The housing bubble is back, and I don’t think that we should be surprised. The housing bubble is actually a subset of a much larger over-valued system: The American Way of Life. Houses are to the entire Rube Goldberg apparatus of car dependency what fancy bathrooms and commercial grade kitchens are to the suburban home whose owner is trying to cash in on 21st century Tulip Mania.
Houses are different from tulips of course, they can have lasting intrinsic value. The operative word there is “can”. Housing has value if it provides shelter within range to the sheltered of some means by which to produce or acquire the things those abiding in the house need to survive. For thousands of years limits in transport arrayed housing and people on the land in a continuum from urban to rural which corresponded roughly to levels of interdependency and self sufficiency.
Trains and trolleys made some alterations to those calculations in the 19th and early 20th centuries, but the automobile and the limited access highway have altered it so thoroughly that it almost seems to have disappeared; it hasn’t. But it has created heretofore almost unthinkable anomalies: people living in dense communities with the appearance of having a great facility to provide for basic needs and yet being “food deserts; meanwhile others live dozens and dozens of miles from food outlets on enormous completely unproductive plots of land and yet access “Power Centers” with an almost unimaginable array of food products.
The simple graphs of M King Hubbert and the calculations of Chuck Marohn point to the finite nature of the experiment. The whole expanded Euclidean zoning concept, expanded by placing dirty industry in a specialized production zone called “China” (or “Jina” if you’re the president elect), relies on one ubiquitous but horribly inefficient enabling device which is the car. It’s time we see the car for what it is: an emblem of complete and total failure. It is the complex doo-dad, thingamajig that we need to attach to the system in order to make it work when thousands of societies have done all the things we’re trying to do without it for millennia.
For our society car dependency makes us uncompetitive once the circumstances which have enabled it substantively change. The huge expense of creating an infrastructure for the car seems justified by the perceived value it creates; just as $30,000 bathrooms and Viking kitchens with Italian marble seem justified by the perceived value they create during a housing boom. They aren’t. Someone will be left holding the bag.
“The bag” in this case is the over-valuation of an enormous amount of what we’ve built in the country over the last 65 years. What is interesting to contemplate is what value will be retained and where after the car dependency bubble bursts. It’s easy to point to current walkability and say “there you go, future value”, but I think it will be much more surprising than that. Will scale be helpful or harmful, and at what levels? Will the politics of keeping society from cracking up give major metro areas an advantage? Will Herculean efforts be made to say “feed New York City” mean that small metros will suffer? Will the suburban housing like we have in this part of New England, a region which has experienced only minimal population growth in the last 80 years, be transformed into farmer or farm worker housing given the enormous undeveloped land that sits around it?
This whole thing is a bubble. Much of what passes for value is really more liability than wealth. Somewhere in Holland though, there’s still a farmer growing tulips and making a good living. Someone is buying pet food online too, if not from pets.com. And on this continent in 50 years many places will be occupied (I hope) and have value because they will be productive or will provide access to productivity. Which places those will be is anybody’s guess, but as the dust clears what we shall see will have a lot more in common with the period from 1,000 B.C.E. to 1930 C.E. than to what we perceive today.