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

by Leigh Gallagher

  That was what was already happening: several hundred thousand square miles of land had just six people per square mile—the definition of frontier settlement, the most rural category of settled land—and the area was seeing rising bankruptcy rates, foreclosures, and human suffering including psychological stress, family violence, suicide, and mental illness. It would be better for everyone, the Poppers argued, if much Great Plains land—they called its settlement the “largest, longest-running agricultural and environmental miscalculation in American history”—was returned to its original “pre-white” state.

  They faced intense criticism for their work. The controversy around their idea inspired a novel, Richard S. Wheeler’s The Buffalo Commons; a Pulitzer Prize finalist book, Anne Matthews’s 1992 Where the Buffalo Roam; and several documentaries. In recent years, after the Poppers’ predictions for the region’s demise had started to come true, several politicians and high-profile thinkers reversed course and started endorsing their idea, with the Kansas City Star publishing two editorials in 2009 and 2010 supporting the creation of a million-acre Buffalo Commons National Park.

  Now the Poppers also study shrinkage in large and midsize cities, former industrial centers such as Buffalo, New York; Flint, Michigan; Youngstown, Ohio; Pittsfield, Massachussetts; and Woonsocket, Rhode Island, that have seen excessive depopulation. According to the Poppers, shrinkage presents one of the century’s great settlement and housing issues. It saps communities and people of income, housing, and a sense of community, But it doesn’t have to, they say; they emphasize what they call “smart decline,” ways to shrink that can be productive: razing structures that are no longer needed so children don’t grow up amid blight, playing up a town’s strengths by boosting Main Streets, retaining old buildings with history, and otherwise adjusting the urban environment to fit its population. They point to Detroit, which experienced the largest depopulation of an industrial-age American city and in response bulldozed hundreds of homes and turned over much of its land to fields and farmland that lay there before. As radical an idea as that might seem to the layperson, it was lauded in the planning world. These other industrial cities, the Poppers say, need to follow similar patterns or risk sinking into blight. Buffalo, they point out, is a “size-40 city in a size-60 suit.”

  Justin Hollander, an assistant professor of urban and environmental policy and planning at Tufts University and a former student of Frank Popper, took this concept to the suburbs, conducting an analysis of the depopulation brought on by the recent housing bust. Using data from the U.S. Postal Service to track the number of occupied housing units—whether a house gets mail is the best determining factor of whether it is truly vacant—Hollander found that one-quarter of all U.S. neighborhoods have fewer occupied homes now than they did in 2006. He found the depopulation in the suburbs to be far greater than cities; suburban areas registered 43 percent more declining zip codes from 2006 to 2009 than from 2000 to 2006, while for urban areas the figure was just 2 percent. In policy planning worlds, Hollander’s results were significant and a major challenge to the long-held belief that cities are most prone to decline while suburban growth will continue forever. “The face of declining cities and regions in America has begun to change,” Hollander wrote. “Decline is no longer limited to older manufacturing towns, urban cores and declining rural farming communities.”

  Hollander takes issue with the government’s idea to turn our excess housing inventory into rentals; he suggests a better use would be turning abandoned suburban homes into offices, storage facilities, and artist studios—and when there’s no demand for any alternate use, he says, regulators should demolish the homes and sell the land for parks or community gardens, or, much like the Poppers suggested for the frontier towns of the Great Plains, return the land to wilderness.

  As our housing crisis deepened and millions of home owners forfeited their homes, this is just what some banks started to do with some of their repossessed properties. Since so many of the homes were entry level and in undesirable neighborhoods, many of them were worth so little that they actually did more damage just by existing. If they stayed on the market, they added to inventory and the banks had to pay to maintain them. If they sold, it would be for a price so low, it would pull down the average. In many cases the best answer was simply to level them. In 2011, major lenders like Bank of America, Wells Fargo, Citigroup, and JPMorgan Chase decided to bulldoze or donate the repossessed homes they owned. In California’s San Bernardino County, when a local bank decided to raze sixteen new homes it couldn’t sell, residents from neighboring streets came by to watch the demolition, taking video on their cell phones to capture the live-action manifestation of the mistake Wall Street had made.

  Besides tearing them down, another solution to mop up the extra homes came from the government. In late 2012 the Federal Housing Finance Agency came up with a plan to sell off thousands of foreclosed properties owned by Fannie Mae and Freddie Mac to big institutional investors who, the idea went, would buy them in bulk and turn them into rental properties at considerable profit. Wall Street giants like Blackstone Group and Colony Capital, along with a gold rush of opportunistic entrepreneurs, have invested billions buying up thousands of foreclosed single-family homes, serving as landlords to what they think is likely to be a thriving rental market as the home ownership rate continues to float back down to its natural level.

  Some say this is a flawed idea. For one thing, many of these homes are in the wrong place, products of a manufactured, bank-led demand that vaporized when the market tanked. These homes may be of no more interest to renters than buyers. Creating a rental market for these properties has its own set of downsides, the biggest being that renters and landlords don’t usually take the same kind of care of their homes and neighborhoods as home owners do. But it is helping mop up the excess. Thanks to these efforts, the low pace of new home construction, and the strengthening of the housing market, much of the excess housing inventory has been worked off. As of this writing, we have a 4.4-month supply of existing homes, the lowest housing supply since early 2006.

  But the migration of wealth from suburb to city started well before Wall Street concocted the no-income, “no-doc” loans that led to the housing crisis. Cities’ renaissance started as early as the mid-1990s, urban housing prices have been rising since 1980, and crime rates have been falling for almost as long. Toll Brothers started moving into the New York City market in 2003. The trend might have been accelerated by the housing crisis, but it was happening already.

  Home valuations are now reflective of the shift inward. Christopher Leinberger, analyzing data from the online real estate database Zillow, found this to be the case by comparing real estate prices in center cities and inner suburbs with their far-out suburban counterparts in the late 1990s and today. In the late 1990s, when measured per square foot, wealthy outer suburbs contained most of the expensive housing in the United States. Today, the most expensive housing is in center cities and inner suburbs. In Seattle, for example, in 1996 the price per square foot in suburban Redmond was equal to Seattle’s Capitol Hill; today, valuations in Capitol Hill are almost 50 percent higher. In Columbus, Ohio, prices in 1996 were highest in Worthington, and values were 135 percent higher than Short North, a neighborhood near the city’s downtown. Today, Short North prices are 30 percent higher than Worthington’s, while the highest prices of all are in downtown Columbus. In Denver, home prices in Highlands Ranch, a master-planned community twenty miles south of downtown, were 21 percent higher per square foot in 1996 than Highlands, a neighborhood next to downtown Denver. Now Highlands’ valuations are more than 60 percent higher than Highlands Ranch’s. “Simply put, there has been a profound structural shift,” Leinberger wrote in the New York Times, “a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.”

  A new kind of Great Migration is taking place. Rather than a cyclical phenomenon, many are suggesting these tr
ends taken together, combined with the demographic shifts in the makeup of our population, signify a permanent shift. “The suburban project is over,” says the author James Howard Kunstler. “The people who deliver suburbia—the realtors, the production builders, the mortgage originators—are kicking back waiting for, quote, ‘the bottom’ to kick in so they can resume doing what they were doing. It’s a vain hope.”

  That may sound extreme, but just looking at Toll Brothers’ activity alone shows that something is afoot. While we chatted on the phone, CEO Yearley—a man who has a framed proverb on his desk that reads “You can buy more land in an afternoon . . . than you can get rid of in a lifetime”—told me the company had ceased operations in some of the most remote areas it ventured into during the height of its expansion. “We have completely shut down and mothballed the Poconos and West Virginia,” he says. “They’re too far out right now. Maybe one day we get back there.” That means Toll is completing whatever homes it sold in those markets and isn’t developing new communities there right now. Toll doesn’t build homes unless they’re sold, so it doesn’t have an inventory problem there; it’s just not expanding outward.

  That said, Yearley still thinks there will be a strong market for what he calls the “suburban move-up” home buyer—the upwardly mobile young family that still wants to live in a subdivision. “I think for most families, once the kids hit kindergarten, most people still want to move to the suburbs and have their own home with their own backyard with the swing set and the little league team playing down the road and with a great school district,” he says. And unlike people like Kunstler or Chuck Marohn in Minnesota, Yearley thinks there will one day be a revived market in some places where the company has stopped expanding, if only because there’s limited land available. “That ‘next frontier’ went away,” he said. “It will come back.” Yearley describes these changes—the company’s move into cities and the cessation of expansion plans in remote markets—as a “shift, but not a monumental shift.”

  Even so, Toll’s mix of what it sells to whom is changing. Those “suburban move-up” homes used to constitute 70 or 80 percent of the company’s business, Yearley says; today they’re about 50 percent, with the other half coming from a combination of city-suburban townhome developments, active adult communities, and pure urban developments like its new projects in New York City.

  And the success of the company’s New York properties has surpassed even Yearley’s own expectations. “I would have never thought we’d be building that building at Twenty-eighth and Park Avenue South,” he says. “I would have never thought we’d be building at Sixty-fifth and asking twenty million dollars for a penthouse.” All told, with the new plans including the hole in the ground on Park Avenue South, Toll Brothers had close to thirty separate buildings in the New York City market when I spoke with Yearley in late 2012. Before we hung up, he told me there were plans for close to a dozen more.

  7

  THE FUTURE

  With your head full of brains and your shoes full of feet, you’re too smart to go down any not-so-good street.

  —DR. SEUSS, OH, THE PLACES YOU’LL GO!

  Even as he has led the movement against sprawl, even as he colorfully lambasts the people and policies responsible for it, Andres Duany freely admits he sees the objective benefits of suburban living. He likes to tell the story of how, when he was first setting up his planning firm in Coral Gables, he asked to commute home with his landlord, a guy in his thirties who lived in South Florida’s outer suburbs, to see what it was like. The commute itself was “awful, awful, awful, awful,” Duany says. They were stuck in horrendous traffic, the sun was setting in their face, and the drive seemed to take forever. But, as Duany describes it, once they pulled into the “semi-gated” community and arrived at his home, it was “complete heaven” inside. There were tall ceilings, a refrigerator full of “cool-looking things to eat,” a long, welcoming L-shaped couch, a big TV, sophisticated lighting, cozy rugs, good acoustics, and more. Duany says he realized in that moment that when people say they like the suburbs, what they like is what he calls the private realm. “The private realm is objectively fantastic,” he says. He understands why so many people want to live that way. “It’s very appealing.”

  It is very appealing, and it’s why most Americans still live in the suburbs. We are a nation that values privacy and individualism down to our very core, and the suburbs give us that. But somewhere between leafy neighborhoods built around lively railroad villages and the Inland Empire, where two-thirds of residents have to drive ten miles to reach a central business district, or shiny new subdivisions in cornfields near Iowa that bill themselves as suburbs of Chicago, we took our wish for privacy too far. The suburbs overshot their mandate.

  The modern American suburbs were a product of many things: a booming middle class, the early wonder of mass production and the automobile, a heavy assist from federal housing policy, and spring-loaded, pent-up demand for housing after the war. When you’re in a rush to solve a problem, you look for the most efficient solution, and in this case the easiest, most efficient solution was the suburbs.

  But things have changed, and many factors—from the resurgence of cities to rising gas prices to our fast-changing household demographics—are lining up that point to the end of the suburbs as we know them. It’s not overstating it to say that we are at the beginning of a transformational shift in our landscape, one as big as or bigger than the shift that took place immediately after World War II.

  There is a group of authors, scholars, and demographers who say this is all a bunch of hogwash, that the suburbs are not changing or losing favor in any way. Americans love their suburbs, these critics say, pointing out that while suburban development was encouraged by the government, government leaders were simply following demand. Joel Kotkin, executive editor of the Web site Newgeography.com and author of the 2010 book The Next Hundred Million: America in 2050, is one of the most prolific of these critics. Kotkin’s own analyses of census data show that it’s suburbs, not cities, that posted most of the household growth in the United States from 2000 to 2010. He also cites preference studies that show that everyone—even millennials—wants single-family houses in the suburbs. But those on the urban side of the debate say that Kotkin includes many urban hubs in his definition of suburbia. The census definitions he uses, they say, define places like New Jersey’s Hoboken and Jersey City as suburbs—metropolises in their own right whose growth might offer more proof of the increasing popularity of cities.

  The debate is complicated by the fact that it’s hard to define much of the American landscape as strictly one or the other. Our cities and suburbs are such a patchwork that for every study that proves one point on this topic, there’s another that proves the opposite. Add to that the fact we’re still recovering from a housing crisis—which makes census data even more difficult to analyze because our migration patterns were so exaggerated during the years of both the boom and the bust—and you’ll see why for every statistic-backed expert assertion there seems to be some other expert claiming fallacy.

  The critics are right about one thing, though: we do love our suburbs. And many residents are fiercely protective of them. Andres Duany says he has met people who think he’s crazy when he asks them if they would prefer living in a denser community. “They look at me and say, ‘Why would I want to know my neighbor? Why would I not want to drive my child everywhere? That’s the only time I ever get to see them.’” When he once suggested eliminating drive-through restaurants, a suburban mother stared at him point-blank and asked him: “Have you ever tried to take a baby out of a car seat?’”

  So while some people might ridicule cul-de-sac life, others wouldn’t have it any other way. For example, the car-to-car trick-or-treating tradition described in chapter 3 that Annette Lee and her family experienced when they lived in suburban Boonton Township, New Jersey, might not be for everyone, but Lee and most in her community who participated in it loved it. It ended u
p becoming a social event for the parents, who drank wine (the nondrivers anyway) and decorated their cars, and the kids collected much more loot than they would have otherwise been able to given the large size of the lots in the community. Lee now lives in a different community with similar zoning, but she still loves her setup. “We always look for the bigger the lot the better,” she says, noting that her husband in particular likes the privacy a large-lot setting affords. “He wants to be able to wash his car without having all the neighbors looking at him,” she says. Even though they’ve been in their community for five years, Lee says she and her husband don’t know many of their neighbors well enough to do anything more than wave and say hello. But she points out that she knows a lot of people who live in town house developments, and they don’t know their neighbors, either. And she doesn’t mind one bit having to drive to go to the grocery store. Even if she could walk to one, she points out, shopping as she does for her family of seven, “what am I going to do—carry all my groceries?”

  Gary Cooper has a unique perspective. A retired broadcast producer who grew up in Harlem and relocated to the suburbs of Kansas City—where, he says, what “used to be farms and cows is now all upper bracket subdivisions”—he loves suburban life. “It is like living in Nirvana,” he says. “You drive up to the bank, drive up to the cleaners, drive up to the pharmacy, and everyone smiles and says hello . . . they have more Pilates and yoga classes than Carter has liver pills, and you can park anywhere.” Since Johnson County, where he lives, is the richest in the state, its school district is one of the highest ranked. “I must admit,” he says, “the quality of living is quite outstanding.”

  To get a sense of the vitriol thrown at those who question the viability of suburbia, just scroll through the comments on any article about the subject. A recent public radio story about the looming demographic changes that threaten suburbia’s growth drew some fiery responses. “Suburbs are only ‘dull and boring’ if you are lazy and unimaginative,” wrote one listener. “I can get to the city when I need to, and leave it when I need to . . . and I will never, ever have to worry about being stuck in a ‘hipster enclave’—hipsters hate suburbs. If that’s not a reason filled with win, I don’t know what is. Viva suburbia!” Chimed in another: “What gives with the suburbs being ‘soulless’? The people who live in the burbs feel the same level of connection as the people in the city. What does that statement mean for rural people? Would they be soul-less-less?”