Suburban Wastelands

July 2nd, 2008 by Matt DiChiara| Posted in Apartment Market Info | No Comments »

We have already discussed the housing crisis from the perspective of quantitative analyses, using the Joint Center for Housing Studies’ State of the Nation’s Housing 2008 Report. We have also examined the political remedies proposed in Congress to address the situation.

With so many empty on the outskirts of the major cities, many unprecedented problems are challenging the mayors of the nation’s largest cities. The new shadow market is not only affecting the market for apartments for rent, but is turning the suburbs into dangerous territory.

However, in order to fully grasp how unprecedented the housing slump is and the unique problems that it poses it is necessary to understand the real life scenarios that have resulted.

According to an article in the Christian Science Monitor, the featured topic at the U.S. Conference of Mayors Annual Meeting in Miami last weekend was how the massive amount of home vacancies are affecting various metropolitan areas and how city governments are coping.

Abandoned homes have caused a number of significant problems for local municipalities. In Mesa, Arizona, abandoned houses have been the sites for squat raves. The Atlanta police arrested a man who was actually building a house from materials stolen from other abandoned houses.

People are walking away from their suburban homes and looking for apartments for rent in the city, rather than work with lenders; this is leaving banks the responsibility of taking care of vacant homes, a task they are not prepared or willing to do. Thus, whole neighborhoods are left to decay, and crime rates increase. Meanwhile, families lose their lifesavings in and banks are left with properties with no equity. The L.A. Times reports that the Inland Empire, located east of Los Angles and north of San Diego, has become a ghost town as foreclosures have led to vacancies.

The Atlantic Monthly portends that this housing crisis will catalyze a return to a more urban lifestyle, as the appeal of suburban living fades. The article argues that the housing trends that have existed since the 1940, with most desiring to purchase their own plot of land out in the suburbs, and creating a vacuum in inner cities, will reverse.

They highlight the neighborhood of Elk Grove, California, where homes once sold for $500,000, but now vandals have moved in and there is gang activity.

The author argues that the eventual fate of large houses in the suburbs will be turned into either single family rental homes and apartments for rent. As we have noted in previous apartment blog posts, the shadow market is already playing a large but role in the apartment rental market.

The Atlantic article also discusses additional factors such as the appeal of a less automobile focused lifestyle and the walkability of one’s neighborhood.

What would you prefer, urban or suburban living?