How Suburban Sprawl Weighs On The U.S. Economy

America's suburbs are sprawling again. Over the 20th century, real estate developers built large tracts of single-family homes outside of major cities. The builders were following mortgage underwriting standards first introduced by the Federal Housing Administration in the 1930s. Over the century, those guidelines created housing market conditions that explicitly shut out many minorities. Experts say it is possible to update these old building codes to create equity while fixing some, but not all of the problems of American suburbia.

Last year, single family housing starts rose to 1.123 million, the highest since 2006, according to the National Association of Home Builders, however, options for prospective homebuyers remain lean.

Experts say the problems of America’s housing market relate to past policy decisions. In particular, they say restrictive zoning codes are limiting housing supply. These codes are based on 1930s-era Federal Housing Administration guidelines for mortgage underwriting. That includes “no sidewalks and curvy dead-end streets,” according to Ben Ross, author of “Dead End: Suburban Sprawl and the Rebirth of American Urbanism.“

Ross and others believe that more must be done to manage residential real estate development. Ross lives in Montgomery County, Maryland, which recently revised its zoning code to bring more population density to the area. The county didn’t have many alternative options — 85% of build-worthy land is already developed.

Strict zoning laws favoring single-family homes have limited the supply of land available for multifamily construction and hampered production of more affordable housing. With land limited for multifamily projects, the price of that land has jumped and made those projects unaffordable for builders.

Today’s homebuyers are paying for past sprawl by drawing on credit to finance their lifestyles. Meanwhile, the cost of public infrastructure maintenance is weighing on depopulating towns across the country.

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How Suburban Sprawl Weighs On The U.S. Economy

[smitty]

I'm glad to see mainstream media slowly picking up on this. I've lived abroad often, and coming home to the US always felt depressing for some reason and I couldn't figure out why. I eventually realized that zoning laws are a major reason. It feels dreary and lifeless to have to hop in a car for EVERY errand. Abroad, if I needed to grab a drink, I could just walk out the door, getting some fresh air and a bit of exercise and interacting with my community.

What people don’t realise is that roads have to be paid for and maintained just as much as public transport.

[peytonwarren]

One major part of the problem regarding road maintenance is that heavier vehicles cause exponentially more road wear — an 8600 pound Hummer will cause approximately 6 times as much damage to the road as a 5500 pound Tahoe, which itself is 3.5 times as damaging as the average 2-ton American car — but the amount of road damage increases far more quickly as weight increases than the fuel needed to move that weight. This means that we’re all essentially subsidizing large trucks and commercial vehicles, who pay about 33% of road taxes but cause 90% of damage to roads.

[jeffc]

You have to wonder if Not Just Bikes and Strong Towns inspired this video the same way Company Man inspired CNBC to make their company videos.

[tomchupick]

I prefer the Dutch urbanization model. It may be a small country with small cities, but it’s a collection of nodes with integrated transport systems that does not require a car for most of the population. Almost every city has a small downtown core that provides all daily requirements on foot or on bike (with little car parking). These cities are linked by high speed rail networks, with trains, buses, trams, metro all using the same « pay as you go » country-wide transit pass. Most people working in our Amsterdam office came from other towns/cities within a half-hour train commute with train departures matching the updates on the NS cell phone app. Only the masochistic would consider using a car.

[perriwenplays]

I love the point they raised in the video about Americans spending thousands and thousands of dollars each year to travel to the other side of the world and marvel at the vibrant, walkable cities in places like Europe and Asia. Then, the same people hold their breath, stamp their feet, and insist they 'like' their souless, copy/pasted expanses of stroads with the same big box stores, fast food places, and self-storage centers you can find in any other Genericville USA suburb.

[Khneefer]

3 reason why US is so pro-suburban and car-dependent:
-Single family zoning,
-minimum parking lots for business,
-property tax instead of land value tax.

[sayda]

I live in a medium sized beach town. In the last two years it seems that the number of wealthy people moving here has been rising. We were saving to buy a house, now the home prices have gone up 50% in two years. 2 bedrooms condos are 500K and family homes are around 850k. Rent for 2 bedroom apartment is $2.5k. I was born and raised here and now within a few years i might not even be able to afford to live here.

[CrownRider]

In the Netherlands, within a 10 minute walk, I can shop for groceries, and visit a bar or restaurant. This goes for 95% of the cities and villages.
I've been to the United States many times, and always wondered why cities were built this way. Thanks for the excellent video.

[abarbar]

"suburbanization" didn't arise from demand, it was a result of zoning policies put together by city planners. It's not the result of market forces.

Shifting to land value taxes would really let the market settle to the most efficient and desired land use. Without it, you have strong land speculation causing distortions.

[guilhermetavares]

It is not only São Paulo that is undergoing a change here in Brazil. The local government in Rio de Janeiro recently passed a law to make the city center denser and discourage sprawling growth in the suburbs. It also encourages construction near public transportation and lowers parking requirements.

[keepkalm]

Schools are still the biggest reason why families choose to live where they do. It is rarely brought up in these discussions.

[RomyIlano]

it's so insane you need a car to work, and the price of a new car is $40, 000 lately. even used cars are expensive. this is an insane system!

[joytotheworld]

I live in a rural community.I was pleased to find out that my neighborhood is zoned residential/business. I could open my dream bakery & run it out of my home.

[johnmcnulty]

I grew up in the suburbs. I hate the suburbs. It was so boring. No art galleries, no cool restaurants, nothing interesting to see. Just your own home and having to drive absolutely everywhere. So sad and so expensive.

[Gibblard]

The US needs more walkable areas/cities and better public transportation

[perriwenplays]

I live in the Houston suburbs, which is a horrendous example of sprawl. They're building a third beltway, which is now increasing it even more...and people act surprised when we have all these terrible floods thanks to that absorbent prairie grass disappearing.

[blainegabbertgabonemhofgoa]

Best thing to do now would be to upzone areas near transit centers for mixed use development and make them walkable

[PARADOXsquared]

I'm excited to see this topic expand into more mainstream channels. Maybe we can shift towards fixing this?

[nickschneider]

Yes, yes it is.
Remember when the major automobile and tire manufacturers literally bought up every Railcar track in cities across the country so they could ensure a monopoly in their respective markets?