Prices at the pump skyrocketed this month and futures point to $200 per barrel by the end of the year. That increase, if it occurs, will certainly continue to push the price at the pump even higher.
The fallout in house values has left many a vacant house in neighborhoods that developers touted as luxury. Often, instead of actually building quality houses, they built 3000 square foot shitboxes so close to each other, hobbits actually live in the spaces between them because they are too small for people to get in there are chase them out.*
We don't need to talk about the meltdown of the global financial system, the climate crisis, or the explosion of other commodity prices to fully appreciate the unprecedented sea-change occurring right before our eyes. Periods like these happen often enough, I would argue the most recent was the proliferation of personal computing (which is still going on), but the forces making up this sea-change will affect every single person on the planet.
If the SUV is first, then perhaps the second is the McMansion. This development, like most others in Western Society, falls on the wrong side of conspicuous consumption. While people won't gladly give up the perceived security of large cars and houses, there are enourmous side benefits. I don't think Green Building is one of them necessarily--super efficient building techniques will develop because they will be a necessity in an age of pricey energy.
Housing in dense urbanesque area close to production centers will become necessary because it require too much energy to do it otherwise. Indeed, we are really witnessing a massive decentralization from global a scale to a local. Authors, scholars, thinktankers and environmentalists have been screaming about this for years, but it's the expensive commodities that are making it happen. In essence, the promises of globalization have become bald faced lies. It's not at all surprising considering who peddled these lyrics.
Localized communities that produce their own food and develop their own culture would create an entirely new type of value that this country has not experience in the last 70 years. Imagine the unique flavor of every city and town. We may well be living in exciting times.
On the other hand, there are some glaring holes in my Utopian imagineering. We have shitboxes on fertile farmland. In many instances, these were built and sold under the assumption of cheap energy. Without that, they have considerably less value. Their size and proximity to each preclude uses such as farming on that soil.
I would guess that the worst scenario is quickly unfolding. Most projections of the credit crisis were severely understated, and those whose projections on energy prices came true were considered crazies only a few short months ago.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.
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. (Emphasis mine.)
If gasoline and heating costs continue to rise, conventional suburban living may not be much of a bargain in the future. And as more Americans, particularly affluent Americans, move into urban communities, families may find that some of the suburbs’ other big advantages—better schools and safer communities—have eroded. Schooling and safety are likely to improve in urban areas, as those areas continue to gentrify; they may worsen in many suburbs if the tax base—often highly dependent on house values and new development—deteriorates. Many of the fringe counties in the Washington, D.C., metropolitan area, for instance, are projecting big budget deficits in 2008. Only Washington itself is expecting a large surplus. Fifteen years ago, this budget situation was reversed.As I said at the beginning of this post, we are in the middle sea-change. It is never pleasant to adapt, but humans are remarkably adaptive creatures. We can change the way our minds work in a manner of years so it is silly to assume that we will not be able to give up living in useless large spaces and drive uselessly large cars.
Despite this glum forecast for many swaths of suburbia, we should not lose sight of the bigger picture—the shift that’s under way toward walkable urban living is a healthy development. In the most literal sense, it may lead to better personal health and a slimmer population. The environment, of course, will also benefit: if New York City were its own state, it would be the most energy-efficient state in the union; most Manhattanites not only walk or take public transit to get around, they unintentionally share heat with their upstairs neighbors.The larger picture is indeed a beautiful one. If we embrace it, our lives will live much healthier fuller and in every way more fulfilling lives.
*Statement has not been reviewed by the FDA for accuracy.
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