Oversupply of suburban housing

“Zombie” subdivisions

Jon Boyd, Jun 24, 10.

Foreclosures strike with the most frequency in suburban areas, according the new book, Foreclosing the Dream: How America’s Housing Crisis Is Reshaping Our Cities and Suburbs, by William H. Lucy, and published by the American Planning Association’s Planners Press. According to his analysis of foreclosures in 2008, 62% occurred in Arizona, California, Florida, and Nevada; and 42% percent occurred in just 16 counties within ten metropolitan areas, most of them concentrated on the metropolitan fringes. The most severe examples of such areas, he calls “zombie subdivisions.”

Among the causes attributed to Lucy for the foreclosure crisis include: increasing federal home ownership goals to 71.4%, long-term declines in wage equality, credit rates which increased during the life of the contract, and the recession.

The present foreclosure crisis aside, Lucy is one of many land use and real estate experts who forecast structural changes in real estate. Christopher Leinberger predicts the same trend in his 2008 book, The Option of Urbanism: Investing in a New American Dream. He claims changing cultural trends are driving many American away from drivable suburbs toward walkable urban neighborhoods. He also points to changing demographics - citing Arthur C. Nelson’s 2006 study in the Journal of American Planning Association. First, aging baby-boomers seek to downsize their domiciles, making an urban townhouse into an attractive option. Leinberger claims that about 1.5 million Americans will reach the age of sixty-five each year between 2012 and 2020. That’s almost twice the annual number compared to the 2007-2011 period. Therefore, if an increasing number of baby boomers prefer walkable urban neighborhoods, they will be a powerful force driving real estate trends. Yet Leinberger and Lucy also believe the next generation of parents are more likely to rear their children in cities than previous generations. As Leinberger quips, “The age of Leave it to Beaver is over, replaced by the era of Seinfeld.”

(photo credit: deejayres)