Tuesday, May 08, 2007
Business Times - 08 May 2007
US exurbia: paradise lost to economic uncertainty
By LEON HADAR
MY car had to go through its yearly emissions inspection last week, and while waiting for my vehicle to be tested, I chatted with another resident of the state of Maryland, who lives with her family in one of the area's emerging 'exurbs' - the far-off small towns that have been built in recent years, usually next to interstate highways.
These exurbs tend to attract young, lower-middle class, mostly conservative Republican families, whose economic survival has been sustained by three major factors - cheap oil, cheap mortgages, and cheap credit.
And as I discovered during my chat with the Marylander, against the backdrop of uncertainties in the energy, housing and financial markets, the exurbanites are quite nervous, fuelling the growing economic and political insecurity in this country. She and her husband, both in their late 20s, moved to the exurb - also referred to as 'micropolitan' (since it lacks the number of residents that are required for metropolitan status) - that is located in a rural area near the border of Maryland and West Virginia in 1999 after their first child was born.
At that time, they couldn't afford buying a house in the more affluent suburbs where they also felt uncomfortable not only because of the growing violence there, but also because of the 'secular' social environment and educational system (they are both ardent Christians). Instead, they were attracted to the exurbs, where the mostly white families have access to an inexpensive and good public educational system and to many shopping malls, including a local Wal-Mart.
In a way, like many residents of the exurbs which now constitute about 20 per cent of American population, the young couple with their modest means made a choice to trade time for space. The booming house market gave them access to an affordable mortgage loan, and with a small downpayment they could purchase a small house where their second kid was born.
But both of them were working in Washington, DC (she is a legal secretary and her husband is a manager in a gym), which is about a two-hour drive from their exurb. But with the prices of gas at the pump at an all-time low (in 1999), they could afford driving their Sport Utility Vehicle (SUV) each morning to the closest metro station, which would take them an hour, park their car there, and take the subway to work in Washington, which would take another 30 minutes.
And indeed, until recently, life looked quite good for our Maryland exurbanites and for the residents of about 600 fast-growing micropolitans around the country. As the housing markets continued to boom, the home-owners watched the value of their property appreciate, making it possible for them to cash in their equity and to feel well-off. Moreover, low interest rates and the availability of never-ending credit added to that sense of never-ending prosperity.
The terrorist attacks on 9/11 only made exurbanites feel that they had made the right choice. They were living far, far away from the large and dangerous cities that seemed to be facing growing threats not only from local violence, but also from international terrorism. It was not surprising that more than 60 per cent of the voters in the exurbs supported President George W Bush and the Republicans in the elections of 2002 and 2004.
They were confident that under the conservative Republicans with whom they shared commitment to American nationalism and religious tradition, the value of their home equity would continue to grow, while cheap gas would permit them to commute to and from work and that with their salary and the availability of credit they would be able to maintain, if not expand, their comfortable standard of living.
But as she was waiting for her SUV to be inspected, my new friend from exurbia sounded very anxious and somewhat angry, noting that they are planning to replace the car with a smaller, cheaper and more, yes, energy-efficient vehicle. In any case, the rising price of gas has been making the commute to work so expensive that she was considering leaving her job.
Moreover, the value of their house has dropped and they seemed to have lost that feeling of 'wealth effect' that home ownership and credit cards have provided them and other exurbanites for quite a while. While she and her husband still voted for the Republicans in 2006, she knows that many of her neighbours have deserted Mr Bush and his party. Indeed, economic uncertainties in the oil, housing and credit markets, coupled with terrorism and the mess in Iraq, seem to be endangering the latest chapter in the American Dream, Exurbia.
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