US housing market is urbanizing

Growth patterns shifting

Matt Dietrichson, May 21, 12.

Development patterns across the country reveal a dramatic shift in demand away from sprawling suburbia and towards low-maintenance urbanism, according to USA Today:

Townhouses and single-family homes are sprouting on old industrial sites in the heart of Southern California cities. In Florida, developers are coveting foreclosed golf courses in urban centers to put up new subdivisions. Builders in Texas are going after available land even near landfills for residential and retail development.

Why are the giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs, doing an about-face? Why are they suddenly building smaller neighborhoods in and close to cities on land more likely to be near a train station than a pig farm?

A housing industry slowly shaking off the worst economic conditions in decades is rethinking what type of housing to build and where to build it. It’s a response to a new wave of home buyers who have no desire to live in traditional subdivisions far from urban amenities.

The nation’s development patterns may be at a historic juncture as builders begin to reverse 60-year-old trends. They’re shifting from giant communities on wide-open “greenfields” to compact “infill” housing in already-developed urban settings.

The market slowdown has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.

Young Millennials and older Baby Boomers are rejecting traditional suburban lifestyles in favor of urban living and shorter commutes. Many want to live near city centers so they can walk to work, shops and restaurants or take public transportation. They also prefer smaller homes because they’re single or have no kids and don’t want to spend their free time maintaining their homes.

“It’s the kids (ages 18 to 32), the empty nesters (Baby Boomers with no kids at home),” says Chris Leinberger, president of Smart Growth America’s LOCUS (Latin for “place”), a national coalition of real estate developers and investors who support urban developments that encourage walking over driving. “These two generations combined are more than half of the American population.”

The housing bust of the last five years hit hardest in subdivisions in remote suburbs, drying up financing for such development. At the same time, gas prices soared and so did environmental consciousness, giving consumers pause about living in distant suburbs away from services, jobs and entertainment.

California couple Maurice Turner and his wife, Preet Bassi, used to rent in the center of Anaheim. When they decided to buy, they found their choices limited at first.

“The majority of homes were single-family homes in the suburbs or older homes and multi-story condos in the city,” says Turner, administrative manager in a nearby city.

The 30-something professionals did not want to leave city neighborhoods and settle in a suburban subdivision. And they didn’t want to live in a multi-story condo building.

That was about the time Brookfield Homes, a leading developer of huge suburban subdivisions, began Colony Park — more than 500 single-family homes, townhouses and condominiums in Anaheim’s Historic District on a site that once housed industrial warehouses. Many of the townhomes are across the street from restaurants, entertainment and other urban attractions.

Turner and Bassi now live in a three-story, 1,700-square-foot townhouse where they and their neighbors make “a conscious effort to spend less time in your car commuting and spend more time in your neighborhood with friends, neighbors, family,” Turner says. “The urban environment was a big key to staying.”

Growth patterns shift

Developers are listening because the market has spoken loud and clear.

Latest Census data show that population growth in fringe counties nearly stopped in the 12 months that ended July 1, 2011, and urban counties at the center of metro areas grew faster than the nation as a whole, a USA TODAY analysis found.

Central metro counties accounted for 94% of U.S. growth, compared with 85% just before the recession and housing bust.

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