Suburbia: The next slum?

Next American City points us toward a sobering article in The Atlantic about the effects of the subprime crisis on the nation’s suburbs. “The Next Slum?” says these changes “may turn today’s McMansions into tomorrow’s tenements.”

Here are some highlights:

At Windy Ridge, a recently built starter-home development seven miles northwest of Charlotte, North Carolina, 81 of the community’s 132 small, vinyl-sided houses were in foreclosure as of late last year. Vandals have kicked in doors and stripped the copper wire from vacant houses; drug users and homeless people have furtively moved in. In December, after a stray bullet blasted through her son’s bedroom and into her own, Laurie Talbot, who’d moved to Windy Ridge from New York in 2005, told The Charlotte Observer, “I thought I’d bought a home in Pleasantville. I never imagined in my wildest dreams that stuff like this would happen.”

(Arthur C.) Nelson (director of the Metropolitan Institute at Virginia Tech) forecasts a likely surplus of 22 million large-lot homes (houses built on a sixth of an acre or more) by 2025 — that’s roughly 40 percent of the large-lot homes in existence today.

If gasoline and heating costs continue to rise, conventional suburban living may not be much of a bargain in the future. And as more Americans, particularly affluent Americans, move into urban communities, families may find that some of the suburbs’ other big advantages — better schools and safer communities — have eroded. Schooling and safety are likely to improve in urban areas, as those areas continue to gentrify; they may worsen in many suburbs if the tax base — often highly dependent on house values and new development — deteriorates. Many of the fringe counties in the Washington, D.C., metropolitan area, for instance, are projecting big budget deficits in 2008. Only Washington itself is expecting a large surplus. Fifteen years ago, this budget situation was reversed.

The experience of cities during the 1950s through the ’80s suggests that the fate of many single-family homes on the metropolitan fringes will be resale, at rock-bottom prices, to lower-income families — and in all likelihood, eventual conversion to apartments.

As the residents of inner-city neighborhoods did before them, suburban homeowners will surely try to prevent the division of neighborhood houses into rental units, which would herald the arrival of the poor. And many will likely succeed, for a time. But eventually, the owners of these fringe houses will have to sell to someone, and they’re not likely to find many buyers; offers from would-be landlords will start to look better, and neighborhood restrictions will relax. Stopping a fundamental market shift by legislation or regulation is generally impossible.

Will this happen in Fort Wayne’s suburbs? It’s certainly possible. Is there any reason that the same forces that brought crime and abandoned houses to the inner cities would be stopped at the city limits? Indiana currently has the ninth highest foreclosure rate in the nation.

There should be no gloating on the part of urban advocates. This is a serious situation that will impact real families who thought they had escaped the negative effects of city living. It will be quite a shock if they discover they were wrong.

Related: Check foreclosures in your own neighborhood at RealtyTrac.

— Photo of Las Vegas suburb by Rich Lem on Flickr


  1. I find it interesting that you are referencing the same article I sent copies of to each member of the city council for Peoria, Arizona. When I moved to my subdivision, Bedford Village, 15 years ago, it was spectacularly beautiful, extremely well-maintained and aesthetically appealing because different builders had constructed different types of homes, including some in the Cape Cod style so familiar to those on the East Coast and so rare here in this suburb just outside the Phoenix metro area.

    While there was a homeowner’s association at the time, apparently those in charge were lenient in allowing owners to paint their homes different colors and to landscape using grass or xeriscaping (a style of landscaping that uses little water and usually includes rocks and desert plants with brightly colored flowers). While other subdivisions featured brown or beige homes with orange or red tile roofs, each just like the next, all yards landscaped the same way, this subdivision’s homes were a combination of styles and colors, from blue and gray to green and white.

    The neighborhood was a feast for the eyes, life here a dream come true. My neighbors at the time were a wonderful combination of younger 20-somethings working their way up the corporate ladder, some with children, and older people who were like parents or grandparents, watching out for us and the neighborhood.

    I felt the name of the subdivision, Bedford Village, was apt, because the neighborhood’s residents were so friendly and warm, and life here was idyllic, reminiscent of Bedford Falls in Frank Capra’s classic “It’s A Wonderful Life”.

    Within two years of purchasing my home, a few residents who were unhappy with the HOA voted to dissolve it. While I was opposed, as were others, I was among only a few who attended the meeting at which the decision to disband the HOA was made. I was outvoted.

    Within a year of the dissolution of the HOA, the few who were opposed to its existence sold their homes and moved because they were unhappy that homes were being purchased for investment purposes. Those owners rented the homes out to tenants who would not care for the property. Furthermore, the city would do nothing more than post a notice stating that an ordinance had been violated.

    For the most part, however, the neighborhood was well-maintained and the rental properties that became eyesores were few. Six years ago, however, more and more properties were sold to people out of state or out of the country who used them for investment purposes and neglected to maintain them, due to the non-existence of an HOA. From time to time, I spoke with other neighbors who, like me, still owned their properties, about forming an HOA, but they were opposed.

    About three years ago, about a fourth of the neighborhood was filled with rental properties and people who were long-term residents began moving away. Recently, the last remaining original homeowners save for me moved away, although their home sits empty while they pay two mortgages.

    Crime has risen, the number of homes that are rented out now is about a third, and the formerly idyllic subdivision now appears to be a slum. Neighbors who purchased homes for nearly $300,000 are extremely upset that they must make monthly mortgage payments on properties now valued at $150,000 or less, yet they still oppose the formation of an HOA or even a neighborhood group.

    Members of the city council, many of whom lied in order to get elected, obvious now by their refusal to abide by their promises, are spending our money however they see fit, $1 million here, $75,000 there, and more recently a raise for each of them, are unconcerned that all around them the subdivisions, the suburbs, so critical to the existence of a city, are turning into slums.

    For whatever reason, they cannot seem to find money for cans of paint or weed killer, nor do they seem to be able to think ahead to consider that if no one but criminals and drug addicts are populating the suburbs, then, as has already occurred, businesses will leave, and there will be nothing of the city left.

    What happened here in Peoria, Arizona, started years ago when members of the city council, particularly our district’s representative, stopped caring about this area, Bedford Village, along with other subdivisions and other districts in Peoria. City council members approved the expenditure of millions of dollars on improvements to a high school just across the street, as well as $14 million on the construction of a new performing arts center. The high school is beautiful, something to boast about, and the performing arts center is gorgeous (not worth $14 million, though), but both look out of place amid the blight of the disheveled, neglected properties in this neighborhood.

    I think that city officials are blind to the opportunity they have of revitalizing this neighborhood to attract the kind of people who would appreciate both the theater and the school.

    Whatever the case, it’s happened here and still happening, so to answer your question, “Will this happen in Fort Wayne’s suburbs?” Yes, it will, if it’s happening here and all across the nation, and so long as no one cares. You see, I am one of a few people in the neighborhood who cares, and I am tired of fighting so I am going to move. I am going to find a subdivision in Glendale, Arizona, whose council isn’t much better than Peoria’s, apparently, with an HOA that has been in existence for a very long time and has no plans of dissolving. And then I will move into a brown home with a brown or red roof that looks just like each of the homes next to it.

    And I will leave those here in Bedford Village who don’t care to deal with the rising crime and falling property values as both spiral out of control.

    My Realtor will list my home, which buyers were willing to pay $285,000 for just two years ago, for $170,000, an amount now considered high for this subdivision, where similar properties, thanks to the enormous number of rentals, the blight, the lack of concern and action by the city and, most recently, the foreclosure fiasco, would be listed for $150,000.

    I have made many, many improvements for the very lucky buyer who I presume will purchase the home for rental purposes.

    Wish me luck.


  2. Good luck KatV! I moved from Phx a few years ago. We had a house in Mesa (Las Sendas) that we sold due to the incredible amount of time in the car and moved back into Phx proper. I read not long ago that Las Sendas was one of the few subdivisions not going down in price. I read the article in the Atlantic when it came out and thought long and hard about all the houses sold to investors in California and all the people living in all those subdivisions who will be fighting for their neighborhoods. I wish you all the best.


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