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Suburbia vs Inner City

When we were paying $1.40/litre for gas last year, there was lots of talk about the suburbs dyeing and inner city homes becoming more desireable.

There was an article in MacLean's which said:

"Experts see two separate real estate markets forming — neighbourhoods that offer easy access by bicycle and public transit, and those accessible only by car. "They're going to be the losers in the next economic downturn," says Anthony Perl, director of Urban Studies at Simon Fraser University. "Those people who didn't think it mattered where you lived and felt transportation would always be cheap made the wrong bet. They probably didn't even know they were betting.:

 Garth Turner posted about this situation on his blog:

"...buyers are falling out of love with the suburbs, a trend that will rapidly augment. In fact, living in the distant, minivan-cluttered pods will become akin to smoking. Shunned, socially downscale, culturally inferior, environmentally toxic."

Let's look at the numbers for the past 30 days compared to last year for the same period: (this is the % change, and includes both condos and single family homes)

                           Sales               Avg Price

SW suburbs          -13%                  -12%

NW suburbs          -21%                  -12%

SE suburbs           -29%                  -13%

NE suburbs           -35%                  -11%

Inner city              -20%                  -13%

We don't see any significant trend that people are moving en masse from the suburbs to the core. Do you think it would have made any difference if the price of gas had stayed high?

Posted: Saturday, March 28, 2009 8:25 AM by Bob Truman

Comments

lukecs said:

How many people raise teenage children in the inner city?  I think it just makes sense to raise families with children 10 to 18 in the suburbs and thats not going to change for me if the cost of transportation tripled.

From what I've seen most people seem to agree.  For me the inner city will always be for adults and not so much for children.

# March 28, 2009 12:05 PM

Ping said:

I agree with Lukecs. When you look at the CBE 10year plan, most new schools are going to be build in the suburbs. Those who live in condos in downtown are professionally tied to downtown. Eventually when they do have a family, a little green space, park and school would be thier desire. For those located in the inner core, it is a lifestyle they chose because they can afford it or inherited or legacy asset build. Nonetheless, these folks are unique to the general market. It will be interesting to note the inner core market in the next few months. In theory the prices in inner core should hold up in most economy. Let's see if this one is any different.

# March 28, 2009 2:46 PM

Glenn said:

I don't see it happening, even if gas double or triples. People will just buy smaller cars and get more efficient.

# March 28, 2009 7:26 PM

Radley77 said:

I think Calgary's evolving skyline is a testament to the desire to live downtown.  What makes this most recent boom unique is the unprecedented amount of MFH built. For people that work downtown it is more than just the cost of gas. It is also the cost of parking which in my office is running at $500 a month. Also, I think it matters how people value their  time as living in the core can give you more time to spend with family or leisure activies if you work downtown.

I think the biggest bonus about living in the suburbs is that you get more house for your money.  Developers need to work on making the inner city more affordable and also accomodating to growing familiies.  

The new Plan It Calgary targets 50% growth in current city boundaries and the rest in greenfield.  Its a good read if you are interested in city planning.  Also, I think in the next decade or so the areas that have better access to transportation nodes will see more development than areas with poorer transportation.

Just my two cents...

# March 29, 2009 5:45 PM

Bob Truman said:

Interesting comments on people's motivations for living in the far-flung reaches of the city. Here's some more insight from Garth Turner on why people live in the suburbs(posted on his blog in Nov 2008):

" I’ve walked too many of these streets and banged on too many suburban doors not to understand the prime motivation for people moving into these kinds of houses. Stuff. They want stuff. Granite or stone or glass countertops. Hardwood floors. Marble sills, columns, media rooms, stainless appliances, hot tubs and paving stones. Lots of stuff, and lots of credit to finance it. That is the current suburban dream, which is why it has no future.

If this mess continues (and I am forecasting it will, with a second wave of real estate declines next year plus a worsening economy and rising unemployment), I’d say the last place you want to be is anywhere near that housing factory, or a similar development."

# March 30, 2009 9:26 AM

dvrvd said:

Why do people live in the 'burbs? It's cheap -- they get more house and more land for less money.

However, this is a subsidized lifestyle (by people like me - urban dwellers). Market-based tax valuations act as a disincentive to live a more sustainable, urban lifestyle. Suburbanites should really be forced to pay the full cost of their lifestyles (new roads, sewers, schools, etc), but sadly Calgarians seem to prefer this little form of socialism.

# March 30, 2009 12:50 PM

Bob Truman said:

There are some good comments on the Herald's blog about this topic. Here are a couple...

"Hey, lets make the builders pay for all the roads, sewer, school and other infrastructure needed to support the suburban communities and THEN let the market arrive at the proper density without the subsidies currently provided. These developers like to set up camp on virgin land, build unreachable communities, and then let the tax payers figure out how to support them. I live in McKenzie Towne and I'm told that the C-Train won't come there for another 20 years. Meanwhile, condo dwellers downtown are having to subsidize all the extra infrastructure needed to reach the suburbs. Market" forces at work indeed."

"I get a kick of developers calling for "market forces" to dictate the type of future development here in Calgary. At present, those developers building their suburban paradise out in the middle of the prairie are doing so with a significant subsidy from the city in the form of INFRASTRUCTURE. If they were forced to pay the true cost of building out in the middle of nowhere (like the roads to get in & out of nowhere) then and only then would their "market forces" argument hold any water."

# April 1, 2009 9:41 AM
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