The End of the Sprawl?

There was a story this week in the New York Times about the distant suburban areas sometimes called “exurbs” because of their distance from the city they are (nominally) connected to, and how these neighborhoods are suddenly looking a lot less inviting, what with the oil crisis, the mortgage crisis, and so on. Back when gas was less than $2 a gallon it might have made sense to drive 70 miles each way to and from work, but with $5 gas fast approaching (and $10 gas expected within the next decade), it no longer does. The average American household spent $1,422 on gasoline in 2003; as of April of this year that figure had risen to $3,196, and the price of gas has risen another dollar since then. All of which leads me to ask if this is the end of the suburban sprawl – and if that is actually a bad thing…

It’s only fair to say that not all of the news during the gas crisis has been bad; the Federal Highway Administration reported that in March of 2008, Americans drive 11 billion fewer miles than in the same month in the previous year – the largest single-month drop since the FHA began keeping records. Sources here at UCLA indicate that the Vanpool program and other ride-share programs are at an all-time high, with the vans in particular reaching 96% of capacity, and an expansion in the works. Public transportation is also experiencing a boom nationwide, with some districts reporting an increase in ridership of as much as 20%. There’s even talk of reviving passenger rail between cities…

It’s also worth pointing out that sprawl is bad from an environmental standpoint; destroying wildlife habitat, eliminating wilderness areas, contributing to the greenhouse effect, and covering productive farm land with cheap houses and asphalt (which increases food prices and leads to flooding). Some people will (and have) argued that sprawl is good from an economic standpoint, in that home-building industries employ a lot of people and purchase a lot of materials, but it seems worthwhile to point out that urban renewal projects employ most of the same people and require much of the same material, but also have the added benefit of keeping our cities from decaying into slums and reducing air pollution (from cars), highway maintenance costs (from commuting cars) and fuel consumption (cars again).

As the article referenced above points out, this sort of enlightened self-interest is working out very well for Denver, where the new Downtown construction projects have brought money and commerce back to blighted areas. You can see a similar alchemy occurring in other cities, including Los Angeles, where the traffic and fuel costs are a definite factor in driving the new Downtown residential and commercial projects. If Denver goes through with its proposed commuter rail system (similar to the light rail and Metro Rail programs in LA) they may also be able to reduce traffic and congestion in outlying areas, while preventing companies from moving their operations out of the Denver Metro area (or out of the state altogether)…

The upshot is that while the current oil crisis may make remote suburban areas (and the long solo commutes to reach them) impractical, it does not have to result in the economic devastation being predicted for real estate, home building and transportation companies. These companies will have the option of retooling to produce products and services that are geared toward the changing forces driving the market, serving the needs of their customers as they are, not as we might wish them to be, and adapting to a new set of rules and conditions, or of trying to maintain a business model rendered obsolete by commercial and market forces and slowly going under. It’s going to be a rough couple of years for companies that insist on having the rest of the world conform to their demands, instead of responding to the market’s demands, but those that can adapt should do quite well for themselves…

And those that can’t will go under – and no one will miss them.