Death of the suburbs? Not in the Inland Empire

With the long-term trend towards higher energy prices, a major theme lately has been the death of the suburbs in favor of urban areas. In fact, on a global scale, cities are expected to continue increasing their percentage of overall population.

According to an article in The Economist, however, that doesn't necessarily mean the death of all suburbs, especially if they're located in Southern California's Inland Empire, or the IE. While the IE has seen housing prices plummet more than in neighboring Los Angeles or Orange counties, so far that's been due more to rising foreclosures and the use of sub-prime and Alt-A mortgages during the housing boom than higher fuel prices. And, according to the story, the IE has a few more tricks up its sleeve to benefit from the eventual rebound:

The Inland Empire is America’s warehouse: goods, mostly from China, are sorted and assembled there before being distributed across the country. Until recently increasing trade could be counted on to prop up the economy. Traffic through the ports of Long Beach and Los Angeles, America’s two biggest by container volume, levelled off only briefly during the early 1990s recession and continued to grow in 2001. Now it is declining. In June imports through the two ports were 15% and 12% below last year’s level. Moreno Valley’s office-vacancy rate is already the highest in the region...

The Inland Empire’s housing market did not collapse because people chose not to live in sprawling suburbs. They clearly did, hence the huge growth there. The problem was that buyers could not really afford the houses that were being built. Now they can...House-builders are at last creating smaller homes, and a few buyers are returning. Now the task is to ensure that neighbourhoods are not snapped up by slumlords...

Places like Moreno Valley retain two enormous advantages over traditional cities. They have lots of cheap, available land and a pool of workers keen to avoid the ever-lengthening commute to Los Angeles and Orange County. When it comes to attracting businesses, these two factors outweigh high petrol prices. The city of Ontario, which contains the Inland Empire’s main airport, already has more than two jobs for each home. Greg Devereaux, the city’s manager, reckons it will eventually have more than three.