Suburban failure

From bucolic bliss to 'gated ghetto' - latimes.com

In this story of a new estate near Los Angeles which has suffered badly from the recent financial woes comes this surprising claim:

There are dozens of places like Willowalk, and they are turning into America's newest slums, says Christopher Leinberger, a visiting fellow at the Brookings Institution. With home values at a fraction of their peak, he said, it no longer makes sense to live so far from the commercial centers where jobs are concentrated.

"We built too much of the wrong product in the wrong locations," Leinberger said.

Thanks to overbuilding, demographic changes and shifts in preferences, by 2030 there could be 25 million more suburban homes on large lots than are needed, said Arthur C. Nelson of the University of Utah. Nelson believes that as baby boomers age and as younger generations buy real estate, the population will abandon remote McMansions for smaller homes closer to shops, jobs and the other necessities of life.

A family that bought a house there in 2006 has seen its value drop dramatically:

The Lopez family plans to stick it out, knowing they can't sell their house for anywhere near the $440,000 they paid for it. Based on comparable prices in the neighborhood, the place is probably worth about $170,000 now, and maybe less. They're petitioning their bank for a loan modification.

There was someone on Radio National Breakfast this morning making the same point: a lot of America's housing crisis has been caused by building the wrong type of houses in the wrong locations.

I see his name was Jeb Brugmann, and he also noted that Australia seems to lack the wide range of urban housing that people find attractive in famous cities. I think he's right.