The End of the Suburbs: Where the American Dream Is Moving

by Leigh Gallagher

  Reinbold and her husband are unique in that they never intended to make that commute a permanent part of their lives. But many of their friends, and millions of Americans, do; it’s the only way they can afford the houses they live in and the lifestyle they signed up for. None of them needs to be told how miserable commuting can be, but a body of research has emerged in recent years that helps to quantify its toll on our bodies and our psyches. A 2006 study on happiness by Princeton cognitive psychologist and Nobel laureate Daniel Kahneman and economist Alan Krueger (now chairman of the White House Council of Economic Advisers) found that commuting was consistently rated the worst part of people’s day (sex was the best). In 2004, a pair of Swiss economists found that people with long commutes consistently and systematically report lower overall well-being and calculated that a worker needed to make a 40 percent higher salary to be compensated for a one-hour commute in order to maintain the same level of happiness. Other studies have linked long commutes to higher levels of stress, anxiety, annoyance, social isolation, and exhaustion, not to mention a litany of serious physical ailments: higher cholesterol and blood pressure, weight gain, back and neck pain, and adverse effects on cognitive performance.

  Since the time spent commuting typically replaces time spent at home, it also has an impact on relationships with friends and family. Robert Putnam, the Harvard political scientist and author of Bowling Alone, found that every ten minutes of commuting results in 10 percent fewer social connections. Experts have suggested a link between sprawl and the rise of teenage hooliganism in some places because parents commuting longer distances to work are spending less time at home. More recently, a study from researchers in Sweden found that couples in which one partner commutes for more than forty-five minutes are more likely to separate. Another study of commuting couples in Canada found that manifestations of long commutes frequently included guilt caused by being away from children in their growing years, poor spousal communication, and an “irregular” sex life.

  Yet even though we hate commuting, we have continued to seek out housing solutions that require it. Researchers have coined this the “commuting paradox”—people consistently underestimate the wear and tear of a commute and overestimate the benefits of its rewards. It’s become conventional wisdom for people to insist that they’re prioritizing family life and lifestyle when they buy a bigger, nicer home with a bigger yard. Yet if that location requires a long commute, they’re unwittingly doing the opposite, putting their lifestyle—and the time they get to spend with their family—at the bottom of the priority list. One explanation for this irrational behavior is that while a big house is easy to see, the commute’s greatest sacrifice—free time and lost moments with family and friends—is invisible. Another, more practical reason why so many people continue to commute by car is that they don’t have much choice. While big cities like New York, Boston, and Chicago are the exceptions, most U.S. suburbs don’t offer robust public transit. Nationwide, roughly 40 percent of workers now commute between suburbs, for which there is often no other option than the car.

  As sprawl has gotten worse, of course, so has road congestion nationwide, the amount of time we spend stuck in traffic has more than doubled in the past thirty years. In badly clogged areas, like Washington, DC, and Los Angeles, commuters spend more than sixty hours a year stuck in traffic. That in turn has led to health problems like increased rates of pollution and asthma, not to mention some $120 billion a year in lost productivity and wasted fuel. It’s also led to a spike in reported incidents of “auto-induced maladaptive behavior,” otherwise known as road rage. Officially given its own medical diagnosis in 2006, incidents of road rage have climbed steadily over the years. A study by the American Automobile Association concluded that the episodes were rarely the result of a single incident but of the “accumulation of stress in the motorist’s life.”

  • • •

  All this driving doesn’t just make us overweight, sick, angry, and stressed out. It also makes us poor. The building of the suburbs took place when oil was cheap and relied on the assumption that it would remain so. But oil didn’t keep its end of the bargain. In 2003, the average suburban household spent $1,422 on gasoline, according to the U.S. Bureau of Labor Statistics. By 2008, that had risen to nearly $3,000. That’s expensive for any household, but for a middle-to-lower-income family, it can be the difference between making ends meet and not. A major flaw with “drive till you qualify” is the cost of all the driving. That shiny new four-bedroom in the hinterlands is cheap. Getting there and back is not.

  Scott Bernstein, who heads the Center for Neighborhood Technology (CNT), a Chicago research outfit that studies ways to make neighborhoods more sustainable, has spent the past several years trying to convince people just how quickly the gallons of gas can add up at suburban and exurban distances. A transportation engineer with a quick wit and a modesty that belies a lustrous résumé, Bernstein is an expert on the role transportation costs play in household budgets, and his opinions have been widely sought in the wake of the financial crisis. In 2008 he testified in front of the House Committee on Financial Services, and he was later one of five experts to present papers to a White House panel to discuss ways to recover from the housing-led financial crisis.

  Early in the 2000s, Bernstein began examining the true role transportation plays in housing costs on a neighborhood-by-neighborhood level. Studying the average cost of transportation in hundreds of metropolitan areas, and using a formula that takes into account gas prices as well as the cost of the car, insurance, maintenance, and repairs, Bernstein and his team found that the average family spends 48 percent of its income on the combined costs of housing and transportation. For working families with incomes of $20,000 to $50,000, the figure was almost 60 percent. This lower end of income earners, he found, was spending slightly more of their income (29 percent) on transportation than on housing itself (28 percent).

  This counters the generally accepted rule of thumb that housing costs alone should represent 30 percent of household income. It also counters the notion that housing is cheaper if you travel farther distances. Most people think about their housing costs without factoring in transportation, but the two are inextricably linked. Plus, it’s the people who can least afford it who buy at the costliest distances. For example, in Kankakee County, sixty miles south of Chicago, Bernstein’s index calculated that housing costs amount to 22.5 percent of the typical household’s income, but transportation costs come to nearly 30 percent. In Peachtree City, Georgia, a master-planned community thirty miles south of Atlanta, 32 percent of the average household’s income goes to housing costs alone, but almost 60 percent goes to housing and transportation combined.

  Bernstein and his team indexed housing and transportation costs for more than nine hundred metropolitan areas and plotted it onto a color-coded map, which they named the H+T Affordability Index. They coded the map in two colors: yellow for areas where housing and transportation together consume less than 45 percent of household income, and blue for neighborhoods where housing and transportation made up more than 45 percent. Using the conventional definition of housing affordability, where housing comprises 30 percent or less of total income, 76 percent of communities would have been considered affordable. But using the new definition—in other words, factoring transportation costs into the total housing outlay—only 28 percent of communities were considered affordable.

  A few years ago, Bernstein led an effort to create a new kind of mortgage that would factor transportation costs into the overall cost of owning a home. A more “efficient” location—one that had better access to public transit and life’s daily conveniences—would mean the buyer could qualify for a bigger mortgage and get a nicer house, or put less money down, or borrow at a lower interest rate. Conversely, a borrower buying the same house located far away from his or her place of work and daily needs would need a proportionally higher income to qualify for a loan for that house or would have to accept a more challenging
set of terms for the loan. Location, in other words, would be factored in as a measure of risk, just like income and credit score.

  The mortgages were a novel idea, and they were favorably received by the housing finance industry. Soon after Bernstein introduced the concept, Fannie Mae agreed to participate in an experimental plan to test them, and bought and underwrote some two thousand of the new “location efficient” mortgages. They performed well: of a random sample CNT studied of three hundred of the mortgages nationally, there was one default, and it never turned into a foreclosure; the home owner was ultimately able to make good.

  Similar studies have shown similar patterns, even when incomes vary wildly. “Nobody’s disputed this,” Bernstein says. “Mortgages in location-efficient places perform better.” At the time, the idea for the mortgages was a tough sell to banks because, still recovering from the housing bust, they weren’t financing anything. And in the time since, they’ve been reluctant to lend to anyone, so the idea has languished.

  Bernstein has one influential follower, though: Shaun Donovan, the secretary of Housing and Urban Development. Donovan is a longtime proponent of smart growth and a big believer in the benefits of transit-oriented, pedestrian-friendly urban communities (he has said he’s trying to put the “UD” back in “HUD”), and he has long talked of a sort of fuel economy or Energy Star–style rating for homes, a required disclosure of the estimated cost of transportation to would-be buyers. “We don’t have a good system today of understanding, when you buy a house, ‘what is this really going to cost me?’” Donovan has said. Bernstein and his team are working with HUD to come up with such a system, an official locational affordability index for homes, by the end of 2013.

  But even if all mortgages switch to the location-efficient kind, and even if a new mandatory fuel economy rating gets slapped on every house, it won’t be enough. The suburbs have a bigger problem. They are arranged in a way that makes gasoline as vital to our daily lives as oxygen, and the price of gas is going up.

  • • •

  The American suburbs are dependent on cars, and, at least for now, cars are dependent on oil. From their beginning, the suburbs were based on the availability of not just energy but inexpensive energy. And for years, oil was cheap, not just back in the 1950s but for most of postwar history. But starting in 2003 it began a steady climb. From 2000 to 2008, oil prices increased almost 80 percent. In 2004, the average price per gallon topped $2 for the first time. In 2007, it crossed $3. In the summer of 2008, oil spiked to $147 a barrel, sending gas prices over $4 per gallon nationwide.

  For people who live in the suburbs, especially remote ones, the cost became untenable. That year, one hundred schools in sixteen states moved to a four-day week to save on transportation, heating, and cooling costs. Ellen Dunham-Jones, architecture professor at the Georgia Institute of Technology, remembers two junior staff members coming into her office and pleading with her to let them shift their schedules; living at the outer reaches of suburban Atlanta (also known as “Sprawlanta”), they could no longer afford to drive in five days a week. “They said, ‘Please, I will work four ten-hour days. I’ll even work four twelve-hour days,’” she says. They went to four ten-hour days, and shortly thereafter, one left for a job closer to her home.

  In truth, our gas prices are a lot cheaper than they should be. In Europe, gas prices are closer to $7 and $8 per gallon, or $10 in Norway. Europeans pay more because they pay higher gas taxes to cover things like road pavement, pollution control, accidents, and more—things we in the United States provide drivers and car owners nearly for free. “The most socialistic thing [2012 presidential candidates Rick] Santorum or [Mitt] Romney ever saw is the American transportation system and the private car,” suburban historian Kenneth Jackson told me in a phone conversation that took place during the 2012 election season. The real cost of gas if it were priced to account for things like the building and paving of our roads and oil and gas industry subsidies, he says, would be $20 per gallon; others peg it anywhere from $5 to $15.

  It’s no coincidence that where gas costs more—in Europe, for example—there is less sprawl. In the United States, we were so happy to spread out and make ourselves comfortable mainly because everyone could afford to. “Exurb homeowners accepted long drives and commutes as an avenue to getting the huge house and lot they wanted,” writes Christopher Steiner, the author of $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better. “That was when cheap gas seemed a certainty rather than a fleeting perk.”

  But even at our subsidized prices, our consumption is so high and the price of oil has risen so much that it’s a strain for many people. And while price spikes have come and gone over the years, most experts agree we’re now at the start of something bigger—a combination of dwindling resources and a looming explosion in global energy demand that will continue to drive gas prices higher. Yes, recently we’ve been heralding lots of good news when it comes to our domestic energy supply: the discovery and extraction of shale gas in recent years has been a boon; our dependence on foreign energy imports is at its lowest point in recent memory. But most cars don’t run on natural gas. And most experts, including the lauded oil economist Daniel Yergin, predict fossil fuels will remain our primary energy source for the foreseeable future.

  Indeed, while the development of alternative fuel sources and electric cars show promise, the solutions so far aren’t going to be enough to make a significant difference in our patterns of energy consumption in the near-term. “The various tech industries are full of MIT-certified, high-achiever status quo techno-triumphalists who are convinced that electric cars or diesel-flavored algae excreta will save suburbia,” says the author and sprawl critic James Howard Kunstler. That may be giving MIT scientists, as well as the array of hybrid vehicles on the market, promising developments in alternative fuel, and advancements in electric cars, short shrift. But the main problem is that to date, none of these developments has reached significant scale. To hit the mark the way cheap oil did, whatever we come up with has to be cheap and accessible enough for the 158 million Americans who need to drive or be driven to, from, and around the suburbs and exurbs each day. If it doesn’t, the ever-rising cost of energy will increasingly impact where people choose to live.

  Those on the extreme side of this argument—people like Kunstler, and Steiner, and Jeff Rubin, the former chief economist of investment bank CIBC World Markets who became so convinced of the coming oil shortage that he left to write a book about it, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization—say that dramatic changes are on the way. Kunstler paints a picture where oil soon hits $6, $8, then $12 per gallon; when it does, airlines shut down, parts of the world become inaccessible, and public transit gets mobbed. He foresees our pattern of development reverting to dense villages and cities where food, goods, and services will need to be produced and consumed hyper-locally; the outer suburbs will be reconverted to farmland, where the land will have more value. “Places that can’t grow food locally are not likely to make it,” he says. (Kunstler has long derided what he calls the “3,000-mile Caesar salad” and the complex, energy-consumptive supply chains we have come to take for granted to get food from the ground to our suburban tables.) As the transport of goods by water becomes increasingly important, he predicts the decline of any community that’s not near a waterway. “You can forget about Phoenix and Las Vegas,” he told me when we sat down for a chat in West Palm Beach—incidentally, the kind of in-person interview that under Kunstler’s logic will probably go by the wayside, too.

  To hear Steiner tell it, meanwhile, cars will mostly be playthings for the rich, and gasoline prices will be so high that for the rest of us, as he writes, “driving to the supermarket becomes an exercise of coasting through stop signs in neutral” to preserve every last drop of fuel. For his part, Rubin envisions a world in which neighbors will reconnect with one another; will relearn domestic crafts li
ke sewing, gardening, and farming; and will stay close to home or close to our villages. He predicts that sky-high oil prices will ultimately bring manufacturing back to the United States; even though our labor rates are higher, that increase will be dwarfed by the increase of transportation costs to import goods from overseas.

  Some of these views may be extreme. Transportation engineer Eric Dumbaugh sees it somewhat more simply. Gas prices are inconvenient, he says, but they won’t be the thing that forces us out of our cars. Real behavioral change, he says, will come from somewhere else. “I think we’re going to get out of the car because it doesn’t make any social sense,” he says. “There’s a cultural shift going on right now—and I think that right there is going to be the game changer.” The cultural shift he’s referring to is that for the first time since the invention of the automobile, our driving behavior is beginning to veer in a different direction.

  • • •

  In one of the more striking societal behavioral shifts of the past few years, after all these years of car dependency and after millions and millions of miles clocked, it seems that Americans are slowly but surely driving less. The total number of miles driven peaked in 2007 for the first time since World War II and has been declining since, according to the Federal Highway Administration. The total number of registered automobiles has fallen, too: nationwide, the figure fell 4.5 percent from 2008 to 2010; in California, it’s fallen nearly 10 percent. In April 2012, a U.S. Public Interest Research Group (PIRG) report showed that by 2011, the average American was driving 6 percent fewer miles per year than in 2004. This is partly due, of course, to the financial crisis and the persistent near recession we’ve been in in the past few years, which has forced Americans to pare back on everything. But the changes are significantly more perplexing than that because they started happening before the financial crisis set in. When measured per capita, vehicle miles traveled started to decline in 2004. And in addition to miles driven and automobiles registered, the share of trips Americans make by car has been on a downward trend as well—one that started in 2001. “America’s transportation preferences appear to be changing,” says Phineas Baxandall, coauthor of the PIRG report. Some in transportation circles are calling these collective changes signs that we’ve reached or are about to reach “peak car.”