

Cities and housing

The end of the dream?

The suburbs have been hit hard by the housing crisis. But reports of their death are exaggerated

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Readers' comments


Avenging Angel

Ah, in the Economist's world of infinite resources/money/possibilites
we never face real constraints. Perhaps you should read and think
long and hard about Europe in the 1450 - 1650 period.

Someimes a political economy becomes non-viable. While it won't be
overnight and there will be ups and downs over the next 5 - 25 years,
that is what the US faces today. No, don't buy those surburban sprawl
houses unless you planm to flip them - and that, if you actually have
any experience with the US housing market i a lot more difficult than
it was 2 yrs ago.


@ Stephen Myles St. George

Having lived in France, I understand the French exchange students' reactions, but I can't support your conclusions.

First, these are children, most likely on their first and only few days' visit in N. America. They have not approached the age where one considers marriage, child rearing, and career. Additionally, they haven't had enough of the Trans-Atlantic cultural experience to make a fair comparison of the two cultures.

Basically, they were young people who were dazzled by the "toys" that are so easy for N. Americans to buy - most N. Americans, that is, not the millions that live hand-to-mouth in ghettoized urban areas.

Having grown up myself in a priviledged US suburban environment, one of the biggest "culture shocks" I had in France as a teenager was how few personal possessions my classmates had. It seemed like the average French high school student could fit all of his personal possessions on the kitchen table.

As a teenage American, my first impression of France was how "poor" the country was: small housing, small cars, limited shopping opportunities, high cost of consumer goods.

As an adult living in France, though, my opinion couldn't have been more different. Still today, I prefer the French way of life/ European way of life. I wish my own US had high taxes such that the folly of consumerism and suburbanism were cost prohibitive and that we lived in a more equitable society.

As an adult living in France, I came to appreciate the culture and community that is a product of walkable urban areas and an economic system where "we are all in the this thing together."

This is what is missing in the N. American suburban wasteland.

Stephen Myles St. George

When my friends hosted French exchange students, there was an universal sense of amazement with and envy of the sizes of suburban dwellings here in Canada. And this was between two affluent private secondary schools. The French were incredibly impressed with the fact that average Canadians managed to live like the haute-bourgeoisie in their country in terms of residential space and conditions, with all the rec rooms, gigantic ensuite bedrooms, sauna, whirlpool, game rooms, et al. And while they initially quipped about gigantic SUVs, once they got a ride inside, they all wanted those spacious rides too.That, despite the high oil, the environmentals crying doom, is something we should strive to preserve, not turn our backs on. Surely if the European way is better, then the French could not so thoroughly admire the North American living conditions?


For the love of god, I wish they would limit their description of the housing crisis to the areas affected because its ruining the entire nation with this blanket crisis.

There are quite a few places that never experienced a boom in real estate, never experienced a boom in the economy, never experienced a boom in population....and these forgotten sections of the country a walking along as usual but forced to carry the worries and risks for the other places.

There are MANY parts of the country that are NOT over built but I dont see any government programs to build them up.


@ caesariaTulsa wait, so how would pumping oil out of the ground help the housing crisis? i think youre the wacky one


It may be "The End of a Dream" for the Suburbs as the article title implies, but NOT for the Cities ( Real Cities like LA, NY ) and the Countless Thousands of Cities that Surround them ( Once referred to as Suburbs, but are now Defector part of the Urban-Sprawl ).

Take Los Angeles ( City of Angels ) as an example, almost 500 Square miles in Size ( Physically larger than most other Cities anywhere ).

Take Los Angeles County, Almost 5000 Square Miles with Way Over 10 Million People, and 87 other Cities of Almost Continues Urban Sprawl. Spreading from the Sea to the Mountains, on to the High & Low Deserts ( San Bernardino & Riverside ).

The FreeWay$ ( Not So Free ) , are our only Mean$ of Practical Tran$portation from & to Work.
De$pite Billion$ $pent on Metro$, Railway$ & Bu$e$, MO$T of US $till Drive to Work ALONE, and get on that Highway ( FreeWay ).
The Result, is Billion$ of Hour$ $pent on that Conge$ted Freeway$. A Lifetime Wasted on the Road. Precious Time, Best Spent with your Family or Yourself.

In Beautiful, Sunny Southern California WE are Fortunate to Live in One of the Most Blessed & Diversified laces on this Good Earth. From Santa Barbra to San Diego ( on the Mexican Border ), the further South You Go , the Sweeter it Gets.

Like the Rest of the Urban World, WE have been Subjected to Double-Digit annual Increa$e$ in the Co$t of Living!
Like the Rest of the Urban World, We have Borne Witness ( and been Subjected ) to this So-Called Gentrification!! Thus Forcing People to Move to the Hills and the Deserts.

Unlike the Rest of the Urban World, we have been Let Down by our Elected, Collective Leadership. From the White House, On Down to Sacramento on to LA, there is no Coherent Plan for ReBuilding the Dilapidated, Outdated Infrastructure and Public Transportation Systems.

Until We pay attention to these important Facts, Places like Moreno Valley ( and other far off Suburban Communities ) will continue to Look More like A Nightmare than the Dream they were Meant to be.

Peace, Love & Respect.


If you think that the suburbs were hit hard by the mortgage crisis, wait until we have a major energy crisis. American cities (likewise Australian and a few other nations cities) have been built upon cheap energy. Big houses with big cars in their big garages. I would completely agree with Risk Thinker, but until recently, with cheap energy, it only cost a bit more to inhabit a McMansion in the outer suburbs.


As a resident of Moreno Valley, allow me to offer the following insights:

- The worst parts of Moreno Valley are more desireable than the idea of living in Los Angeles. Hundreds of families in areas undergoing gentrification in LA have moved to Moreno Valley in the past decade. These families typically lived in regions of LA associated with the lower rungs of the socio-economic scale. Unfortunately, their lack of business acumen now places their continued ownership of a home in Moreno Valley in jepordy as they are saddled with the challenges of Alt A and sub-prime mortgages.

- A recent article in the local Press Enterprise described Moreno Valley as a community that, "despite its handy location, wide range of homes and passionate city leadership, suffers from an image problem. Its unofficial slogan, "We don't want another Moreno Valley," was born during Riverside County's approve-everything stewardship before the city incorporated in 1984. In surrounding cities, when big developments were proposed, opponents could be heard chanting, "We don't want another Moreno Valley."
It is THE case study for the purpose of studying the pitfalls of expansive growth in the absence of effective leadership and competent planning. The latest example of this void is the fact the new warehouse cited by Moreno Valley's mayor in the article is unlikely to be approved because of its environmental impact to the surrounding area. The city's mall continues to lose anchor tenants and is populated with fast food eateries and discount specialty stores capitalizing on low rent. A fractious city council (consisting of members typically elected "for life") rotate the mayor position among themslves on annual basis. Can you think of a better recipe for failure in public policy management?

- It is now possible to purchase homes in Moreno Valley for 50% of what they listed/sold for at the height of the real estate bonanza. This glut of existing/foreclosed proporties effectively negates any opportunity for newly constructed homes to be sold. The vast tracts of newly constructed and partially constructed homes bear witness to this. Latest statistics show sales of foreclosed properties account for more than 60% of home sales for the latest reported period. For all intents and purposes Moreno Valley remains a bedroom suburb of Orange and Los Angeles Counties. The dearth of high paying positions in the area relegates those in higher earning positions to a 60-180 minute round trip daily. The positions offered by the numerous distribution centers are moderate-to-low paying ones not likely to allow those workers to purchase homes in the area.

- An ancillary result of the downturn in the economy and real estate market is the impact on the local school district. Historically one of the worst performing in the state of California, it is dependent upon fees assessed to real estate developers for funding for new construction. As construction dries up, so does a major construction funding source for the District. Delapitated buildings reinforce the perception among struggling students they do not matter, further driving down the District's already sad academic perfomance rating.

- Moreno Valley affords those able to capitalize on it the opportunity to enjoy a quality of housing which would cost 3-4 times more in Orange/Los Angeles County. The present upheaval represents an opportunity for Moreno Valley to "get it right" in terms of long-term municipal infra-structure planning, housing and commercial development, and branding. Unfortunately, opportunity does not guarantee success and the smart money is on Moreno Valley's continued status as a "case study".


When my younger son was in college, a friend of his had a summer job driving down every single street in the Minneapolis-St.Paul Metro Area and measuring cell phone signal strength. He told me that what really struck him was just how widely dispersed employment providing institutions were. Not a single part of the Metro was strictly residential with no industry. Today's suburbanites live in highly developed communities with full services and employers. The fact that some of these suburbs don't have a traditional downtown is irrelevant. Travel is isotropic, rather than linear, as in the old core city model, and jobs no longer have the security they once did, necessitating frequent job changes.Moving people back into core cities also means moving jobs, schools, services. That's a lot of real estate to move. The expense would be astronomical. Humans are a generalist species that prefers extensive utilization of resources over intensive. If we really wanted to live closely packed together, we would be doing that as the norm. The fact that, when given the opportunity, so many people chose to live spread out is an indication that that is normal for humans. It's no accident that there is only one vertical city in America.


This is a bubble bursting with a few exceptions. Houses still have inherent value many dotcoms do not.Population is still rising and these houses will be needed soon.If you can afford to buy and you live in California you should buy.

Risk Thinker

Don't understand why people never learn!

Learn to walk before you run......buy propety you can make full use of....if u have no kids, why do u need to buy a 2-bed house with a big garden? If u have 1 kid, u only need a 2-bed house with a small courtyard.

Show me a property developer building 2-bed houses? If they exist, they will be selling properties like hot cakes....even now!!!!!!!


My lovely bride and I moved to a suburb which we selected based on the quality of the schools and the county's Republican voting history. When it came time to send our children to school, we discovered, much to our dismay, that many of our children's fellow students came from homes in which the parents had been divorced, and others who used alcohol, including wine, beer and high balls. What we thought was a community of like minded individuals, turned out to be a seriously harmful place for the moral development of our children. We couldn't imagine leaving our boy and girl in such a degenerate environment so we were forced to take them out of school and school them at home (so-called home schooling).

Well, I won't say that it hasn't been alot of work for my wife and I, however our children are being raised the correct way, free of contaminating influences.

In closing I would just like to say: Like minded individuals? Don't you believe it!


"America needs to learn this energy lesson, pack up, and move to where they work. The inner city, or whereever, will be much nicer when everyone lives there, not just the poor!" - Simply ScottSimply Scott, don't preach to use what you refuse to practice. If living near where you work is so important, than do it yourself. BWI is not in the city of Baltimore. Saving a couple miles of driving each week because you walk to the store does not offset the amount of driving necessitated by you not following your own advice and not living where you work.


Goodness - what a bitter and cynical group.A dark manifestation of the business cycle is now showing its ebb. Increasing technology and understanding of energy, the environment, new investment vehicles, and planning will allow for creative solutions and workable compromises within the coming 2-5 years. Adversity has always been the mother of invention. Diversity of lifestyles and values, along with a tenacity to see improvement will continue to raise the standard of living, understand which portions of nature can best be preserved, and effectively solve the faltering assessment of risk in investment vehicles. It is crucial to the american lifestyle that a wide selection of living arrangements (house, apt, farm) be preserved and made available. A large range of choices is the best hedge against faltering industries, transitioning demographic populations, and disgruntled residents.The suburbs represent an important community structure that many find support their value systems. As with myself, i believe that backyards are crucial to child development - as it provides the semi-supervised area that parks, forests, and city blocks cannot provide on a daily basis. However, there is an ideal time for the use of the two-garage, 1/4 acre property - young families. Encouragement for pre-family, adult-only, single, empty-nester, and other such childless family types to embrace a higher density arrangement is probably best for maintaining a dynamic housing industry.As one with a planning background, i recognize that knowledge of people's desires, habits, and lifestyles is crucial to setting up communities that create happy and productive citizens. Communities that provide amenities and facilities that are appropriate to the resources available. Understanding that transit systems and job opportunities can only exist where there is sufficient tax base and diverse population access. Not 'everyone' can live within walking distance (30 min transit) of their dream job/grocer/recreation - the demographics of housing desired vs. amenities/professional/industrial/zoning often conflicts. This is a complicated problem that has been pondered for centuries by people far smarter than you and me - and is getting worse as fuel prices have caused us to reassess the lifestyle balance that we are willing to maintain.The key is to recognize the complexity that this problem represents and be informed about how your own values can fit into the wide range of communities available. A diverse and educated public is one willing to entertain compromise, adversity, and vision.


Another note on schools: it’s not the funding that makes a school good; it’s the concerned parents. (Consider how much better an education our Depression era, countryside grandparents received in one-room school houses way back when compared to what our average high school “graduate” gets today.)

For better and for worse, today’s concerned parents are largely in suburbia. Unfortunately, they’re only concerned about their own children’s future, not the nation’s.

The charter school is giving concerned-urban-but-not-wealthy-enough-for-private-school parents like me the opportunity to send my children to decent, publicly-funded primary & secondary schools.

Unfortunately, this is not addressing the issue of economic apartheid, which is the real issue at hand and the suburb’s raison d’etre.


Americans live in the suburbs to cluster with people who want to live like they do. In particular, they want their kids to go to schools with the kids of parents who think like they do. There are no standards in American schools. All students must be kept in class, no matter how disruptive or how unwilling to learn, and they will be promoted with their age group no matter how few skills they attain. Living in a community made up of families who take education seriously is the only way to get your kids a good education in America. As long as this is true, the suburbs will remain as they are now. In a society that refuses to set limits and standards, self-segregation by migration is the only way for middle class families to live safe, productive lives. Singles and couples without kids can self-segregate by choosing who they associate with (unless your neighbor starts selling heroine). Families need community structure.


The American Dream will be kept alive by thrusting another 10% of the US population into the landless, debtor class, thus preserving the rights of the remainder of the "middle class" to aspire to become home owners (with the carrot of being debt-free and retired by age 69 or so).

Supply & Demand for suburban houses (or any kind of housing for that matter) won't figure into the equation in an Econ 101 textbook fashion. Consider the demand for decent housing in Mexico today or in Depression era USA; that's a large demand, but prices do not come down to be affordable. Instead, homelessness and shantytown squatters rise to reach a market "equilibrium." In the current housing crisis to date, all of the US initiatives to stave off foreclosure have aimed at keeping housing prices artificially inflated. It's going to stay that way for years, maybe 20 more years.

Well, it won't be homelessness & shantytowns in 21st-century USA. It will be crummy apartments and 40-year homeloans and couples that never get enough money together to move up from that 800 sq. ft. "starter condo."


Moreno Valley should change its name to Death Valley. There is empty space as far as the eye can see - and A LOT farther! Not only that, the Inland Empire is hot as hell during the summer and the price of electricity (A/C) isn't going down any time soon. The people who live there are DOOMED, including by high and escalating commuting costs and time. LA and environs (California) are being turned into one massive CAPITAL TRAP - set by our Zionist 'friends', Sir Alan the Sorcerer and Whirly Ben, his Apprentice.Caveat Emptor!



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