Living in southwest suburban Oswego, Jeff Wehrli recalls a heady time not too long ago when city dwellers poured in and developers couldn’t build McMansions fast enough. Now boom has turned to bust, as in many of the nation’s “exurbs,” and Wehrli can’t help but wonder when, or if, things will turn around.
All across the U.S., residential exurbs that sprouted on the edge of metropolitan areas are seeing their growth fizzle, according to new 2011 census estimates released Thursday.
Gas prices are discouraging long commutes. Young singles prefer city apartments. Two years after the recession technically ended, and despite some signs of economic recovery, there’s a reversal of urbanites’ decades-long exodus to roomy homes in distant towns. Indeed, Americans are shunning any moves at all – the lowest rate in records going back to the 1940s.
The annual rate of growth in American cities and surrounding urban areas has now surpassed that of exurbs for the first time in at least 20 years, spanning the most recent era of sprawling suburban development.
For instance, Wehrli’s Kendall County, about 50 miles southwest of Chicago, the population had more than doubled to 116,000 over the past decade, making it the nation’s fastest-growing county from 2000 to 2010. By late in the decade, however, the county’s growth had begun to wane amid recession and rising gasoline costs. In 2011, Kendall County’s growth stalled at 1 percent, dropping its rate rank to 236th.
“It’s going to take a while,” Wehrli said, speaking of a local recovery that he acknowledges will never reach the same levels as the previous decade.
It’s not just his county. Economists believe the effects of an exurban bust will be long term.
“The heyday of exurbs may well be behind us,” Yale University economist Robert J. Shiller said. Shiller, co-creator of a Standard & Poor’s housing index, is perhaps best known for identifying the risks of a U.S. housing bubble before it actually burst in 2006-2007. Examining the current market, he believes America is now at a turning point, shifting away from faraway suburbs to cities amid persistently high gasoline prices.
Demographic changes also play a role: They include young singles increasingly delaying marriage and children, and thus more apt to rent, and a graying population that in its golden years may prefer closer-in, walkable urban centers.
“Suburban housing prices may not recover in our lifetime,” Shiller said, calling the development of suburbs since 1950 “unusual,” enabled only by the rise of the automobile and the nation’s highway system.
“With the bursting of the bubble, we may be discovering the pleasures of the city and the advantages of renting, investing our money not in a single house but in a diversified portfolio,” he said.
Kendall County was part of an exurban wave in the mid-2000s that helped President George W. Bush to re-election, offering Republicans the hope of a new era of conservative voters sprouting on the rural-urban edge.
Amid growing concerns about the economy, however, the Chicago-area county, like many other exurbs, turned to Illinois Democrat Barack Obama in the 2008 presidential race. Since then, its growth has slipped further.
At the height of growth in 2006, Kendall’s county seat of Yorkville issued 1,000 new housing permits for the year and began construction on an 800,000-square foot commercial development with a Target and Home Depot. But these days only about half of the retail space of Kendall Market is filled, and the city issued a mere 35 housing permits last year.
“New home construction couldn’t be built fast enough,” said real estate agent George Richter, who has worked in Kendall County for more than two decades. “A lot of us in the industry were very, very nervous about how fast and large the annual growth rate and property value were. We knew there’s no way that something could continue on.”
Wehrli, a longtime Kendall County board member who runs an excavating company, said the signs of the slowdown are most apparent from devalued homes, foreclosures and a general uncertainty among residents. “Our economy has got to get back to the point where people can confidently sign off on a 40-year mortgage,” he said.
About 10.6 million Americans reside in the nation’s exurbs, just 5 percent of the number in large metropolitan areas. That number for exurbs represents annual growth of just 0.4 percent from 2010 to 2011, smaller than the 0.8 percent rate for cities and their surrounding urban areas. Still, it also represents the largest one-year growth drop for exurbs in at least 20 years.
By comparison, in 2006 exurban communities grew at an annual rate of 2.1 percent, compared with a population loss of 0.2 percent for inner cities.
In all, 99 of the 100 fastest-growing exurbs and outer suburbs saw slower or no growth in 2011 compared with the mid-decade housing peak – the exception being Spotsylvania County, Va., located south of the Washington, D.C., metropolitan area, which has boomed even in the downturn. Nearly three-fourths of the top 100 outer suburban areas also saw slower growth compared with 2010, hurt by $3-a-gallon gasoline last year that has since climbed higher.
Other areas showing big slowdowns are Pinal County outside Phoenix; Barrow, Paulding and Pike counties near Atlanta; Union and York counties outside Charlotte, N.C., and Sandoval County near Albuquerque, N.M.
“The sting of this experience may very well put the damper on the long-held view among young families and new immigrants that building a home in the outer suburbs is a quick way to achieve the American dream,” said William H. Frey, a Brookings Institution demographer who analyzed the census data.
Over the past decade, the number of poor people living in the suburbs of major metro areas grew 53 percent, compared with 23 percent in cities. Suburbs were also home to roughly one-third of the nation’s poor population, outranking cities and rural areas.
The latest census data come amid an overall U.S. growth rate in 2011 of 0.9 percent, the lowest since the mid-1940s, due to fewer births and less immigration following the recent recession.
Fewer people are also moving around within the nation’s borders – just 11.6 percent of the nation’s population moved to new homes, the lowest since the government began tracking such information in 1948. That means fewer Americans are migrating to residential hot spots in the suburbs or Sun Belt metro areas such as Las Vegas, Phoenix and Atlanta, upending several of the population trends of the 2000s.
Metro areas showing renewed growth or slower losses last year included Los Angeles, Miami, Seattle and Detroit, where steep population drops in the downturn have largely bottomed out.
–Rural counties just beyond the edge of metropolitan areas saw growth drop sharply last year, hurt by the slowing of outward sprawl. From 2010-2011, these counties increased by 30,000 people on average, compared with annual growth of 174,000 in the 2000-2010 period, according to Kenneth Johnson, sociology professor at the University of New Hampshire.
As a whole, nonmetropolitan areas last year grew 0.1 percent, compared with 0.9 percent for large metro areas and 0.6 percent for small metropolitan areas.
–Charlton, Ga., led the nation last year as the fastest-growing county, followed by St. Bernard Parish, La., both increasing more than 10 percent. That was in contrast to the 2010 census, when St. Bernard Parish ranked last in percentage growth, due primarily to the effects of Hurricane Katrina.
–Texas had four of the nation’s fastest-growing large metropolitan areas: Austin, San Antonio, Dallas-Fort Worth and Houston.
–Los Angeles was the most populous county, with 9.9 million residents.
The census estimates used local records of births and deaths, Internal Revenue Service records of people moving within the United States and census statistics on immigrants. The estimates were for both counties and metropolitan areas, which include cities and surrounding suburbs.