Thirteen million and counting! That is how many foreclosure filings have occurred in the U.S. since the recession began. The crisis may be slowing down, but that is up for debate. What is not debatable is that foreclosures can have a devastating effect on neighborhoods and cities. Just ask a resident of Phoenix or Las Vegas. Nationwide, housing values have declined more than 17% from 2006 numbers (according to National Association of Realtors), but declines were much more prominent in areas that saw the most foreclosures; namely, sunbelt cities. Yet, it is some of those same cities that will experience the greatest growth in years to come.
This begs the question: What is the role of urban planners in accommodating such growth while trying to mitigate against another foreclosure crisis?
Before blindly answering that question, we should consider how urban planning practices may have contributed to the current crisis. Although foreclosures begin and end with the relationship between homeowners and their lenders, one could make the argument that certain planning practices provide license and foundation for such financial troubles. In places such as Phoenix, Las Vegas, and even suburban Salt Lake City, cheap land drives demand for exurban living. In the mid-2000s, when the boom was occurring, a homeowner could purchase a home on the city’s edge and gain $20,000 in equity before moving in. This situation invariably invites waves of refinances and loan consolidations, not to mention creative first loans, such as Adjustable Rate Mortgages, that can be very dangerous if the economy dips. Unfortunately, dip it did, and a sea of endless single-use residential zoning provided the genetic code for this virus to spread. Perhaps zoning was not the culprit, as some conservative land use researchers have suggested, but it was surely an accomplice.
In light of this critique, there are several practices planners should strive for to help places grow in a more sustainable way:
- Remove legal restrictions against higher densities and mixed land-uses in neighborhoods. A self-sustaining neighborhood with opportunities for corner stores and housing for people of a variety of incomes is more likely to weather a financial and housing crisis, as we saw so clearly in the past few years.
- Plan for smaller housing and apartments as infill development in existing suburban areas to send the message that not everyone needs to be a homeowner, and not all homeowners need “McMansions.”
- Work with local governments, chambers of commerce, and citizens to develop alternative transportation options and more walkable amenities for suburban and exurban neighborhoods. Remember, it was gas prices that ballooned first, and ate significant chunks of extra cash out of the budgets of suburban dwellers.
In my opinion, the suburban lifestyle, backed up by suburban land-use planning, ultimately led to the crisis. The answer is not to abolish suburbia, however, but to foster the creation of suburban environments that retain suburban character without being so susceptible to fuel prices and financial downturns. Do you agree with me?
How would you go about planning in the wake of the foreclosure crisis so that one of this magnitude never occurs again? As always, Global Site Plans and I welcome your comments.