Serious implications for the housing bubble – The Future of the Suburban Slum

As my regular readers know, the housing bubble in America has been one of my my frequent topics. After all, the advent of $700,000 condo has been the kind of event that portends all kinds of economic shocks to the future.

That’s why this week’s must read is from The Atlantic Monthly entitled "The Next Slum." It seems that many of the exurban developments on the outskirts of New York City, Charlotte, NC, and other communities were being built on the rickety foundation of subprime loans. Now that foreclosures are taking out as many as 66% of the residents, terrible things are befalling these new communities.

Crackhouses are springing up. Vandalism abounds. Pirates are busting in to strip out copper wiring to sell on the black market. (Chinese construction has driven the cost of basic minerals through the roof!) All this is the suburbs, the supposed home of safe, bland living.

Remember the riots in Paris a few years ago? They started in the suburbs, which are the centers of European poverty. The inner cities command the highest rents and the best development, while the suburbs have become teeming hives of socio-economic unrest. 

As demand for urban conveniences increase, could the suburbs be the dangerous neighborhoods of the future? It seems increasingly likely.

-Garland