Friday, October 23, 2009

Who is Going to Buy Your House?

Many of us have long questioned whether the exponential growth in the suburban single family lot is, in fact, socially sustainable. Beyond the environmental and economic challenges that many suburban areas pose, is there enough market in the future to ensure their long-term viability?

Harrison Marshall, a colleague and bulk emailer (reformed) of planning news sent around a link about two years ago (before the crash) to an article in the Journal of the American Planning Association, Winter 2008, entitled Who’s Going to Buy Your House? Facing the Consequences of the Generational Housing Bubble. Being a student of both policy policy and urban design I was in intrigued as to the implications of this aging trend on growth and development in our urban areas.

They posited that the coming "generation housing bubble" caused by the graying of the 78 million baby boomers will result in a massive sell-off of homes to younger generations that aren't large or wealthy enough to absorb the supply.

And now, more than a year after the house of cards tumbled, I re-read this article to see if it again held water. In fact, it seems more timely than ever.
Newly estimated data reported in this article show that roughly 2% of people of all ages younger than 70 sell homes each year, but the selling rate climbs far higher after age 75. Meanwhile, the percent buying homes peaks at a much younger age, 30 to 34 (3.6%), before declining steadily into older ages.

After three decades of relative stability, the ratio of seniors to working age adults nationwide will increase by a total of 67% in the next two decades (2010 to 2030). After 2010 the leading edge of the 78 million strong boomer population will pass age 65 and growth among the elderly population will substantially exceed that of younger adults, an unprecedented social and economic development that is expected to impact every state in the U.S.

I recently participated in a panel presentation on retrofitting suburbia at the North Carolina Planning Conference with Mitchell Silver, the Planning Director for the City of Raleigh, NC and Kathryn Lawler, the Chief of Staff for the Atlanta Regional Commission. Mr. Silver outlined an analysis of the low density suburban growth patterns in Raleigh that have been largely driven by non-Hispanic white, middle and upper income families. A fact that recently forced a dramatic changeover in their local school board when the previous board elected to continue the busing policy that precludes a true neighborhood school model. Ms. Lawler then gave an eye-opening presentation on aging trends. Specifically she noted that the senior population (defined as those over 55) is expected to grow from 20% of the current population (2000 census) to nearly 1 in every 3 people by 2030 in states like North Carolina and Georgia. 1 in every 3! Of course, the graying of our population is only one of at least two other key demographic trends that will have significant impacts on how we grow our communities.

The next issue is our current fertility rate. It is widely accepted that 2.11 births/woman is the needed replacement rate to ensure a stable population. According to the US Census Bureau-National Center for Health Statistics the fertility rate of our white and black populations hovers in the 2.06 births/woman range. Only when you include the current Hispanic fertility rate of almost 3 births/woman does our current population growth curve approach the replacement rate. In 2006, it was estimated at 2.10 births/woman. Non-hispanic whites, currently 75% of the population, are expected to be in significant decline by 2030 because of declining birth rates while Black populations are expected to double its present size in the same period. Source: US Census Bureau National Projections.

So how does our country keep growing? Very simply - immigration. Immigration accounts for nearly a third of our current population. Not surprisingly, the largest immigrant group is Hispanics who have grown from 12.5% of the population in 2000 to almost 15% in 2006. In 2030, Hispanics are estimated to comprise nearly 1 in 5 Americans, more so in many counties particularly in the southeast and the west where they are expected to comprise 50% or more of the population. From 2000 - 2006, Hispanic growth accounted for 50.4% of the total population increase! Source: Hispanic Population Projections, US Census Bureau.

What do these changes have in store for American communities. There are a number of potential impacts that will be explored in subsequent posts but the fact remains that in 2030 the face of the average American will be much different from what it is today. These changes are likely to have very significant impacts on a myriad of issues include growth patterns in our communities, our social service network, and our education system.

The baby boom generation, long the driver of housing and other community growth patterns will be slowly replaced with new groups whose values will likely be different. The non-Hispanic white majority is being rapidly replaced by a more diverse face that may or may not accept the suburban ideal. Will the new immigrant family endure long commutes for a large house on a large lot. If history is any precedent, the numbers point to an even greater sell-off of the suburbs in the years to come.

No comments:

Post a Comment