Sprawled Out: The Search for Community in the American Suburb

The Decline of the Exurban Lifestyle: Still not convinced?

Though this blog is more concerned with improving present suburban communities than it is in seeing them wiped out, a story in today's New York Times paints a pretty dismal picture for those suburbs that are even more far-flung - - the so-called "exurbs"; collections of subdivisions that are utterly and completely dependent upon automobiles for their very existence.

Sure, people like having their space and their 5-car garages, but ...

... life on the edges of suburbia is beginning to feel untenable. Mr. Boyle and his wife must drive nearly an hour to their jobs in the high-tech corridor of southern Denver. With gasoline at more than $4 a gallon, Mr. Boyle recently paid $121 to fill his pickup truck with diesel fuel. In March, the last time he filled his propane tank to heat his spacious house, he paid $566, more than twice the price of 5 years ago.

Though Mr. Boyle finds city life unappealing, it is now up for reconsideration.
....

In Atlanta, Philadelphia, San Francisco and Minneapolis, homes beyond the urban core have been falling in value faster than those within, according to an analysis by Moody’s Economy.com.

Car-worshippers (and Bush-Cheney-Big Oil apologists) who constantly confound Milwaukee's efforts to get a sane light rail system built would do well to observe Denver, Colorado's experience:

A $6.1 billion commuter rail system has been in the works over the last four years, drawing people downtown without cars, while stimulating swift sales of densely clustered condos near stations.

Coors Field, the intimate, brick-fronted baseball stadium for the Colorado Rockies, has transformed the surrounding area from a desolate skid row into fashionable Lower Downtown, a neighborhood of restaurants and microbreweries in restored warehouses. Along the Platte River, new condos set on a park strip offer an arresting tableau of glass, steel, and futuristic geometry, attracting throngs of buyers at rising prices.

“This is a city where it’s fun to be in the center,” said Tim Burleigh, 56, who sold his house in the suburbs and now walks to Rockies games from his downtown condo.

But, alas, you gotta spend some real money and change the one-person-per-car paradigm to get out from under the thumb of Big Oil. The same "conservative" attitudes (and a few liberal ones as well) that have led to the current crumbling state of our national infrastructure and dismal community standards (optional sidewalks?) are raising the stakes of the upcoming crisis by obstinately denying the fact that we desperately need a mass transit re-fit program at the level of 1956's Federal Aid Highway Act.

And, what the heck, put the word "defense" in the name of whatever act we come up with (ala the Highway Act's alternate name, National Interstate and Highways Defense Act). Imagine a foreign policy scenario wherein OPEC-member nations observe an entire nation gearing up to drastically reduce consumption of their cash cow. Imagine NOT spending lives and money in Iraq (because that's an oil war, pure and simple).

The full NYT story is after the jump. (NYT story Via Calculated Risk:)

See also this entry from Calculated Risk linking to an LA Times story that describes a California community where 15%(!) of homes are bank-owned or in some level of foreclosure.

New York Times Graphic (click to enlarge)

Is Ed McMahon the Rock Hudson of the mortgage lending crisis?

Bear with me.

Remember when AIDS was considered by the high-minded to be some sort of punishment from on high sent to punish libidinous homosexuals for their morality-flouting lifestyles?

It wasn't just southern evangelists. Ronald Reagan's communications director, Pat Buchanan, stated that AIDS is "nature's revenge on gay men." Reagan's response to the growing epidemic was anemic at best. It was a problem confined to "others," people outside of his conception of reality (he fought World War II on a soundstage, remember).

The message was clear whne it came to AIDS: Fund programs for prevention, education, treatment and a cure? Why should we upstanding heterosexuals pay for the profligate lifestyles of morally bankrupt homosexuals - - i.e. bad people?

Because, you see, only bad people got AIDS.

How deep did the notion pervade the Reagan administration? From an article called Reagan's AIDS Legacy: Silence Equals Death:

Dr. C. Everett Koop, Reagan's surgeon general, has said that because of "intradepartmental politics" he was cut out of all AIDS discussions for the first five years of the Reagan administration. The reason, he explained, was "because transmission of AIDS was understood to be primarily in the homosexual population and in those who abused intravenous drugs." The president's advisers, Koop said, "took the stand, 'They are only getting what they justly deserve.' "

Not even a medical problem, they thought.

Things changed on July 25, 1985, when the American Hospital in Paris announced that Rock Hudson, a mainstream star in the Reagans' circle of acquaintance - - high profile good people! - -  had AIDS. Though Reagan and his administration remained resolutely silent on the epidemic (he finally publicly addressed AIDS in 1987, near the end of his second term), mainstream Hollywood rallied around the cause all the more fervently, campaigning for government funding and intervention. 

Because, you see, good people get AIDS. "Gosh, this could happen to anyone!" the people in Ron and Nancy's circle began to say to themselves.

If this could happen to Rock Hudson ...

Compare the pre-Rock Hudson attitude of righteous conservatives toward AIDS with local right wing columnist Patrick McIlheran's cold condescension toward those unlucky enough to be swept up in the mortgage lending crisis wave. He quotes an "angry renter":

"It just seems so wrong that these people made a wrong decision," she said, "and now they're crying for help and they seem to be getting it."

McIlheran himself lectures further:

Rage as you will about liars' loans and bankers' bonuses, what's still more outrageous is when we make it official public policy to punish the prudent and to help the profligate. It's grim that some people could lose their houses and have to rent for a while. It would be far worse if Big Mama Government swooped in to undo their mistake - with money taken from people who wanted to stop renting and never got the chance.

In this case the federal government has decided to take action; foreclosures are occurring at record levels, and, frankly, the banks are the main beneficiaries of the bail-out (it pays to have friends in high places). If some actual American citizens see a bit of relief, so much the better.

But, McIlheran sputters, why should we upstanding homeowners pay for the profligate habits of all those bad people? Because, you see, only bad people get into mortgage trouble. Only bad people can be taken in by fast-talking loan representatives who profit enormously from ridiculous mortgages. Only bad people experience bad breaks. McIlheran apparently can no more muster compassion for these deadbeats than Pat Buchanan could for the promiscuous, hedonistic queens he saw in his mind's eye when contemplating the scourge of AIDS.

We now learn that Ed McMahon - - by all accounts a sensible, good person with money and lawyers and powerful pals! - - is facing foreclosure on his mansion.

From CNN:

King: And the payments, you can't make -- what's the problem?

Ed McMahon: Well, if you spend more money than you make, you know what happens. And it can happen. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen. You want everything to be perfect, but that combination of the economy, I have a little injury, I have a situation. And it all came together.

Anyone even vaguely acquainted with pop culture of the past half-century is aware of McMahon's countless hosting and spokesman gigs. The guy was always working, tireless - - and don't forget his profit and syndication participation in shows like Star Search and TV Bloopers And Practical Jokes (on NBC from 1982 until 1998!). I'm fairly certain he never has to pay for his Budweiser, either.

And yet, it is happening to him - - a man with armies of agents and lawyers watching over him. He's not a guy known for tossing around money or being particularly "profligate." He's known as one of the "good eggs" in Hollywood. But, nonetheless, misfortune swooped on him (a broken neck, a bad real estate market, etc.) and now he faces a crisis.

Sure - you can see gold-encrusted Evander Holyfield getting into money trouble - that fits the McIlheran "you had it coming" profile. And the McMansion-lusting young couples who jumped from dorms to five-acre cul-de-sacs via mom and dad loans and made-up income numbers - - I admit to feeling they cooked their own goose.

But Ed McMahon? There he is on Larry King saying, "You know, things happen"! He's a veteran of two wars!

Gosh, this could happen to anyone!

So, what about non-celebrity people who are equally "good eggs," not particular greedy (though McIlheran preaches incessantly that greed and wastefulness are our God-given rights as Americans), and didn't/don't have that army of lawyers and agents nearby to check the paperwork for them? What about the ones that didn't "over-buy," but just bought a modest house for their family while trusting their mortgage broker?

Remember that paperwork when you bought your house? Remember the whole afternoon of signing and initialing? Did you have a lawyer present? You don't think they could have slipped one by you during that process?

Think again. One does not have to be "profligate" to be victimized. There are solid, coupon-clipping, flag-waving citizens out there who are in a deep hole because they took bad advice.

And to the "Angry Renters" quoted in McIlheran's piece: Rather than wallow in smug self-involvement and blame the victims, count your lucky stars (as I do; I bought my house before the boom and have a "sane" fixed mortgage). You dodged a bullet - the slightest shift in circumstances and you would have been in a chair at CountryWide Mortgage with a grinning rep hovering over you, paperwork in hand, American Dream in sight. "Only a fool would pass up this deal in this market. Are you going to be a fool?"

Because if it can happen to Ed McMahon ...

RELATED: The mortgage lending crisis explained

Is Menards having its cake and eating it too with subdivision development?

No one else has asked, so I will: In cases where Menards is developing locations adjacent to or in proximity of land that they have acquired through subsidy deals with local governments, or near roads improved or built as part of that subsidy, is someone holding Menards accountable in some way as they exploit that subsidy in this new venture?

For example, are local municipalities seeing to it that taxpayer-funded subsidies to Menards are at least partially repaid by ensuring that these new subdivisions serve their constituents that are in need of affordable housing?

A sidenote to the story in the Milwaukee Journal Sentinel answers that question:

THESE AREN'T STARTER HOMES
Of the three residential subdivisions being developed by Menard Inc., just one - Prairie Meadows, in Yorkville, Ill. - has homes that have been built. Houses currently available there have listed sale prices ranging from $349,900 to $396,900. They include such features as three-car garages, walk-in pantries, stainless steel appliances and master bathrooms with whirlpool tubs.

Perhaps there is someone out there who can show me that the locations mentioned in the story were developed without subsidy support, and therefor Menards faces no obligation to local taxpayers. Good luck.

Wal-Mart plays a similar game. Local municipalities basically give Wal-Mart the huge chunk of land they demand for their superstores; then Wal-Mart collects rent from "out-buildings" on the huge unused frontage that are leased by Wendy's and other tenants (Wal-Mart counts itself as a tenant as well, paying rent to itself in the ever-popular REIT tax avoidance scheme).

What a deal.

Menards breaks new ground

Retailer hopes developing subdivisions will pay off

By TOM DAYKIN
tdaykin@journalsentinel.com

Posted: May 5, 2008

People typically run to Menards to buy stuff for their weekend projects: a new drill, maybe a toilet seat.

But lately, the company is stocking something a bit more unusual: home sites.

Eau Claire-based Menard Inc. is becoming more active as a developer of residential subdivisions - an extension of the company's role as the nation's third-largest home improvement retailer.

Menard is proceeding with plans to develop two large subdivisions, in Warsaw, Ind., and Urbana, Ill., and is currently developing another subdivision in Yorkville, Ill. The company also owns land set aside for a small condominium development that might someday be built near its Oak Creek store.

Those projects are happening through opportune purchases of excess land as Menard buys parcels to build home improvement stores, said Jamie Radabaugh, director of sales and leasing for the company's property division.

"We are actively looking for new residential projects around our new and existing stores," Radabaugh said.

The company appears to be the nation's only home improvement retailer that's also a subdivision developer, said Scott Wright, spokesman for the North American Retail Hardware Association, an Indianapolis-based trade group with around 13,000 members - most of them independently owned stores.

"I certainly haven't heard of anyone doing anything like that," Wright said about Menard's side business. "Especially in this economic climate."

Menard did its first residential subdivisions, in Franklin and Eau Claire, many years ago. The company's land acquisitions have increased as Menard, which operates around 240 stores in 11 states, continues to grow.

Because it's privately held, Menard doesn't have to meet the quarterly earnings expectations that Wall Street demands from the chain's chief rivals, Lowe's Cos. and Home Depot Inc.; the latter announced last week the closing of 15 stores, including three in Wisconsin. The fact that Menard is not publicly traded gives it more leeway to invest in real estate developments, according to a company presentation made in January to the Urbana Plan Commission.

By developing residential subdivisions close to new stores, Menard creates a larger customer base among those new homeowners, and among local homebuilders.

Houses go up in Illinois

Menard's development in Yorkville, on the outer fringe of the Chicago metropolitan area, illustrates that strategy.

Yorkville is in Kendall County, which the Census Bureau recently named the nation's fastest-growing county.

In 2001, Yorkville annexed around 250 acres of farmland owned by Menard. Some of the land was set aside for a new store, which opened in 2003, said Lynn Dubajic, executive director of the Yorkville Economic Development Corp.

Additional parcels were set aside for 164 single-family homes and 68 townhouse-style condos, Dubajic said.

Menard put in utilities and other infrastructure for the single-family homes, and so far, it has sold 129 lots to AMG Homes, a local homebuilder. Since 2005, AMG has built 110 homes, said Chad Gunderson, AMG co-owner and chief executive officer.

The townhouse sites probably will be sold once the housing market improves, Dubajic said.

Materials from Menard

In purchasing the lots, AMG agreed to buy virtually all of its building materials for the project from Menard, Gunderson said.

The shopping list includes lumber, windows, doors, flooring materials and roof shingles, Gunderson said. AMG was allowed to buy a few products, such as concrete, from other vendors, because Menard doesn't sell them in large enough quantities.

The arrangement has worked out well for AMG, Gunderson said.

"We look at the contract as mutually beneficial," he said.

The company will have similar requirements with homebuilders buying lots from other Menard-developed subdivisions, Radabaugh said.

"It only makes sense to tie our company's main business with the residential development projects," he said.

Two more sites in works

In Warsaw, in north central Indiana, Menard is building a store that will open early next year, said Jeremy Skinner, city planner. He said Menard owns 70 acres, with 30 acres set aside for the store and other commercial use. The remaining land is for single-family homes.

Menard originally proposed 66 single-family lots for the Warsaw site but now is seeking to develop 89 lots, Skinner said. He said Menard is in discussions with a local homebuilder interested in buying the lots.

In Urbana, in east central Illinois, Menard bought just more than 350 acres at an auction in 2005. Menard is still working on its plans for a store, additional retail space, single-family homes and townhouses. The company expects to have a total of 425 residential units in Urbana.

As in Yorkville and Warsaw, Menard plans to sell the residential lots to homebuilders, said Lisa Karcher, a city planner. She said the entire project, including construction of all the planned houses and condos, will likely take five to 10 years to complete.

In the Milwaukee area, Menard owns just over 5 acres of vacant land northeast of its Oak Creek store, at 6800 S. 27th St. That store opened in 1998, just across S. 27th St. from a smaller Menards store in Franklin, which closed.

In 2001, Menard was granted permission to develop 22 townhouses on the Oak Creek parcel, but that approval has since lapsed, said Doug Seymour, Oak Creek director of community development.

Menard is looking for homebuilders interested in developing the Oak Creek parcel, Radabaugh said.

Menard's foray into development is "very interesting," said Wright, of the hardware retailers association.

The chain, which has grown despite increased competition from national players Home Depot and Lowe's, "has staying power unlike any other," Wright said.

McMansion blight

Clip from the film Subdivided