Kotkin Still Confused about Where People Prefer to Live

Plenty of people would like to live in a place like this Dallas condo -- but not enough are being built.
Plenty of people would like to live in a place like this Dallas condo — but not enough are being built.

by James A. Bacon

Joel Kotkin is at it again. The anti-Smart Growth crusader insists that the Burbs are Back. Writing in Forbes, he cites data compiled by his ideological pal Wendell Cox to argue that suburban and exurban counties have made a come-back since the dark days following the 2007-2008 real estate crash and recession.

Writes Kotkin of the period since 2010:

Of the 10 fastest-growing large counties all but two — Orleans Parish, home to the recovering city of New Orleans, and the Texas oil town of Midland — are located in the suburban or exurban fringe of major metropolitan areas. … More people aren’t moving “back to the city” but further out. In the last decade in the 51 largest U.S. metropolitan areas, inner cores, within two miles of downtown, gained some 206,000 people,  while locations 20 miles out gained over 8.5 million.

It now seems clear that the preference for single-family houses did not change in the recession, but was just stunted by it. With construction starts up again — more than two-thirds single family — this trend is beginning to re-assert itself.

As examples, Kotkin points specifically to the population growth of outlying Loudoun County and Prince William County in Northern Virginia.

For the purposes of argument, let’s accept Kotkin’s point that jurisdictions on the metropolitan fringe are gaining population faster than those in the urban core. Does that justify his conclusion that “the preference for single-family houses” did not change in the recession? I think not.

There are two important points worth making.

First, the idea of “preference” is meaningless in the absence of price. My personal automobile preference is for a brand-new Porsche 911. Unfortunately, I cannot afford it, so I drive an 11-year-old Mercedes CLK 320 instead. The fact that I drive a dinged-up Mercedes does not change the fact that I prefer a Porsche. Likewise, many people would prefer to live in safe neighborhoods closer to the urban core, where they enjoy easier access to jobs, shopping and amenities. But the scarcity value of the preferred locations drives up the price, so not everyone who would like to live there can afford to. So, many people settle for less desirable locations in outlying areas that they can afford.

Second, the movement of population to the suburban/exurban counties is a function of supply, not demand. People are moving to those locations because that’s where the houses are, not because they prefer those locations. The real estate boom of the 2000s created a huge overhang of houses and lots. By contrast, the process of adding new housing in the urban core by densifying human settlement patterns is an inherently prolonged and painstaking process. As super-low mortgage rates goose the quantity demanded of new housing in the past two or three years, builders have found it far easier to dust off the pre-cession building plans in the ‘burbs than find re-development prospects in the city.  So suburban single-family dwellings are what gets built, and that’s what  people have to buy if they want their own place.

Bacon’s Bottom line: Kotkin is right about the facts but he draws the wrong conclusion. Instead of building more in the suburbs and exurbs, we need to make it easier to densify in the urban core. There is more than enough land there to handle projected population growth. We need to eliminate the zoning, regulatory and financing obstacles to re-developing it.

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11 responses to “Kotkin Still Confused about Where People Prefer to Live”

  1. Peter Galuszka Avatar
    Peter Galuszka

    This might not fit dogma, but I have noticed a resurgence of construction in outlying exurban residential developments that came to a screeching halt in the 2007-08 crash. That is, with one big twist. They are going for cheaper, smaller homes close to each other.
    In other words, you are getting townhouse-like units sort of New Urbanist but it areas originally designed to be anything but. The same problems will apply, despite the pocket nature of these spots.
    It’s the FREE MARKET, Bacon. Love it or become a Smart Growth statist!

  2. Kotkin is not only right – he’s accepting the reality.

    Since January, the Fredericksburg area has approved over 4000 new houses that we already know are primarily commuters to NoVa.

    think about that – 4000 houses at 10 trips a day is 40,000 new auto trips a day and it’s likely 20,000 are going to get added to I-95.

    People want single family homes – they can afford. In the Fredericksburg area, that’s in the range of 250K to 350K. Ask yourself what kind of a single family home you can buy in NoVa for that kind of money.

    How will NoVa make it “easier” to build single family homes – at this price point?

    Approving more “density” will not provide to the market – what the market wants – i.e. affordable single family residences ….

    I seriously don’t see how Fairfax and other NoVa jurisdictions can “fix” this.

    I think ultimately what is going to “fix” it – is HOT Lanes that up the ante and boost slugging, carpooling, vans and buses…

    and so I do have my inevitable bonus question:

    what is wrong is exurban house building… IF… people commute to work on Mass transit and not SOVs?

    why is that bad?

    1. DJRippert Avatar

      Let me get this clothespin firmly attached to my nose. There we go. OK – the argument against single family housing is that it takes up too much of the Earth’s natural resources. I’m not making this up. People cut down trees to have lawns, they need cars even if they use mass transit to commute so they build driveways and garages, mass transit is subsidized by the government, etc.

      In the world of Jim Bacon there are various subsidies at play in the suburban and ex-urban world. And these subsidies are the only thing that makes ex-urban living affordable. If the subsidies were ended then people would realize that they can’t afford to live in the boondocks and would move to nice Soviet style square gray concrete apartment buildings in town.

      Ok, let me take off the clothes pin.

      Ahhh ….

      The problem with the analysis is that it never takes into consideration who is paying the taxes. A working couple in Fredricksburg with two jobs in Tysons Corner probably pay all the costs of government fairly pinned to them and then some. Yet, somehow, it’s the hard working couple in Fredricksburg that is causing the economic problems in America. Hmmm…

      The other problem is that urban living is unaffordable. San Francisco is in outright revolt against the “startup d-bags” (their term, not mine) who are living in SF while taking company provided buses to Google, Apple, etc. The longer term residents claim this is driving up rents and forcing people out. I have no doubt this is true. I also have no doubt that this will happen everywhere that Jim Bacon’s new urbanism takes root. Of course the Baconistas have a retort – it’s the zoning laws that make density impossible and artificially keep prices high. But New York City is both high density and high cost. In fact, the highest cost areas are often the highest density areas.

      One has to wonder what Bacon thinks Manhattan should look like in a no zoning world.

      Space is finite and cramming more people into any given space makes each additional unit more expensive. At least, that’s what seems to be the empirical evidence across the world today.

      Where is the affordable, high density, urban locale?

  3. “People want single family homes – they can afford.” That hits the nail on the head and drives it in smoothly. At the same time, I readily acknowledge people would also like to live closer to work and have a 15-minute commute. Many would also like a large lot. But few can afford to purchase all of these “goods.” (Have you seen the price of the big houses replacing teardowns. So we get trade-offs.

    While each person has his/her own priorities, the affordable SFH is often high on the list. Four bedrooms and three baths often trumps two bedrooms and one bath, even when the latter provides a much shorter commute. I think big lots carry less weight in the trade-off equation.

    This is good for people who live closer to the urban core too–read Fairfax County. When people don’t live in Fairfax County the demand on infrastructure is less, which, in turn, improves our quality of life and reduces the need to pay higher taxes. I like that — a lot!

  4. re: ” This is good for people who live closer to the urban core too–read Fairfax County. When people don’t live in Fairfax County the demand on infrastructure is less, which, in turn, improves our quality of life and reduces the need to pay higher taxes. I like that — a lot!”

    so all those commuters from Loudoun and Fredericksburg don’t drive on the surface streets you drive on?



    1. Larry, no matter what happens in or outside Fairfax County, traffic here will be terrible. I accept that as a given. But slowing growth within the county can make a difference with police, fire, schools, parks, libraries, etc. I’m old enough to understand half a loaf is better than an empty pantry.

      1. but TMT – you are just offloading that growth to other counties that will also suffer the same impacts PLUS the commuting impacts to both the exurban and NoVa areas.

        We don’t have the roads, schools, police and fire/ems either.

        1. I don’t disagree, Larry. But to be candid, I’d rather you pay those costs than me. 😉

          1. but they DO screw up your regional transportation system, as well as the East Coast I-95 system.

            I believe you support tolls, right?

            do they affect you in any way?

  5. re: Fredericksburg couple “taxpayers”.

    when they both work for the govt or govt contractor – and they have two kids and live in a 300K home – nope.

    I think the break-even for ONE KID is about 400K for the house.

    we have an 88 cent property tax rate… so do the math.

    and virtually NONE of it goes for road infrastructure save the $300 or so that people spend on gas taxes.

    but when the HOT lanes go online this time next year, I expect to see changes in people’s commuting behaviors though they are still free to SOV commute.. just no additional lanes to do it on.

    what would be interesting in terms of Demographics – would be to see how many people that commute from the exurbs are single, married, married with kids.

    My suspects are that the exurban commuters are largely not singles but if it turns out they are a significant number – say 1/3 or higher, might have to re-think the 3 bedroom house in the burbs – thinking.

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