Further Proof that New Urbanism Makes Economic Sense
U-VA Study Sees Mismatch Between Market Demand and Current Housing StockSubmitted on 09/29/2010. Tags for this image:
Analysts scrambling to figure out why the housing market has remained so poor for so long have pointed at everything from mortgage policy to excessive construction for answers. But William H. Lucy, a professor of architecture and urban and environmental planning at the University of Virginia who has focused his research on the changing demographics of homebuyers, sees the continued problem as springing from a fundamental misreading of what Americans now value in the place they call “home.” Increasingly, Lucy reports in a new University of Virginia study, the sorts of things that homeowners and buyers are looking for in a home are shifting, from an exurban-centric model to a more convenient, walkable, and neighborhood-oriented model. The housing market’s failure to adapt to these changes in mindset and values is one of the major factors depressing the already troubled American housing market.
The author of Foreclosing the Dream: How America's Housing Crisis is Reshaping Our Cities and Suburbs and co-author with David Phillips of Confronting Suburban Decline, Lacy examined for this latest project U.S. Census Bureau data, U.S. Department of Housing and Urban Development reports, historical data of U.S. housing markets, and the work of other scholars to try and figure why the housing market had plummeted so quickly. Lucy discovered that, from 2000 to 2009, the number of homeowners 55 and over who may want to sell increased by 8 million, while the number of potential 30- to 45-year-old homebuyers decreased by 3.6 million, a change that is directly affecting the American housing market.
So why the sudden shift? Certainly, part of it has to do with the large increase in the ratio of baby boomers to young adults, from 3.5 to 1 in 2000 to 5 to 1 in 2010. But Lucy sites another factor contributing to the increasing number of homes sitting empty, especially in far-flung, large-lot locations: “Location is more important than ever, and how location is interpreted has changed.” The 30- to 45-year-old market that has traditionally flocked to the suburbs, eager for the opportunity for homeownership, has begun to value new things in their housing decisions. More and more, just-large-enough units, greater convenience and variety, and decreasing drive times are categories that first-time homebuyers are considering when deciding where to settle down. Similarly, homeowners 55 and older are rethinking their large-lot lifestyle and looking instead to downsize and move closer in to core cities.
Lucy suggests that these changing attitudes towards the suburban car-centric lifestyle, and not foreclosures and new construction, are what are really to blame for the prolonged downturn in the housing market. Lucy discovered that, from 2000 to 2008, central cities have tended to improve in income and housing values relative to their suburbs in the 35 largest metropolitan areas. And yet, developers are still greenlighting massive subdivisions of cookie-cutter houses, resulting in a surplus of suburban and exurban — a surplus that is proving a deadweight to the recovery of the housing market. For over six decades, the push has been for continuous suburban construction in ever more far-flung outer suburbs. This model, Lucy says, is simply "no longer a viable option.“
We need to take a different perspective," Lucy said, suggesting that increased development, remodeling, and fix-up projects in core cities and their first-ring suburbs are going to become the foundation of the housing market in the future. “Revival of housing may be slower than many wish, and it will not be a full early partner in moving employment toward its previous peak,” Lucy predicts. “It is time to move on to a richer, more varied and enhanced quality of life with the convenience and energy efficiency that denser settlements can provide.”
-- Reported by Colleen Foran
Images: Just three blocks from a commuter rail station and around the corner from a Starbucks coffee shop and other amenities, School Street in downtown Libertyville, IL is an example of a walkable, mixed-use location that is seeing strong demand in today's tough housing market. The developer of a new urbanist infill project there has sold 14 of 24 future homes in six months. Courtesy of School Street Libertyville.