On the House: Inner-rings suburbs disprove the doubters

Bustling activity on Butler Pike shows the resurgence Ambler has had in Montgomery County.
Bustling activity on Butler Pike shows the resurgence Ambler has had in Montgomery County. (CLEM MURRAY / Staff)
Posted: March 09, 2014

Someone asked me the other day: Why are you fascinated with the concept of reemerging boroughs?

Because it's happening, period.

These are suburban communities that began as 18th-century farming villages, evolved into 19th- and 20th-century factory towns such as Ambler and Phoenixville, then struggled when the industries were closed. The ones near Philadelphia and other cities also are known as first-ring suburbs, created as public transit made those areas more accessible.

In the fall of 1999, I attended a session on the decline of first-ring suburbs at an Urban Land Institute (ULI) conference in Washington. The discussion focused on ways some towns were reversing the trend through public-private partnerships - developing new transit centers and mixed-use (residential and commercial) projects to inject new life into faltering business districts.

Many communities, first-ring and farther out, that are reemerging here today were dead in the water 15 years ago. Their renaissance follows the pattern talked about at ULI.

The evidence is not just anecdotal. A year ago, economist Kevin Gillen, of the Fels Institute of Government at the University of Pennsylvania, studied the topic for the Congress for the New Urbanism.

Gillen examined total peak-to-trough decline in house prices for the Philadelphia region, from both the recent housing bubble and the previous serious recession in 1991-94, and compared spatial patterns in house-price declines from the Great Recession to those from the earlier recession.

Among the three main findings were that the communities that held their home values best and experienced the least declines were:

More centrally located to employment centers and commercial corridors.

More walkable to subway or regional rail stops.

In walkable, mixed-use communities.

"In short, homes located in walkable, urban neighborhoods or suburban town centers with plenty of retail and dining options and a commute to work via foot or transit held their value the best," Gillen said.

"Conversely, homes located on the suburban fringe, in single-use, auto-oriented developments with relatively long commutes to work via car, experienced the biggest declines," he said.

Though that is interesting in and of itself, he said, "this is real news to the urban economics community" because this pattern in home prices stands in direct contrast to patterns of previous housing downturns and recessions.

"Historically, it was the new, single-family detached home with garage located in a good suburban school district that weathered economic storms the best, and it was the older urban rowhome that got hit with the biggest depreciation during bad times, often leading to abandonment."

The exact opposite, in general, occurred during the recent downturn. Gillen said most research has identified three key factors contributing to this outcome.

One is very high energy costs during the recent recession. Most recessions are periods of declining prices and wages. The recent one saw energy costs not only remain persistently high but rise, making homes with shorter commutes and lower energy bills desirable.  

There also has been a shift in consumer preferences to urban-style living, cultivated among newer generations that grew up in the suburbs.

Finally, home buyers appear to have a greater environmental consciousness, especially younger ones interested in smaller carbon footprints.

They look for smaller and existing homes in walkable neighborhoods with a work commute via foot, bike or public transit, Gillen said.


aheavens@phillynews.com

215-854-2472 @alheavens

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