In many areas, housing on the suburban fringe has gone rental. The shift indicates mobility on the part of renters who want to stay put, but could also be a precursor for a low-income future for the exurbs.

1 minute read

March 31, 2009, 1:00 PM PDT

By Judy Chang


"These communities have a low tax base made up mostly of property and sales taxes, both of which are in decline. Lawrence Summers, economic adviser to President Barack Obama, has often explained it this way: 'No one in the history of the world ever washed a rented car.'

What is happening on the urban fringe is similar to the urban decay that plagued cities after World War II, says Christopher B. Leinberger, a real-estate developer and visiting fellow at the Brookings Institution. 'Single-family homes and townhouses in cities were broken into rental units. Now, we're seeing that phenomenon move out to the fringe.'

More than three million homes have either been lost to foreclosure or a foreclosure-related sale between 2006 and 2008, according to Moody's Economy.com. And the decline in home prices and concentration of foreclosures is generally worse in outer-lying communities than in the central city or closer-in suburbs."

Tuesday, March 31, 2009 in The Wall Street Journal

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