by Connie Barlow
A superb Op-Ed piece by Christopher Leinberger appeared in The New York Times on November 25, 2011:
The Death of the Fringe Suburb
That essay offers profound insights and trends for twenty- and thirty-somethings to keep in mind when buying a home in this new and volatile era. I view the signs of change as truly hope-filled. Nonetheless, as we peel away the layers of causality, we boomers are forced to see ourselves as the reason for much of the economic decline. Now it is our job to ensure that the lessons of this sixty-year history that we have lived through are not lost on the generations that follow.
Note: Please take a few minutes to read Leinberger's Op-Ed piece. Then return to this blog to consider two additional points I wish to make.
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First, a little background: My husband, Michael Dowd, and I have lived entirely on the road for ten years, occupying for a few days to a few weeks the guest rooms (or sometimes, vacation homes) of Americans affiliated with the churches and nonprofit groups that delight in the message we deliver as “America’s evolutionary evangelists”. Accordingly, we have, in a sense, been sampling and eavesdropping on the lifestyle of Americans our age and older — that is, couples whose kids are grown and out of the house, and who are wealthy enough to live in a home that has a spare room (sometimes an entire wing) for guests. We have carved out an odd career and lifestyle that utterly depends on the generosity of others: we live almost entirely in homes that we ourselves could never afford.
Thanks to this amazing opportunity to sample middle-class American homes and standards of living, I now offer two insights that perhaps will help Gen X, Gen Y, and the Millennials avoid the mistakes that we boomers have made — mistakes we have made mostly as a group, not because we are especially foolish or self-centered as individuals.
Mistake number 1: MIS-JUDGING WHAT MAKES FOR QUALITY OF LIFE
Time and again, surveys have shown that people who choose a home for the wonderful nature-filled yard (but a long distance from anything), find themselves oppressed by a long commute or isolated because it takes too long to drive anywhere to extra-curricular events (for themselves or their lonely kids), especially in inclement weather.
Even though I am a nature fanatic (and feel like the luckiest person alive when my husband and I are offered a month or more hospitality at someone’s vacation home in one of the unbelievably large number of astonishingly beautiful nooks in North America), I have also delighted in getting a chance to live a few days at a time in high quality urban and established suburban settings. Michael and I have often been hosted by folks who have been living in the same neighborhood for 30 or 40 years — the traditional suburbs of the 50s and 60s. Though the homes we have been invited into would have been regarded as the wealthier neighborhoods decades back, today those homes don’t have enough square-footage, bathrooms, and garage space to be attractive to the “wealthy” anymore. The reasons for my fondness of these older “inner suburbs” are four-fold:
- It is just a walk or short drive to the store and post office and other venues.
- There are actual sidewalks in the neighborhood; one doesn’t have to walk in the street (nor drive kids a long distance to play with other kids).
- The trees (whether or not they were large to begin with) are now extravagant and represent a far greater diversity of species, even slow-growing oaks, than one finds in new developments that are turning into ghost towns in farmlands-turned-exurbs.
- The homes tend to be smaller and hence fully used; untouched dining rooms and living rooms are rare, as are energy-extravagant cathedral ceilings.
My point is this: older neighborhoods are not only still thriving; for many reasons (as presented in Leinberger’s Op-Ed piece) these are the locales that youngers should think about moving into themselves.
Mistake number 2: INVESTING FOR RETIREMENT
My second point is not one that was covered in the recommended Op-Ed piece. Indeed, I haven’t encountered anybody else writing on the housing collapse or Wall Street madness from quite this angle. Here is my take:
Boomers invested in extra homes (especially, homes larger than most of us would want to retire into), as we expected to resell those homes for a large profit. Boomers also invested in the stock market because of a new phenomenon initiated by our parents’ generation: old folks no longer expected (nor wanted) to move in with their adult offspring. When we boomers were kids, we ourselves (or at least some of our friends) had grandparents living with us in our home. That was normal in the 50s and 60s. The grandparents did not save a huge sum for retirement, and few got pensions. Back then, grandma got a bedroom to herself and was expected to help out with the kids and cooking some meals. Her social security check was fully adequate for covering her share of the mortgage (for that extra room) and she certainly earned her food costs by the help she gave in the kitchen and with the kids.
In my case, my father’s parents lived with us in, what would have been, the master bedroom. They had a private attached bath and their bed folded into a sofa during the day. They had a little cookstove and refrigerator and tiny “kitchen” table in their room too, and their TV set was on top of the clothes dresser.
That is not the future we boomers intend for ourselves. Also, we expect to live a lot longer after retirement than our grandparents did — and to spend those years taking excursions, golfing, shuttling between our regular home and our vacation home — indeed, intending to live rather extravagantly because many of us have been working just too darned hard. At least, that was our plan before our stocks, real estate, and 401k accounts tanked.
In contrast, our grandparents never even considered those activities. They were happy (at least as happy as anyone expected to be in those days) staying close to home, feeling useful for the next generations, perhaps tending a small vegetable garden.
Of course, changing demographics and the fact that few boomers can expect their adult children to be living anywhere near where they were raised (nor to remain in that locale for long) will make it nearly impossible for grandma or grandpa boomer to happily move in with our adult children. Long-time friends and community groups would have to be left behind — and maybe repeatedly as the kids keep following jobs, mates, and dreams around the country.
All this means that, unlike my grandparents’ generation, most of my peers have assumed that they have to save a quarter million dollars or more before they can safely retire. That is a quarter million dollars per couple that must be “invested” somewhere over the course of decades that it is stashed away. Once upon a time, one simply put money into a savings account. But boomers viewed savings accounts as a loss — no profit there, and with interest rates lagging behind the rate of inflation. The only two places to invest, really, were the stock market and real estate — hence the crash of both of those institutions.
The result of this extraordinary drive to “invest” for retirement was this: huge sums of money were taken out of the real economy and stashed in the casino called Wall Street and in vacant lands and overbuilt housing called real estate. That money was not available for spending on the next generations. Instead, we let the infrastructure that we share communally (roads, bridges, parks, sewers) decline. We pulled state and federal taxes out of the subsidies that we formerly invested in colleges. Instead, we forced the younger generations to pay enormous sums for higher education and thus to be saddled with debt. Consciously or not, we allowed the marvelous infrastructure that we inherited from the Eisenhower era to rust away. Not to worry: “Be, here, now!” Remember?
CONCLUSION: The point of this essay is to let the younger generations know that it is not just Wall Street that screwed them over, but a massive shift in how ordinary Americans came to use and invest their earnings. It is my generation and the one older that made it possible for Wall Street financiers to become garishly wealthy doing nothing of use (and in the case of derivatives, doing much harm). It is my generation that invested in land and new homes that we knew we would not want to retire into, and that would be flagrant energy guzzlers (both in home heating and in gasoline for commutes and errands). I think we had an inkling that our kids could not afford, nor would they want, to live in such wastefulness. But all we needed to do was to resell that McMansion in five or eight years to someone else of our generation who was looking not for a home but for an investment — an investment for retirement.
MY DREAM: My dream is not that Grandma Boomer and Grandpa Boomer turn the pages of history back and go move in with the kids and grandkids. Those days are over for the reason I mentioned earlier: the kids keep moving from city to city and state to state. Rather, I’d like to see two new forms of high-density, low square-footage housing that 20-somethings just starting out and retiring boomers would occupy. (Noise from stereos would not be a problem, as earbuds would be required and no loud parties by anyone choosing those special, low-rent digs.) We olders would choose to occupy such housing not only because our investments failed, but because paring down to simple living would bring a joy to life that we haven’t known since the 60s and the 70s.
Such lost-cost housing developments, of course, must be located near a greenway or park in walking distance, and a grocery a short walk or taxi or bus ride away. There must be sidewalks; there must be trees. Neither we olders nor the youngers just starting out would have to own a car. We wouldn’t mourn a lost opportunity to golf or to cruise. We would be happily engaged in our patch of community garden, volunteering in local schools, joining birdwatching groups in the parks, mentoring the twenty-somethings, and finding real community with peers just around the corner or across the street.
Imagine this: we would be able to pretty much live on our Social Security checks, just like our grandparents did. And no generation, ever again, would be tricked into “saving for retirement” in ways that impoverish and threaten the health and wellbeing of those who follow.