"Living Too Large in Exurbia"

[jread]

Very good article with some excellent points. I think that throughout the next couple of years we will see some big changes in current trends.

a chill is sweeping through the fast-growing exurbs that have popped up like mushrooms on the outskirts of established cities and suburbs all across America. A lifestyle built on cheap energy costs and low mortgage rates is in jeopardy. Consumers who hardly gave a thought to gassing up when regular was $1.50 a gallon are abandoning their hulking sport-utility vehicles and pickups, signing up for carpools, and leaving the motorboat in the backyard now that prices are stuck at nearly twice that. And with heating bills expected to jump as much as 70% for many this winter, more pain is on the way.

But if super-high energy prices persist for the next few years, as now appears increasingly likely, they will put a world of hurt on the thousands who already were stretching their budgets to live in the outer suburbs and rural fringes.

While many of America's biggest cities continue to lose population, and inner suburbs are suffering symptoms of old age, out in the exurbs it's a different world. Between 2000 and 2004 exurbia accounted for 17 of the 20 fastest-growing counties in the nation with more than 10,000 people. The population has mushroomed in once-rural counties near Atlanta, Dallas, Reno, and other cities. And that's certainly reflected in commute times: According to the Joint Center for Housing Studies at Harvard University, the number of workers in the 49 largest metro areas commuting an hour or more increased by 2 million between 1990 and 2000; in the rest of the nation there were 1 million more hour-away commuters.

The economic consequences of a slowdown in exurban exuberance is difficult to measure. Clearly the exurbs' rapid growth has been one of the main engines of U.S. economic expansion in recent years. Consider all the homebuilding plus the malls, box stores, restaurant chains, fire departments, and schools that have popped up on cheap farmland beyond the suburbs. The new arrivals provided huge growth for retailers and other service companies, hundreds of thousands of new jobs for teachers, firemen, and the like, and entrepreneurial opportunities galore. Indeed, it is unlikely that the U.S. economy could have outperformed every other major industrial country in recent years without the explosion of exurbs and their ripple effects on business.

Even if current residents hold tight to their exurban life, a big question in the near term is whether new families will keep flooding to the outskirts. Any hesitation by buyers could leave developers and homebuilders in a bind.

The availability and price of mortgages will also weigh heavily, and some economists believe that the Federal Reserve, with its frequent rate increases, is determined to apply the brakes to the runaway housing market. Long-term interest rates have jumped by nearly a half percentage point over the past month on growing fears of faster inflation and tough talk from Fed officials about the need to contain it. The higher borrowing costs are starting to put a damper on the overheated housing market. Builders now hold a 4.7 months' supply of unsold homes, the highest level in more than five years. If housing cools off, the exurbs could be among the first places to feel the pain.

Full Article: http://www.businessweek.com/magazine...2/b3955060.htm

[BKM]

Even in its "Could things be heading for a fall" tone, there are still assumptions here that are very, very questionable.

The economic consequences of a slowdown in exurban exuberance is difficult to measure. Clearly the exurbs' rapid growth has been one of the main engines of U.S. economic expansion in recent years. Consider all the homebuilding plus the malls, box stores, restaurant chains, fire departments, and schools that have popped up on cheap farmland beyond the suburbs. The new arrivals provided huge growth for retailers and other service companies, hundreds of thousands of new jobs for teachers, firemen, and the like, and entrepreneurial opportunities galore. Indeed, it is unlikely that the U.S. economy could have outperformed every other major industrial country in recent years without the explosion of exurbs and their ripple effects on business.

Is an economy based solely on new retail selling imported goods and sold on credit really as positive, as strong as this paragraph assumes? Are the clusters of box stores and new, ever larger houses really adding to the long term sustainability (there's that horrific word ) of the American economy? Or, is it really not the world's best economy after all? A drunk engaged in a full-on binge sure looks and sounds like he is happy-but is his bacchanal really a positive, healthy thing?

BRIAN'S RANT FOR TODAY

[pete-rock]

A drunk engaged in a full-on binge sure looks and sounds like he is happy-but is his bacchanal really a positive, healthy thing?

That's an interesting -- and maybe accurate -- way of describing our nation's economic house of cards.

I dunno, I think I'll just ask my sister how people are surviving in the exurbs. She lives in one of the fastest-growing in the nation, Loudoun County, VA.

[BKM]

That's an interesting -- and maybe accurate -- way of describing our nation's economic house of cards.

I dunno, I think I'll just ask my sister how people are surviving in the exurbs. She lives in one of the fastest-growing in the nation, Loudoun County, VA.

Lord lnows it describes MY habits

[jaws]

Is an economy based solely on new retail selling imported goods and sold on credit really as positive, as strong as this paragraph assumes? Are the clusters of box stores and new, ever larger houses really adding to the long term sustainability (there's that horrific word ) of the American economy? Or, is it really not the world's best economy after all? A drunk engaged in a full-on binge sure looks and sounds like he is happy-but is his bacchanal really a positive, healthy thing?

The Broken Window Fallacy pops up to justify all kinds of stupidity. For some reason people believe that any economic activity is good, no matter how destructive it is. It doesn't help that economic success is measured as GDP.

[Kovanovich]

I'm not a regular reader of Business Week, but this past week while waiting for an appointment I happened to pick this issue up...It's interesting to see suburbia being questioned in such a publication...Actually, I tend to agree with Joel Kotkin (don't quote me!) that higher energy costs will not lead to much of a revival of the cities...Most are pretty far gone and those that aren't are too expensive. High energy costs will hurt the farthest out exurbs but so many of the jobs are now in the suburbs and I can't see employers scrambling to move back to the central city...In the specific case of Northern Virginia, I haven't checked Census data, but I suspect that most residents of Loudon County work in either Loudon or neighboring Fairfax County, and not in relatively distant DC. It's those who live out in Fauquier County or in West Virginia, who out of necessity commute long distances to reach the job centers of N. Virginia, who will be most hurt. I predict that high energy costs will "benefit" (in terms of investment and increasing property values) the suburban job centers (like Fairfax) the most.

[Luca]

The Broken Window Fallacy pops up to justify all kinds of stupidity. For some reason people believe that any economic activity is good, no matter how destructive it is. It doesn't help that economic success is measured as GDP.

To be fair, that's not the ONLY measure of success. I, like most economists, shares that frustration but frankly all other measures of economic welfare/success I've ever seen are so blatantly skewed/politicized as to be meaningless. (you know: % of people in the bottom 20 percentile making less than 50% than the people in the third 20 percentile etc., In the old days some measures such as hosueholds wth a phone or runnign water, etc. were incomplete but useful (objective) measures). I think the least bad approach is GDP, but perhaps with adjustments , especially for non-monetarized production and some of the more obvious externalities, etc. Indeed it's the simplistic misuse of GDP that sometimes leads to those paradoxical "Africans lving on 10 USD a year" statements, they're not counting all their self-directed work. etc.

[BeansandCod]

Forgive my ignorance, folks. I have heard the term 'exurbia' in the recent past, and while I get its meaning in the abstract, I'm interested in what it technically constitutes. When does a rural area become exurbia? If suburbia is known as 'bedroom communities' does that make exurbia the toolshed?

Although I have been seeing it happen rapidly here in the Boston area, I think more so of my home county in Northern Vermont. While it is still populated by just as many cows as people, I see more and more evidence of homes popping up where it was farmland and fields and traffic at a crawl down Main Street which still only has a blinking yellow light in the center of town.

[Kovanovich]

Forgive my ignorance, folks. I have heard the term 'exurbia' in the recent past, and while I get its meaning in the abstract, I'm interested in what it technically constitutes. When does a rural area become exurbia? If suburbia is known as 'bedroom communities' does that make exurbia the toolshed?

Although I have been seeing it happen rapidly here in the Boston area, I think more so of my home county in Northern Vermont. While it is still populated by just as many cows as people, I see more and more evidence of homes popping up where it was farmland and fields and traffic at a crawl down Main Street which still only has a blinking yellow light in the center of town.

I am not a planner or a geographer, but I suspect that no formal definition exists. The concept of "bedroom community" is often associated with exurbia, but it's not the same thing. You can have an older, almost exclusively inner suburb that could qualify as a bedroom community or perhaps even a neighborhood in a central city that lacks any (or at least major) employers, and these clearly are not exurbia. Exurbia is, my mind, the suburban fringe where housing has sprouted, perhaps quite a bit of it, but typically has insufficient jobs for the new exurbanites, requiring them to commute elsewhere. But sometimes exurbia can be relatively job-rich. As of today (2005), exurbia was built in the 1990s or later (this dating is obviously a moving target). So it's sort of just the most recent generation of suburbia.

I think that your sense is that it is difficult to define exurbia, but you know it when you see it...Partly it is simply our need as a society to create new and original definitions for quasi new phenomenon, and to this extent the term probably isn't necessary. But it also may capture a sort of hyper-suburban (read: more car-centered) form of built environment, though I may encounter some resistance in introducing this feature into the definition...Of course, if you search the cyburbia archives you will find others' conception of exurbia.

[jaws]

I always defined Exurbia as bits and pieces of suburban sprawl randomly plopped down in rural areas. A subdivision pops up among corn fields, completely isolated from anything. Or an office building. Sometimes they come with a golf course and hotel.

It doesn't have to be in the orbit of any city.

[dobopoq]

I haven't read it, but Joel Garreau's book, "Edge City", here:http://www.garreau.com/main.cfm?action=book&id=1
might be a good place for more info on exurbia.

To me, exurbia is any place where the dichotomy between work and leisure is most extreme.

[michaelskis]

I haven't read it, but Joel Garreau's book, "Edge City", here:http://www.garreau.com/main.cfm?action=book&id=1
might be a good place for more info on exurbia.

To me, exurbia is any place where the dichotomy between work and leisure is most extreme.

That is a great book.

I think that the author brings up several very good points. But I also think that there might be a very interesting sift and gentrification in full force in many cities. Many of these homes where built with very low interest rates, and now that it costs so much to commute, they are going to sell the house. Well unless they can get a significant profit on many of these homes, and if the market will be able to sustain so many going on the market, they will still have to take out a new loan for a home in the city, and they won’t be able to get the same interest rate. Instead they will look at low income areas, and with many other buy these cheep homes causing a noticeable displacement of many low income persons.

Another option would be to improve mass and efficient pubic transportation to many of these exurbs. The can then drive the short distance to the station, hop on a train, and off to the city.

This might be a good time for many places to start thinking about regional plans.

[RatchetyPlan]

Edge Cities is an excellent and thought-provoking book that tells the story of city decentralization--especially job dispersal--through developers. To Garreau (or at least the developers he talked to), architects and planners were all but obsolete, if not completely irrelevant. At least that was my read.

I cannot remember if Garreau used exurbs or not--I think it's a more recent term. NYT columnist David Brooks is a big booster of the term in recent past. He uses it a lot in his political commentary--the exurbs is the place where conservative values America resides. Soccer moms, SUVs, Republicans, and the like. We'll see if the census bureau picks it up in 2010.

My sense is that exurbs are places bordering on rural that require long commutes to job centers, usually edge cities, not center cities. It's primarily a residential phenomenon because of cheap land, lots of space, and little regulatory barriers.

Any jobs in these areas are retail and other services for consumption. However, they could become office centers once there is an adequate worker base--or a CEO moves into the neighborhood with his company. That's one of Garreau's theories of corporate location decisions. Plus, there needs to be high volume, high speed auto connection to shorten commute times and expand the job center's worker base. Oh and sufficiently cheap land and perhaps location incentives.

I guess you can locate exurbs as one step in the development of edge cities. Needless to say, exurbs are one form of sprawl.

I wonder if there is such a thing as a New Urbanist exurb...

[pete-rock]

As for a definition for exurbia, I tend to think of it as not the suburban fringe, but the suburban front line. Exurbia exists at the line where rural is being turned into suburban, or has done so in the last ten years or so. Depending on the pace of growth, after 15-20 years what was exurbia is exurbia no more.

Also, I agree with Kovanovich's observation that suburban job centers like a Fairfax County, VA or Schaumburg/Hoffman Estates, IL will benefit most from high energy costs. Those spots will become the first choice for investment when energy is at a premium.

[gkmo62u]

Yes,an economy based soley on retail sales is not that sound, but that assumption ispretty sweeping in its descritption of "exurbs"--whatever that means.

Take the Loudoun/Northern VA example (though its not really a good one because of the fed influence)...yes this area is growing dramatically with houses and new retail popping up everywhere. But, Loudoun and Northern VA are leading the nation in job growth as well, including new consulting, technology, and bio-tech. So the jobs are moving as well.

Pete, as an aside, a great many Loudouners commute to DC/Tysons. But many new jobs are being created in the suburbs of Fairfax, Loudoun, and price William.

I guess my point is that Americans never really drastically change habits. Its more cyclical than anything. Sure, many are trading in their SUV's or with new purchases buying smaller cars. For now.