Recent news is not good for home prices across the country. In a spot on CNBC today, market analyst Gary Kaminsky focused on the continued drop in the prices for current, single family housing stock. While this continues to hamper recovery efforts within the US, the bright spot, according to Kaminsky is multifamily housing, where rents have continued to increase and mulitfamily real estate trusts continue to do well in trading markets. As Kaminsky puts it, “things in the industry continue to worsen despite the government's best efforts. In short, there's a sea change in attitudes toward buying vs. renting.”
Could this be the sea change that Smart Growth policies, espoused by Smart Growth Network, have been waiting for to facilitate the transition of American housing from the unwieldy urban sprawl it has become to more environmentally friendly, affordable mixed use communities? In it’s publication “Getting to Smart Growth; 100 Policies for Implementation” the Smart Growth Network spells out ten key policy principles that, if followed at the national level, could drive the development (and redevelopment) of communities that can achieve the benefits of Smart Growth.
For these principles to be effective, a shift in the way communities function, are financed, zoned, developed, governed, managed, and inhabited is required. And for each of these changes to take place, the key stakeholders involved at each point must see the benefits of the change and be willing to invest to make it happen. I believe the tipping point is near where lenders, burdened with ever deflating housing asset values, states, experiencing losses in tax revenues, and residents and business owners realizing the American Dream may not have to be delivered in sprawling suburbs, will each see the benefits or more sustainably created communities.
If current trends in housing prices continue or, at a minimum prices do not recover to pre-recession levels, Americans and American lenders will seek the stability of communities where housing prices are affordable and buyers will not have to overextend themselves to own their own home. Where development of attractive communities will not have to be at the expense of farmland and natural resource areas. Where mixed land use development will encourage living and working in close proximity so that transportation options can be more varied and available. And finally where people can develop a stronger sense of place and feel more connected to the decisions made around how their community is managed.
So while I, as a home owner, will most likely feel the effects of today’s news in the near future when I go to sell my home, I hold out hope that there is a positive side to current trends. I also hope that the policy organizations, administration, and lending community take advantage of this open window and pursue the policies that will lead to a more sustainable housing future.