The Next Slum?

[njvisitor]

The Atlantic published a piece last month on the rising number of subdivision-slums. Read it here.

This isn't about the third-ward. It's not even about those $150,000 subdivisions. Major master-planned communities are going kaput across the nation.

In the Franklin Reserve neighborhood of Elk Grove, California, south of Sacramento, the houses are nicer than those at Windy Ridge

[memebag]

It's not even about those $150,000 subdivisions.

Say what? $150,000 house subdivisions are slums??

[flipper]

This doesn't have anything to do with Houston real estate.

No widespread bubble = no widespread crash

flipper

[RedScare]

This doesn't have anything to do with Houston real estate.

No widespread bubble = no widespread crash

flipper

Mmm.....that's not what the article is about.

[KatieDidIt]

Mmm.....that's not what the article is about.

"In-filling." This would be great for Houston. It's happening a little already, but I'd like to see more.

Also, there seem to be a lot of people moving into the urban areas and leaving the suburbs. Maybe all this reshuffle will help to improve the urban schools and cause even more rebirth of once good neighborhoods.

[desirous]

Twenty years ago, Houston was a donut. Now, it looks more like a target. Most mid-age "suburbs" between 610 and BW8 have trended downward, and even some areas outside the Beltway are reasonably ghetto.

[TheNiche]

This isn't about the third-ward. It's not even about those $150,000 subdivisions. Major master-planned communities are going kaput across the nation.

I wonder what's in store for new developments in Katy, Sugarland, Pearland, Pasadena, the Northwest, etc...

Also, does anyone think these newfangled urban "lifestyle centers" have potential (as described in the article)?

Houston wasn't nearly as overbuilt as other cities and has the economic momentum to pretty easily fill the more upscale homes. Nevertheless, I do predict major new-build slummage in north Katy, Spring, and around Richmond/Rosenberg.

[20thStDad]

What do you think about in Pearland? I think they are overbuilding down there, based on people I know who have tried to move out and suffered on the sale. They are building to the point that there is no market for homes 2-10 years old. This is my limited observation, I have not looked up any data on this.

[njvisitor]

Say what? $150,000 house subdivisions are slums??

No! I simply said that because people here usually discount the long-term worth of subdivisions in that price-range. Of course, that's not always the case.

But yea, I suppose "re-urbanization" of areas near the city (in the loop) would be a good thing for Houston...

[VicMan]

Nevertheless, I do predict major new-build slummage in north Katy, Spring, and around Richmond/Rosenberg.

The Spring ISD area is certainly adhering to TheNiche's predictions...

[N Judah]

In the long run, the US is adding -what- another 300 million residents in the next 40 years or so...and they have to live somewhere...

[Triton]

In the long run, the US is adding -what- another 300 million residents in the next 40 years or so...and they have to live somewhere...

Huh? We're going to double in 40 years?

[RedScare]

Hmmm....not according to the US Census.

Population Estimates 2050

[N Judah]

My point remains the same.

[TheNiche]

What do you think about in Pearland? I think they are overbuilding down there, based on people I know who have tried to move out and suffered on the sale. They are building to the point that there is no market for homes 2-10 years old. This is my limited observation, I have not looked up any data on this.

Its always going to be relatively more difficult to sell a home in an area where builders are trying to sell thousands of virginal units. The used home market is often pretty thin in those kinds of places, too.

[RedScare]

My point remains the same.

Perhaps, but the researcher studied where those people were going to live, and found that the number of families that would be interested in living in suburban housing was less than the amount of housing being built there, hence the potential for big drops in suburban home value.

[N Judah]

Perhaps, but the researcher studied where those people were going to live, and found that the number of families that would be interested in living in suburban housing was less than the amount of housing being built there, hence the potential for big drops in suburban home value.

What time frame are we talking about? Half of our current population is a lot of people.

[RedScare]

What time frame are we talking about? Half of our current population is a lot of people.

I'd probably have to refer to the article cited to give you an answer....

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

[TheNiche]

I'd probably have to refer to the article cited to give you an answer....

I'd like to see the specific methodology in order to better evaluate his conclusion. I'd hope that he's got pricing assumptions built into this in some way or another. It'd be a shame if this was an intentially open-ended and therefore meaningless survey much like Klineberg does.

It's easy to find people that fantasize about urban living, but most simply can't afford it and the level of consumption or quality of life that they're accustomed to in a suburban setting. Some suburbanites have enough income that that's not really a meaningful constraint, but most suburbanites actually live on pretty modest means. Consolidating even an eight of the suburban population into an urban core would cause in-town housing prices to become ridiculously high.

[N Judah]

Ah, there it is. Thanks.

[RedScare]

It is probably safe to say that cities like Atlanta, Dallas and Houston will not have nearly the problem with this phenomenon that northeastern and midwestern cities could. Population is still increasing dramatically here. In many other areas, population is stagnant or even declining. While population might move in from the suburbs in those cities, our increasing population could fill up both our inner city and our burbs.

[TAK]

on the flip side, people are putting granite into houses already in so-called "slums" (like Inwood Forest, which is not a slum at all, but considered one by many - for legit and not so legit reasons.)

[westguy]

Those cities went into decline because of air conditioning. What will Houston's problem be? Water?

There won't be growth in Texas like the period between 1950-2000.

[TheNiche]

Those cities went into decline because of air conditioning. What will Houston's problem be? Water?

There won't be growth in Texas like the period between 1950-2000.

Which cities are you talking about?

Houston won't have a serious water problem for at least another 45 or 50 years, even with growth rates like there have been in recent years. By that time, I'll bet that at least one of two things has occurred: 1) demand factors supporting oil production have largely disintegrated, slowing our population growth rate, or 2) desalinization becomes viable to support incremental growth over and above the carrying capacity of our surface water and groundwater resources.

[desirous]

I'd like to see the specific methodology in order to better evaluate his conclusion. I'd hope that he's got pricing assumptions built into this in some way or another. It'd be a shame if this was an intentially open-ended and therefore meaningless survey much like Klineberg does.

It's easy to find people that fantasize about urban living, but most simply can't afford it and the level of consumption or quality of life that they're accustomed to in a suburban setting. Some suburbanites have enough income that that's not really a meaningful constraint, but most suburbanites actually live on pretty modest means. Consolidating even an eight of the suburban population into an urban core would cause in-town housing prices to become ridiculously high.

Most people did not initially desert cities either. Crime and public schooling became tremendous push factors by the 1960's. The long-term prosperity of any specific suburb is strongly dependent upon such factors, and personally I believe the case is poor for many McMansion suburbs of today:

1. Public infrastructure. Large-lot suburbs are inefficient to maintain in regards to utilities and road networks. Many subdivisions may face problems in the future once the initial round of required maintenance kicks in.

2. Private infrastructure. Homes these days tend not to be built to the same standards as those of days past.

3. Crime. Safety in a McMansion suburb is more of a psychological than a physical concept. With the street grids in most of these areas designed to maximize isolation, police patrols rarely create a real presence. In effect, safety is built upon the perception of safety. This perception of safety is easily damaged once a rash of crimes occur. There is less ability for such neighborhoods to bounce back after a downturn, because the type of people that choose to live there tend to be the most skittish about whatever factors drove out the original residents in the first place.

4. Education. Schools receive funding from property taxes. If anything occurs to deflate the property tax base, stuff goes downhill very quickly. Given the above challenges, bedroom communities may have a harder time staying out of the red in the long run.

Objectively speaking, once the current wave of gentrification boosts its corresponding public schools, people will, for the first time in decades, have a real choice in where to live. Once in a while, somebody will choose to sacrifice some space and live closer in, rather than moving another five miles down the interstate. Judging by the state of old "suburban" developments between 610 and BW8, it'll be a long time before such areas get revitalized.

[TheNiche]

Most people did not initially desert cities either. Crime and public schooling became tremendous push factors by the 1960's. The long-term prosperity of any specific suburb is strongly dependent upon such factors, and personally I believe the case is poor for many McMansion suburbs of today:

1. Public infrastructure. Large-lot suburbs are inefficient to maintain in regards to utilities and road networks. Many subdivisions may face problems in the future once the initial round of required maintenance kicks in.

2. Private infrastructure. Homes these days tend not to be built to the same standards as those of days past.

Public infrastructure in the Houston area is typically financed with MUDs, and the worst part of the tax burden is always up-front. Older communities that have been built out, paid down the principle on their bonds, and presumably had their gross taxable value appreciate at least a tiny bit are able to very easily refinance and cover both the initial capital outlays from when the subdivision was developed and ongoing maintenance at a tax rate that is often less than half of what it had been as a new subdivision. The use of MUDs is a system that isn't unique to Texas, but we certainly use them more than anywhere else. And the Houston area uses it like no other major city in the country. If many subdivisions were depreciating quickly in gross taxable value around here, I'd be concerned that a number of them may not be able to refinance in the next several years in such a way as they can realize a cost savings, but even then, the amount demanded of homeowners likely wouldn't go up appreciably.

I'd contend that homes presently being built generally exceed the quality of homes built in the past, especially with respect to poured slab foundations and energy efficiency. Hardie siding is also much better than alternatives from the past. But I'd also contend that much of what had been built in the past that remains and is admired was built for people that were pretty well-to-do in their day. Nobody compares housing that is built for poor people today and housing built for poor people 100 years ago, and the very worst of it just isn't around much anymore to witness. Also, while it may be tempting to believe that craftsmanship is lost to history, my personal experiences have taught me that nincompoop contractors are no recent innovation. The key words are always, "...if properly installed and maintained..."

[musicman]

I'd contend that homes presently being built generally exceed the quality of homes built in the past, especially with respect to poured slab foundations and energy efficiency.

technology has advanced quite a bit in the last 50 yrs so that energy efficiency is a given but i'm not sure i can say quality has improved.

[N Judah]

Basically as far as that article is concerned, any suburb which does not consolidate into an "edge city" (eg a suburb which offers the same amenities as a small town) will be left behind.

[TheNiche]

Basically as far as that article is concerned, any suburb which does not consolidate into an "edge city" (eg a suburb which offers the same amenities as a small town) will be left behind.

I can think of plenty of subdivisions scattered randomly throughout the exurbs that have access to the same amenities as a small town (if you define small towns as those similar to Bastrop, La Grange, Brenham, or Conroe). Strip centers and big box stores are easy to come by.

But then, I wouldn't consider any of these to be edge cities. Edge cities are better exemplified by Greenway Plaza, Uptown, the Texas Medical Center, Greenspoint, the Energy Corridor, Memorial City, or The Woodlands Town Center. They're attached to a metropolitan area by the hip and offer employment and services such as far surpass any small town.

In any event, I think that anybody trying to read an exurban obituary is way off the mark. Provided that there are good schools and inexpensive housing further out, there will always be exurbs. And if north Katy ISD is contaminated and south Katy ISD is full-up, there's always the next school district down the road. The most important thing to remember is that transportation costs and leisure time will always come second to an overprotective parent.

[ricco67]

I have to agree with you as far as that goes. TIF and his wife is moving to Pear land in the next year for more room and more "security". Him and Mrs. TIF have known some pretty rough and tumble people and are among the most street smart people I know.

I guess having 1.2 kids will change you a bit.