The End of the Suburbs: Where the American Dream Is Moving (8 page)

In 1956, the Federal-Aid Highway Act granted funding to the construction of high-speed roads so Americans could easily access new and more distant communities. This system still exists, and while developers usually pay to build the roads in their subdivisions, and sometimes for the feeder roads that connect them, they’re not required to pay for the state or federal highway construction needed to enable that growth.
This subsidy amounts to nearly $200 billion a year
and is enjoyed not only by millions of suburban commuters, but by the trucking industry, which, with the exception of a small percentage of toll roads, rides free to haul goods long distances. The freight rail transport system, meanwhile, is funded by private companies. “When we move goods by freight, the private sector pays for everything,” says Arcadia Land’s Jason Duckworth. “When we move them by truck, the truck rides on a free highway subsidized by the federal government.”

Conservatives often decry any efforts to scale back suburban development as Big Government intervention. When California recently proposed new planning laws that would require new housing to be built at higher density levels or that would limit the percentage of housing permitted on or beyond the “urban fringe,” for example,
it sparked outrage among conservatives
, who cried that the state had declared war on the single-family home. But this argument disregards the fact that suburban development itself—everything from the federal highway system to the single-family home to the low price of gasoline in the United States compared to other countries—was built thanks to, and still depends on, generous governmental subsidies. “
The suburbs are a big government handout
if there ever was one,” the author William Upski Wimsatt wrote in the
Washington Post
in a 2011 article debunking five myths about the suburbs. Myth number three: the suburbs are a product of the free market.

Even the way our suburbs look is guided by a thicket of government regulations. Beyond just adhering to single-use zoning, for example, conventional suburban developers must follow other zoning laws, building codes, street design regulations, and minimum parking requirements. Just like the book of standards Chuck Marohn had to follow, the codes are highly specific about these rules, which drill down into detailed requirements for things like street width, building setbacks, and the percentage of space given over to off-street parking. Some of these rules border on the ridiculous.
The city of Long Beach
, California, for instance, at one point required twenty parking spaces for every thousand square feet of gross floor area in “taverns,” where the primary activity was drinking alcohol. “The code and standards are everything,” says Marohn. As he wrote in his “Confessions of a Recovering Engineer” essay, “A book of standards to an engineer is better than a bible to a priest.” Of course, these rules often defeat their own purpose.
In the delightfully entertaining
2000 book
Suburban Nation
,
Andres Duany and his coauthors coined the term “Pensacola Parking Syndrome” to refer to the phenomenon in which a city or municipality tears down so many buildings to create parking spaces that people stop going there because it’s no longer an appealing place to visit—so named, the book’s authors explain, “in honor of one of its victims.”

You could argue that the initial wave of government support for modern suburban development was a reasonable, if not well-thought-out, response to our postwar housing shortage that simply didn’t factor in the unintended consequences. But this doesn’t fully explain the ethos surrounding suburban living, which has only become more deeply entrenched in our society in the decades since. A shortage of housing is no longer a problem, of course, and hasn’t been for quite some time. So why have Americans continued to be so obsessed with owning a house in the suburbs?

This wasn’t exactly an accident, either. Almost as soon as we started building the modern suburbs, we began viewing them as an ideal, almost magical way of life. At the 1939 World’s Fair in New York, General Motors presented a now-famous exhibit, “The Futurama,” that showed what the American landscape might look like twenty years into the future. The model featured a vast network of suburbs overlaid with an intricate web of high-speed “magic motor-ways.” It was a car-centric vision of the future, it was awe-inspiring, and it actually seemed within reach. More than nine million people stood in hour-long lines to view it. After the Futurama exhibit, there was a palpable hope—even a dream—among the American people that this would be the way we would build our country. “It was a brilliant marketing move,” says George Washington University’s Christopher Leinberger. “We fell for it hook, line and sinker as a people.”

But marketing works best when it taps into something deep within our psyche, and even Leinberger, who today maintains an extensive collection of Futurama paraphernalia, points out that GM would not have been able to sell us this vision if deep down we hadn’t already wanted it. “You have to move people in their guts to make them really embrace something, and people fell in love with it,” he says. The vision of this novel way of life did exactly that. Along with the car, the private home had long been a symbol of prosperity. The Futurama exhibit crystallized for the American people how the car, the house, and the suburban way of life could come together to symbolize something bigger: the American Dream.

Technically speaking, the original notion of the American Dream wasn’t tied to having a house at all;
in 1931, the author James Truslow Adams simply wrote
of “that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement,” regardless of “circumstances of birth or position.” But when government policies made home ownership possible for the masses, owning a house suddenly presented a logical proxy for this prosperity. The difference between life before the Great Depression, when only the extremely wealthy could afford homes, and after, when almost anyone could, was night and day. Very quickly, people embraced the notion that anyone who was smart and morally and financially responsible would make it a goal to buy a plot of land and live in a house with a yard. It was as true in rural Minnesota in the 1970s as it was in Levittown in the 1950s. “I grew up believing that prosperity was suburbia,” Chuck Marohn says.

Owning a home represented more than just prosperity; over the years, it came to represent patriotism, good citizenship, and the mark of a productive member of society. During the Cold War, home ownership was credited with upholding American free-market ideals. “
No man who owns his own house and lot
can be a Communist,” William Levitt said. In 1995, Bill Clinton launched National Homeownership Day to celebrate the role home owners played in building a productive society. “
Strengthening families, establishing communities
, and fostering prosperity, homeownership is the cornerstone of our economy and a common thread in our national life,” Clinton wrote in the proclamation. A few days later he established a new National Homeownership Strategy, a joint initiative with the U.S. Department of Housing and Urban Development designed to boost the home ownership rate.
In his remarks
announcing the strategy, Clinton recounted a charming story about how, when he was trying to “coax” Hillary into marrying him, he finally succeeded by surprising her and buying a house the future secretary of state had admired while she was away on a trip. A decade later, in the midst of what was becoming a massive real estate bubble
in 2004, George W. Bush
fanned the home ownership flames by touting that we were creating an “ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, ‘welcome to my piece of property.’”

And then, of course, when mortgages became incredibly, artificially cheap during the recent housing boom, the home-owner-as-hero ethos only became even more evident, as those who had previously only dreamed of owning a home bought up property like the good, proud Americans they had always hoped to be.

•   •   •

W
hile the housing bubble of the 2000s is by now well-trod territory, it is worth mention here since it accelerated, and then accentuated, the decline of the suburbs. In 2001, the United States was struggling to emerge from the ashes of the dot-com stock crash of the late ’90s that weakened our economy and the 9/11 attacks that nearly decimated it. In search of a fix, the Federal Reserve turned to home ownership, slashing interest rates to jump-start home sales and demand for new construction. What better way to juice the economy, the government reasoned—just as it had in the wake of the Great Depression—than to promote home ownership, that reliable engine of growth?

Only this time, it wasn’t just the government encouraging us to live in big homes on plots of land. A giant assist came from another player: banks, which, in search of better returns, engineered a new asset class around housing. What if investors, who had tired of stocks, could buy packages of home loans instead? The American Dream had suddenly met the Wall Street Machine, two powerful engines that came together with the force of a neutron bomb. The creation of the mortgage-backed security, as we now know, was an instant success, and the cultural obsession with home ownership would play right into the banks’ hands as they happily fed the voracious demand for new home loans. The whole experiment would leverage the hope and hype of the American Dream and award it to millions of new home owners.

As has by now been well documented, our housing industry ballooned.
Prices rose nearly 200 percent
from 1995 to 2005. Houses that sold for $300,000 were worth $600,000 two years later, then $700,000, then more. It wasn’t just Wall Street making a profit: everyone wanted in on the new gold rush. Everyone became an investor; the cocktail party chatter wasn’t just about the home you bought to live in, it was the home you bought to flip.
A
Fortune
article
in May 2005 chronicling this euphoria opened with the tale of a twenty-two-year-old in Phoenix who owned so many homes that he got lost going from one to the next.

The home-building industry exploded
, too, going from constructing 1.3 million new single-family houses in 2000 to 1.7 million in 2006, an all-time high. Farmers made millions as real estate speculators and developers bought up citrus groves and cotton fields by the thousands and converted them into subdivisions.
From 2000 to 2007
the United States developed close to four million acres of farmland, spending billions tilling it and filling it with fast, cheap tract houses for first-time buyers. Code inspectors couldn’t keep up with the pace; years later, consumer watch groups would urge home owners who bought homes built between 1999 and 2007 to have them reinspected because so many contractors had cut corners.

At some indiscernible point, a mania started to take hold. Everyone wanted bigger, better, more. And if you couldn’t afford it near where you wanted to live, you could find one in your price range if you just kept going. Builders and developers plowed farther and farther out along the periphery, where land was cheapest. Soon there were places like the plot of land earmarked by luxury home builder Toll Brothers an hour and a half drive from DC toward the Shenandoah Mountains.
A
New York Times
Magazine
profile
described the meeting where the president of the company had presented this parcel to cofounder and then CEO Bob Toll, who marveled at the high prices other builders had been able to command nearby: “Look at these prices,” Toll said. “At the end of the world, these prices.” The Poconos soon became bedroom communities of Philadelphia and New York, and Poughkeepsie became a suburb of Manhattan; similar development spread out into Loudoun County outside of Washington, DC, and Gwinnett County outside Atlanta. The traditional American Dream said nothing about ninety-minute one-way commutes, but that’s what people were willing to do to get the biggest, best home they could buy.
By 2009, three million Americans
were making “extreme commutes” of three hours or more round-trip every weekday. Sometime during this era, Bob Toll, who kept an apartment on New York City’s Upper East Side, learned that one of his doormen had moved his family from Queens to the Poconos. He asked him why he did it, when it meant he had to drive an hour and a half—on a good day—to work. “I wanted my family to have their own home and their own land,” the doorman said. “And I was willing to drive an hour and a half a day to be your doorman to do it.”

This approach put millions more people into millions of homes.
In the span of eleven years
, the rate of home ownership in the United States went from 64.4 percent, where it had hovered for more than three decades, to 69.4 percent. Rising prices, meanwhile, allowed existing home owners to refinance their mortgages at higher and higher valuations, pocketing the extra cash. This further increased home owners’ sense of wealth and spurred purchases of everything from SUVs to second homes to Saks Fifth Avenue shopping sprees. In addition to representing a place to live, the home had suddenly become a wealth creation machine. It was the American Dream, squared.

The homes themselves grew bigger and more ornate—Arcadia Land’s Jason Duckworth refers to this as housing’s “baroque” period—and soon we were identifying them with a new label, the McMansion. Though almost every builder started making them during the housing boom, the invention of the modern-day McMansion dates decades earlier; the first use of the term dates to around 1990 and was soon thereafter defined by the
Oxford English Dictionay
as “a large modern house that is considered ostentatious and lacking in architectural integrity.” But identifying the demand for a new category of housing in between high-end custom-built homes and tract housing can be credited to Toll Brothers, which came to mass produce the most expensive homes of any builder in the country. In the mid-’80s Toll was a regional builder operating in Pennsylvania and New Jersey when Bob Toll identified the demand among a new upper-middle-class buyer for flourishes that suggested prestige, like large floor plans, brass fixtures, columns on the front facade, marble countertops, and the like. Toll masterminded the art of delivering these visual embellishments on houses that were high-end but mass-produced, so they could be built at a much lower cost than custom homes. Toll’s houses were still twice as expensive as its rivals, but it popularized a new category in housing: a halfway point between suburban tract homes and multimillion-dollar upscale abodes. “They were brilliant about it,” says Duckworth (Duckworth says this as a Philadelphia-area real estate developer himself and one with particular insight on Toll: his father was a top executive at the company for years). Toll, the younger Duckworth points out, understood that buying a house was as much about fantasy as utility. “They knew how to push people’s psychological buttons,” he says. “They could see the buyer saying, ‘This is how I’m going to impress my brother-in-law.’ You can get by with a cheap subfloor, but you had to have the Jacuzzi for two.”