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Real Estate News December 4, 2008, 3:16PM EST

Earning More, Commuting Farther

(page 2 of 2)

The majority of middle-class Americans seem to want a more suburban lifestyle, possibly because inner-city public schools are weak but also because they value space. In 1955, before the national highway system was developed, the median home was 1,000 square feet and had 3.6 people living in it, said Al Lee, director of quantitative analysis at PayScale.com. Now, the median home is 2,400 square feet and shelters 2.3 people, he said.

"Even for people who could afford to buy a shorter commute time, the typical person was deciding to take the trade-off for a bigger yard and a nicer house in a nicer neighborhood," Lee said. "They were valuing private space vs. public space."

But Lee said there was evidence that a small percentage of those earning more than about $120,000 were returning to some urban cores, many of which had a boom in high-end condos in recent decades.

Rethinking Suburbs

Christopher B. Leinberger, a visiting fellow at the Brookings Institution in Washington, whose development company, Arcadia Land, builds mass transit-oriented communities, said people have a hunger for walkable communities near jobs and public transportation, even in the suburbs. Government policies in suburban communities need to be changed to allow denser mixed-use developments close to train stations because it's what people want, he said.

"My research shows there's a pent-up demand for walkable urban communities," Leinberger said. "Look at the folks living in Battery Park [in Manhattan], which is filled with families that are living in a very vertical family lifestyle. People want choice."

Wealthier people in our society have more choice as to where they live but often less choice when it comes to where they work. A McDonald's (MCD) worker will likely choose to work at the branch nearest his home. A nuclear physicist or a professor of Romantic literature have to go where the jobs are, said Alan E. Pisarski, author of the Commuting in America series of books and one of the nation's experts on commuting patterns. Also, many professionals have two earners in their household and, thus, at least one of them is likely to have a long commute, he said.

"The idea of living outside the factory gate is 1908, not 2008," Pisarski said.

People these days change jobs often and therefore shy away from moves because they aren't sure where the next job will be, he said. The real estate downturn has also put restrictions on their ability to move.

Workers such as Campaña would rather commute a longer distance within a given metro area than move. Employers are also reluctant to pay relocation expenses to attract candidates from across the country and would rather find candidates living within commuting distance.

"Having a job where you have to relocate the whole family is becoming a lot less common," Campaña said. "I don't feel that I have to be tied to working in a single city. Many people are thinking that way."

Jobs Move to Suburbs, Too

But many jobs have followed workers to the suburbs, especially to wealthy communities that have attracted large corporate office parks. Wealthy towns like office parks because they generate tax revenue. Those towns dislike rental housing because poorer people don't bring in much tax revenue and require schools and other expensive services, said Robert Cervero, professor of city and regional planning at the University of California at Berkeley.

"This is American democracy at play," Cervero said. "The market leads to settlement patterns. Seclusion is a fact of life. Well-heeled Americans send their children to private schools and separate themselves in communities of high-end housing."

Click here to see the U.S. cities where people are willing to travel the farthest for the most money.

Business Exchange related topics:
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Middle Class Finances
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Gopal writes about real estate for BusinessWeek.com in New York.

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