Tag: suburbs
Real Estate Trend Sees Bigger Homes Built On Smaller Lots

Real Estate Trend Sees Bigger Homes Built On Smaller Lots

By Alan J. Heavens, The Philadelphia Inquirer (TNS)

PHILADELPHIA — Despite the lingering downturn and the “tiny house” craze, mostly upscale suburban buyers continue to favor larger new houses on ever-shrinking building lots.

The age of the buyer doesn’t seem to matter.

About 43 percent of 2,000 adults surveyed nationally would prefer homes bigger than what they live in now, the real estate search engine Trulia found.

Baby boomers preferred bigger by a narrow margin while millennials and those considered Generation X favored larger in even greater numbers.

“Would-be downsizers outnumber upsizers only among households living in the largest homes,” said Trulia housing economist Ralph McLaughlin.

Nationally and in the Philadelphia region, most builders cater to the luxury-home market, said Quita Syhapanya, Northeast regional director for real estate media firm Hanley-Wood’s Metrostudy in Philadelphia.

The average square footage of a home nationally in 2014, 2,467, was 13 percent higher than the 2,174 in 2005, before the housing bubble burst, Quita said, but the 2014 figure grew by 11 percent from 2010 — considered the depths of the real estate recession.

That is 812 square feet more than in 1975, even though family size has fallen from 3.42 to 3.13, census statistics show.

“Obviously, the numbers are skewed to be higher because of the market segment these builders are going after,” Syhapanya said.

The suburban trend has its counterpart in the city high-rise luxury condominium market, where buyers combine two units into one to boost square footage to 3,000 or more.

John Westrum, president of Westrum Development Co. in suburban Philadelphia, calls them “buyers of choice, who want a big house with lots of features in prime locations and are willing to pay for it.”

“This product is the only kind that might make a builder money, and they have a guaranteed buyer,” Westrum said.

Anthony E. Maras, regional president of real estate company K. Hovnanian Homes, pointed to Doylestown Greene, a 25-home development the company is building in suburban Philly, as an example of this large house/small-lot phenomenon.

Doylestown Greene’s estate homes will top out at 4,946 square feet — 60-foot-wide houses on 80-foot-wide, one-third- to one-half-acre lots, he said.

“People are using their homes differently” and “don’t want large lots to maintain,” Maras said.

“What we are seeing with the high-end new construction buyer is a home in the 4,000-square-foot range on a maintenance-free type of lot with an open family room off the kitchen where they spend most of their time,” said John Duffy, broker/owner of Duffy Real Estate, another Philly-area firm, in confirming Maras’ observation.

“Extensive research” shows upscale buyers want large kitchens, family rooms, and bedrooms; a den/library; and scaled-down living and dining rooms, Duffy said.

The Philadelphia suburban experience differs somewhat from the rest of the country, Syhapanya said.

While builders here, too, market to affluent buyers, square footage is increasing more slowly — just two percent since 2009 to 2,431 from 2,383.

“Builders locally are not just building large homes for the sake of building larger homes,” he said. “They are building homes in prime locations and getting the most dollars per square foot” — $199 in 2014, compared with $183 in 2011, and $188 in 2013.

Land — in short supply and expensive — appears to be a major driver.

Builders look for prime locations, and “when we find them, the best way to maximize the return is to maximize the offering to the customer,” said Rob Fluehr Jr. of the Goldenberg Group, based in the Philadelphia region.

This means builders must put the largest house possible on a site, Fluehr said, and are aided by zoning laws “set up to give bonuses for providing larger contiguous areas of open space when you cluster the development.”

Mark Semerjian of Semerjian Builders, also in the Philadelphia area, said the custom homes he’s been building for high-end clients in recent years ranged from about 8,000 to 10,000 square feet.

His clients “are looking to maximize and leverage the value of the land they are purchasing by building larger residences.”

When vacant land is not available, “I’m usually involved in identifying, negotiating and handling the purchase of teardowns in order to build these homes as well,” he said.

Factors other than land, including development expenses, and “the approval process,” as Fluehr added, contribute to the increase in square footage costs.

Construction expenses have risen 15 percent or more over the last two years, said Bruce Paparone of Bruce Paparone New Homes, based outside Philly.

“However, some of this cost is related to an increase in the included features that we offer today as well,” he said.

“Some of these have been absorbed by the builders, offering as much value as possible in a new home versus a resale.”

In the large custom homes, those features are often designed to “minimize the cost of maintaining” them, including geothermal and hot water radiant heat, Semerjian said.

Still, land, especially prime locations, remains a defining factor, Paparone said, “so it pays to drive an extra exit or two off the highway for a better value sometimes.”

While Fluehr said Goldenberg was getting some feedback that “smaller may be better,” it is coming from people who still want to pay $800,000 and up for new construction.

Builders agree the day of the entry-level new home that built suburban America — now costing $200,000 to $400,000 — is history since houses cost far more than that to build.

Even when they build entry-level, the houses don’t go like hotcakes, no matter how they’re loaded.

Charlie Kojeski of Kojeski Builders built a 1,650-square-foot, four-bedroom, 2.5-bath with a walkout basement and all the bells and whistles last fall.

For $220,000. “With no takers,” he said.

Photo: Dean Terry via Flickr

Suburban Poverty Grows Beyond Ferguson

Suburban Poverty Grows Beyond Ferguson

By Teresa Wiltz, Stateline.org

The fires of Ferguson, Mo., run counter to the narrative about suburbia, the story Americans tell themselves about strip malls and rolling lawns, about McMansions and upward mobility. Instead, the unrest in the St. Louis suburb after the shooting of an unarmed black teenager by a white police officer evokes images of 1960s-era Watts, of burning inner-city neighborhoods in New York, Washington, Detroit and Chicago.

The tear gas and protests in Ferguson were sparked by the shooting of Michael Brown, but they point to deeper, more pervasive problems that plague suburbs across the country: rapidly increasing poverty, scarce jobs and even scarcer resources.

“Poverty is rising in suburban communities and it’s smashing the stereotype of calm and prosperity,” said Lawrence Levy, executive dean of the National Center for Suburban Studies at Hofstra University. “All over the country outside major central cities, the rate of poverty in the suburbs is exceeding that of the (urban) places people used to leave to escape.”

In Ferguson, which has a population of just over 21,000, the poor population rose 99 percent in the past decade, said Elizabeth Kneebone, a fellow at the Brookings Institution and the co-author of “Confronting Suburban Poverty in America.” (Overall, the poor population in the St. Louis suburbs rose 68 percent.)

Across the country, more poor people live in suburbs than live in cities.

Perceptions have yet to catch up with how radically the geography of poverty has shifted, Kneebone said. Without an up-to-date understanding of the complexity of poverty, suburbs often don’t have the resources needed to help their impoverished populations, she said.

“We need to come up with a 21st century agenda,” said Sylvester Brown, a community activist and former columnist for the St. Louis Post-Dispatch. “We know poverty is at the root of all this (in Ferguson). But I’m not hearing talk about the long-term solution, about what is really the belly of the beast, economic transformation.

“This is a country (wide) problem. It just happened to fire up in Ferguson.”

From 2000 to 2011, the number of Americans living below the federal poverty level ($23,492 for a family of four in 2012) rose about 36 percent, to 46.2 million. Meanwhile, the number of the suburban poor grew 64 percent.

There’s no single path to poverty in the suburbs. Some of suburbia’s poor are the formerly middle class who were walloped by the 2007-09 recession, losing jobs and homes when the housing bubble popped. Some are immigrants who bypassed the traditional urban route and headed straight for the suburbs. Others are lower-income African Americans and Latinos who were pushed out of gentrifying cities as housing prices skyrocketed. Other people, some of them with federal housing vouchers, left cities looking for jobs, safer neighborhoods or better schools.

“The movement to the suburbs is really about people moving to opportunity,” said John A. Powell (he spells his name with lower-case letters), a professor at the University of California, Berkeley, and director of the Hass Institute for a Fair and Inclusive Society.

“But low-income people have not landed in places of high opportunity in the suburbs,” Powell said. “They move from depressed cities to depressed suburbs. They are trying to move to opportunity and they are failing. Opportunity is moving away from them.”

In the suburbs, as in the rest of the country, race and poverty are inextricably linked. There are prosperous African-American suburbs, like Maryland’s Prince George’s County (outside Washington), California’s Ladera Heights (Los Angeles) and New York’s Hillcrest (New York City). And yes, most poor suburban residents are white. But increasingly, the faces of suburban poverty are black and brown.

People of color in the suburbs are disproportionately likely to be poor and much more likely to live in neighborhoods with high concentrations of poverty. The disparities are stark, Kneebone said: Over 50 percent of African Americans and Latinos live in poor suburban neighborhoods, compared with 23 percent of white suburbanites.

Case in point: Ferguson, where 25 percent of blacks live below the poverty line, compared with 11 percent of whites. (Ferguson is divided along strictly black/white lines; its Asian and Latino populations are quite small.) The median income for African Americans in Ferguson is $32,500, compared with $53,400 for whites. The black unemployment rate in Ferguson is 19 percent; white unemployment is 6.7 percent. In 1990, Ferguson was a majority-white enclave; today 67 percent of the population is African American. Its leadership structure, from City Hall to the police, remains overwhelmingly white.

Broader changes in the U.S. economy also have changed the character of the suburbs. Jobs have moved out of cities into the suburbs, even with the revitalization of many cities. But most are not the well-paying manufacturing jobs that bolstered the urban middle class for decades. Instead, suburban jobs are concentrated in the retail or construction sector — jobs that tend to pay less and were decimated by the recession.

Even as the U.S. economy continues its slow recovery from the recession, a structural shift to lower-paying jobs is likely to exacerbate the suburban poverty trend.

A 2012 study by the National Employment Law Project found that lower-paying jobs accounted for 21 percent of recession job losses and for 58 percent of recovery growth. Higher-income wage earners accounted for 19 percent of job losses in the recession and 20 percent of growth in the recent economic recovery. Middle-income wage earners took the biggest hit, accounting for 60 percent of recession losses and only 22 percent of recovery growth.

In many ways, being poor in the suburbs is more difficult than it is in cities.

For one, transportation is often a problem. Few suburbs have the kind of reliable public transit systems of cities like Chicago, New York and Washington, making owning a car imperative. Commutes are often lengthy and expensive; a sick child in day care needing to be picked up from the other side of town can present a crisis for a parent who could lose a much-needed job.

For poor suburbanites, having a car can be both a lifeline and a liability. In St. Louis County, which includes Ferguson, there are 90 municipalities. In a nine-mile strip, a driver can drive through as many as 16 of them, said Thomas Harvey, co-founder and executive director of the Arch City Defenders, a nonprofit agency that provides legal services for the indigent in St. Louis County. The Arch City Defenders released a study of the municipal courts in St. Louis County and found that in Ferguson, court fees were the suburb’s second-largest source of revenue.

Often, Harvey said, their clients will get traffic tickets driving through one of those 16 jurisdictions. Perhaps they’re driving a car that needs repairs before it can pass inspection. They can’t afford to pay the tickets and their licenses are suspended.

“These are people who are making a choice between paying their electricity and getting their car fixed,” Harvey said. He added that his group’s study also found that in Ferguson, 86 percent of traffic stops involved black motorists, although blacks make up just 67 percent of the population. Whites make up 29 percent of the population of Ferguson but account for just 12.7 percent of vehicle stops. Blacks in Ferguson were much more likely to be searched by police, although whites were more likely to be found with contraband, the study found.

Ferguson has a large apartment complex just across from where Michael Brown was shot. But most suburbs don’t have the kind of bleak housing projects that put inner cities like Chicago on the poverty map. Privation can look different in the suburbs, but poor is still poor. A poor person in a relatively prosperous suburban county, for example, might not qualify for health and social services because their ZIP code appears to be much richer on paper, said Levy of the National Center for Suburban Studies.

And most suburbs aren’t equipped — and in some cases, aren’t willing — to handle the problems presented by its poor populations. Most government and nonprofit money is concentrated in the cities, leaving the suburbs short on services. Few have adequate job training, foreclosure counseling, food banks or multilingual social workers.

That’s partly because suburbs with large impoverished populations don’t have the tax base to fund such programs, said Ed Paesel, executive director of the South Suburban Mayors and Managers Association in suburban Chicago.

In Chicago’s south suburbs, for example, tens of thousands of jobs disappeared in the 1970s and 1980s when steel mills were closed. When the jobs left, working-class suburbs became home to the working poor — and to the jobless.

Homes were left vacant and abandoned, and so, too, were many industrial sites. Property and sales tax revenues plummeted, squeezing schools reliant on that money. Middle-class families, deterred by the struggling schools, declined to move in.

Levy said American suburbs are likely to continue to be home to growing numbers of poor people.

“This is creating not just a moral dilemma for these communities, but it creates economic challenges as well,” Levy said. “How can you have a truly successful and sustainable economy in a region if more and more of your communities are sending your kids to the worst schools, have access to the fewest jobs, the worst health care and people have a harder time getting to work — if they have it?”

Some communities are battling the suburban poverty crisis by encouraging jurisdictions to work together, combining resources and sharing solutions. In Montgomery County, Md., county government worked with local churches and other nonprofits to create the Neighborhood Opportunity Network, which provides help for those in need of such things as paying utility bills, health care and foreclosure prevention.

The city and county of Denver partnered with investors to create a fund that would build affordable housing close to mass transit, so that lower-income residents would have easy access to jobs.

Chicago’s south suburbs have 43 municipalities, many of which have populations and face problems similar to Ferguson’s. When the housing industry tanked at the end of the past decade, government officials collaborated to apply for federal government assistance. The idea was to think about the needs they had as a collective region of 650,000 inhabitants, rather than just that of individual towns, said Janice Morrissy, deputy executive director of housing for the South Suburban Mayors and Managers Association.

The association received about $29 million for housing rehab, neighborhood stabilization and workforce development. In 2010, the cross-jurisdictional collaboration expanded to focusing on economic development. The group recently started a $6 million loan fund to encourage developers to build a mix of retail, commercial and housing developments close to mass transit.

It’s unclear whether leaders in Ferguson and St. Louis County will follow that path.

“My biggest fear is that this case will be resolved one way or another, and there will be a lot of federal money given to (local) nonprofits. But if they don’t get new voices at the table, it won’t address the systemic problems,” the Arch City Defenders’ Harvey said.

Photo: Curtis Compton/Atlanta Journal-Constitution/MC