The Oil Drum | Living Large in Exurbia

303 comments on Living Large in Exurbia

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AlanfromBigEasy on March 20, 2006 - 12:20am

~20% of the Phoenix labor force is in construction. They have been growing steadily for several decades now.

But let us suppose that growth slows by half and half of the construction workers are laid off. Soon, they will move on to greener pastures, vacating 10% of the housing, as well as many small offices. With a large influx of "new" hosuing (recently vacated) the demand for new construction will nearly evaporate, laying off 19% of the labor force (1% will always find some construction). They leave town after a period of unemployment. 19% housing vacancy. Housing prices drop, service industries from medical to car dealers (and especially banks) suffer. More layoffs, more move outs. More empty houses EVEN IF NEW CORPORATE TRANSFERS CONTINUE AT A MODEST PACE (perhaps 1/2 current rates).

Taxes rise, services and schools decline.

Add $6 gas and Phoenix suddenly seems less attractive. Corporations begin to move out ...

I can see Phoenix reforming around it's light rail line (s) with higher density. And retirees selecting parts of the Valley to move into cheap housing (leaving in summer.

The US abandoned much of it's preWW II housing after WW II, and the standard of construction and materials was FAR higher then. I am currently in Phoenix very close to Scottsdale, and the standard of construction here will not hold up well for most homes. 50 years and many will need lots of TLC & repairs. Boarding up and abandonment seem quite plausible to me.

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Leanan on March 20, 2006 - 12:32am

That is a very good point. I was reading one article about the new McMansions, where a contractor argued that there's no point in building to last. He said the clientele they are aiming for normally buy a new house every 5-7 years. Ten at the most. Simply because fashions change, and no wants a house that's out of style. Why build to last for decades, when the customer is only going to be there a few years?

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Magnus Redin on March 20, 2006 - 2:43am

They do not even ask for quality to get a high second hand value on their house? Building after the fashion, I would rather build in a way that reflects who I am. I am toying with the idea to build a house if I get the career I hope for. Something practical and reasonably sized that can be usefull for generations and I dont even have kids. (Yet, who knows? )
Whith a gable suitable for building an extension if there is need for more rooms in the future.

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Leanan on March 20, 2006 - 8:40am

They figure when the house is resold, the new owner will want to renovate it, not live in it as is.

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Engineer-Poet on March 20, 2006 - 3:18am

~20% of the Phoenix labor force is in construction.

And a large fraction of the construction labor is illegal aliens, who are:

Much cheaper than US labor, thus driving the construction boom.
Culturally alien and more prone to crime, thus increasing the attractiveness of "safe, distant" communities.
Directly driving the explosion of population which is served by the construction.

If you fenced off the border and deported illegals even half-heartedly, this problem would end.

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wkwillis on March 20, 2006 - 6:12am

You don't have to deport them. When the dollar stops being overvalued, the remittances they send home will become almost worthless and they will go home by themselves.

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Glenn on March 20, 2006 - 9:42am

This is a picture, my friend Dave took when he was stuck out in Phoenix for a year working at an auto repair shop and training to be an auto mechanic. He's now a video editor in NYC. Some of his stories of Phoenix are quite ridiculous, but true.

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303 comments on Living Large in Exurbia

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