Tuesday, October 27, 2009
When the financial history of this era is told, it is possible that it will be seen as the bailout of not just the banks, Fannie Mae, and Freddie Mac, it will also to some extent be seen as the bailout of sprawl.
Leinberger's argument is that the highest rates of foreclosure are in the low-density, single family houses on the suburban/exurban fringe; therefore the federal efforts to reduce foreclosures will disproportionately flow to these homeowners. Leinberger says that we have structurally overbuilt housing in the exurbs compared to market demand, and that despite efforts to bail out overleveraged mortgages, sprawl housing may continue to decline in value. Meanwhile, he notes, property values for walkable urban housing have remained flat and may even include a price premium. Leinberger is concerned that if the value of sprawl housing continues to decline even after the recovery, it is "the recipe for the creation of a slum."
There are a number of other interesting items on metropolitan governance, planning, and land use on The Avenue.