Posted by: Peter Black | October 7, 2008

Sprawl = Higher Foreclosure Rates

sprawl.jpg

Take a look at the two interactive maps below. The first shows the most up to date foreclosure data from across the US by zip code, generously shared with EDF’s Climateatlas from hotpads.com. The other map shows the population growth, also by zip code, during the time frame of 2000-2003. Notice anything? Yep. The communities that had the highest population growth rate between 2000-2003 have the highest foreclosure rates in the country right now.

Communities that have greater than or equal to 1% foreclosure rate grew at 4 times the national average

Sprawl in the last 15 years has been well documented. The combination of cheap land and cheap gas allowed builders to create more homes in areas further afield from metropolitan centers. However, as gas prices and adjustable mortgages rates rose, the people who had been lured out to the fringe began to struggle to make their payments. Some folks were apparently spending upwards of 25% of their household incomes just getting to work.

The population growth rate for the US in the period of 2000-2003 was about 0.7%. In zip codes greater than or equal to 1% foreclosure rate (national average is about 0.3%), the growth rate during that ’00-’03 period was 4.3 times the national average. As you can see from examining the maps, there is a direct link between where foreclosures are the worst and where sprawl is the norm.

As we progress through turbulent economic times, we should be more conservative in our building and growth policies. The message is clear: sprawl predicated on cheap energy is not sustainable for the environment or American prosperity. Fortunately, EDF Staff has been working on this issue for years. In testimony before the Senate this year, Andy Darrell made the case to reduce our dependence upon foreign oil by investing in our transit infrastructure. Jim Tripp, EDF’s General Counsel has long been an advocate for smart growth initiatives, especially in the New York City area. His team and I are working on growth alternatives in the New York Highlands area just upstate from the city. And in one of the areas hit worst by the foreclosure crisis, Kathryn Phillips has been advocating for an innovative regulation that could help clean up the Central Valley’s air quality, reduce greenhouse gas emissions, and encourage smart growth alternatives.

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Responses

  1. I will be following this post up with some summary statistics for certain geographic entities (state, city, MSAs) and will post these as comments.

    Here are the state summary statistics.

    Average Foreclosure rate

    NV 8.98%
    AZ 2.88%
    CA 2.13%
    FL 1.36%
    CO 1.11%
    GA 0.56%
    MI 0.47%
    UT 0.46%
    IL 0.45%
    TX 0.43%
    TN 0.39%
    OH 0.36%
    IN 0.30%
    VA 0.28%
    WA 0.27%
    MO 0.26%
    NJ 0.24%
    NC 0.21%
    KY 0.20%
    DE 0.19%
    OR 0.19%
    ND 0.17%
    NY 0.17%
    RI 0.17%
    AR 0.16%
    IA 0.16%
    MA 0.16%
    ID 0.15%
    WY 0.15%
    SD 0.13%
    WI 0.13%
    MN 0.12%
    OK 0.12%
    CT 0.11%
    NH 0.11%
    PA 0.11%
    AK 0.10%
    MD 0.10%
    SC 0.10%
    MS 0.09%
    DC 0.08%
    LA 0.08%
    ME 0.07%
    NM 0.07%
    VT 0.06%
    AL 0.04%
    KS 0.04%
    MT 0.04%
    NE 0.04%
    HI 0.03%
    WV 0.02%

    Average Population Growth Rate 2000-2003(%)

    NV 3.35
    AZ 2.59
    CO 2.29
    FL 2.01
    GA 1.82
    DE 1.72
    UT 1.71
    NC 1.48
    TX 1.34
    CA 1.32
    WA 1.18
    SC 1.18
    MD 1.17
    TN 1.12
    ID 1.11
    VA 1.06
    NH 1.00
    HI 0.96
    WI 0.85
    NJ 0.76
    NM 0.70
    VT 0.64
    RI 0.64
    AL 0.63
    AR 0.63
    OR 0.62
    IN 0.61
    MI 0.59
    MN 0.58
    MS 0.56
    MO 0.55
    KY 0.51
    CT 0.50
    ME 0.49
    MA 0.48
    WY 0.38
    IL 0.34
    LA 0.34
    PA 0.29
    NY 0.27
    DC 0.26
    OH 0.25
    OK 0.20
    AK 0.18
    IA 0.05
    KS 0.03
    MT -0.05
    NE -0.05
    SD -0.09
    WV -0.14
    ND -1.13

    As you can see, 8 out of the 10 worst states in terms of foreclosures per household were also the fastest growing states early on this decade. What’s remarkable about that is that the data is pretty fine grained, being at the zip code level. Yet even when I aggregate up to the state level, the patterns are still there.

    It will be interesting to summarize this data by MSAs, and cities as well. More to come…

  2. This is a huge amount of information to process. It is not difficult to understand how the great American dream of homeownership drives people to these huge sprawling communities. Cheaper is certainly not always better. We now also know that the divorce rates are much higher when people have to travel long distances to get to work. Time with family also needs to be considered, not just the price of housing and gas.
    One thing that really concerns me is the complete lack of trees in the sprawl picture.

  3. In most communities in the country mixed use zoning is illegal. A simple answer that could help would be to legalize mixed use zoning so that more people could work, go out to dinner, and have services in close proximity to where they live.

  4. PBS has done an excellent piece on this topic: http://www.pbs.org/now/shows/440/index.html

  5. Peter, is there any chance you can post these maps again – here or somewhere else? I found them very useful and would like to use them – with appropriate acknowledgement – in a presentation here in Melbourne, Australia next week.

    Kind regards,
    Gabrielle Kuiper

    Environment Director
    VicUrban


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