Have you seen the death of suburbia series from Business Insider? The sensationalist headline is a bit overblown, but they do make a compelling case. We’ve lived in downtown Portland since 2007, so we’re a bit out of touch with how suburban life is these days. The whole Portland metro is doing pretty well, though. The Portland suburbs seem to be thriving and it is very busy there. This area is probably not the right place to look for the death of suburbia. My question today is – How is your suburb doing? Is it dying like Business Insider reported? Or is this another click-bait headline?
Escape from the suburb
Personally, I never really liked living in the suburbs. The main selling point is that you can get a house with a yard for a reasonable price. However, you’d have to drive everywhere. The neighborhood is quiet and stable, but there aren’t a lot of fun activities unless you have a family of your own. I grew up in a suburban town and it was fine when I was young.
After I graduated from college, I moved to Portland for work. My old employer’s “campus” was in the suburbs so I lived in a nearby apartment for a year. Once I got familiar with the area, I decided to move downtown with a roommate because there were a lot more fun activities in town. I really enjoyed it because friends and co-workers can come hang out at our cool downtown apartment before and after going out. It was much more fun than living in the suburbs and it wasn’t that much more expensive. I lived in downtown Portland for a few years and moved back to the suburbs when we got married and purchased a house.
Living in the suburbs was nice because it was close to my work, but we never enjoyed it as much as living in town. Our 2,000 sq ft house was too big for just the two of us. Mrs. RB40 thought her family members would visit often, so we purposely looked for a house that had a guest room. They never visited. We also put off having a kid. In 2007, Mrs. RB40 got a job in the urban core so we decided to move downtown again. We’ve really enjoyed living downtown over the last decade. It just suits us better. We drive less, get out more, and connect with the local community better. The suburb wasn’t bad, but we just like living in the city better.
We’ll have to move soon, though. Our condo is starting to get too small. RB40Jr recently turned 6 and he will want his own room soon. Right now his room does triple duty as my office and a guest room for my mom. She stays with us 6-8 months out of the year. Luckily, we already have a plan for a short distance relocation. We can move into our rental home (duplex) and still be in the urban core. It’d be a lot harder for a young family to find an affordable house in the urban core area. That’s the main reason why people move out to the suburbs. Families with kids want a bigger home with a yard.
Are the suburbs declining?
Are the suburbs really dying or is it just a phase? Many baby boomers are downsizing and moving to the urban core. The Millenials also love living in a more energetic environment. I think the big driver really is the Millennial generation who are more frugal than previous age groups. They’ve been through the financial crisis and they don’t value a big house as much as the previous generations. However, once the Millenials start to have children, I’m pretty sure most of them will head back to the suburbs. There are other factors that are diminishing the suburbs, though. Americans are changing the way we live. Let’s go through them one by one.
Moving toward efficient living space
The average size of new single family homes is still growing every year. The Census Bureau reported the average size of a new house in the US reached an all time high of 2,687 square feet. However, a lot of Millenials are still struggling with debt and they can’t afford these big houses. Young Millenials prefer to live in apartments and they care more about saving money than buying a big house. They don’t mind living in a smaller space because they prefer to spend money on experiences. I can understand that. A smaller living space is perfectly fine as long as you can go out and have fun outside.
I don’t like big houses either because it is more expensive to live there. You pay more for utilities, insurance, property tax, and maintenance. We used to spend our weekends weeding the backyard instead of going out. You’d also need to buy more furniture and toys to fill up the big house. How many garages are used to store cars these days? It’s mostly filled with stuff. I prefer a more efficient living space in a location with a lot of amenities. That’s why the Walk Score is important to us. Yesterday, I walked to the gym, the library, and the grocery store. In the suburbs, I’d have to drive to all these locations. My fitness improves just by living in an area with a high Walk Score. Many Millenials agree with me and they don’t want to own a car anymore. You can’t do that in the suburbs.
Companies are heading back to the city
This one is news to me. Companies are closing traditional suburban office parks and relocating to the city. Young talents want to live in cities and companies are realizing that they need to accommodate them. Wow, Millennials are really driving changes. They are the biggest segment of the population and outnumber every other generation in the US. How did that happen?
I’ve noticed that employment has improved a lot in Portland over the last few years, but I thought that was due to remote work. Maybe companies really are moving back to the city. I haven’t looked for a job lately so I don’t really know. 😉
Suburban malls are in crisis
I don’t have any recent anecdotal stories here. We haven’t been to a suburban mall in ages. I know that anchor-stores like Macy’s and Sears are closing hundreds of locations. This kind of closing could easily kill off a mall. Once the anchor store closes, the other smaller stores see less traffic and they eventually go out of business, too.
These days, Americans increasingly prefer to shop online and malls are getting less and less popular. That’s too bad because I feel somewhat nostalgic about going to the mall. It was enjoyable when I was a kid. It’s not all bad news, though. High-end luxury malls in touristy area are doing well. However, that leaves out most regular suburbs so the integral part of the suburbia experience near you might be going away soon. Oh, outlet malls are still doing pretty well though.
Chain restaurants are less popular
I never liked eating at casual dining chain restaurants like Applebee’s or Red Lobster. The only time we eat at one is when we’re traveling. At home, we prefer to go out to local non-chain restaurants. These restaurants have more personality and the food is more authentic. Luckily, Portland is full of small independent restaurants so we have plenty of choices. Well, maybe not so lucky for the restaurants because even good ones go out of business all the time. It’s a tough environment for restaurants here.
Anyway, many casual dining chains are going down. That’s where suburbanites go to eat. Fewer choices mean they will have to drive into town to find good restaurants. Perhaps more family owned restaurants will fill the holes that the chains leave. Who knows?
Cities are safer now
Violent crime has been falling for decades and cities are much safer now. There is still a lot of petty crime in our area, but I feel relatively safe. We walk down the street every day and I’ve never felt threatened. There are also a lot more places to live in cities now. Many condos and apartments were built and renovated over the last 2 decades in Portland. The city feels lived in and we have a lot fewer scary deserted streets. There are a lot of homeless people here, but they generally mind their own business. I’ve never had any problem with them.
The roads and bridges connecting suburbia America are crumbling. According to the American Society of Civil Engineers, the US needs to invest $3.6 trillion to update our infrastructure by 2020. Yikes! That’s a lot of money. Our roads are pretty bad too and there are pot holes everywhere after this long winter. The DOT patched up a bunch of pot holes recently so it’s a bit better now.
The traffic is getting really bad in Portland. When I first moved here 20 years ago, we only had traffic jams during rush hour. Now, we have traffic jams a lot more often. Luckily, I don’t have to drive much anymore so I don’t have to worry about it too much.
Golf courses are shutting down
Okay, I have no opinion here. I don’t play golf and I don’t really think it’s an integral part of the suburbs. How is this even related?
Are the suburbs really dying?
Whew, it seems like suburbia is going through some tough changes. That’s not really apparent in our local area because the economy is doing well here and the housing market has been great. The Portland suburbs seem to be doing just fine. The traffic really sucks, but that’s just life in a city that doesn’t want to build roads. I don’t think the suburbs changed that much over the 20 years that I’ve been here.
The urban core, on the other hand, improved a ton. There are a lot more residential buildings, great restaurants, and vibrant food carts. Portland State University is expanding and renovating the south side of town. Public transportation has improved a lot, too. When I first moved here, we had one light rail line. Now we have 4 light rail lines, 2 street car lines, and the buses. There are a lot more music, film, cultural, brewing, and other kind of festivals than 20 years ago. Portland has grown a lot since we moved here.
What about your area? Has it changed since you lived there? Is your local suburban area dying or is this just another piece of “news” that’s been overblown?
As a side note, I’m having a big conundrum here. When we move into our rental home, should we sell our condo? The property price is going up and it might be wise to hold onto it. Mrs. RB40 really likes it and if she had a choice, she would never move. However, it is not going to produce positive cash flow if we rent the condo out. The HOA also has some restrictive rental rule like a $600 move in fee! (The HOA board went nuts a few years back.) We’ll probably just sell it to make life simpler and invest the money in dividend stocks or Realty Shares.
Image credit: Flickr Richard Elzey
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.