Thursday, May 07, 2009

More Exurbs

Building on my piece about the future of exurbs from yesterday, I strongly recommend Rob Inglis' and Jonathan Thompson's profile of Surprise, Arizona in High Country News.

While Ben Adler's piece I discussed yesterday typically focused on the DC area (what a surprise coming from a national political publication!), exurbs are far more prevalent in the Sunbelt. There are hundreds of communities like Surprise in the Southwest, in Texas, Georgia, Florida, and around the Sunbelt. Inglis and Thompson hint at why I think the glory days of exurbia might be behind us. There are literally millions of housing units in exurbs. Most of them were built because of the housing bubble kool-aid. Many of the people who bought these homes did so with adjustable-rate mortgages and then got thrown out of their homes when the payments ballooned.

As the authors point out, people don't move to the Phoenix suburbs for the weather or even for jobs. They move there because California is too expensive. Cheap land means development. But the overbuild of housing has led to plummeting prices. So it will continue to remain cheap. However, they still don't get at the core issue of what I believe will be exurban decline--oil. If you actually have a job now, you can buy those homes tremendously cheap if you can get then mortgage. But what good are those homes going to be when gas is $5, as I believe it will be in 2-3 years? The affordability of extreme suburbia will be undermined by structural problems beyond the real estate industry's control. Again, I think many of those houses will be occupied, but as working-class housing by people who will have to use their meagre resources to commute long distances to work, commutes that will eat up their low salaries in astronomical gas prices. There won't be public transit as an option. The West and Southeast will come to look like the Santa Fe area, with an expensive city surrounded by poor areas filled with working-class people forced to drive 30 miles from home to get to their jobs.