Lessons from the Pros

Real Estate

Good Bye Suburbs the Trend is Toward the Urban

It was interesting in church this past week. My minister talked about how isolated we have become because of suburban living, we drive into our garages, close the door and don’t see anyone. This got me to thinking about “the suburbs” and how some people are choosing to live differently.  Some of the changes are economics and some cultural.

First, a little history lesson. There are examples of suburbs as far back as 539 BC:

“Our property seems to me the most beautiful in the world. It is so close to Babylon that we enjoy all the advantages of the city, and yet when we come home we stay away from all the noise and dust.” A letter from an early suburbanite to the King of Persia 539 BCE, written in cuneiform on a clay tablet .

The suburbs really came into being with the implementation of the electric railways in the late 1800’s. This began the extensive growth of the suburbs.  The railways created a quick and relatively inexpensive method of transportation and made it easy for people to travel to and from work. Then autos, the Interstate Highway system, the creation of the FHA and post-world war II growth made suburban living a part of the American culture.

But there is a shift happening toward more urban living and less suburban living today in 2014. Is there proof of this trend?  According to the Global Health Observatory, more than half of the world’s population lived in urban areas as of 2010.  That is up 10 percent from the 1990’s. It is estimated that by 2030, 60 percent will be living in more urban settings.

One of the biggest shifts (which has been happening for the past three to four decades) is from an agriculture based economy to a technology/service based economy and industry. Some of the key things experts say the younger generation are looking for are shorter commutes, simplicity, walkable neighborhoods, community and good mass transit but they still want space and privacy. suburb vs urbanGood design and high efficiency are key for the development of these homes/townhomes.  This demographic is looking for minimal maintenance and upkeep but maximum entertaining options.  A newly developed urban home would more likely have three levels, one for communal living i.e.: kitchen, dining and family/living room, one for the children and one for the parents’ bedroom and study.  While these homes don’t have a garage, driveway or backyard, they do have space and separation and communal areas.

Urban living is not inexpensive. In fact even though there is a savings on transportation (expenses of having a car) the purchase of the home can cost much more than a suburban home.But not only are we seeing young people who want to live more urbanely, people who are retiring and downsizing are also finding it attractive.  They are able to be close to many activities and have less issues with transportation and maintenance.

Forbes compiled a list of U.S. Cities with emerging downtowns and urban living:

  • Detroit, MI – Its downtown being transformed in large part to Billionaire Dan Gilbert founder of Quicken Loans.
  • Denver, CO – In the last 25 years there has been both private and public funds of 4.8 billion invested in the city.
  • Louisville, KY – Over the past decade there has been over 1.8 billion invested in converting subsidized housing into market-rate real estate.
  • Los Angeles, CA – Recently approved a plan for 1 billion-plus renovation that will include an NFL stadium.
  • El Paso, TX –In 2006 over $700 million in government reinvestment started the revitalization; voters just approved $475 million in bonds to further the redevelopment.
  • New York City, NY – More than 430 billion in both public and private reinvestment has gone into Lower Manhattan (the square mile that encompasses the World Trade Center and Wall Street).
  • Grand Rapids, MI – Since the mid-1990’s billions of private and public funds have gone into investments such as the Van Andel Arena, Grand Rapids Museum, convention Center and Hospital.
  • Pittsburgh, PA – The city population is up 21% in the last decade.  In 2009, 219 new housing units came to market with another 346 currently under construction.

Great Fortune

Diana Hill

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