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Fuel price hikes drive rethink of US suburbs
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08:55, July 11, 2008

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NEW YORK: Ever since the rise of the automobile in the 1950s, the American Dream has featured a home in the suburbs and two cars in the garage.

Now the iconic white picket fence comes with a hefty price tag, in the form of the cost of the gasoline needed to drive to work and to the supermarket - bringing the suburban idyll under review.

In different parts of the United States, there are signs of change. While home prices in the suburbs have crashed, apartments in city centers are in demand. Home builders across the country are frantically trying to unload land they had intended for new subdivisions, while planners are rethinking how they can meet demand for housing.


A couple walk their dog in Denver's Stapleton development on July 6. High gas prices in the U.S. are bringing home buyers to the Colorado region, which used to be an airport and is in the process of becoming a town connected to the downtown area by bus, bike trails and, in 2014, rail.(Xinhua/Reuters Photo)

One such place is Stapleton, Colorado, on the site of what used to be Denver's airport. Its developer, real estate company Forest City, puts homes within walking distance of schools and stores while linking them to the workplace by public transportation.

Resident Evelyn Baker says Stapleton appeals to the "cheapskate" side of her nature that favors towing her offspring about in a trailer attached to her bike, over paying for gas for her car.

"We're a family of four with two young kids and the obligatory yellow Lab, but we've managed to get by with one car," said Baker, who has lived here since April 2006.

With gas prices above $4 a gallon, Baker said her move to Stapleton feels like a smart decision, both because of lower day-to-day costs and the durability of her home's value.

In the suburb of Maricopa, about an hour's drive outside Phoenix, residents have a very different feeling.

Built on former corn and cotton fields, the suburb has grown to number 38,000 people from about 1,500 in 2002, accommodating those who were willing to accept longer commutes in order to get homes at cheaper prices.

These days, Maricopa has been inundated by foreclosures and short sales - where lenders agree to take a repayment that is lower than the outstanding loan to avoid dealing with a foreclosure, with high gas prices part of the reason.

The town even launched its own bus service, taking residents to work in central Phoenix and home again for $6, but homes here are still hemorrhaging value.

Tracy McKelvey and his wife Jan lived in a similar suburb and used to commute two hours a day to their jobs in Phoenix. But, a few years ago, they traded in their three-bedroom, two-garage house in the Phoenix valley for a downtown loft.

Both McKelveys now travel to work by scooter and enjoy restaurants, cafes, sports arenas and shops within walking distance of their home, taking advantage of the $2.3 billion that the country's fifth-largest city is spending to build housing, a university campus and a mass transit rail system.

"We save money on gas. It's a good feeling. I haven't sat in a traffic jam for years," Tracy McKelvey said.

As people like the McKelveys take action to shorten their commutes, home builders are fleeing the suburbs, too, sometimes selling land at a loss, even the priciest parcels snapped up at the height of the building boom.

Meritage Homes Corp, the 12th-largest US home builder, has pulled out of many places where people are not buying, said spokesman Brent Anderson.

A recent survey of 903 brokers affiliated with national real estate chain Coldwell Banker suggests that pressure is building. Almost 80 percent of them said higher fuel costs are increasing their clients' desire to live in cities.

"People rejected cities for 30 years or so but now they're looking again," said John Norquist of Congress for the New Urbanism, a Chicago-based group that promotes walkable development.

Young families, once considered synonymous with suburbs, are increasingly opting to raise urban babies in places like New York.

Even smaller cities are getting in on the act. Omaha, Nebraska, and Kansas City, Missouri, are among those revitalizing their downtowns.

Mick Cornett, the mayor of Oklahoma City, Oklahoma, said that once the only people who lived in the city's downtown were those who were in jail. "It's a different story today," he said.

Retirees who put their empty nests in the suburbs up for sale are also increasingly looking at moving into cities. That shift may get a further boost when the big Baby Boom generation starts turning 65 in 2011.

Experts like Christopher Leinberger, a visiting fellow at the Brookings Institution and head of the graduate program in real estate development at the University of Michigan, said that people are now willing to pay a premium to live in the city, a reversal from the last 50 years.

The resale value of attached housing, such as condominiums and cooperatives, is appreciating faster than single-family homes, said Arthur Nelson, a director of the Metropolitan Institute at Virginia Tech. For those who cannot afford or do not want to live downtown, but cannot afford or do not want to commute to the suburbs, hybrids like Stapleton are literally a middle ground.

Government and home builders are supporting such communities by expanding rail networks and putting housing within walking distance of train stations, said Sam Zimmerman-Bergman of Reconnecting America, a mass transit advocacy organization.

However, Forest City's Ronald Ratner, head of residential development, cautions against overstating the trend, which he says still needs nurturing.

Federal transit spending is not sufficient to keep pace with the increase in local demand for transit, said Zimmerman-Bergman, although that could change with the reauthorization of the federal transportation bill next year.

On the local level, municipalities whose budgets have taken a hit due to falling property values are struggling to fund transportation needs.

Some cities, like Denver, that have either streamlined their review process or provided the necessary transportation infrastructure, have found productive partnerships with builders eager to get into hybrid development.

Source:China Daily/Agencies



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