A fascinating article in the New York Times looks at how changing demographics and the housing crash the USA has experienced over the past five years is changing the future form of their cities – away from car dependent urban sprawl and towards higher-density walkable urban areas.
Drive through any number of outer-ring suburbs in America, and you’ll see boarded-up and vacant strip malls, surrounded by vast seas of empty parking spaces. These forlorn monuments to the real estate crash are not going to come back to life, even when the economy recovers. And that’s because the demand for the housing that once supported commercial activity in many exurbs isn’t coming back, either…
… It was predominantly the collapse of the car-dependent suburban fringe that caused the mortgage collapse.
In the late 1990s, high-end outer suburbs contained most of the expensive housing in the United States, as measured by price per square foot, according to data I analyzed from the Zillow real estate database. Today, the most expensive housing is in the high-density, pedestrian-friendly neighborhoods of the center city and inner suburbs. Some of the most expensive neighborhoods in their metropolitan areas are Capitol Hill in Seattle; Virginia Highland in Atlanta; German Village in Columbus, Ohio, and Logan Circle in Washington. Considered slums as recently as 30 years ago, they have been transformed by gentrification.
Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.
Certainly in Auckland we have seen some of the same process happening over the past 20-30 years. Parts of the inner-city, like Ponsonby and Freemans Bay, that were verging on being slums in the 1960s and 1970s are now some of the most sought-after places to live. We have also seen, over the past 15 years, a dramatic increase in the number of people living in the city centre.
What we haven’t seen so much is the real estate crash the USA has experienced, the vast empty parking lots (except for Manukau City of course), vacant strip malls, empty houses and so forth. I suspect that this is largely due to our urban limits – which made ‘over-building’ during the boom years that much more difficult.
An interesting question is how these trends might continue into the future, and here’s where demographic change becomes important:
The shift is durable and lasting because of a major demographic event: the convergence of the two largest generations in American history, the baby boomers (born between 1946 and 1964) and the millennials (born between 1979 and 1996), which today represent half of the total population.
Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town, according to a recent survey by the National Association of Realtors.
The millennials are just now beginning to emerge from the nest — at least those who can afford to live on their own. This coming-of-age cohort also favors urban downtowns and suburban town centers — for lifestyle reasons and the convenience of not having to own cars.
Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey.
There still seems to be quite a lag in Auckland between our changing demographics and the types of housing which are being built. Even though an aging population means smaller and smaller household sizes, we continue to construct larger and larger houses. I’m guessing that it’s probably our planning rules at fault here, which prevent the splitting of existing houses into smaller units and generally discourage urban intensification. This is setting ourselves up for a huge imbalance in the future between the demand for smaller places and the supply of oversize houses.
The connections between these changes and transport shouldn’t be under-estimated. The article highlights that the transport decisions which will support our future urban form may be very different to those we have been making in the past. Critically, and I could not support this issue more, local government should have a greater say over how transport money is spent:
The cities and inner-ring suburbs that will be the foundation of the recovery require significant investment at a time of government retrenchment. Bus and light-rail systems, bike lanes and pedestrian improvements — what traffic engineers dismissively call “alternative transportation” — are vital. So is the repair of infrastructure like roads and bridges. Places as diverse as Los Angeles, Phoenix, Salt Lake City, Dallas, Charlotte, Denver and Washington have recently voted to pay for “alternative transportation,” mindful of the dividends to be reaped. As Congress works to reauthorize highway and transit legislation, it must give metropolitan areas greater flexibility for financing transportation, rather than mandating that the vast bulk of the money can be used only for roads.
For too long, we over-invested in the wrong places. Those retail centers and subdivisions will never be worth what they cost to build. We have to stop throwing good money after bad. It is time to instead build what the market wants: mixed-income, walkable cities and suburbs that will support the knowledge economy, promote environmental sustainability and create jobs.
I really do hope the final version of the Auckland Plan takes these matters into consideration.
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In other zeitgeist news, how about ‘peak stuff’ or ‘dematerialiasation’?: http://e360.yale.edu/feature/the_new_story_of_stuff_can_we_consume_less/2468/
Australia is the emu in the coal mine here. The outer suburbs of Sydney, Melbourne and Brisbane are in freefall. The inner cities are propping up the average, but the low density sprawl is really struggling. Perth and Hobart are heading for a 10% decline from peak, Perth in spite of being awash in mining money.
The NZ real estate industry is still pumping out press releases about Auckland price growth though. How long can it last?
House prices in Auckland are likely to stay strong for a little while yet, over the last year there have been something like 53,000 new jobs created in the Auckland region which means there are either more people competing for the same housing stock or there are more people who can afford to buy houses and are competing for what’s on offer. There is probably an element of both of those two factors at play and it certainly doesn’t hurt that home loan rates are at all time lows either.
Here’s the tragic reality of our true sprawl story:
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10770543
We just don’t call them the same as they do in the US (Exurbs etc….), but lots of our coastal development is sprawl. Car-reliant, based on the myth that you can live miles from the city and still maintain connection with all the modern lifestyle benefits of a city, and basically the product of the real estate machine. Oh yeah … and no public transport options whatever, usually. We’d all love a modest, simple bach to escape to every now and then….but is that what coastal development is these days?
It’s interesting that you note Ponsonby and Freemans bay as local examples, they are also beautiful Victorian heritage neighbourhoods largely untouched by the glass and tilt slab that passes for Auckland architecture these days.
Intrigued (and hoping to bolster my point) I Google Imaged the U.S. examples- Capitol Hill in Seattle; Virginia Highland in Atlanta; German Village in Columbus, Ohio, and Logan Circle in Washington.
Guess what? They’re all heritage neighbourhoods too.
Seems like people like to live in historic neighbourhoods more than most anywhere else.
Perhaps the way to get people to move into apartments is to build “heritage apartments”?
Great article and TTL we have a MUL/RUB!
(Sarcasm monitor on) Hush your mouth. Surely modern architects are the only ones who can desin buidings that people want to live in? (ends)
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You can’t make that connection as a given. Generally suburbs close to a city are the oldest, and it is that closeness that is attractive. After all somewhere like Helensville has as many villas as say Ponsonby but doesn’t command the same pricing level.
And the corollary is also true: new apartments and houses in the inner city and suburbs also command high value. So it is fairer to conclude it is the location that primarily drives value… though that doesn’t mean the charm of the older structures is not also an important feature…. although generally once the buildings are expensively modernised.
One thing that that usually doesn’t change that is of great value is the street pattern…. except when motorways are rammed through. The great age of urban motorway building [which most of the western world has left behind] was always justified by ideas of cleansing ‘slum clearance’ and street pattern rationalising. No part of Auckland has been improved by this ideology, it is the great and shameful legacy of modernism: cool buildings, horrible neighbourhoods.
And in particular the old inner suburbs and their people were sacrificed for the right of suburbanites to drive unimpeded through the city. Newton, Freeman’s Bay, Grafton, Newmarket, St Mary’s Bay, Western Springs Kingsland, Northcote Point. And more recently even further out Onehunga and Mangere…. Same pattern across many cities in the world, except where it got strongly opposed like in Vancouver.
Hmmm. Actually I think we probably can make the connections – but it’s probably to do with a wider issue than style alone. I suspect that history imbues these places with an identity and set of community dynamics that are more attractive. Style is just a veneer that endorses these things – as good architecture (of whatever style) should, it represents an interpretation of social values.
FWIW – I agree with Geoff. We Architects have much to answer for collectively. Auckland’s collective urbanism is only young in city terms…there is much still to be established as to how we go about building a good ‘place’ in this part of Godzone.
I think it is important the Auckland puts an end to the massive list of regulations that push development to the fringe. The market should take care of the rest.
I was particularly displeased to see a goal of the Auckland Plan was high home ownership rates. High home ownership is typically associate with suburban standalone or townhouses, not apartments. Hopefully they will change that.
Another thing working against increased density is air quality. I’d love a walkable neighbourhood, but it has to have clean air. All solid fuel heating (wood and coal) needs to be completely outlawed before I’m moving into town, where I actually want to live car-free and near a train station. Til then I’ll stick with my lifestyle block away from the neighbours so they can’t poison me with stink and I have to drive most places out of necessity.
Of course the likes of Demographia, with Wendell Cox, and his local acolyte (in the transport sense) David Wilmott will continue to point to the “American example” as to why cities “need” to sprawl to succeed.
David Willmott during a recent event on the Waterview Tunnel used the example of the lack of a new harbour crossing in the design, to run from Waterview to North Shore (!) as an example of how transport and housing planning of the “sustainable” and “planner-driven” kind is damaging our cities and will lead to the collapse of the Western World (withing 5 years, too, were his words).
Thankfully, he’s so fringe, even in the transport profession he’s seen as a holdover from the bad old days (he noted in another recent sustainability meeting* that he was to a good degree responsible for planning Manukau City Centre – guilty as charged, I would say).
*He goes to these things, apparently seeing himself as the lone warning voice – like keeping tabs on the eco-freaks?
Ha.
Obviously if the free-market of road construction and use was allowed to flourish, the only natural outcome would have been to tunnel the extra 6k’s to Birkenhead. Can’t believe those central planners forcing the tunnel to STOP at Waterview!!
Swan, you misrepresent poor David. HE would have argued for a surface Waterview motorway, thus saving lots of money for unnecessary tunnelling – that could have off-set the cost of a new bridge. Remove all that extra unneccessary mitigation, and you can finally afford the extra roads!
Haven’t heard of David Wilmott, but I know Owen McShane and Hugh Pavlevich are disciples of the Wendall Cox school of urban design (Down with regulation! Everyone wants to live in a fringe suburb! Motorways for all! Housing affordability uber alles!) and they get enough press.
Here he is arguing for the dismantlement of cities in favour of small disconnected hamlets.
http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10673985
Don’t forget leaky homes.
Remind me what happens when you remove regulations on builders, oh, and bankers?
And here is the counter article from New Geography
http://www.newgeography.com/content/002550-s-suburbia-doomed-not-so-fast
Interesting read and hope Auckland Council and Planners that the linked article into consideration