The End of the Suburbs: Where the American Dream Is Moving (20 page)

Some experts say this shouldn’t come as such a surprise. The suburbs may have started out as safe, peaceful enclaves for the middle class, but as they grew, they came to more closely mirror the country in general. There are now suburbs for every society, age, race, housing type, and income, and the suburbs now contain all the good and bad things that come with those things, too. As Brookings demographer William Frey puts it, “If it’s part of America, it’s part of the suburbs.”

Other aspects of the suburbs have fallen into decline, too. Take the shopping mall. Once a hallmark of suburbia, it had by the mid-2000s become an anachronism. On the one hand, Internet commerce enabled shopping from the living room, and on the other, suburban shoppers now have other options in newer, open-air shopping centers that more resemble shopping on a Main Street.
Only one enclosed indoor shopping mall has opened in the United States since 2006
, and at existing malls, vacancy rates are soaring, hitting their highest level since the early 1990s. (A Web site, deadmalls.com, started by two retail historians, now tracks the “demise of these great giants of retail.”) But because mall construction is so expensive, once the massive structures are built, they’re stuck there. To stem the tide of vacancies, mall developers have been getting creative about finding new tenants, filling them with call centers, art galleries, car showrooms, even farmer’s markets.
Cleveland’s Galleria at Erieview
is now closed on weekends because there are so few visitors, and part of the mall has been converted into a vegetable garden. “I look at it as space,” Vicky Poole, a Galleria executive, told the
New York Times
. “I don’t look at it as retail.”

Some developers have actually turned their focus on these dead or dying malls.
Ellen Dunham-Jones
, architecture professor at the Georgia Institute of Technology, and June Williamson, associate professor of architecture at the City College of New York, have documented this phenomenon in their book,
Retrofitting Suburbia: Urban Design Solutions for Redesigning Suburbs
, a comprehensive look at efforts to retool, reinhabit, or return to nature abandoned suburban forms. In some cases, this means turning gargantuan forgotten malls into hip, urbanized residential villages. One such experiment is under way in Lakewood, Colorado, an affluent suburb west of Denver. The former Villa Italia shopping mall, a 1.2-million-square-foot indoor mall built in 1966 that had fallen on hard times, has been turned into Belmar, a 104-acre pedestrian-friendly community that has apartments, condos, town houses, office space, artists studios, and a shopping and entertainment promenade on twenty-two walkable, urbanized blocks. Now, instead of turning into the mall’s giant parking lot, you end up cruising along a downtown main drag, Alaska Street, which is lined with old-fashioned streetlights, coffee shops, boutiques, and restaurants. There are more than a thousand housing units, which range from town houses to loft condominiums to small-lot single-family homes, as well as a row of ground-floor artist studio and business incubator spaces. A public art project called “Urban Anatomy” has installed small works of art and fragments of poetry on manhole covers, sidewalk joints, and grates throughout the development, highlighting overlooked details of the urban environment.

The whole setup is definitely still suburban—the new urbanized village includes a Zales, Yankee Candle, and Sur La Table—but these suburbanites can leave their loft apartments on foot, pick up an espresso, and go hear a poetry reading, all on a site where Foley’s, Dillard’s, Montgomery Ward, and JCPenney once sat. There are dozens of these projects at other malls around the country. “It’s time to let the suburbs grow up,” Dunham-Jones says.

Suburban chain restaurants are in the middle of a retrenchment, too.
The number of restaurants
in the country grew by more than one hundred thousand from 1996 to 2008 as mid-priced mass-market restaurateurs like Friendly’s, Applebee’s, TGI Friday’s, Olive Garden, and others chased the boom into the suburbs and the exurbs; after the recession and housing bust hit, analysts said at least twenty thousand restaurants needed to close in order to bring the industry back to equilibrium. Now, so-called zombie restaurants languish everywhere. “I don’t think we’re overbuilt,” Paul M. Mangiamele, the CEO of Bennigan’s Franchising, told the
New York Times
. “I think we’re underdemolished.”

•   •   •

T
he one area where we may be the most underdemolished of all, of course, is in houses. Our recent housing boom and bust was primarily a suburban crisis, and the overbuilding and resulting excess inventory still weighs on our residential landscape. When the music stopped, once-booming suburbs and exurbs quickly went bust, many emptying out almost as quickly as they’d been built. Because the boom had ended so abruptly, many subdivisions were halted in mid-development. While industry-wide housing inventory figures have improved, hundreds of these “zombie subdivisions” still dot our landscape, many with infrastructure teed up and ready to pipe water and electricity into homes that will never appear.

Residential land values plummeted so much—falling nearly 70 percent from 2006 to 2011—that developers who had bought up raw land during the boom started selling it back to the farmers they bought it from. It was a reversal from the boom years, when the amount of land used for farms fell by two to four million acres a year as developers paid huge premiums to get their hands on farmland that they could develop. Now, farmers who sold during the boom, making multiples they never dreamed of on their land, were able to profit on the other side as well, buying that very same land back for a song. In an additional dose of irony,
crop prices had soared
, jumping 20 percent from 2007 to 2011, at the same time that home values plummeted, so the land was now more valuable to the farmers than ever. The
Wall Street Journal
’s Robbie Whelan recounted the tale of the Englands, an Arizona cotton farming family that paid $731,000 for 430 acres of cotton fields sixty-five miles southeast of Phoenix in 2004, flipped the property to an apartment builder in 2009 for $8.6 million, then bought the farm back out of foreclosure for $1.75 million. “It was a pretty good deal,” Don England Jr. told the paper.

The fact that suburban tracts intended for development were reverting back to farmland was little noticed at the time, but it was a shocking turn of events, says Frank Popper, a renowned land-use expert and professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. The conventional thinking in the planning world, Popper says, is that every time a farm goes into development, it’s lost to agriculture forever. That reversal, he says, is “a mind-blowing thing from a planning point of view.”

Popper is an expert in the planning world for his work studying the depopulation and decline of urban and rural areas, and how policy makers and land-use regulators can best manage depopulation. It’s a topic few in the planning world have liked to talk about—in planning, real estate, and development worlds, “growth” is religion, and words like “shrink,” “contract,” “decline,” or even just “small” have typically been verboten. In the late 1980s, Popper and his wife, Deborah, now a professor of geography at the City University of New York’s College of Staten Island, conducted an in-depth study of the ailing rural areas of the Great Plains. The area had lost a third of its population since 1920, and much of the land had dried out to such a degree that it was unsustainable.
In a seminal article published in 1987, the Poppers argued
that the land should be returned to native prairie in order to create a vast nature preserve. Returning the land to native grasses and reintroducing the buffalo, an approach they called the Buffalo Commons, would be vastly better for society than letting the local economies continue to depopulate and disintegrate into near-ghost towns.

That was what was already happening: several hundred thousand square miles of land had just six people per square mile—the definition of frontier settlement, the most rural category of settled land—and the area was seeing rising bankruptcy rates, foreclosures, and human suffering including psychological stress, family violence, suicide, and mental illness. It would be better for everyone, the Poppers argued, if much Great Plains land—they called its settlement the “largest, longest-running agricultural and environmental miscalculation in American history”—was returned to its original “pre-white” state.

They faced intense criticism for their work.
The controversy around their idea inspired
a novel, Richard S. Wheeler’s
The Buffalo Commons
; a Pulitzer Prize finalist book, Anne Matthews’s 1992
Where the Buffalo Roam
; and several documentaries. In recent years, after the Poppers’ predictions for the region’s demise had started to come true, several politicians and high-profile thinkers reversed course and
started endorsing their idea
, with the
Kansas City Star
publishing two editorials in 2009 and 2010 supporting the creation of a million-acre Buffalo Commons National Park.

Now the Poppers also study shrinkage
in large and midsize cities, former industrial centers such as Buffalo, New York; Flint, Michigan; Youngstown, Ohio; Pittsfield, Massachussetts; and Woonsocket, Rhode Island, that have seen excessive depopulation. According to the Poppers, shrinkage presents one of the century’s great settlement and housing issues. It saps communities and people of income, housing, and a sense of community, But it doesn’t have to, they say; they emphasize what they call “smart decline,” ways to shrink that can be productive: razing structures that are no longer needed so children don’t grow up amid blight, playing up a town’s strengths by boosting Main Streets, retaining old buildings with history, and otherwise adjusting the urban environment to fit its population. They point to Detroit, which experienced the largest depopulation of an industrial-age American city and in response bulldozed hundreds of homes and turned over much of its land to fields and farmland that lay there before. As radical an idea as that might seem to the layperson, it was lauded in the planning world. These other industrial cities, the Poppers say, need to follow similar patterns or risk sinking into blight.
Buffalo, they point out
, is a “size-40 city in a size-60 suit.”

Justin Hollander
, an assistant professor of urban and environmental policy and planning at Tufts University and a former student of Frank Popper, took this concept to the suburbs, conducting an analysis of the depopulation brought on by the recent housing bust. Using data from the U.S. Postal Service to track the number of occupied housing units—whether a house gets mail is the best determining factor of whether it is truly vacant—Hollander found that one-quarter of all U.S. neighborhoods have fewer occupied homes now than they did in 2006. He found the depopulation in the suburbs to be far greater than cities; suburban areas registered 43 percent more declining zip codes from 2006 to 2009 than from 2000 to 2006, while for urban areas the figure was just 2 percent. In policy planning worlds, Hollander’s results were significant and a major challenge to the long-held belief that cities are most prone to decline while suburban growth will continue forever. “The face of declining cities and regions in America has begun to change,” Hollander wrote. “Decline is no longer limited to older manufacturing towns, urban cores and declining rural farming communities.”

Hollander takes issue with the government’s idea to turn our excess housing inventory into rentals; he suggests a better use would be turning abandoned suburban homes into offices, storage facilities, and artist studios—and when there’s no demand for any alternate use, he says, regulators should demolish the homes and sell the land for parks or community gardens, or, much like the Poppers suggested for the frontier towns of the Great Plains, return the land to wilderness.

As our housing crisis deepened and millions of home owners forfeited their homes, this is just what some banks started to do with some of their repossessed properties. Since so many of the homes were entry level and in undesirable neighborhoods, many of them were worth so little that they actually did more damage just by existing. If they stayed on the market, they added to inventory and the banks had to pay to maintain them. If they sold, it would be for a price so low, it would pull down the average. In many cases the best answer was simply to level them. In 2011, major lenders like Bank of America, Wells Fargo, Citigroup, and JPMorgan Chase decided to bulldoze or donate the repossessed homes they owned.
In California’s San Bernardino County
, when a local bank decided to raze sixteen new homes it couldn’t sell, residents from neighboring streets came by to watch the demolition, taking video on their cell phones to capture the live-action manifestation of the mistake Wall Street had made.

Besides tearing them down, another solution to mop up the extra homes came from the government. In late 2012 the Federal Housing Finance Agency came up with a plan to sell off thousands of foreclosed properties owned by Fannie Mae and Freddie Mac to big institutional investors who, the idea went, would buy them in bulk and turn them into rental properties at considerable profit.
Wall Street giants like Blackstone Group
and Colony Capital, along with a gold rush of opportunistic entrepreneurs, have invested billions buying up thousands of foreclosed single-family homes, serving as landlords to what they think is likely to be a thriving rental market as the home ownership rate continues to float back down to its natural level.

Some say this is a flawed idea. For one thing, many of these homes are in the wrong place, products of a manufactured, bank-led demand that vaporized when the market tanked. These homes may be of no more interest to renters than buyers. Creating a rental market for these properties has its own set of downsides, the biggest being that renters and landlords don’t usually take the same kind of care of their homes and neighborhoods as home owners do. But it is helping mop up the excess. Thanks to these efforts, the low pace of new home construction, and the strengthening of the housing market, much of the excess housing inventory has been worked off.
As of this writing, we have a 4.4-month supply
of existing homes, the lowest housing supply since early 2006.