there’s the high cost of a tank of gas.

Consider that 3.5 million working people have commutes in excess of three hours per day. One can imagine the toll that exacts on fuel budgets, as well as people’s physical and emotional health and relationships.

Meanwhile, many wealthy and middle class people are choosing to move back to the cities. Young people increasingly want to move out of the boring, monochrome suburbs and into kinetic urban cores, in part because many don’t want automobiles. Shocking though it seems to previous generations, rising numbers of young people are choosing to forgo getting a driver’s license, at least until later years. Instead, they are opting for high-density, walkable communities with mass transit options.

Leigh Gallagher, assistant managing editor of Fortune magazine and author of The End of the Suburbs: Where the American Dream is Moving, writes that the 1950s notion of the nuclear family is rapidly disappearing. Among her sources is an executive with Pulte Homes who says the traditional family is the minority theses days.

Gallagher uses the term “zombie subdivisions” and predicts they are going to become the future slums of America, even as inner cities are being resuscitated by a fresh influx of people, money and redevelopment projects.

Levittown has become Leavittown.

MikeCfinalwebMike Consol is editor of The Institutional Real Estate Letter – Americas.

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