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Suburbs That Haven't Recovered from the Recession

91 points by DiabloD3 9y ago

cagenut 9y ago
Good. Suburbs are a delusional fantasy that every nuclear family is a financially independent island who's lives can be air-gap'd off from the rest of the world. They were built for boomers and should die with boomers.
- toomuchtodo 9y ago
  Not true. Millennials love the suburbs too! https://www.bloomberg.com/view/articles/2017-08-25/millennials-are-driving-the-suburban-resurgence https://www.bloomberg.com/view/articles/2017-08-25/millennia...
  - InitialLastName 9y ago
    I don't think "love" is the takeaway from that article. "Are forced to live in" is more like it.
  - ocschwar 9y ago
    For anyone outside the very rich, housing is not a consumer-driven market. When you're looking for housing, your choices are basically to move into something that exists, or living in a van by the rive. You don't get to put a construction crew to work to build your dream home. So when millenials move into the burbs, that's not an indication that they want to. Suburban housing exists in enough quantity. Urban housing does not.
    - pc86 9y ago
      > You don't get to put a construction crew to work to build your dream home. If you want to you absolutely can, without being "the very rich." It just takes more work, and the availability of vacant land. Yes, I understand vacant land doesn't exist in NYC or the Bay Area but for most of the country it's trivial to buy a half acre (or larger) lot with water and sewer hookups already, and get a construction loan for the building of a house. Yes it's more logistics and you need to management the mortgage for the land and the construction loan(s) separately but if you're not in a very concentrated urban area it's doable for anyone in the middle class or above who actually wants to do it.
      - mywittyname 9y ago
        > most of the country it's trivial to buy a half acre (or larger) lot with water and sewer hookups already Not really. Having just gone through this process myself in the midwest, we found it impossible to find land within a reasonable commute to the city that was not already owned by a major developer. The handful of plots a year that we came across were basically the undesirable ones that you'd have to be desperate to build on, or that required a private road to be constructed for access. We got lucky and a town close to the city parceled off an old park. But it took years of looking to stumble upon this. We were honestly beginning to look into the cost of demoing an existing house.
- sharms 9y ago
  This article focuses on the high city rents forcing low-income earners to the suburbs - not sure how this fits in with your comment?
  - ghaff 9y ago
    The article headline especially here but also on the original article is misleading even if not actually inaccurate. It encourages you to assume there's going to be a narrative about millennials abandoning the suburbs but, as you say, it's really more about the high rents in a lot of large cities pushing people out to smaller cities and the suburbs. ADDED: This is consistent with data showing the supposed urbanization trend mostly being about a certain demographic (mostly college-educated millennials) moving into the cores of a relatively small number of popular cities.
- ghostbrainalpha 9y ago
  I live in one of the communities this article is talking about in Las Vegas. I am 10 minutes from Downtown Las Vegas, and 20 by bus. I wouldn't even call it a "suburb" like most people think of it, just the normal city of Las Vegas. What the article is really about is how when 3/4 of the houses in my community went up for foreclosure they were all purchased by real estate investors. In my neighborhood these investors were almost 100% Chinese. The person I bought my house from owns 7 houses on my street, and he has never even visited the United States. He is not a great land lord obviously, and the renters who live in these houses don't keep them up and the area is very different than it was before 2008. I think the neighborhood will recover eventually, but people don't realize it will take decades before the owner occupancy rates return to what they were. The investors aren't bad people, but they profited from a bad situation so much that even their investments aren't exactly what they thought they were anymore. The investors thought they were investing in super safe bonds of the "American Dream TM", and now they own a majority of the shares in "New Suburban Ghetto Inc". What they didn't realize is that real estate isn't like another stock you can own anonymously. It's value depends a lot on who owns it. The market can absorb some amount of real estate investors without changing much, but the consequences of crossing a certain threshold will completely change what the investment is.
- markbnj 9y ago
  They weren't "built for boomers" so much as they were built for returning GIs after WWII. https://en.wikipedia.org/wiki/Levittown https://en.wikipedia.org/wiki/Levittown
tabeth 9y ago
There's a lot to digest in this article: 1) Absentee landlords are terrible. I can't say I know what the solution is, but perhaps simply lowering the price of the houses until the (low income) workers could afford to buy and therefore take stake in the community is preferable? 2) Unfortunately the sprawling layout of Hemet in particular is unconducive for creating the kinds of businesses that could at least mark the beginning of a more dense mixed use area. In this case there will have to be pain to raze some of the houses at the very least to help things go in that direction. 3) Broken window effect seems to be in full force with the absentee landlords only throwing fuel to the fire. Ideally the city would help some of these residents sue these landlords to resolve some of these issues, which would help slow the downward spiral of non-maintenance by the residents.
- EADGBE 9y ago
  As a landlord (I don't like that name, it kinda has a negative connotation) I can see first-hand in dealing with new potential properties the lack of care most landlords have towards their investments. They approach it as an entirely passive income without ponying up the relatively small amount for someone to actually maintain it (Since they're too old or bothered to do it themselves). I think a major windfall could be had with better regulations and rights renters could have protecting them from abusive landlords. The rental regulations in my city are laughable and I have to deal with it almost every time we look at a potential property when I "assess" how much care has been put into its structure, mechanical, appliances, etc. That's even assuming the previous owner permitted the property for such use.
  - real_estate 9y ago
    Personal anecdote: I know of a retired magistrate judge that acquired over 30 residential properties via tax-delinquency sales. These properties, not in the best condition, were used as Section 8 HUD housing, with no improvements made. Tactics included keeping the utilities in the landlord's name to be able to shut-off water, electric, or gas at a moment's notice. Many of the tenants were former defendants with the magistrate court that the judge oversaw. Additionally, barter was used in lieu of security deposits and partial rent payments - the tenant could fix-up the property. However, the tenants lacked any ability to properly repair anything, and the repairs caused further damage to the properties. The wife of the landlord, insisted he divest himself of these properties before his death, so she would not have to continue to deal with this. However, he did die, she inherited the properties, and is too old to have the energy to deal with this. As you said, "too old or bothered to do it themselves". Some of these properties now sit unoccupied, but cannot pass inspection because of the substandard repairs, and further disintegrate. I know of one particular property that was not winterized (unoccupied), and I am certain the pipes have frozen and cracked. At this point, the property should be razed (roof issues, structural issues, mildew, pests), but that costs money too.
at-fates-hands 9y ago
I went looking for a house about four years ago. That was in 2013, a full 5 years post recession. I was surprised to see how many foreclosures were still on the market. I asked my realtor to show me, despite his misgivings about possibly buying a foreclosed property. It was pretty much exactly how the article described it. I looked at about five or six lower priced large houses (5-6 bedrooms, 4-5 bathrooms, in the 4-5k ft range) and all were the same. They were all totally run down. Gutters falling off, carpets destroyed, holes in walls, kitchens in total disrepair. All kinds of stuff were left behind like there was a fire and the owners just fled. My realtor also pointed out a few of the houses where the workmanship of the house was way below where it should be. The houses were built quickly for the boom. Corners were cut and it was clear even after five years, the houses would need a ton of work. One other thing the article didn't touch on was the huge availability of retail and commercial space. There's a bunch of suburbs around where I live where businesses went under during the recession and nothing has filled those buildings yet. Retail is the same thing. There are businesses that either moved out or closed shops and those spaces remain empty, almost ten years after the recession.
- maxerickson 9y ago
  I would describe 4000 square feet as enormous. 2000 square feet is plenty of upkeep if you aren't paying someone to do it.
  - at-fates-hands 9y ago
    It was and I was surprised at how far the costs of houses in that range had come down. I guess the balance of the cost of work needed, essentially then pushed them back into the proper range. As you noted, the upkeep would've killed me. I ended up with a 2500 sq ft mid century modern that was in rock solid condition that I got for a steal. I haven't had to do anything substantial in the last five years. Some things will be due in the next three years (windows and HVAC) but otherwise, it's been easy to maintain.
- Gargoyle 9y ago
  I'm on the edge of Sacramento, and retail especially is still dead across the board in this city. Commercial has picked up, but it's the seat of one of the largest governments in the world. Drive around from downtown to way out here, though, and you'll see an extremely high vacancy rate for retail. And it's clear that it's been that way for some years. Given that residential has a shortage and commercial is booming, I don't know if retail is ever coming back, ever.
randiantech 9y ago
Decentralization of bigger cities is one of the key things where govern should take action in the foreseeable future. I live in Buenos Aires, Argentina, which receives 2 million workers every day. Govern should pass laws to incentivize companies to move out of the city, banks to give credits on underdeveloped areas, and heavily invest of public transportation to those areas. We are reaching a level bigger cities are not capable to scale any longer.
- ocschwar 9y ago
  Visit Atlanta, Georgia, or Charlotte, North Carolina, or Phoenix, Arizona before wishing that on your own city. We made that particular mistake already. You don't need to repeat it.
  - frandroid 9y ago
    Can you expand on this? Are large businesses spread across the land in these areas?
    - maxerickson 9y ago
      There's little in the way of geographic constraints and they sprawl all over the place.
    - ocschwar 9y ago
      Yes. There are business parks along the highways all over the suburbs, and so everyone has a hellish suburb-to-suburb commute.
      - brewdad 9y ago
        And transit can't really pick up the slack since there is no core target that large numbers of people want to reach. Successful transit can take a dispersed residential population to a central core or a centralized population to dispersed employment zones but not both.
killjoywashere 9y ago
Shouldn't cities grow and fade though? If whatever attracted people is lost, it should shrink. The problem is it's really hard to shrink concrete. In Louisiana after Katrina, the main solution was bulldozers. Think of them as the macrophages of the urban immune system.
- Bartweiss 9y ago
  > The problem is it's really hard to shrink concrete. A better summary in one line than most essays on the topic. We've put together a system that's unstable in the face of even modest shrinkage - and in some cases a mere failure to grow. The result is that even non-crisis change, like people moving to take better jobs, creates crisis results in shrinking cities. In the short term, promoting growth is probably an inescapable part of the solution. But if we keep up the pattern of debt-financing expansion by planning for growth, we're never going to do better than deferring the crisis. Long term, we need to build financially-stable cities and work out actual strategies for managed decline. 'Shrinking' and 'failing' are equivalent today, but that pattern needs to be broken if we're going to get out of crisis mode.
  - ghaff 9y ago
    For that matter it's hard to grow concrete above a certain rate both for physical and political reasons. It's one of the problems causing the housing crunch in certain cities. Yes, in each case, there are specific issues. But, generally, when everyone and their dog suddenly wants to move into certain areas of certain cities that were actually declining in population not all that long ago, you're going to have issues.
- rdiddly 9y ago
  Yes, especially when a place has nothing intrinsically going for it, and is a sort of "nowhere" that people settle for, in order to be close (but ironically, not especially close) to an actual place, that they want to be in but can't afford. Unfortunately, the invention of the automobile didn't make geography irrelevant; some spots are just better than others. And far-flung exurbs that are solely bedroom communities for other places seem especially unsustainable/doomed. Another good oil-price spike, and they're once again cut off to a surprising degree, from any real, useful human economic activity. Survival of a place depends on finding & exploiting whatever it is that the location has uniquely. If society collapsed, Hemet could convert itself back to agriculture using some of your bulldozers. Though fuel might be hard to come by in that case. Plus, the people currently moving in in droves might be inclined away from that kind of hard work and more toward forming a roving band of predatory nomads based on ruthlessness, that raids other places. Mad Max!
thriftwy 9y ago
There is this thing I was thinking about: Single homes ought to be owned, and multi-tenant apartment buildings ought to be rented. Why? One case you are observing in the article. Renters of home don't care about keeping up their house. Spending any kind of money on it is just not their priority. The only one who can keep up the house is owner, but as you can see in this case they'll just choose to pocket the rent. But there's a different angle. Imagine an apartment building where every apartment is owned. Some of them by elderly, some of them by poor. Now the common areas and house territory would deteriorate, because apartment owners don't have incentive to spend on either one. You could try to roll these charges into their utilities bill, but they will fight tooth and nail. Poor will say "we don't have money for this", elderly will say "we don't care and also don't have money", the rest will say "we're not paying for the aforementioned if they're not". This is becoming a problem in countries where owned apartments are a thing. The city has to pay from its pocket for the upkeep of territories around such apartment blocks. Naturally when apartments are rented out, landlord is interested in its state because they have to maintain steady number of new tenants to replace people moving out. Bad upkeep = no more tenants = lost money.
- real_estate 9y ago
  They are called condominiums.
- scaryclam 9y ago
  In the UK, it's normal for apartment buildings where people buy the apartments to have what's called ground rent. This is an additional charge that is specifically for the upkeep of the buildings shared areas and grounds. I don't know if perhaps that's missing in other places, but it seems to work ok here.
  - alistairSH 9y ago
    In the US, owner-occupied flats are called condominiums. And ground rent exists as "condo fees". In my area, condo fees are often high enough to make buying a condo a strange proposition - you really must want to live in a multi-unit building because mortgage+fees > mortgage for a detached dwelling.
mbrumlow 9y ago
Haven't recovered... What if it is should have not been? Many things were built and new subdivisions were creates with the notion the economy was ready for it. It clearly was all built on lies and bad practice. That is why I question not that it is recovering but maybe it should have not been. I think the real solution is to leave these areas that clearly can't be supported by the local economy. And sorry to say. Yeah it's going to suck for a lot of people. But that is life. Not everything is going to be perfect. Holding on to a dying dream is only going to make it worse. (I am not cold hearted. I have just experience life enough to not let a sob story make me make irrational decisions).
- criddell 9y ago
  If you don't like suburbs, you're really going to hate what self driving cars bring. Get ready for sprawl like you've never seen it before. I, for one, plan on moving further out of the city as soon as my car can drive itself. The dream isn't dying. It hasn't even started yet.
  - CalRobert 9y ago
    sadly I want to think you're wrong but in reality every last remote place will be destroyed by them. Why live in walnut creek when you could commute from yosemite?
  - organsnyder 9y ago
    I could see it going either way. I actually have become more likely to use transit since ride-hailing is so much easier—if I'm ever stranded anywhere (lack of good bus route, after hours, etc.), I just have to open the Lyft app. Furthermore, when car ownership is no longer considered a necessity (as it is today in most of the US), the economics will change. Right now, my personal vehicle is a sunk cost, so I view car trips as costing close to zero—unlike the up-front, immediate transactions inherent to taking the bus or Lyft. Once I no longer own that vehicle (I'm not planning to replace it), all of my options will be on more equal footing, since they'll all be priced per-trip. Even self-driving vehicles will not be able to compete with mass transit when they're both priced similarly.
southphillyman 9y ago
"This dynamic changes the housing markets of these cities, too, with big cities getting more expensive as more high-wage workers migrate there, and low-wage workers leaving cities to seek more affordable housing in the far-away suburbs they can afford. Now that the dust of the recession has cleared, it is evident that the geography of poverty has changed in America." There was just an article posted here a couple of weeks ago about a woman who was pushed out of LA and moved to Hemet while continuing to commute to LA for work. IIRC the woman was in her 50s and still renting in Hemet despite the lower housing costs. There are no jobs in cities like Hemet but you'd expect that a significant enough number of LA expats moving there would revitalize the local economy some what, just from the higher earnings of super commuters.
- lazerpants 9y ago
  I think most people who would traditionally move to further flung neighborhoods to buy are those who are just getting started with families. However, most people aren't willing to commute that far in painful traffic. Anecdotally, my wife and I are more willing to relocate to Austin or Denver than to NJ or Westchester (this is from NYC). I imagine many other young, moderate income, residents of high population cities feel the same.
- s73ver_ 9y ago
  For that to happen, those people would have to be spending money in Hemet, and not just at the grocery store or the gas station. They'd have to be dining out in restaurants in Hemet (local ones, preferably, not just fast food chains), going to bars in Hemet, buying things in little shops in Hemet, etc. As it stands, a lot of these people are probably still commuting to LA, not just for work, but for their leisure as well.
- rdiddly 9y ago
  Yeah I was like "Hemet, Hemet, now where have I heard of that town before?" Didn't find the HN discussion (gave up rather easily) but this is the LA Times article: http://www.latimes.com/local/california/la-me-lopez-commute-cherry-20171216-story.html http://www.latimes.com/local/california/la-me-lopez-commute-...
lmm 9y ago
People who want to live in the cities are moving to the cities, and so house prices in those suburbs are dropping and people who can't afford houses in the city are moving to places where they can afford houses. Both of those seem like good things. Of course if you look only at the suburb then it looks like a decline. A country that has built enough housing for its population should have empty houses, should have houses that are not worth keeping up slowly falling into disrepair, available on the cheap to anyone who decides they do want them. Build more houses where people want to live - the cities. Let them rot where people don't.
jpm_sd 9y ago
It seems like there's a market opportunity to create a property management company that operates on a Wal-Mart or McDonalds scale. Franchises all over the country, consistent architectural design for apartments, consistent management and maintenance. I'm surprised something like this doesn't exist already.
- jzymbaluk 9y ago
  That's an interesting thought. The only reason I can think of that such a thing might not exist is that each state and city might have a unique set of regulations and licensing, which would make it difficult to operate nationally.
- closeparen 9y ago
  Equity Residential, Avalon Communities, Essex Property Trust, etc. They are cold profit-maximizes at lease renewal, but very good at maintenance and very easy to move into. Make an appointment, see the place, sign the papers, get the keys. No “wait and see which one of the 50 applicants I pick,” low security deposit ($500-$1000 vs $8000+ for a mom and pop), helpful onsite staff.
- astura 9y ago
  Correct me if I'm wrong but isn't this basically what REITs do minus the franchising? (Walmart doesn't franchise either) There's also large privately own property management/real estate companies, I lived in a complex owned by one for 4 years. They own and operate properties in 25 states.
  - ABCLAW 9y ago
    REITs don't necessarily run the building management or development sides of the business. Normally these functions are bid out to developers and property management companies.

91 points by DiabloD3 9y ago

Good. Suburbs are a delusional fantasy that every nuclear family is a financially independent island who's lives can be air-gap'd off from the rest of the world. They were built for boomers and should die with boomers.

toomuchtodo 9y ago
Not true. Millennials love the suburbs too! https://www.bloomberg.com/view/articles/2017-08-25/millennials-are-driving-the-suburban-resurgence https://www.bloomberg.com/view/articles/2017-08-25/millennia...
- InitialLastName 9y ago
  I don't think "love" is the takeaway from that article. "Are forced to live in" is more like it.
- ocschwar 9y ago
  For anyone outside the very rich, housing is not a consumer-driven market. When you're looking for housing, your choices are basically to move into something that exists, or living in a van by the rive. You don't get to put a construction crew to work to build your dream home. So when millenials move into the burbs, that's not an indication that they want to. Suburban housing exists in enough quantity. Urban housing does not.
  - pc86 9y ago
    > You don't get to put a construction crew to work to build your dream home. If you want to you absolutely can, without being "the very rich." It just takes more work, and the availability of vacant land. Yes, I understand vacant land doesn't exist in NYC or the Bay Area but for most of the country it's trivial to buy a half acre (or larger) lot with water and sewer hookups already, and get a construction loan for the building of a house. Yes it's more logistics and you need to management the mortgage for the land and the construction loan(s) separately but if you're not in a very concentrated urban area it's doable for anyone in the middle class or above who actually wants to do it.
    - mywittyname 9y ago
      > most of the country it's trivial to buy a half acre (or larger) lot with water and sewer hookups already Not really. Having just gone through this process myself in the midwest, we found it impossible to find land within a reasonable commute to the city that was not already owned by a major developer. The handful of plots a year that we came across were basically the undesirable ones that you'd have to be desperate to build on, or that required a private road to be constructed for access. We got lucky and a town close to the city parceled off an old park. But it took years of looking to stumble upon this. We were honestly beginning to look into the cost of demoing an existing house.
sharms 9y ago
This article focuses on the high city rents forcing low-income earners to the suburbs - not sure how this fits in with your comment?
- ghaff 9y ago
  The article headline especially here but also on the original article is misleading even if not actually inaccurate. It encourages you to assume there's going to be a narrative about millennials abandoning the suburbs but, as you say, it's really more about the high rents in a lot of large cities pushing people out to smaller cities and the suburbs. ADDED: This is consistent with data showing the supposed urbanization trend mostly being about a certain demographic (mostly college-educated millennials) moving into the cores of a relatively small number of popular cities.
ghostbrainalpha 9y ago
I live in one of the communities this article is talking about in Las Vegas. I am 10 minutes from Downtown Las Vegas, and 20 by bus. I wouldn't even call it a "suburb" like most people think of it, just the normal city of Las Vegas. What the article is really about is how when 3/4 of the houses in my community went up for foreclosure they were all purchased by real estate investors. In my neighborhood these investors were almost 100% Chinese. The person I bought my house from owns 7 houses on my street, and he has never even visited the United States. He is not a great land lord obviously, and the renters who live in these houses don't keep them up and the area is very different than it was before 2008. I think the neighborhood will recover eventually, but people don't realize it will take decades before the owner occupancy rates return to what they were. The investors aren't bad people, but they profited from a bad situation so much that even their investments aren't exactly what they thought they were anymore. The investors thought they were investing in super safe bonds of the "American Dream TM", and now they own a majority of the shares in "New Suburban Ghetto Inc". What they didn't realize is that real estate isn't like another stock you can own anonymously. It's value depends a lot on who owns it. The market can absorb some amount of real estate investors without changing much, but the consequences of crossing a certain threshold will completely change what the investment is.
markbnj 9y ago
They weren't "built for boomers" so much as they were built for returning GIs after WWII. https://en.wikipedia.org/wiki/Levittown https://en.wikipedia.org/wiki/Levittown

tabeth 9y ago

There's a lot to digest in this article: 1) Absentee landlords are terrible. I can't say I know what the solution is, but perhaps simply lowering the price of the houses until the (low income) workers could afford to buy and therefore take stake in the community is preferable? 2) Unfortunately the sprawling layout of Hemet in particular is unconducive for creating the kinds of businesses that could at least mark the beginning of a more dense mixed use area. In this case there will have to be pain to raze some of the houses at the very least to help things go in that direction. 3) Broken window effect seems to be in full force with the absentee landlords only throwing fuel to the fire. Ideally the city would help some of these residents sue these landlords to resolve some of these issues, which would help slow the downward spiral of non-maintenance by the residents.

EADGBE 9y ago
As a landlord (I don't like that name, it kinda has a negative connotation) I can see first-hand in dealing with new potential properties the lack of care most landlords have towards their investments. They approach it as an entirely passive income without ponying up the relatively small amount for someone to actually maintain it (Since they're too old or bothered to do it themselves). I think a major windfall could be had with better regulations and rights renters could have protecting them from abusive landlords. The rental regulations in my city are laughable and I have to deal with it almost every time we look at a potential property when I "assess" how much care has been put into its structure, mechanical, appliances, etc. That's even assuming the previous owner permitted the property for such use.
- real_estate 9y ago
  Personal anecdote: I know of a retired magistrate judge that acquired over 30 residential properties via tax-delinquency sales. These properties, not in the best condition, were used as Section 8 HUD housing, with no improvements made. Tactics included keeping the utilities in the landlord's name to be able to shut-off water, electric, or gas at a moment's notice. Many of the tenants were former defendants with the magistrate court that the judge oversaw. Additionally, barter was used in lieu of security deposits and partial rent payments - the tenant could fix-up the property. However, the tenants lacked any ability to properly repair anything, and the repairs caused further damage to the properties. The wife of the landlord, insisted he divest himself of these properties before his death, so she would not have to continue to deal with this. However, he did die, she inherited the properties, and is too old to have the energy to deal with this. As you said, "too old or bothered to do it themselves". Some of these properties now sit unoccupied, but cannot pass inspection because of the substandard repairs, and further disintegrate. I know of one particular property that was not winterized (unoccupied), and I am certain the pipes have frozen and cracked. At this point, the property should be razed (roof issues, structural issues, mildew, pests), but that costs money too.

at-fates-hands 9y ago

I went looking for a house about four years ago. That was in 2013, a full 5 years post recession. I was surprised to see how many foreclosures were still on the market. I asked my realtor to show me, despite his misgivings about possibly buying a foreclosed property. It was pretty much exactly how the article described it. I looked at about five or six lower priced large houses (5-6 bedrooms, 4-5 bathrooms, in the 4-5k ft range) and all were the same. They were all totally run down. Gutters falling off, carpets destroyed, holes in walls, kitchens in total disrepair. All kinds of stuff were left behind like there was a fire and the owners just fled. My realtor also pointed out a few of the houses where the workmanship of the house was way below where it should be. The houses were built quickly for the boom. Corners were cut and it was clear even after five years, the houses would need a ton of work. One other thing the article didn't touch on was the huge availability of retail and commercial space. There's a bunch of suburbs around where I live where businesses went under during the recession and nothing has filled those buildings yet. Retail is the same thing. There are businesses that either moved out or closed shops and those spaces remain empty, almost ten years after the recession.

maxerickson 9y ago
I would describe 4000 square feet as enormous. 2000 square feet is plenty of upkeep if you aren't paying someone to do it.
- at-fates-hands 9y ago
  It was and I was surprised at how far the costs of houses in that range had come down. I guess the balance of the cost of work needed, essentially then pushed them back into the proper range. As you noted, the upkeep would've killed me. I ended up with a 2500 sq ft mid century modern that was in rock solid condition that I got for a steal. I haven't had to do anything substantial in the last five years. Some things will be due in the next three years (windows and HVAC) but otherwise, it's been easy to maintain.
Gargoyle 9y ago
I'm on the edge of Sacramento, and retail especially is still dead across the board in this city. Commercial has picked up, but it's the seat of one of the largest governments in the world. Drive around from downtown to way out here, though, and you'll see an extremely high vacancy rate for retail. And it's clear that it's been that way for some years. Given that residential has a shortage and commercial is booming, I don't know if retail is ever coming back, ever.

randiantech 9y ago

Decentralization of bigger cities is one of the key things where govern should take action in the foreseeable future. I live in Buenos Aires, Argentina, which receives 2 million workers every day. Govern should pass laws to incentivize companies to move out of the city, banks to give credits on underdeveloped areas, and heavily invest of public transportation to those areas. We are reaching a level bigger cities are not capable to scale any longer.

ocschwar 9y ago
Visit Atlanta, Georgia, or Charlotte, North Carolina, or Phoenix, Arizona before wishing that on your own city. We made that particular mistake already. You don't need to repeat it.
- frandroid 9y ago
  Can you expand on this? Are large businesses spread across the land in these areas?
  - maxerickson 9y ago
    There's little in the way of geographic constraints and they sprawl all over the place.
  - ocschwar 9y ago
    Yes. There are business parks along the highways all over the suburbs, and so everyone has a hellish suburb-to-suburb commute.
    - brewdad 9y ago
      And transit can't really pick up the slack since there is no core target that large numbers of people want to reach. Successful transit can take a dispersed residential population to a central core or a centralized population to dispersed employment zones but not both.

killjoywashere 9y ago

Shouldn't cities grow and fade though? If whatever attracted people is lost, it should shrink. The problem is it's really hard to shrink concrete. In Louisiana after Katrina, the main solution was bulldozers. Think of them as the macrophages of the urban immune system.

Bartweiss 9y ago
> The problem is it's really hard to shrink concrete. A better summary in one line than most essays on the topic. We've put together a system that's unstable in the face of even modest shrinkage - and in some cases a mere failure to grow. The result is that even non-crisis change, like people moving to take better jobs, creates crisis results in shrinking cities. In the short term, promoting growth is probably an inescapable part of the solution. But if we keep up the pattern of debt-financing expansion by planning for growth, we're never going to do better than deferring the crisis. Long term, we need to build financially-stable cities and work out actual strategies for managed decline. 'Shrinking' and 'failing' are equivalent today, but that pattern needs to be broken if we're going to get out of crisis mode.
- ghaff 9y ago
  For that matter it's hard to grow concrete above a certain rate both for physical and political reasons. It's one of the problems causing the housing crunch in certain cities. Yes, in each case, there are specific issues. But, generally, when everyone and their dog suddenly wants to move into certain areas of certain cities that were actually declining in population not all that long ago, you're going to have issues.
rdiddly 9y ago
Yes, especially when a place has nothing intrinsically going for it, and is a sort of "nowhere" that people settle for, in order to be close (but ironically, not especially close) to an actual place, that they want to be in but can't afford. Unfortunately, the invention of the automobile didn't make geography irrelevant; some spots are just better than others. And far-flung exurbs that are solely bedroom communities for other places seem especially unsustainable/doomed. Another good oil-price spike, and they're once again cut off to a surprising degree, from any real, useful human economic activity. Survival of a place depends on finding & exploiting whatever it is that the location has uniquely. If society collapsed, Hemet could convert itself back to agriculture using some of your bulldozers. Though fuel might be hard to come by in that case. Plus, the people currently moving in in droves might be inclined away from that kind of hard work and more toward forming a roving band of predatory nomads based on ruthlessness, that raids other places. Mad Max!

thriftwy 9y ago

There is this thing I was thinking about: Single homes ought to be owned, and multi-tenant apartment buildings ought to be rented. Why? One case you are observing in the article. Renters of home don't care about keeping up their house. Spending any kind of money on it is just not their priority. The only one who can keep up the house is owner, but as you can see in this case they'll just choose to pocket the rent. But there's a different angle. Imagine an apartment building where every apartment is owned. Some of them by elderly, some of them by poor. Now the common areas and house territory would deteriorate, because apartment owners don't have incentive to spend on either one. You could try to roll these charges into their utilities bill, but they will fight tooth and nail. Poor will say "we don't have money for this", elderly will say "we don't care and also don't have money", the rest will say "we're not paying for the aforementioned if they're not". This is becoming a problem in countries where owned apartments are a thing. The city has to pay from its pocket for the upkeep of territories around such apartment blocks. Naturally when apartments are rented out, landlord is interested in its state because they have to maintain steady number of new tenants to replace people moving out. Bad upkeep = no more tenants = lost money.

real_estate 9y ago
They are called condominiums.
scaryclam 9y ago
In the UK, it's normal for apartment buildings where people buy the apartments to have what's called ground rent. This is an additional charge that is specifically for the upkeep of the buildings shared areas and grounds. I don't know if perhaps that's missing in other places, but it seems to work ok here.
- alistairSH 9y ago
  In the US, owner-occupied flats are called condominiums. And ground rent exists as "condo fees". In my area, condo fees are often high enough to make buying a condo a strange proposition - you really must want to live in a multi-unit building because mortgage+fees > mortgage for a detached dwelling.

mbrumlow 9y ago

Haven't recovered... What if it is should have not been? Many things were built and new subdivisions were creates with the notion the economy was ready for it. It clearly was all built on lies and bad practice. That is why I question not that it is recovering but maybe it should have not been. I think the real solution is to leave these areas that clearly can't be supported by the local economy. And sorry to say. Yeah it's going to suck for a lot of people. But that is life. Not everything is going to be perfect. Holding on to a dying dream is only going to make it worse. (I am not cold hearted. I have just experience life enough to not let a sob story make me make irrational decisions).

criddell 9y ago
If you don't like suburbs, you're really going to hate what self driving cars bring. Get ready for sprawl like you've never seen it before. I, for one, plan on moving further out of the city as soon as my car can drive itself. The dream isn't dying. It hasn't even started yet.
- CalRobert 9y ago
  sadly I want to think you're wrong but in reality every last remote place will be destroyed by them. Why live in walnut creek when you could commute from yosemite?
- organsnyder 9y ago
  I could see it going either way. I actually have become more likely to use transit since ride-hailing is so much easier—if I'm ever stranded anywhere (lack of good bus route, after hours, etc.), I just have to open the Lyft app. Furthermore, when car ownership is no longer considered a necessity (as it is today in most of the US), the economics will change. Right now, my personal vehicle is a sunk cost, so I view car trips as costing close to zero—unlike the up-front, immediate transactions inherent to taking the bus or Lyft. Once I no longer own that vehicle (I'm not planning to replace it), all of my options will be on more equal footing, since they'll all be priced per-trip. Even self-driving vehicles will not be able to compete with mass transit when they're both priced similarly.

southphillyman 9y ago

"This dynamic changes the housing markets of these cities, too, with big cities getting more expensive as more high-wage workers migrate there, and low-wage workers leaving cities to seek more affordable housing in the far-away suburbs they can afford. Now that the dust of the recession has cleared, it is evident that the geography of poverty has changed in America." There was just an article posted here a couple of weeks ago about a woman who was pushed out of LA and moved to Hemet while continuing to commute to LA for work. IIRC the woman was in her 50s and still renting in Hemet despite the lower housing costs. There are no jobs in cities like Hemet but you'd expect that a significant enough number of LA expats moving there would revitalize the local economy some what, just from the higher earnings of super commuters.

lazerpants 9y ago
I think most people who would traditionally move to further flung neighborhoods to buy are those who are just getting started with families. However, most people aren't willing to commute that far in painful traffic. Anecdotally, my wife and I are more willing to relocate to Austin or Denver than to NJ or Westchester (this is from NYC). I imagine many other young, moderate income, residents of high population cities feel the same.
s73ver_ 9y ago
For that to happen, those people would have to be spending money in Hemet, and not just at the grocery store or the gas station. They'd have to be dining out in restaurants in Hemet (local ones, preferably, not just fast food chains), going to bars in Hemet, buying things in little shops in Hemet, etc. As it stands, a lot of these people are probably still commuting to LA, not just for work, but for their leisure as well.
rdiddly 9y ago
Yeah I was like "Hemet, Hemet, now where have I heard of that town before?" Didn't find the HN discussion (gave up rather easily) but this is the LA Times article: http://www.latimes.com/local/california/la-me-lopez-commute-cherry-20171216-story.html http://www.latimes.com/local/california/la-me-lopez-commute-...

lmm 9y ago

People who want to live in the cities are moving to the cities, and so house prices in those suburbs are dropping and people who can't afford houses in the city are moving to places where they can afford houses. Both of those seem like good things. Of course if you look only at the suburb then it looks like a decline. A country that has built enough housing for its population should have empty houses, should have houses that are not worth keeping up slowly falling into disrepair, available on the cheap to anyone who decides they do want them. Build more houses where people want to live - the cities. Let them rot where people don't.

jpm_sd 9y ago

It seems like there's a market opportunity to create a property management company that operates on a Wal-Mart or McDonalds scale. Franchises all over the country, consistent architectural design for apartments, consistent management and maintenance. I'm surprised something like this doesn't exist already.

jzymbaluk 9y ago
That's an interesting thought. The only reason I can think of that such a thing might not exist is that each state and city might have a unique set of regulations and licensing, which would make it difficult to operate nationally.
closeparen 9y ago
Equity Residential, Avalon Communities, Essex Property Trust, etc. They are cold profit-maximizes at lease renewal, but very good at maintenance and very easy to move into. Make an appointment, see the place, sign the papers, get the keys. No “wait and see which one of the 50 applicants I pick,” low security deposit ($500-$1000 vs $8000+ for a mom and pop), helpful onsite staff.
astura 9y ago
Correct me if I'm wrong but isn't this basically what REITs do minus the franchising? (Walmart doesn't franchise either) There's also large privately own property management/real estate companies, I lived in a complex owned by one for 4 years. They own and operate properties in 25 states.
- ABCLAW 9y ago
  REITs don't necessarily run the building management or development sides of the business. Normally these functions are bid out to developers and property management companies.