Friday, March 28, 2008

Are we sprawled out?...

A USFR viewer recently wrote to object to high farmland prices and how urban development is likely causing them. You can see my answer during the "Mailbag" segment at the end of the show, but I stumbled on this really interesting piece that puts another perspective in suburban expansion. The quiet return to the city from the suburbs - or at least the emergence of a vibrant new group of urban residents - has changed both the picture and the reality of the suburb. In the process the business model of the suburb underwent a drastic revision.
Until recently DuPage County had been one of the big winners during the forty-year decline and imminent collapse of Cook County. Major corporations fled Chicago’s failing downtown and moved to DuPage’s open spaces and tax-friendly towns. Working class homeowners on the west and southwest sides of the city sold their bungalows and bought ranch houses, Cape Cods, and new town homes in Wheaton and Naperville and Downers Grove. Families troubled by the city’s public schools happily sent their children into shining new facilities and well-equipped classrooms. County government prided itself on its lean budgets and effective service-delivery.

By the date of the meeting, however, the developers who had helped double DuPage’s population in just 30 years had run out of land. The income generated by their construction efforts had dwindled to a trickle. Education and public safety costs continued to climb. Scores of specialized local districts and commissions—water, sanitary, and others —absorbed hundreds of millions of dollars that never made it into the general operating budget of the county and were subject to little, if any, scrutiny or oversight. And residential real estate taxes—the backbone of the county’s budget due to the long-standing agreement to attract and retain business by keeping commercial taxes low—soared.


DuPage is not alone, of course. In Nassau and Suffolk Counties in New York, in Montgomery and Baltimore Counties in Maryland, in Bergen and Essex and Middlesex Counties in New Jersey, in almost every mature suburb in the northeast and Midwest and mid south, families face these same conditions. A Roman Catholic pastor I met in Nassau County described it as suburbia’s midlife crisis. It may be part of America’s midlife crisis as well.

No longer young, no longer trendy, no longer the place to be, no longer without apparent limitations or constraints, these places, like people, have developed ways of avoiding reality. [More]
These social and demographic forces have been at work for some time, but now they are joined by economic punches like energy costs and real estate price declines. Given the delay factor inherent in real estate taxes, the forecasts for those tax revenues must be horrific for the next few years.

I have long been less than hysterical about urban development. After Richard Bruegmann published "Sprawl: A Compact History", I found some justification for my position. [Read my review here]
What this iconoclastic little book demonstrates is that sprawl is not the anomalous result of American zoning laws, or mortgage interest tax deduction, or cheap gas, or subsidized highway construction, or cultural antipathy toward cities. Nor is it an aberration. Bruegmann shows that asking whether sprawl is "good" or "bad" is the wrong question. Sprawl is and always has been inherent to urbanization. It is driven less by the regulations of legislators, the actions of developers, and the theories of city planners, than by the decisions of millions of individuals—Adam Smith's "invisible hand." [More]
It would seem those invisible hands are moving in other directions now. Maybe mall is beginning to pall. (Sorry - couldn't resist) Regardless, the fact that more people have the ability to choose can only be a good thing.

And if we can just keep our real estate finance system from imploding, even more citizens will have the chance to determine what our cities will look like with their decisions.


Ol James said...

Hmmm....we used to be known as "The Cotton State", then.."The Heart of Dixie". with time comes I am told. But so much change has occurred that folks have forgotten what they were changing to start with.
Instead of strip tilling cotton now I guess they could change the motto to, "The Strip Mall State".
I liked the report on the price of land that was on the AgWEB site. Here's an example from here. In 2002 land was auctioned off by Alabama Land and Timber. Rome-Craft managed the land for pulp wood as far back as I can remember. R-C sold it to Weyerhaeuser who cut the timber and replanted. They then sold it to an Asian Client,(their reply). The land auctioned for $1650.00 for road front acreage and $1400.00 for non frontal acres. Most land was going for $1200.00/ac. regardless of road front or not at the time. The asking price now is, hope you are sitting down, $$3450.00 for frontal and $2100-2800 for non. Yep, we are about to be over-run with "Yuppies".

Anonymous said...

Sounds like a bargain! Similar land in Ind. is $5,000. Ol james, you better get on the ball and buy some of this stuff!!!

Ol James said... would seem a bargain compared to other parts of the country, except for a few things. The property taxes have risen on average 200-300% from a few years ago. The land will not perk and owners have to put in a chemical system, which around here cost about $7,000.00-10,000.00. Power and phone come from the city, but gas is propane. There is a considerable start-up cost just to get a house built or a trailer set up. Maybe not as high as most regions but you can't flip burgers and support a family unless you are established already.