A Cure for ‘Slumburbia’

February 11, 2010

Timonthy Egan’s New York Times commentary, Slumburbia, is more than just a tour through a post-bubble housing development. Yes, the Lathrop, California project he visits has one in eight homes in foreclosure, with a spiking crime rate. And yes, the development appears to confirm Brookings Institution’s Christopher B. Leinberger’s 2008 prediction that the collapse of the new-home market could turn many of today’s McMansions into tenements. But Egan goes deeper than the bubble for the cause – and a possible cure – for foreclosure alley: “In California, the outlying cities themselves encouraged the boom, spurred by the state’s broken tax system. Hemmed in by property tax limitations, cities were compelled to increase revenue by the easiest route: expanding urban boundaries.”

Also, the most stable or recovering home markets – San Francisco, Portland, Seattle, San Diego – have the strictest development codes to curb sprawl, according to Egan. This is the reverse of what some suburban-development advocates (cough, cough, Joel Kotkin) warned about when they said coastal cities would price out the middle class and start to empty. Says Egan, “The developers’ favorite role models, the laissez faire free-for-alls – Las Vegas, the Phoenix metro area, South Florida, this valley – are the most troubled, the suburban slums.”

Strong land-use regulations, he seems to say, combined with a growing population and stabilization of prices, may help correct a “free market” in freefall.