The Rebirth of Suburbia, USA

November 11, 2014

Traditional suburban life as we’ve known it is melding with the “downtown” living experience. People are choosing to live in suburban locations where you can walk to dinner, the grocery store, the gym, or to the local coffee shop. With this renewed focus on living in walkable, suburban communities, retailers (large format and boutiques) have begun to take notice and are offering these suburbanites the amenities they are looking for close to home, further enhancing the viability of these markets.

Many of these “small town” communities were blue collar towns with local economies based on manufacturing. As the local manufacturing jobs left towards the end of the last century, housing became the dominant industry in the runup to the crash of 2008. The dramatic increase in housing supply, coupled with loose mortgage lending, made homeownership in some of these communities a very attractive proposition. The new residents buying single family homes were younger people who otherwise would have lived in multi-family properties, and this demographic shift helped buoy locales hit hard by the loss of the manufacturing sector. However, with the collapse of the housing market in the late ‘aughts, towns and municipalities realized they needed a more sustainable way to grow and have turned to density and multi-family rentals as a way to insulate against the ups and downs of the volatile housing market. We see this shift happening in communities (many of which are transit-oriented developments) such as Lansdale, Malvern, West Chester and Ardmore, with new mixed-use communities being planned that will define these towns for years to come.

Many of these use communities have always had a traditional “Main Street” feel to them: hardware stores, antique shops, comic book havens, a mom-and-pop pet store, etc. But we are now seeing national and regional retailers take notice of these changes as chef-driven restaurants, apparel retail, running stores, etc., are drawn in by the energy and vibrancy of these new communities.

One of the many small towns in our region seeing these changes is Lansdale. Lansdale is located just to the Northwest of Philadelphia along the Northeast extension of the PA Turnpike. The town is also located on one of the many SEPTA Regional Rail lines, making it an excellent candidate to develop around a transportation hub that provides an easy commute into Center City. Developers and retailers have taken notice of Lansdale in recent years and the changes are already starting to be felt. The historic Hager-Schultz building, located on Lansdale’s picturesque Main Street, only a stone’s throw away from the train station is being redeveloped with 13,000 SF of ground floor retail and apartments upstairs. Equus Capital Partners, a local multi-family developer, is eyeing a mixed-use project that would be constructed where the parking for the train station currently exists, similar to how mixed-use projects are being discussed in Ardmore and Downingtown’s River Station.

Going hand-in-hand with these new development patterns, we are seeing a rise in ridership numbers in public transportation across the country. SEPTA Regional Rail ridership is up 4% over last year and is up 50% over 15 years ago. In response to this increased demand, over the summer, SEPTA started a pilot project to run 24 hour subway service in the city and the response has been so positive that the program has been extended indefinitely.

These new development patterns show no signs of abating. Communities around the Delaware Valley have recognized that relying on single-family housing is not a sound way to have the kinds of livable, walkable communities that are now in demand and are looking at different ways to develop underutilized land in key locations. Towns that were built around transit, like Lansdale, are the ones that are best positioned to succeed because of competitive advantage rail brings. As demand for this kind of living increases, so will the profile of the towns that take advantage of it by building a diversified tax base, providing desirable amenities for residents and solidifying their future for years to come.

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