Terry Gilliam's new film, "The Zero Theorem" will be familiar to his fans.
For many people, cities are becoming the place to live, while sprawling suburbs are losing their appeal.
In her new book, “The End of the Suburbs: Where the American Dream is Moving,” Leigh Gallagher, assistant managing editor of Fortune, says millennials — the next generation of home buyers — are abandoning their suburban roots and choosing to raise their own families in the city.
Along with this shift, suburbs are also experiencing an increase in crime and poverty. Gallagher joins Here & Now’s Jeremy Hobson to discuss her research.
By Leigh Gallagher
When I set out to write a book in the spring of 2011, I originally planned to explore the future of our economy and how the aftereffects of the financial crisis would bring permanent changes to various aspects of our lives. But the more I researched, the more I discovered that the most dramatic shift involved where and how we choose to live—and it wasn’t a result of the Great Recession at all. Rather, the housing crisis only concealed something deeper and more profound happening to what we have come to know as American suburbia. Simply speaking, more and more Americans don’t want to live there anymore.
The reasons are varied, but several disparate factors all point to a decrease in demand for traditional suburban living: many Americans are tiring of the physical aspect of the suburbs, the design of which has changed dramatically over the years to gradually spread people farther and farther apart from one another and the things they like to do, making them increasingly reliant on their cars and, increasingly, on Thelma and Louise –length commutes. Big demographic shifts are seeing our population grow older, younger, and more diverse seemingly all at once, while powerful social trends are shrinking and transforming the American nuclear family, long the dominant driver of suburbia. An epic financial crisis coupled with the rising cost of energy has made punishing commutes also unaffordable, while a new-found hyperawareness of environmental issues has shaken up and re-ordered our priorities in ways that stand in direct conflict to the suburban way of life.
This has all been happening for years, but it’s now being backed up by data. The rate of suburban population growth has outpaced that of urban centers in every decade since the invention of the automobile, but in 2011, for the first time in a hundred years, that trend reversed. Construction permit data shows that in several cities, building activity that was once concentrated in the suburban fringe has now shifted primarily to cities, or what planners call the “urban core.” At the same time, demand for the large, single-family homes that characterize the suburbs is dwindling, and big suburban home builders like Toll Brothers are saying their best markets are now cities.
Many of the builders present at the NAHB show in Orlando know this and have started changing the way they do business. Like Ralston, they’ve started breaking their own bones by tearing up old floor plans, adjusting land acquisition strategies, and shifting their focus to include smaller houses and more urban developments. “Gone are the master bathrooms you can land planes in,” said Boyce Thompson, the editorial director of the Builder group of magazines at the housing research and publishing firm Hanley Wood, during a presentation on market trends. Many of the attendees took part in educational sessions on “multifamily” housing units, design strategies for a shifting market, and the changing preferences of the new home buyer. During one such session, the audience watched an ad for builder Shea Homes’ new “Spaces” line in which pleasant-looking suburbanites talked about what they wanted in their new homes. “A typical home in the suburbs for me?” one house-wife asks. “It’s just not the way things are done anymore.” The 2012 annual Builder magazine “concept home,” at the show, always an important barometer of where housing trends are headed, was instead a series of three different homes targeted to three different generations, all featuring smaller—or “right-sized,” since “small” is still a word that goes unsaid by this group—floor plans and more efficient use of space. “Change is the only path to tomorrow,” Larry Swank, chairman of the NAHB’s conventions and meetings committee and a leading builder in Indiana, advised an audience in a breakout session.
Not every home builder is hurting. Floating around at the NAHB show were people like John McLinden, a longtime builder in Chicago who had spent the past few years developing a kind of replacement for the conventional subdivision: a neighborhood of compact, upscale bungalows steps from the train station in the middle of Libertyville, Illinois. His sales were going gangbusters. “Nothing exists like this— certainly not in the suburbs,” he told me eagerly. “And we did it in the midst of a housing crisis.” Indeed, one of the biggest trends in home building right now is remaking our suburbs to look more, well, urban. Like McLinden, developers in suburbs from Morristown, New Jersey, to Leesburg, Virginia, to Lakewood, Colorado, are rebuilding their downtowns as urbanized centers with streets that combine stores, restaurants, and apartments, while nearly every home builder now has a town house or condo division. Even Toll Brothers, the Horsham, Pennsylvania–based home builder that rose to fame on the wings of the suburban mega-home, says what it calls its “suburban move-up” houses are now roughly 50 percent of what it builds and sells, down from 70 to 80 percent just a few years ago.
This brings me to an important point: when I talk about the “end of the suburbs,” I do not mean to suggest that all suburban communities are going to vaporize. Plenty of older suburbs are going strong for reasons we’ll explore later, and many newer suburbs are reinventing themselves to adapt to the times. But when the people who have delivered the same kind of one-size-fits-all suburban subdivisions over the past few decades are tearing up their blueprints, venturing gingerly into urban markets, and actually fainting at the thought of what the future holds, something big is afoot. The reliable expansion of our suburbs, the steady growth of the housing industry, and the seemingly unending supply of new single-family homes—and home owners— that we became used to over the past several decades may well be a thing of the past. Robert Shiller, a Yale University economist, founder of the Case-Shiller Home Price Indices, and the forecaster who predicted both the dot-com and housing bubbles, has said we may be in for a new normal. According to Shiller, U.S. suburban development since the 1950s was “unusual” in its reliance on the automobile and the highway system; the bursting of the bubble may result in a bigger, more structural change. “The heyday of exurbs may well be behind us,” he has said. “Suburban prices may not recover in our lifetime.”
JEREMY HOBSON, HOST:
It's HERE AND NOW.
Several big cities elected mayors yesterday.
MAYOR-ELECT BILL DE BLASIO: But make no mistake, the people of this city have chosen a progressive path.
(SOUNDBITE OF CHEERING)
MAYOR-ELECT MARTY WALSH: And, Boston, I promise you, the best is yet to come.
(SOUNDBITE OF CHEERING)
MAYOR ANNISE PARKER: I want to thank, most importantly, the voters of Houston. Our voters are dedicated to making Houston an even better place to live, to work and to raise a family.
HOBSON: That was Houston's re-elected mayor, Annise Parker, before that, Boston's new mayor, Marty Walsh, and New York City's new mayor, Bill de Blasio. And pay attention to them, because our next guest says cities are becoming more important than ever. Leigh Gallagher is assistant managing editor of Fortune. Her new book is called "The End of the Suburbs: Where the American Dream is Moving." Leigh Gallagher joins us from New York. Welcome.
LEIGH GALLAGHER: Thanks, Jeremy.
HOBSON: Well, is it really the end of the suburbs? Because I have to say, when I drive out into the suburbs, they seem like they're thriving and booming and getting bigger every day.
GALLAGHER: You know, it's the end of the suburbs as we've come to know them. You know, the suburbs, really, have evolved over the years from these sort of small village-oriented communities to these sprawling subdivisions that are kind of supersized and Stepford-ized, and many of them are in the middle of nowhere. And that's the kind of suburb that is no longer satisfying to a lot of people and is going to be a smaller part of our overall residential environment.
HOBSON: Did the housing collapse several years ago make a real dent in the suburbs? Have we seen something significant happen in the last five years?
GALLAGHER: We did, for sure. The housing crisis affected the suburbs because most of our houses in this country are suburban houses. So that's where we felt the brunt of the overexpansion, the overbuilding, and that's where we felt the brunt of the pain. But the truth is, and I say this in the book, many of the forces that are leading to the end of the suburbs are actually longer-term, slower-moving forces that have really been grinding away for quite sometime.
HOBSON: Well, talk about some of those. What are the main forces that are leading to the end of the suburbs?
GALLAGHER: The biggest ones I will say are the price of energy, which has been rising ever since suburbs were created and is making these long commutes really unaffordable for a lot of people. It's also things like demographics, which people don't really give a lot of thought to. But the makeup and the fabric of our nation is changing. We used to be a country of - households of, you know, mother, father, 2.5 children, a couple cars. And that's really declining. Our birth rate's declining, we're getting married later. Single-person households are the fastest-growing household in this country.
So all of these changes mean that that nuclear family is going to represent a smaller percentage of the overall mix, and we're already seeing that in some suburbs which have more senior citizens and baby boomers in them than families with young children.
HOBSON: And you write, millennials hate the burbs.
GALLAGHER: That's another huge thing. I mean, that's, you know, millennials are the next generation of homebuyer. And all evidence shows that they really want to be close to where the action is. And that can be in a kind of urban burb, the right urban burb, but they want to be somewhere where they can walk to things, where they can be on their devices and texting and not being behind the wheel of a car for, you know, a half hour or hours at a time.
HOBSON: But can the suburbs really go away, or at least shrink down, while we still have policies in place like the mortgage interest tax deduction, which incentivizes home buying or like putting money into highways and expanding highways all around this country and making it easy for people to get back and forth from the city to the suburb and vice versa?
GALLAGHER: Our policies have definitely pushed us into a suburban residential pattern, there's no doubt about it. Another thing that people don't realize is even the price of gas is highly subsidized. You know, we don't pay nearly the cost that other countries pay because there's so much subsidies that go into keeping the cost of our gas per gallon low.
So those policies are all pushing us towards suburban living, but the demographics and the changing preferences of people are really starting to move in the other direction. We're seeing a greater demand for houses in communities where there's more of a centralized urban downtown. Yes, more people are moving into cities, and that's part of it. Especially young families are moving into cities, staying in cities. You never used to see that.
But the future is also about kind of urban burbs, suburbs that can adapt and kind of get with these times and reorient themselves along the lines, such that they'll be offering things that the homebuyer wants.
HOBSON: Well, and, of course, one of the big reasons that people have wanted to go to the suburbs traditionally is that it is considered a safer place - you have more space. And you write that maybe that's not so much the case anymore.
GALLAGHER: Not so much anymore. I really found a number of reversals happening, and it's everything from where the wealth is moving and all of these moneyed people moving into cities now, corporate headquarters moving into cities. But another reversal that people, I think, never thought would really happen is that poverty and crime are now dropping in cities fairly sharply and rising in the suburbs, especially poverty. It's been one of the more striking trends at the last decade is the rise of poverty in suburban America.
HOBSON: You talk about some of the social implications of the fact that many people have grown up in the suburbs, starting with the fact that young people have to be chauffeured around by their parents. They don't have the kind of freedom that they would have if they lived in a city.
GALLAGHER: The suburban model can be isolating for a lot of people, even though you think of suburbs as these tight communities, and many are. But the more remote, sprawling kind of suburban communities, you know, where you're really in your car all the time, that means that until you're 16 or 17 years old and you can drive, you're completely at the mercy of your parents driving you around, which, you know, adolescent psychologists say that this is precisely the time when teenagers need to develop - and preteens need to develop - autonomy, which is a very important trait. So, you know, you kind of can't do that.
And when you also can't go outside and just walk around in many of these communities, because there's no sidewalks and the design doesn't really encourage that kind of playing in the street or running around outside the way older suburbs do, you can see why so many kids are inside playing video games in the basement.
HOBSON: Now, I grew up in Champaign-Urbana, Illinois, which is not a suburb or a city. It's a college town. And as a result, it's very different than other places. And actually, when I saw the movie "American Beauty," which is a very suburban movie, I didn't even really get it at first because I hadn't lived in a suburb. It was only after I had lived in Bethesda, Maryland, which is about as suburban as you can get, that I really understood the movie. You grew up in Media, Pennsylvania. Tell us about your experience there.
GALLAGHER: It's funny, I take great pains to point out that I grew up in the suburbs. I'm a child of suburbia. I don't have anything against it. People may not believe that, but I don't. I had a wonderful experience, and that's because I grew up in a town that was really kind of unique, or it's unique now. It's a suburb about 12 miles southwest of Philadelphia. And it has all these ingredients that you don't really see in suburbs anymore. It has a courthouse. It's the county seat of our county. It has a trolley. It has a lively, densely packed main street that has bars that are open until two in the morning. And it has all of this kind of built-in natural organic community.
And we work close to the town. We could walk to it. But I also grew up in this little community where we had a Fourth of July party every year. We had Christmas caroling on, you know, around the holidays. I mean, it was very, you know, Grover's Corners, almost. But that kind of suburb and that kind of community is not how most people in this country live anymore. And so that's the point I'm really trying to make in the book.
I mean, I think we're spoiled here in the northeast because - I mean, in Boston, there are so many older historic suburbs that are built on this older model and that still have many of the things that people are now so desperately missing in their communities. But, you know, most Americans live in communities that were built in the last 50 years. And you look at places like the Inland Empire, Southern California, you know, these places are just centralist communities, and that's because they were built that way, and it's really impacting people in the way they live.
HOBSON: And as you write, it sounds like people are not that interested in those kinds of communities.
GALLAGHER: Increasingly, not so much. They want the old kind. They want the better kind. They want the urban kind, even if that's in a suburb. Not everybody wants to live in a skyscraper in Manhattan, that's for sure.
HOBSON: Leigh Gallagher is assistant managing editor at Fortune and author of "The End of the Suburbs: Where the American Dream is Moving." Leigh, thank you so much.
GALLAGHER: Thank you, Jeremy.
(SOUNDBITE OF SONG, "NO MAN'S LAND")
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HOBSON: And you can read excerpts from Leigh's book at hereandnow.org and let us know if you think the suburbs are coming to an end. From NPR and WBUR Boston, I'm Jeremy Hobson.
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