The Dark Side of Housing/Commercial Building Starts

When housing and commercial building starts data are released and they show a jump there is generally a positive reaction. They seemingly show that the economy is back on track or that is it is growing and that people are being put back to work.

But is it good news? Not necessarily from the green or economic points of view.
And here's why. If the new buildings are being built on open space and not as replacements for older homes, offices, stores, and factories on existing land that is sprawl, which eats up more resources--environmental, infrastructure, services, and taxes--than it generates in income.

Commercial building, especially offices, is not a good sign because it shows that many companies still don't get it--that you don't need as many offices as you have--because half if not more of the work can be done at home. Which helps the public good by eliminating pollution-creating commutes and helps corporate survival by doing away with needless expenses.

Sprawl also leads to vast areas of already-services dying areas, locales that have become infested with crime that infects its way to the suburbs i.e. where the money is--as any drive through any mid to large city will attest. Crime does pay and in more ways than one. Ask any supplier to the law enforcement and prison biz. Money that in reality is a drain on the economy as it comes directly from the public purse than in turn subtracts from the public income.

Such starts also worsen the plight of existing owners and their communities by depressing prices. Many are already underwater and are walking away. More new homes and buildings at a time when the economy is weak will accelerate this exodus. It makes no sense to build new homes when existing ones are being foreclosed and abandoned.

Unfortunately there is an incestuous relationship between contractors, developers, and local politicians that encourages sprawl. Campaigns even in the smallest cities require serious money--I know, I ran for local office once--and developers have the cash.

There is also a collective leeching of resources from older and more efficient cities by outlying less-efficient car-oriented exurbs, such as blocking money to support mass transit. Many businesses and residents in these communities would like nothing more than to erect barbed-wire moats to keep the inner city out. One contact center company manager told me that when they picked a site in the exurbs they deliberately chose it not to be on a transit route to thwart central city residents i.e. "those people" (their quotes, not mine) from applying.

Fortunately there is an enlightened Administration in Washington D.C, which is the first one that recognizes the dark side of growth i.e. sprawl, with a President who understands all too well the issues and the consequences. 

The White House can do a lot by its control of federal highway and infrastructure dollars by rewarding those cities that encourage brownfield not greenfield developments, renewing not destroying housing and commercial building stock and neighborhoods, that create jobs that support not to ruin communities and the environment. And in turn limiting or cutting off cash to those that insist on sprawl which studies show clogs up added highway capacity in 4 to 5 years...a needless and destructive waste of tax dollars that consumers and businesses can ill afford to see happen.

In short, doing more and better with less instead of wasting land, resources, people, and the environment. That's the kind of positive news we need.