How alarming is it?
When a once pristine city fueled with economic drive becomes a ghost town, what do we get? It’s a slumburb and no, the term isn’t new at all. Cities that have fallen into disrepair since once-promising communities become uninhabited and not maintained slowly become a picture of what it has become, are a true testament to how the real estate crisis has pummeled markets all over the country two years ago.
And how does slumburb differ from the ghetto of NYC? Investopedi differentiates it as, “(having) regular real estate developments and required amenities such as parks and schools. At one point, these areas were prosperous and saw increased real estate deveolpment, but became too expensive for the potential or current owners. Due to a high level of foreclosure in such areas, families move away, leaving vacant homes that fall into disrepair. These types of communities usually arise during tough economic times.”
Back in 2008, the patterns in the declining state of the market were already seen as a huge tsunami by experts. Christopher Leinberger, a visiting fellow at the Brookings Institution in Washington and a former developer, states in a San Francisco Gate article, “Over the last few decades, we’ve structurally over-invested in fringe real estate. Builders are experts in overbuilding, in terms of cyclical overbuilding, like lemmings to the sea. But this time it’s different. It’s not just a cycle. It’s going to take more than two or three years to recover from this.”
We should all be concerned about it if we try to make sense out of the research by Arthur C. Nelson, director of the Metropolitan Institute at Virginia Tech who has found out that “there’s a likely surplus of 22 million large-lot homes (houses built on a sixth of an acre or more) by 2025—that’s roughly 40 percent of the large-lot homes in existence today.” In the same report, slumburbs came into being when “Sprawling, large-lot suburbs become less attractive as they become more densely built, but urban areas—especially those well served by public transit—become more appealing as they are filled in and built up. Crowded sidewalks tend to be safe and lively, and bigger crowds can support more shops, restaurants, art galleries.”
To support this claim, Tara Struyk of Investopedia explains, “In most cases, this urban sprawl occurs as a result of population growth, according to the U.S. Bureau of Census Data on Urbanized Areas. Between 1970 and 1990, the 100 largest urban areas in the U.S. sprawled out more than 14,000 square miles. When sprawling cities experience a population exodus, it’s the outlying areas that tend to suffer the most sever declines in property value.”
With still unimproved real estate conditions, I’m hoping that these places would soon find their way of this entire mess. There are too many real estate developments that could be transformed into potential economic centers or eco-communities. All we need is a huge rebound in economic activity, which is still far from the hopes of the many.
Again, I remain optimistic.