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Living Large in Exurbia
Posted by Dave Cohen on March 19, 2006 - 10:32pm
Topic: Miscellaneous
Tags: california, exurbia, fastest growing counties, florida, phoenix, sprawl, suburbia, texas, us census bureau, virginia [list all tags]
View It And Weep -- Figure 1
It started for me this week when National Public Radio did a series of stories about Phoenix Grows and Grows (audio) which according to the latest US Census Bureau statistics, is now the fifth largest city in America. But we're not talking about suburban sprawl. The hottest new demographic is the growth of Exurbia, the suburbs beyond the suburbs.
Development & Population in the US - Figure 2
This recent press release from the census bureau has been the source of a spate of news stories from the MSM. But the data they provide does not tell the most pertinent fact about this exurbia boom. We can get that from Metro area 'fringes' are booming from USA Today.
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Stuart has done a long series of posts on the correlation between GDP growth and vehicle miles traveled (VMT).
Some of the fastest-growing counties in 2005 lie on the farthest edges of large metropolitan areas, stretching the definition of "exurbs" to the limit....More vehicle miles traveled! When you live in the Exurbs, you can't walk, you can't ride your bike, there's no buses, there's rarely a train service to get you to the city where your job is. Carpooling is impractical. You are completely dependent on your car and you spend a lot of time in it. You have no choice. Zero choice. That's the simple truth of it. It's a 90 mile commute to Washington, DC. from King George County in Virginia and 60 miles to Richmond, the 9th fastest growing county in the US."It's not just the decade of the exurbs but the decade of the exurbs of the exurbs," says William Frey, demographer at the Brookings Institution. "People are leaving expensive cores and going as far out as they can to get a big house and a big yard. Suburbia is moving much further out."
Rising gas prices do not seem to have steered Americans away from this outward push. Skyrocketing housing prices in major markets are a major contributor to growth in far-flung areas, Frey says.
Virginia's King George County, for example, is attracting people who commute 90 miles to Washington. The spillover began along Interstate 95 south of the capital and then moved east toward King George. The county grew 6.7% to 20,637 from 2004 to 2005.
Stuart's Correlation of GDP and VMT - Figure 3
So does this mean, perverting Stuart's analysis altogether, that now that we are developing more and more of America's rural lands to build Exurban communities with a concomitant rise in VMT, that this will cause US GDP growth to rise? Exurbia is really a good thing for America. Just kidding! 
But maybe I should take this more seriously. As far as US GDP growth is concerned, it seems to be all about new home building, buying SUVs and cars, high-tech gadgets and pharmaceuticals. As Peak Oil arrives, increasingly all we'll have left are the toys (blackberries, ipods, cellphones) and the drugs. There seems to be some poetic justice in that. If the truth doesn't save us, what does that say about us? -- from Lois McMaster Bujold. Sigh.
OK, let's do some analysis of the Exurban boom. First its important to know that there is a set of huge land development companies behind the trek to Exurbia. One of these is KB Home and they've got it down to a science. From this NY Times article Living Large, by Design, in the Middle of Nowhere, we learn
More than three dozen other communities in Pasco County [outside Tampa, Florida], some bigger than New River, are in the works, promising 100,000 new homes in the next five years. A megamall is coming. And the first of the big-box stores, a Home Depot and a Sam's Club, had their gala openings not long ago.But if there were no demand for these exurban communities, nobody would build them. Give the people what they want.In the case of New River [Pasco County], that developer is KB Home, one of the nation's biggest and most profitable builders with $7 billion in sales last year, which helped make it sixth among all Standard & Poor's 500 companies in total revenues.
KB Home has 483 communities under development in 13 states and expects to complete more than 40,000 new homes this year. Yet it is just one of about two dozen such corporate giants fiercely competing for land and customers at the edge of America's suburban expanse....
Poring over elaborate market research, these corporations divine what young families want, addressing things like carpet texture and kitchen placement and determining how many streetlights and cul-de-sacs will evoke a soothing sense of safety.
They know almost to the dollar how much buyers are willing to pay to exchange a longer commute for more space, a sense of higher status and the feeling of security....
In its most recent survey of Tampa home buyers, KB asked people what they valued the most in their home and community. They wanted more space and a greater sense of security. Safety always ranks second, even in communities where there is virtually no crime.But the chief driving force is affordibility. Now that we've had inflation in housing prices, the housing bubble, for some years now--which you know as well as I do is going to burst--the tradeoff between commuting time and the cheaper prices in exurbia are still well worth it to these prospective home buyers, Particularly, they want all that space. These are McMansions, 4000 square feet or up. And apparently, they want more security. "Paranoia runs deep in the heartland" as a band from the 1960's once sang. Presumably, Al-Qaeda is expected to show little interest in Kendall County 50 miles outside of Chicago.Asked what they wanted in a home, 88 percent said a home security system, 93 percent said they preferred neighborhoods with "more streetlights" and 96 percent insisted on deadbolt locks or security doors.
Let's finish up by revisiting Arizona. Phoenix is not so much a city per se, it is a conglomeration of exurban communities like Tempe, Mesa, Scottsdale, et. al.
Phoenix Metropolitan Area - Figure 4
It's a desert and it gets very hot out there. Daytime temperatures are well over 100° for several months of the year. Our audio from NPR (cited above) notes that it is a heat island and in last few decades night time temperatures have risen 11° fahrenheit. In addition, it is expected that soon night time temperatures will fail to get below 100° during the warmest months. You can not live there without air conditioning--it is simply impossible. Where's all this electricity going to come from? And where's the water going to come from? Currently, it's from the Salt River described in this bizarre "no need to worry" FAQ document entitled "Phoenix in Drought". This is not what I would call an infinite supply source. Finally, this Greater Phoenix Economic Council document describes the projected population there out to 2020.
Phoenix Expected Population Growth - Figure 5
That would be 5,210,000 people in 2020. And what about the price of oil and gasoline in 2020 in an Exurban Paradise bigger than Los Angeles County that is entirely dependent on cars and trucks? $15/gallon? $140/barrel? And the NPR story quotes that the population is expected to be over 7 million some 35 years from now! It was at this point, listening to the story that I just burst out laughing. My immediate facetious thought was that the Phoenix Metro area would be able to comfortably support about 70 or 80 people at that point.
Real Estate developers can entice these consumers but most of the time people just fool ourselves. They are not aware of energy and other resource issues (eg. water). Impossible, unsustainable exponential growth issues simply do not exist for them. The post-World War II American Dream lives on and on for now until at some point in the fairly near future, it doesn't. For a few more years, these upwardly mobile Exurbanites will have what they consider the "good life". But nothing lasts forever. As John Maynard Keynes could have said about Phoenix, "In the long-run we are all dead".
In the same way, we have to understand and appreciate the native ingenuity and creativity which will be spawned from a change in economic conditions. People are not going to be locked into today's way of life. If and when that way of life becomes impossible, they will create something new.
An obvious possibility is to move jobs nearer to these exurban communities. You mentioned Phoenix being structured more like a bunch of satellite cities rather than a single megalopolis. That is an ideal arrangement to reduce driving distances and allow people to live closer to where they work. I imagine that we will see similar developments happening throughout metropolitan areas. Suburban communities will become the preferred places for companies to locate. People will move to be closer to their jobs. We may see greater mobility, flexibility and dynamism in how people integrate their working and leisure lives.
Another possibility is to see greater use of telecommuting. Yes, this has been predicted for years without much success. But the truth is that for many of those jobs there is really no pressing need to bring everyone physically together. Most people today do service jobs and many of them can be handled remotely. What we need is improved communications beyond what we have today, so that two way view screens are a standard and ordinary part of the home office. You need to be able to chat with a co-worker as easily as at work, and managers likewise need to do the equivalent of walking past desks to see that everyone is being productive. This technology is nearly here and if the economic need arises, it can be efficiently implemented.
The point is that when things change, people change to adapt to them. I agree that it is unfortunate for people to be making fixed investments in real estate and housing if the basic economic circumstances are about to undergo radical change. As you know I am not as certain as most people here that this kind of radical change is truly just around the corner. But if it does, and most investments today turn out to be far from optimal, nevertheless I am confident that an entire population of motivated, intelligent and creative individuals will come up with much better solutions to their problems than a few people today can envision.
Which means the can be handled in India for half the cost.
Furthermore, most of those jobs invovle managing/accounting/distributing the hallucinated wealth created from buidling homes, cars, consumer goods, etc. You really think these jobs are even going to exist in the future when there is a lot less wealth to be managed and accounted for?
Best,
Matt
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.
Whith a gable suitable for building an extension if there is need for more rooms in the future.
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.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.
One of the financial gurus worried that the government would be pressured into offering another big social program: mortgage bailouts.
No one actually came out and said it, but implied in their analysis was that Kunstler is right: the suburbs will be the new slums.
I agree, this kind of mining for scrap occurred extensively in Lithuania after the Soviet Union fell apart, and it wouldn't be much of a stretch to see this happening in the exurbs. Occupied houses weren't disturbed too much, but a construction site that was only half-completed, and then abandoned, was fair game. In my wife's village (okay, former collective-farm settlement, to be precise), a building that was set to become a cafe/store was abandoned prior to completion. Within several years, it was looted for its metal fixtures, and its remains were privatized. The buyers broke down the walls, and used the bricks for other structures. The site is now basically a hole in the ground.
Same fate awaited the Soviet military structures that were not immediately put to use by the Lithuanian military.
The really adventurous thieves went after electrical transmission infrastructure.
I shudder to think of the chemicals released when you burn PVC pipe and treated lumber, but people are not going to be too picky when TSHTF.
I don't share your optimism at all, not in the short term at least. When this thing starts to crash, all that exurban and suburban property turns to kaka. Huge mortages, asset values dropping below the mortage, incomes threatened, the most fearful and isolated segment of the population, the least inclined to cooperation, goes under water: this is a formula for hell on earth.
Just the economics is frightening enough: this will be the largest asset devaluation in the history of the planet. I don't see how it can turn out any other way -- I am really trying to see it, but I don't. Even the warrior state cannot fend this off very long.
It is a mistake to just think of the physical side of things, alternate uses of the McMansions -- not that I think that there is any hope there either: what can they really be used for? No, these are financial assets, and their devaluation will have catastrophic consequences for the economy as a whole, the world economy I might add.
I think that would be a very good thing, after the initial pain. Lets face it, one of the reasons that Americans have a higher cost of living, and cannot compete with the cost of labor in other countries is the amount of debt we carry. This requires high salaries to sustain. If all mortgages and personal debt was wiped out, and easy credit was eliminated, the cost of everything would go down, and salaries could drop substaintially.
The real issue is that Americans don't want factory or any labor intensive jobs. Everyone wants a nine-to-five office job. Who wants to dig ditches and be exposed to freezing and sweltering temperatures when you can work in a enviromentaly controlled office?
Why have so many blue collar jobs moved overseas over the past 30 years? Not because "Americans didn't want that kind of job." It was because people would do it cheaper overseas.
No.
It was because one group of Americans could capture more welth if they laid off this group of Americans and hired that group of non-Americans to provide goods and services to those Americans who still had employment.
Where did China's capital come from? American investment. Who gets hurt if China revalues as demanded by the US government? American firms exporting fromm China.
Sure, overseas labour work's cheaper. Not because their labour is actually worth less, but simply because the environment from which they hail can sustain lower wages.
And any "right thinking" suit (this must be an oxymoron) would see this as a boon and make a dash to locate labour expensive activities to labour cheap locations.
As for Americans and "undesirable" jobs, if wages and benefits reflected the "nut" that needed cracking, then I cannot think of any group more willing to work than Americans.
jimbo
;-)
Try this. Go to the nearest office building and ask people entering or leaving if they would consider a farm or factory job if they earned the same pay as they currently do. I guarentee not a soul over 30 would consider it, unless they don't understand how hard it is. Working in a factory, or a farm is very hard work, boring and dirty.
On the other side, go to a working farm or a factory and ask the workers if they would trade their current job for an office job at the same pay. I bet the majority would consider switching.
The reason for choosing a profession career isn't just about financial benefits. Most educated people want careers, not a repetitive, back breaking job.
What is it that you do for a living? Do you work in a factory or on a farm? Have you ever tried a labor intensive job for more than a month? (No need to reply, just think about it.)
>Why have so many blue collar jobs moved overseas over the past 30 years? Not because "Americans didn't want that kind of job." It was because people would do it cheaper overseas.
Labor costs are certainly a strong reason for manufacturing jobs leaving the US. However, the trend started in the early 1950s as more an more Americans seeked out professional jobs. This was way before jobs began moving overseas. You can research the facts on the Labor department web site and see that the since the 1950s people seeking employment in farming and manufacturing has been in a steady decline.
BTW, I'm 42 and would gladly move to a farming job if I could make anywhere near the pay I do now as an engineering manager. And yes, I do know what is involved.
Somehow, I made it through and within two weeks was having the time of my life, working with some of the best people I've ever met and doing the most immediately gratifying, and perhaps more challenging work that I have ever done. This included sandblasting, painting, cleaning drydocks, removing sludge out of empty fuel tanks, etc. Dangerous and incredibly dirty, hard work.
It was really one of the most liberating experiences of my life after the petty politics of the electronics shop I had worked in for years. I worked (by choice) in this job for almost three years, only going back to the shop to work on equipment for which I was the sole qualified tech. Lest anyone think that I was just a malcontent who couldn't handle a technical job, I have been an electronics tech/test engineer for over 25 years at this point and have received nothing but accolades for my performance every one of those years.
No, I'm not really representative, I guess. When I go to my mom's on vacation, the first thing I do is rake manure from the barn. Therapy...
In any case, for most people, it's not a choice between a professional job and a factory job. The people who used to work at factory jobs are now working at jobs in the service sector. They are often just as boring as the dullest factory job, if not quite as dangerous. The pay is also lower.
I used to live in a small city that was known for its manufacturing. The last manufacturing company closed a couple of decades ago (a paper company). With the loss of the $20/hour jobs at the paper company, the area really went into a tailspin. The only other jobs people could get with their level of education were fast food or retail jobs. McDonald's, the mall, etc. A lot of people started dealing drugs, since that paid very well and didn't require a degree.
I find such work to be very rewarding and enjoyable, and have long tried to accumulate as much of such skills and knowledge as I can. I would not hesitate even a moment to trade my present career for one of these. I suspect I would be much happier. Next on my list are gardening and ironworking/blacksmithing (if I can find the time).
Most physical work isn't that hard, it is the boring that gets you. I got so bored while a grinderman that I took a power washer and cleaned 80 years worth of wood pulp off the machinery.
Farming is hard, physical work but it is also good exercise and low stress (I mostly did hay/straw baling and hauling).
My current job is much more draining from the mental exertion and stress.
I don't have to. At my office, we are about half deskbound and half out in the field (construction, maintenance, survey, etc.). And those who are out in the field doing physical work are there because they want to be. Some just hate deskjobs on principle. Some like the overtime available to people who are out in the field.
As for farming...I live in an area that was all farms not too long ago. Many of my coworkers own working farms. They plan to farm full time in retirement. They mourn the changes that mean their children who want to be full time family farmers will have a tough time of it.
Perhaps so...but a lot of people don't really want to be educated. If they could get a job that paid well without having to get an expensive degree, they would take that route.
I recently had to deal with someone who took a job as a "CADD operator" in our engineering dept. He was a good kid, but didn't want to work at a computer all day. Turns out, he thought "CADD operator" was some kind of heavy equipment operator. (Such people are often referred to as "operating engineers," so the mistake is understandable.) He eventually quit and took a job running an excavating machine for a construction company, and was much, much happier.
I am currently working as a civil engineer. I have worked at labor intensive jobs in the past, including farmwork. (It was my first job, and yes, it was grueling, but I wouldn't mind doing it again.)
I've worked out in the field before, and would do it again. Indeed, I asked for a field position when I was first hired; my previous job was as a bridge inspector. I was put in the office because that was where they needed people. I've stayed there because the office is