Has suburbia turned onto a dead-end street?
Some experts say rising gas prices mean people will abandon communities far from their jobs
By BRIAN NEARING, Staff writer
Sunday, August 3, 2008
ALBANY – Decades of cheap gas fueled the rise of the far-flung suburban cul-de-sac. A nightmare of $4-a-gallon gas may strangle it.
In David Lewis’ vision, homes built around suddenly-unaffordable commutes to distant cities and jobs are doomed to years of declining prices, decay and eventual abandonment. Owners will flee after taking a loss and renters will move in.
“This will be the next abandoned land. Nobody will be able to afford to live there,” said Lewis, an assistant professor of geography and planning at the University at Albany. “The decline of real estate prices at the fringes already is being documented. The more that the price of gas goes up, the more this trend will continue.”
This scenario is emerging in some collapsing real estate markets in California, Florida and North Carolina, where foreclosed vacant homes are stripped by looters and renters of dubious character become more common.
In Las Vegas, where sprawl spreads out in the nation’s fastest-growing county, Clark County, homes had lost nearly 28 percent of their value in May compared with a year earlier, according to the national Case-Shiller price index released last month.
It was the dramatic rise in gas prices – not rising mortgage interest rates – that popped the housing bubble, according to a May 2008 report issued by CEOs for Cities, a not-for-profit group that represents more than 200 urban leaders from 45 of the largest U.S. cities.
Gas prices hit a 13-year low, adjusted for inflation, in 2004, and have nearly tripled since then. Housing price increases began to slow in 2005 and the next year began a decline that has yet to end.
“The low price of gas made sprawl economical … As gas prices rose, homes in those far-flung neighborhoods tended to lose their market appeal first and fastest. The decline in housing markets is strongly correlated with auto dependence,” according to the CEOs for Cities report, which studied housing prices in Pittsburgh, Chicago, Tampa, Los Angeles and Portland. “The collapse of the housing bubble, punctured by gas price spike, marks a watershed point for the nation’s suburbs. The trend toward ever-increasing sprawl is ebbing.”
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