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The Suburban Switch: How Longer Commutes Affect Homebuying

by James F. McClister

Suburban sprawl is giving way to walkability. But what does this mean for the people stuck in the suburbs?

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The lay of the land is changing. Where once work and life shared common vicinity, these days, people, whether by choice or circumstance, are living further away from their employment, which is fundamentally altering the way prospective and current homeowners evaluate their housing needs.

In a recent study from The Brookings Institution, researchers attempted to quantify the effects of commuting increases, using Census-tract-level data to establish median commute distances for the nation’s largest 96 metros, and determine the number of “nearby” jobs for each neighborhood.

Between 2000 and 2012, the number of jobs within a typical commute dropped 6 percent throughout the U.S. However, those changes varied greatly depending on location. For instance, in rural and small metro areas, job losses were negligible. But for larger metro areas, where changes are sometimes swift and always often, the number of nearby jobs fell by 7 percent.

“After steep employment losses following the Great Recession, by 2012 the nation’s 96 largest metro areas had 2 percent more jobs overall than in 2000,” the report reads. “But those gains were not spread evenly across regions. Individual metro areas experienced wide variations in both employ- ment trends and in changing proximity to jobs for the typical resident.”

In fact, 29 of the 96 major metros monitored experienced slight improvements to the average employment proximity.

Road to Today

In the past, wealthy suburban neighborhoods enjoyed ripe, local job markets that sustained economies, often allowing them to flourish. But within the last decade, employment offerings in the frays of major metros have become less fruitful relative to population despite consistent job growth.

“Suburban jobs grew but became more spread out, and average neighborhood job density there declined,” the report’s authors wrote. “As a result, the number of nearby jobs for the typical suburban resident dropped by more than 7 percent, twice as fast as for the typical city resident.”

Historically, suburbanization has been most common for white and non-poor residents – a trend Brookings attributes to a “legacy of restricting zoning and housing policies” – making the loss of immediate job opportunities less impactful. But in recent years, the makeup of suburbia has shifted dramatically.

“Majorities of every major racial and ethnic group, and the poor, in major metro areas live in suburbs today,” the report reads.

A Disparaging Impact

It’s a story that’s been told the industry over, and one we’ve covered extensively: the market is not balanced on an even keel.

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As the Brookings report reads: “As jobs suburbanized, so did people. Minorities and the poor suburbanized at the fastest pace, such that, by 2010 in the nation’s largest metro areas, the majority of every major ethnic and racial group and the majority of the poor lived in the suburbs for the first time.”

Even today, rents and home prices are significantly lower in the suburbs than their urban counterparts, which wouldn’t necessarily be so disparaging if the number of available jobs were enough to support the influx of residents. But they are not.

For Hispanics and black residents, the number of nearby jobs dropped by 17 and 14 percent, respectively, while declines for white residents were much less significant at only 6 percent. The pattern was similar among economic divides, as jobs for poor residents dropped 17 percent versus the 6 percent decline experience by the non-poor. But the impact on minorities and poor residents goes beyond the availability of jobs.

“Proximity matters for lower-income, lower-skill workers, in particular because they tend to be more constrained by the cost of housing and commuting,” researchers wrote.

As a result, thinning job options have resulted in a number of setbacks specific to those areas, including an increase to the duration of joblessness and a decrease in the chance leaving welfare, which has made finding a suitable dwelling challenging.

Leveraging the Research

By this point, you may be asking a valid question – how do these trends affect me as a real estate agent?

Simply, the problems facing minority and poor neighborhoods and residents, in terms of job availability and affordable housing, are overarching issues throughout the U.S., and they will undoubtedly affect what real estate markets your clients can access.

In light of its report, Brookings is urging decision makers and industry professionals to look beyond national and even regional trends and instead focus on individual neighborhoods, and how those demographics influence residents – good or bad.

“The increasing share of poor and minority residents living in the suburbs, and the emergence of more areas of concentrated disadvantage and racial segregation outside the urban core, raise new concerns about the ability of these residents to connect to employment opportunities in the first place,” the report reads.

The fix to these problems, as researchers pointed out, is not something that can be determined and implemented on a wide scale. Bolstering the positions of the underprivileged will require intimate insight into the areas in question, which is why agent’s initiative in this matter is so paramount.

By leveraging Brookings’ findings, as well as complementary research that’s regularly released and reported on, agents can help increase access to economic opportunity, which will mean “not only understanding the barriers that may impede these residents from taking advantage of nearby job opportunities, but also understanding that the new geography of these populations means that a growing number may not have many job opportunities to begin with.”

A big help or hindrance could come later this year as the Supreme Court plans to rule on a redefinition of the long-standing Fair Housing Act, which was originally authored to protect minorities from being discriminated.

As we reported earlier this year, the court has already heard arguments to redefine the FHA to include specific verbiage either allowing or denying policies with an unintentionally disparate impact. If the court rules to specifically bar unintentional discrimination, such as zoning laws that work to subvert construction efforts for low-income families, minorities and low-income families will benefit.

In the long run, changing the real estate landscape will require an encompassing effort from all sides of the industry, as well as the tertiary bodies that influence it.

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