http://www.theatlantic.com/doc/200803/subprime
The subprime crisis is just the tip of the iceberg. Fundamental changes
in American life may turn today’s McMansions into tomorrow’s tenements.
by Christopher B. Leinberger
The Next Slum?
Strange days are upon the residents of many a suburban cul-de-sac.
Once-tidy yards have become overgrown, as the houses they front have
gone vacant. Signs of physical and social disorder are spreading.
At Windy Ridge, a recently built starter-home development seven miles
northwest of Charlotte, North Carolina, 81 of the community’s 132 small,
vinyl-sided houses were in foreclosure as of late last year. Vandals
have kicked in doors and stripped the copper wire from vacant houses;
drug users and homeless people have furtively moved in. In December,
after a stray bullet blasted through her son’s bedroom and into her own,
Laurie Talbot, who’d moved to Windy Ridge from New York in 2005, told
The Charlotte Observer, “I thought I’d bought a home in Pleasantville. I
never imagined in my wildest dreams that stuff like this would happen.”
In the Franklin Reserve neighborhood of Elk Grove, California, south of
Sacramento, the houses are nicer than those at Windy Ridge—many once
sold for well over $500,000—but the phenomenon is the same. At the
height of the boom, 10,000 new homes were built there in just four
years. Now many are empty; renters of dubious character occupy others.
Graffiti, broken windows, and other markers of decay have multiplied.
Susan McDonald, president of the local residents’ association and an
executive at a local bank, told the Associated Press, “There’s been gang
activity. Things have really been changing, the last few years.”
In the first half of last year, residential burglaries rose by 35
percent and robberies by 58 percent in suburban Lee County, Florida,
where one in four houses stands empty. Charlotte’s crime rates have
stayed flat overall in recent years—but from 2003 to 2006, in the 10
suburbs of the city that have experienced the highest foreclosure rates,
crime rose 33 percent. Civic organizations in some suburbs have begun to
mow the lawns around empty houses to keep up the appearance of
stability. Police departments are mapping foreclosures in an effort to
identify emerging criminal hot spots.
The decline of places like Windy Ridge and Franklin Reserve is usually
attributed to the subprime-mortgage crisis, with its wave of
foreclosures. And the crisis has indeed catalyzed or intensified social
problems in many communities. But the story of vacant suburban homes and
declining suburban neighborhoods did not begin with the crisis, and will
not end with it. A structural change is under way in the housing
market—a major shift in the way many Americans want to live and work. It
has shaped the current downturn, steering some of the worst problems
away from the cities and toward the suburban fringes. And its effects
will be felt more strongly, and more broadly, as the years pass. Its
ultimate impact on the suburbs, and the cities, will be profound.
Arthur C. Nelson, director of the Metropolitan Institute at Virginia
Tech, has looked carefully at trends in American demographics,
construction, house prices, and consumer preferences. In 2006, using
recent consumer research, housing supply data, and population growth
rates, he modeled future demand for various types of housing. The
results were bracing: Nelson forecasts a likely surplus of 22 million
large-lot homes (houses built on a sixth of an acre or more) by
2025—that’s roughly 40 percent of the large-lot homes in existence today.
For 60 years, Americans have pushed steadily into the suburbs,
transforming the landscape and (until recently) leaving cities behind.
But today the pendulum is swinging back toward urban living, and there
are many reasons to believe this swing will continue. As it does, many
low-density suburbs and McMansion subdivisions, including some that are
lovely and affluent today, may become what inner cities became in the
1960s and ’70s—slums characterized by poverty, crime, and decay.
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