For the past 70 years, U.S. housing has moved steadily further and further from the city center. This trend is ending. Demographically, most new housing will be for renter prone consumers. Moreover, effects of the crisis in the long term will reduce housing subsidies. This change will accelerate as the vote base moves away from home ownership. Without subsidies the efficiency and the environmental advantage of denser living and the convenience of the urban lifestyle will economically and socially drive families and households back to urban centers.From the depression era on as sited in a recent Time Magazine article, the American public and political system accepted homeownership as the most efficient means to expand a growing nation. Averaging $100 billion in subsidies per year, suburban housing promoted sprawl, created vastly greater energy requirements, and in effect created an economic hangover that will cost the United States decades to overcome.Now the crisis and developing demographic housing demand reverses the accepted view of home ownership. Consumers, business, and politicians are beginning to recognize that the time has come to reverse our move to suburbia and to take advantage of the economic capital our urban centers create. Additionally, with this developing trend the voter base is certain to begin weakening the housing subsidy structure that created this distorted development.Real estate investors must tread carefully on this topic. New construction placed in the wrong areas could prove very difficult to sustain. Some suburban areas are likely to fall into decline. Clearly, the country will continue to grow. Investors who can develop concepts that this emerging transformation will bring stand to make substantial sums.Some patterns to consider are the following:Cities will likely begin approving increasing density in zoning for business and housing. Markets well positioned for this are likely to find this a highly attractive growth strategy.
Cities in the more dense older suburban neighborhoods nearer the core will have an economic advantage. Accessing this advantage will lead to higher density per household structure than currently allowed.
Edge communities not supported by other trends will struggle and some will fall into ongoing decline.
Edge communities that find ways to convert to new economic centers supported by health care (for an aging population), knowledge work for an increasingly information dependent world, commodity distribution and commodity production for a growing global consumer demand will be winners.