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Residential Neighborhood
For the vest majority of people
who are looking for valuable property investment at an affordable price,
residential neighborhoods are where they start first. This is natural and very intuitive. However, the housing market is not what it used to be. After a period of relative stasis, the
housing market in the United States began booming again in the 1990’s.
This radically shifted many
of the dichotomies that people had grown accustomed too, and were planning
their financial future around. The
following guide should be used as tool, to identify the major principles and
misconception about residential neighborhoods and their over-all place in the
real estate market.
The FIVE fundamental features of a good investment
neighborhood.
Most great neighborhoods have an identifiable core
and edge. This means that you
should visibly know when you have entered the neighborhood, when you are
at its center and when you are leaving.
On the past, neighborhoods were defined as anything within a
five-minute walk from the core.
Now I’d say a five-minute drive is fair, but that doesn’t
incorporate many suburbs.
A mix of land use also characterizes great
neighborhoods. Commercial
buildings, with apartments, corners stores, plazas and apartment and
business complexes.
Building size diversity is also a crucial factor
in the success of a neighborhood.
You want some diversity in the skyline. It also usually means that you will have a more diverse
population.
Most importantly you need to look for
neighborhoods with sidewalks and interconnected streets. This is essential for human
interaction. Otherwise, you simply
have strangers passing each other in cars with tinted windows.
Parks and civic buildings should also play a
role in your neighborhood. They should be neat and accessible and available
to all. Regrettably, these usually
are best suited for the core, and therefore, the most expensive land. Thus, a balance needs to be achieved.
Suburban Growth Dilemma
It would seem like those
five factors for a great neighborhood, are not only common sense, but very easy
to implement. At one time they in fact
were. Now however, is a different
story.
Suburban growth has taken
over the United States like a wild-fire. Devouring land and leaving the
environment damaged. The main culprits
in this expansion are the southwest states.
With vast tracts of semi-arable land, local developers see no reason to
deny people the space they crave. For
instance, Phoenix Arizona is rapidly becoming one of the largest cities in the
US. This is mainly due to the huge
amount of flat (therefore, easy to develop) land at their disposal.
Their reasoning makes sense
as well. More people make for a higher
tax base, which means the government can distribute services easier. It also means that there are more workers, to
attract business, and the cycle continues.
Public opinion has shifted
somewhat in the past five years. The
growth has yielded some unexpected side effects that are lowing in the quality
of life in the oases in the desert. For
instance, the large spaces dictate that a car is an essential way to move
about. More cars, more traffic. The same can be said for schools, more
people, all middle class, almost all families equals more children which leads
to overcrowding in schools.
These inconveniences have led
to a ‘no-growth’ explosion.
Essentially, proponents of no growth hope that building, up, instead of
out, will solve these problems. Or, at
the very least, allow for municipalities to catch up and develop a strategy to
deal with these issues. They do not want to sop progress, and they are not
xenophobic isolationists who are paranoid of new people coming into their
neighborhoods and stealing their resources.
Instead they favor caution,
and balance. Here are some of their concerns.
Concerns you should be paying attention to if you are thinking of
investing in a neighborhood. In most
ways, the neighborhoods future is more important than its present.
Lack of balanced growth:
Many suburban neighborhoods can be described as
bedroom communities. Essential
this means that those who live there cause an imbalance between housing
and employment growth. Therefore,
the tax base does not rise in proportion to the number of people who
require services and, the vast spaced those services must reach. Therefore, these people favor
employment growth, to attract people, and no home growth to attract
apartments.
Lack of public
investment:
Taxes, taxes, taxes. We all hate paying them, but studies show that suburban
communities vote resoundingly for republican and right wing candidates who
attract business, but also lower taxes.
This puts a missive strain on communities who need those tax
dollars to provide essential services and investment.
Government’s still need money and right now,
American neighborhoods are stuck in one of the least efficient cycles in
the world. Fearful of raising
taxes, governments are forced to levy impact fees on new residents. This pays for stopgap band-aid
solutions. However, it does not
create balanced budgets, and it does not give governments the mandate to
make larger long-term investment that will pay for them in the long
term. In short: PAY YOUR TAXES!!!!
Low Density single-use
zoning is the devil:
This essential means, only building houses, or a similar size,
equal distances apart. This is not
a bad idea, but when the process gets repeated ad nausea, you start to get
a homogenizing effect. This
creates traffic and it wastes a lot of energy. Everything from gas to drive around the sprawl to running
underground cable is just more expensive.
Politicians and the public then shift the blame to commuters in the
city core, where traffic is more visible, but often these are just
car-dependant folks diving in from the suburbs to pick up a suit or get
their nails done.
Solutions:
While there are no absolute
answers to the problems of urban sprawl and the decay of the traditional
residential neighborhood, there are some steps we can take to reverse the
problems. The effect will greatly
stabilize future property investment and value, and help stabilize a market
that is spinning out of control.
“No growth” activists have
identified a few things that we can do to improve our neighborhoods and make a
better climate for investing in real estate.
Traffic Congestion:
Most people believe that increasing development
causes traffic in their neighborhoods.
While this is partly true, it is linked with a much more esoteric
problem. That is the national
obsession this country has with cars.
Cars per capita have grown at a much faster rate
than the population over the past two decades.
The average number of miles driven per person
has also risen dramatically.
Therefore, even if the population stopped
growing and not another home was built for a decade, there would be
continued rise in the number or cars and the miles the drive.
Common purpose:
Those who want to see their investments maintain
their value, and those who would like a cleaner environment are teaming up
all across the country to try and put an end to urban sprawl. What was once simply a local issue is
turning into a national crisis
Simply put, these networks organize and attempt
to find profitable compromises that they can propose to city governments
and developers. It also advocated
the collaboration between different disciplines when organizing a
development. For instance,
environmentalists, construction coordinators, policy officials and urban
planners all getting together to discuss the more cost effective and
responsible way to go about building a neighborhood.
Where are you Growing?
How much a community grows is just as important
as where it grows. Communities,
while separate from each other share so many of the same resources that it
makes sense to spread the wealth.
For instance, subdivision should be built along pre-existing
thoroughfares with built in infrastructure. So, don’t build away from a city build around it.
There is also evidence that deteriorating
infrastructure has a serious effect on citizen productivity. Therefore, the very limited tax dollars
available should be used to inexpensively repair existing infrastructure,
instead of the enormously costly venture of building new
infrastructure.
Mixed Use Zoning:
Easy
to say, harder to do. This takes a
lot of co-ordination (and quite a bit of trial and error) but what results
is a mixed city, where people can walk to work. Get fresh veggies on the table in five minutes, and an
overall improvement of civic life.
Most importantly it decreases automobile dependence. Something that is crucial to high value
cities. Imagine how much of a
selling point it would be to tell a prospective buyer that they could sell
one of their cars, and rarely pay for gas again. It’d be like giving them $10,000 as a credit on the home.
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