Residential Neighborhood

For the vest majority of people who are looking for valuable property investment at an affordable price, residential neighborhoods are where they start first. This is natural and very intuitive. However, the housing market is not what it used to be. After a period of relative stasis, the housing market in the United States began booming again in the 1990's.

This radically shifted many of the dichotomies that people had grown accustomed too, and were planning their financial future around. The following guide should be used as tool, to identify the major principles and misconception about residential neighborhoods and their over-all place in the real estate market.

The FIVE fundamental features of a good investment neighborhood.

Most great neighborhoods have an identifiable core and edge. This means that you should visibly know when you have entered the neighborhood, when you are at its center and when you are leaving. On the past, neighborhoods were defined as anything within a five-minute walk from the core. Now I'd say a five-minute drive is fair, but that doesn't incorporate many suburbs. A mix of land use also characterizes great neighborhoods. Commercial buildings, with apartments, corners stores, plazas and apartment and business complexes. Building size diversity is also a crucial factor in the success of a neighborhood. You want some diversity in the skyline. It also usually means that you will have a more diverse population. Most importantly you need to look for neighborhoods with sidewalks and interconnected streets. This is essential for human interaction. Otherwise, you simply have strangers passing each other in cars with tinted windows. Parks and civic buildings should also play a role in your neighborhood. They should be neat and accessible and available to all. Regrettably, these usually are best suited for the core, and therefore, the most expensive land. Thus, a balance needs to be achieved. Suburban Growth Dilemma

It would seem like those five factors for a great neighborhood, are not only common sense, but very easy to implement. At one time they in fact were. Now however, is a different story.

Suburban growth has taken over the United States like a wild-fire. Devouring land and leaving the environment damaged. The main culprits in this expansion are the southwest states. With vast tracts of semi-arable land, local developers see no reason to deny people the space they crave. For instance, Phoenix Arizona is rapidly becoming one of the largest cities in the US. This is mainly due to the huge amount of flat (therefore, easy to develop) land at their disposal.

Their reasoning makes sense as well. More people make for a higher tax base, which means the government can distribute services easier. It also means that there are more workers, to attract business, and the cycle continues.

Public opinion has shifted somewhat in the past five years. The growth has yielded some unexpected side effects that are lowing in the quality of life in the oases in the desert. For instance, the large spaces dictate that a car is an essential way to move about. More cars, more traffic. The same can be said for schools, more people, all middle class, almost all families equals more children which leads to overcrowding in schools.

These inconveniences have led to a no-growth explosion. Essentially, proponents of no growth hope that building, up, instead of out, will solve these problems. Or, at the very least, allow for municipalities to catch up and develop a strategy to deal with these issues. They do not want to sop progress, and they are not xenophobic isolationists who are paranoid of new people coming into their neighborhoods and stealing their resources.

Instead they favor caution, and balance. Here are some of their concerns. Concerns you should be paying attention to if you are thinking of investing in a neighborhood. In most ways, the neighborhoods future is more important than its present.

Lack of balanced growth:

Many suburban neighborhoods can be described as bedroom communities. Essential this means that those who live there cause an imbalance between housing and employment growth. Therefore, the tax base does not rise in proportion to the number of people who require services and, the vast spaced those services must reach. Therefore, these people favor employment growth, to attract people, and no home growth to attract apartments.

Lack of public investment:

Taxes, taxes, taxes. We all hate paying them, but studies show that suburban communities vote resoundingly for republican and right wing candidates who attract business, but also lower taxes. This puts a missive strain on communities who need those tax dollars to provide essential services and investment. Government�s still need money and right now, American neighborhoods are stuck in one of the least efficient cycles in the world. Fearful of raising taxes, governments are forced to levy impact fees on new residents. This pays for stopgap band-aid solutions. However, it does not create balanced budgets, and it does not give governments the mandate to make larger long-term investment that will pay for them in the long term. In short: PAY YOUR TAXES!!!!

Low Density single-use zoning is the devil:

This essential means, only building houses, or a similar size, equal distances apart. This is not a bad idea, but when the process gets repeated ad nausea, you start to get a homogenizing effect. This creates traffic and it wastes a lot of energy. Everything from gas to drive around the sprawl to running underground cable is just more expensive. Politicians and the public then shift the blame to commuters in the city core, where traffic is more visible, but often these are just car-dependant folks diving in from the suburbs to pick up a suit or get their nails done.


While there are no absolute answers to the problems of urban sprawl and the decay of the traditional residential neighborhood, there are some steps we can take to reverse the problems. The effect will greatly stabilize future property investment and value, and help stabilize a market that is spinning out of control.

No growth activists have identified a few things that we can do to improve our neighborhoods and make a better climate for investing in real estate.

Traffic Congestion:

Most people believe that increasing development causes traffic in their neighborhoods. While this is partly true, it is linked with a much more esoteric problem. That is the national obsession this country has with cars. Cars per capita have grown at a much faster rate than the population over the past two decades. The average number of miles driven per person has also risen dramatically. Therefore, even if the population stopped growing and not another home was built for a decade, there would be continued rise in the number or cars and the miles the drive.

Common purpose:

Those who want to see their investments maintain their value, and those who would like a cleaner environment are teaming up all across the country to try and put an end to urban sprawl. What was once simply a local issue is turning into a national crisis Simply put, these networks organize and attempt to find profitable compromises that they can propose to city governments and developers. It also advocated the collaboration between different disciplines when organizing a development. For instance, environmentalists, construction coordinators, policy officials and urban planners all getting together to discuss the more cost effective and responsible way to go about building a neighborhood. Where are you Growing? How much a community grows is just as important as where it grows. Communities, while separate from each other share so many of the same resources that it makes sense to spread the wealth. For instance, subdivision should be built along pre-existing thoroughfares with built in infrastructure. So, don't build away from a city build around it. There is also evidence that deteriorating infrastructure has a serious effect on citizen productivity. Therefore, the very limited tax dollars available should be used to inexpensively repair existing infrastructure, instead of the enormously costly venture of building new infrastructure.

Mixed Use Zoning:

Easy to say, harder to do. This takes a lot of co-ordination (and quite a bit of trial and error) but what results is a mixed city, where people can walk to work. Get fresh veggies on the table in five minutes, and an overall improvement of civic life. Most importantly it decreases automobile dependence. Something that is crucial to high value cities. Imagine how much of a selling point it would be to tell a prospective buyer that they could sell one of their cars, and rarely pay for gas again. It'd be like giving them $10,000 as a credit on the home.