Twitchin’ Curtains in Suburbia

Green Day, the US punk rock band sang a song once which spoke about life in suburbia. The lyrics went something like this: “Suburbia…City of the dead, at the end of another lost highway, signs misleading to nowhere…”. It might have been true back in 2005, when the song came out. Suburbia might have been a dead place, just lost somewhere, leading (and going nowhere). But, recent statistics just released by the Census Bureau show the opposite. Suburbia is maybe not quite the place to be as of yet, but it’s seeing a huge increase in population as people seek better, quieter, more peaceful lives, with quality living and it might just forebode the on-set of an economy that seems to be picking up.

According to the Census Bureau of the US, it’s the suburbs that have recorded the highest growing population increases over the past two years (2010-2012). The suburbs went through some tough times as the housing bubble burst right in their own back yard just a few years ago. Now at last there is a glimmer of light at the end of the tunnel for suburbanites. The federal government spends some $400 billion on suburban areas every year and that looks like it’s set to increase or at least maintain at that level. Suburbs traditionally tend to have lower population densities than urban inner-city areas. They also tend to be more affluent, as the building of roads and infrastructure had to start from scratch. On average, roads and sewers end up costing a hefty 38% more than in urban areas.

There were changes between 2000 and 2011though, when poverty levels in suburbia increased by 64%. Perhaps it was the affluent investors and money-makers that lost unfathomable sums of money during the financial crisis. At any rate, it was much higher than the 29%-average of increase in poverty levels in urban areas. Now, suburbanites are looking like they are getting back on track. And that may be the first sign of a better economy. If the affluent areas are starting to look more affluent, if they are attracting more and more affluent people, then things must be getting better. Has (the beginning of) the end already begun? Looks like it might have!

Some places in Arizona showed an even bigger jump over the same period, at times up to 3.2%. At the height of the financial crisis in 2008, people were fighting to get out of the suburbs and there was a fall of 1.9% in those same places in Arizona. People were moving back to city centers, where they had greater access to the job market and to infrastructure, with cheaper housing. Florida, typically the place to retire to (with more than 17% of people aged over 65) saw a 1% rise in population over the past two-year period, while it shrunk by 0.1% between 2008-2010. People are coming back, and that sounds like good news. Good for the suburbs and the economy in general as it means we are possibly getting richer. But, it’s also good for the urban areas which are already overcrowded.

People are moving to the suburbs in a quest for peaceful living. They are looking for less crime, less trouble, less-densely populated areas, better schools for the kids, in essence a better life. Troubled times of financial crisis, less money and fewer jobs led to periods of greater crime and upheaval in society according to sociologists. It’s not surprising that people are moving out to the suburbs to get away from that.  New York has added 2% to its already huge suburban population. The last time there was a census there (2010) it was at 8.3 million people, now it’s at nearly 8.5 million. That’s 1% a year, on average.

Suburbs were first created in 1947 in the town of Levittown (named after the building firm Levitt and Sons Inc.). William Levitt (one of the sons of the company) is considered as the founding father of suburban cities today on which modern suburbs are built following his model. But, suburbia is no longer the land of the living dead far from city centers. It’s breaking free from that. It’s the place to be. Watch out, those curtains will be twitching more than usual as suburbia swells in size! Swell!

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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