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

by Leigh Gallagher

  Nowhere is this more obvious than in San Francisco, where some of the hottest tech start-ups are forgoing Silicon Valley for the city itself. Twitter, Zynga, Airbnb, Dropbox, Uber, Pinterest, and Yelp are among those that have opted to build new headquarters in San Franciscos proper instead of the stretch of suburbs that make up the Bay Area peninsula. Several venture capital firms, too, longtime fixtures of Menlo Park’s Sand Hill Road, have recently announced plans to either relocate or open satellite offices in San Francisco. In the mornings, the traffic on the 101, the main commuting freeway out of San Francisco toward the Valley, is now heavier heading out of the city than the reverse.

  One of the more interesting company relocations these days is happening in Las Vegas, where Zappos, the online shoe giant, is getting ready to move from a cookie-cutter suburban office park off a highway interchange in Henderson, Nevada, to a brand-new headquarters in Las Vegas’s old city hall. The company’s CEO, Tony Hsieh, is something of a guru when it comes to building workplaces, and the zany, quirky Zappos offices are legendary both for the employees’ cubicles, which are decorated with streamers, foil, kitschy figurines, faux-jungle greenery, and more, and for its stated mission to “create fun and a little weirdness.”

  But even with all the office whimsy, Hsieh, a big believer in the benefits of the spontaneous “collisions” that occur among employees when they are encouraged to socialize and have places to do so, felt his company’s culture was stifled by its suburban location. The closest place workers could “collide” after work or outside the office was at a bar a half mile away across a few parking lots. So when the opportunity arose to move to the city, Hsieh jumped, leased the building, and set about planning to move his company there in 2013.

  He didn’t stop there. Hsieh decided to invest in reenergizing the entire neighborhood, the neglected Fremont East area a few miles north of the Strip. He committed $350 million—the soft-spoken thirty-nine-year-old is worth hundreds of millions thanks to the sale of Zappos to Amazon.com in 2009—to develop the neighborhood surrounding the company’s new headquarters and fill it with all the necessary ingredients for a thriving urban culture. That means things like loft apartments, hipster cocktail lounges, great Thai food, a thriving arts scene, yoga, doggie day care, coffee shops, and plenty of places for residents to interact with one another. In keeping with the findings of economists like Harvard’s Edward Glaeser, who has found that innovation happens faster in cities because proximity to others breeds creativity, a big part of Hsieh’s plan is to draw entrepreneurs from all over the country with a network of co-working spaces where dozens of start-ups can set up shop and work in close proximity to one another.

  Hsieh wants as many of his employees—and those of the other start-ups—to live in the area as possible, and he knows that having good schools is critical, so his team is working on building an early-childhood school set to open later this year. He’s investing in bringing displays of artwork from the Burning Man festival to the area, and his team is developing bike-sharing and car-sharing programs. “The idea went from, ‘Let’s build a campus’ to ‘Let’s build a city,’” Hsieh says over shots of Fernet, the bitter digestif that has become the team’s signature drink, at his new neighborhood’s Cheers equivalent, the Downtown Cocktail Room.

  Hsieh has a vision to create his own version of the sidewalk “ballet” Jane Jacobs described, a place where people can live, work, and play without leaving their neighborhood. (It’s actually Jane Jacobs meets Ed Glaeser; the economist and author has become a hero of the Downtown Project team.) Hsieh himself has moved, too, vacating his suburban Vegas house for one of the loft-style apartments. “I haven’t been back there in months,” he told me.

  In addition to home builders, retailers, and corporate office parks, the urban migration can be seen in that most iconic emblem of America: our sports stadiums. For most of the 1970s, the trend in stadium construction and financing was to build “concrete doughnuts,” massive, multipurpose cement structures usually placed at or close to highway interchanges accessible only by car. Built in the ’60s and ’70s, like everything else, they followed the move of Americans to suburbia. But starting in the mid-1990s with the opening of the Camden Yards Sports Complex, the new home for the Baltimore Orioles based right in the city’s central business district and near its popular Inner Harbor, ballpark construction has been moving downtown. Coors Field in Denver, Petco Park in San Diego, and others soon followed, channeling the storied historical design of old urban ballparks like Boston’s Fenway Park and Chicago’s Wrigley Field. In an informal survey of twenty-three ballparks built since 1990, all but two can generally be described as “urban,” with most being built in a city’s downtown area.

  Suburban expansion sports teams are following this path, too. Late last year, the National Hockey League’s New York Islanders announced they were moving from their home in the Nassau Veterans Memorial Coliseum in Uniondale to Brooklyn, where, beginning in 2015, they will play in the shiny-new Barclays Center. It was a seminal moment in sports, one TheAtlanticCities.com called a “harbinger of suburban decline.” Forty years ago, as one blogger pointed out, Nassau County was “given a gift” in the form of the first professional sports team for suburbanites. The team was a sign that the suburbs had grown large enough to compete economically with the urban center of New York. Now, the story argued, that trend is happening in reverse. “It may seem like a simple, 30-mile move from one arena to another,” the Web site wrote. “But really, it’s just one more reminder that the mid-century suburb has peaked.”

  • • •

  One could argue that the resurgence of our cities does not necessarily portend the fall of the suburbs. But while many cities have been benefitting from an influx of wealth, the suburbs have been suffering a rise in poverty. From 2000 to 2010, the number of poor in the suburbs or the nation’s largest metro areas grew by 53 percent to a record 15.3 million. And while poverty has increased in cities as well, the growth rate in the number of poor living in the suburbs was more than twice that in cities during the decade—and the suburbs are now home to the largest and fastest-growing poor population in the country. This isn’t just the Great Recession at work; as early as 2005, the suburban poor outnumbered their city counterparts by almost a million. “We think of poverty as a really urban phenomenon or an ultra-rural phenomenon. It’s increasingly a suburban issue,” says Elizabeth Kneebone, Brookings fellow and coauthor of a recent Brookings book on the topic, Confronting Suburban Poverty in America.

  The reasons for this shift are many. During the growth years of the 1990s and 2000s, low-skill construction and service jobs boomed in the suburbs. Soon immigrants began bypassing cities and immigrating directly to the suburbs and exurbs. But these low-skill jobs were the first to vaporize in the housing bust and ensuing recession. At the same time, the longer-term collapse of the manufacturing industry outside midwestern cities pushed many people into poverty. Some of this is also due to the squeeze on the middle class in general. Indeed, the rapid rise in the poor population in the suburbs in the 2000s can’t be explained simply by more low-income residents moving there; a wide swath of the new suburban poor are longtime suburban residents who weren’t poor in the beginning of the decade but fell below the poverty line as incomes stagnated and home prices increased.

  According to one study, nearly three-quarters of suburban nonprofits are seeing new visitors with no previous connection to safety net programs of any kind. In Grand Rapids, Michigan, Steve Gibson, executive director of Byron Community Ministries, says many people he sees seeking help were until very recently members of the middle class. “I hear it over and over again,” he told a reporter for Next City magazine. “‘We used to donate to you.’” In Long Island’s Suffolk County, the number of food stamp cases jumped 55 percent from 2010 to 2012, and the emergency-housing caseload hit a ten-year peak with nearly five hundred families and three hundred individuals living in shelters and motels.

  Suburban poverty pose
s different kinds of challenges than urban poverty. There are fewer social services in the suburbs, so the safety net is “patchier and spread thinner” than in large cities, says Brookings’ Kneebone. And even when services do exist, it’s difficult for the poor to get to them if they lack access to a car. Suburban poverty also tends to be hidden behind closed doors as its residents fear the stigma of having their neighbors learn they’re getting government assistance. Falling below the poverty line, after all, is not exactly keeping up with the Joneses. “Soaring poverty rates threaten the very foundations of suburban identities, suburban politics and the suburb’s place in the nation’s self-image,” wrote Lisa McGirr, professor of history at Harvard and the author of Suburban Warriors: The Origins of the New American Right.

  Along with poverty, crime rates have gone up in suburban counties at the same time as they have declined in cities, and suburbs are increasingly seeing gang, gun, and drug activity, and worse. In 2012 federal prosecutors in northern Virginia charged alleged members of the Crips gang with luring high school girls in its wealthy suburban areas into teen prostitution rings. “Slavery in the suburbs,” read the special logo on the local news the night the story broke. After a tragic gang rape in a park in a planned community in Moreno Valley, California, the accused teens were said to have ties to a local gang. There has always been crime in the suburbs, of course, but increasingly it seems to be more of the sort once reserved for cities. While overall homicides have been falling nationwide—they fell sharply from 2001 to 2010, including a 16.7 percent decline in big cities, as places like New York City saw rates hit forty-year lows—they rose 17 percent in the suburbs. “People used to leave the city because they were afraid,” says the historian Kenneth Jackson. “Now, if you throw car crash danger in, you’re really in more danger in the suburbs than the city most of the time.”

  Some experts say this shouldn’t come as such a surprise. The suburbs may have started out as safe, peaceful enclaves for the middle class, but as they grew, they came to more closely mirror the country in general. There are now suburbs for every society, age, race, housing type, and income, and the suburbs now contain all the good and bad things that come with those things, too. As Brookings demographer William Frey puts it, “If it’s part of America, it’s part of the suburbs.”

  Other aspects of the suburbs have fallen into decline, too. Take the shopping mall. Once a hallmark of suburbia, it had by the mid-2000s become an anachronism. On the one hand, Internet commerce enabled shopping from the living room, and on the other, suburban shoppers now have other options in newer, open-air shopping centers that more resemble shopping on a Main Street. Only one enclosed indoor shopping mall has opened in the United States since 2006, and at existing malls, vacancy rates are soaring, hitting their highest level since the early 1990s. (A Web site, deadmalls.com, started by two retail historians, now tracks the “demise of these great giants of retail.”) But because mall construction is so expensive, once the massive structures are built, they’re stuck there. To stem the tide of vacancies, mall developers have been getting creative about finding new tenants, filling them with call centers, art galleries, car showrooms, even farmer’s markets. Cleveland’s Galleria at Erieview is now closed on weekends because there are so few visitors, and part of the mall has been converted into a vegetable garden. “I look at it as space,” Vicky Poole, a Galleria executive, told the New York Times. “I don’t look at it as retail.”

  Some developers have actually turned their focus on these dead or dying malls. Ellen Dunham-Jones, architecture professor at the Georgia Institute of Technology, and June Williamson, associate professor of architecture at the City College of New York, have documented this phenomenon in their book, Retrofitting Suburbia: Urban Design Solutions for Redesigning Suburbs, a comprehensive look at efforts to retool, reinhabit, or return to nature abandoned suburban forms. In some cases, this means turning gargantuan forgotten malls into hip, urbanized residential villages. One such experiment is under way in Lakewood, Colorado, an affluent suburb west of Denver. The former Villa Italia shopping mall, a 1.2-million-square-foot indoor mall built in 1966 that had fallen on hard times, has been turned into Belmar, a 104-acre pedestrian-friendly community that has apartments, condos, town houses, office space, artists studios, and a shopping and entertainment promenade on twenty-two walkable, urbanized blocks. Now, instead of turning into the mall’s giant parking lot, you end up cruising along a downtown main drag, Alaska Street, which is lined with old-fashioned streetlights, coffee shops, boutiques, and restaurants. There are more than a thousand housing units, which range from town houses to loft condominiums to small-lot single-family homes, as well as a row of ground-floor artist studio and business incubator spaces. A public art project called “Urban Anatomy” has installed small works of art and fragments of poetry on manhole covers, sidewalk joints, and grates throughout the development, highlighting overlooked details of the urban environment.

  The whole setup is definitely still suburban—the new urbanized village includes a Zales, Yankee Candle, and Sur La Table—but these suburbanites can leave their loft apartments on foot, pick up an espresso, and go hear a poetry reading, all on a site where Foley’s, Dillard’s, Montgomery Ward, and JCPenney once sat. There are dozens of these projects at other malls around the country. “It’s time to let the suburbs grow up,” Dunham-Jones says.

  Suburban chain restaurants are in the middle of a retrenchment, too. The number of restaurants in the country grew by more than one hundred thousand from 1996 to 2008 as mid-priced mass-market restaurateurs like Friendly’s, Applebee’s, TGI Friday’s, Olive Garden, and others chased the boom into the suburbs and the exurbs; after the recession and housing bust hit, analysts said at least twenty thousand restaurants needed to close in order to bring the industry back to equilibrium. Now, so-called zombie restaurants languish everywhere. “I don’t think we’re overbuilt,” Paul M. Mangiamele, the CEO of Bennigan’s Franchising, told the New York Times. “I think we’re underdemolished.”

  • • •

  The one area where we may be the most underdemolished of all, of course, is in houses. Our recent housing boom and bust was primarily a suburban crisis, and the overbuilding and resulting excess inventory still weighs on our residential landscape. When the music stopped, once-booming suburbs and exurbs quickly went bust, many emptying out almost as quickly as they’d been built. Because the boom had ended so abruptly, many subdivisions were halted in mid-development. While industry-wide housing inventory figures have improved, hundreds of these “zombie subdivisions” still dot our landscape, many with infrastructure teed up and ready to pipe water and electricity into homes that will never appear.

  Residential land values plummeted so much—falling nearly 70 percent from 2006 to 2011—that developers who had bought up raw land during the boom started selling it back to the farmers they bought it from. It was a reversal from the boom years, when the amount of land used for farms fell by two to four million acres a year as developers paid huge premiums to get their hands on farmland that they could develop. Now, farmers who sold during the boom, making multiples they never dreamed of on their land, were able to profit on the other side as well, buying that very same land back for a song. In an additional dose of irony, crop prices had soared, jumping 20 percent from 2007 to 2011, at the same time that home values plummeted, so the land was now more valuable to the farmers than ever. The Wall Street Journal’s Robbie Whelan recounted the tale of the Englands, an Arizona cotton farming family that paid $731,000 for 430 acres of cotton fields sixty-five miles southeast of Phoenix in 2004, flipped the property to an apartment builder in 2009 for $8.6 million, then bought the farm back out of foreclosure for $1.75 million. “It was a pretty good deal,” Don England Jr. told the paper.

  The fact that suburban tracts intended for development were reverting back to farmland was little noticed at the time, but it was a shocking turn of events, says Frank Popper, a renowned land-use expert and professor at the
Edward J. Bloustein School of Planning and Public Policy at Rutgers University. The conventional thinking in the planning world, Popper says, is that every time a farm goes into development, it’s lost to agriculture forever. That reversal, he says, is “a mind-blowing thing from a planning point of view.”

  Popper is an expert in the planning world for his work studying the depopulation and decline of urban and rural areas, and how policy makers and land-use regulators can best manage depopulation. It’s a topic few in the planning world have liked to talk about—in planning, real estate, and development worlds, “growth” is religion, and words like “shrink,” “contract,” “decline,” or even just “small” have typically been verboten. In the late 1980s, Popper and his wife, Deborah, now a professor of geography at the City University of New York’s College of Staten Island, conducted an in-depth study of the ailing rural areas of the Great Plains. The area had lost a third of its population since 1920, and much of the land had dried out to such a degree that it was unsustainable. In a seminal article published in 1987, the Poppers argued that the land should be returned to native prairie in order to create a vast nature preserve. Returning the land to native grasses and reintroducing the buffalo, an approach they called the Buffalo Commons, would be vastly better for society than letting the local economies continue to depopulate and disintegrate into near-ghost towns.