[lbo-talk] Krugman's Latest Column

Chuck chuck at mutualaid.org
Sun Jan 1 21:29:32 PST 2006


mike larkin wrote:
> January 2, 2006
> Op-Ed Columnist
> No Bubble Trouble?
> By PAUL KRUGMAN


> In Flatland, there's plenty of room to build houses,
> so house prices mainly reflect the cost of
> construction. As a result, Flatland is pretty much
> immune to housing bubbles. And in Flatland, houses
> have, if anything, become easier to afford since 2000
> because of falling interest rates.

Most of the Kansas City metropolitan area is Flatland, especially Johnson County where I currently live. It's very inexpensive to throw up new houses around here--the bigger the better. The Kansas City area has been in an economic bubble since 1980--all of the recent recessions haven't really touched Kansas City.

The growth areas around KC are North Kansas City (near the airport), Blue Springs (on the east side), Lee's Summit (southeast side), and of course Johnson County (southwest side).

The growth in Johnson County continues to be explosive. New developments are going up between 135th st and 199th St (the southern county line) and between the KS-MO state line on the east and Olathe on the West. You would be amazed at the amount of high end retail going up along 135th st. I read an article several months ago that said that there was something like $5 billion in consumer spending within a five mail radius of the retail intersection of 135th St and Metcalf.

All of this is incredibly surreal to me, since my family moved to Leawood from southern KCMO in 1977. One of the primary reasons why I turned into an anti-capitalist and anarchist was because I saw what capitalism was doing to the land here. And that was before I moved away, before the second and third waves of the suburban explosion.

The intersection of 135th and Metcalf used to be the crossing points of two two-lane highways. Right now they are building more chain store crap on the southeast corner, which used to have a small pond where we high school kids would have our field parties.

In "What's the Matter With Kansas," Thomas Frank talks about another intersection in Leawood, that being the intersection of 119th and Roe. When my family moved out here in 1977, I was in middle school. I used to bike over to this intersection, which was a challenge because it involved riding down the gravel road that was 119th. Roe was just a lonely two lane wannabe highway. The intersection had a stable on one corner and corn and soybean fields on the other corners.

They recently tore down the Shell station that was on the site of the stables in order to build a new development featuring Crate and Barrel. The other corners have their strip malls. One corner features a Dean and Deluca and behind that is the huge Town Center mall (where I go for movies and the Barnes and Noble).

My parents have a nice house, but it won't appreciate in value because of the Flatland phenomenon. The house is getting older, but the neighborhood is nice and the location is excellent.

The Flatland phenomenon in JOCO is also built on the years of white flight from KCMO into the Kansas side of the metro area. People moved to JOCO because of racism and the schools. The suburbanites have little to no interest in moving into the city, except for empty nesters and other folks who are moving into all of the new condos downtown. They've built so many condos downtown and on Hospital Hill that you would think that gentrification would start kicking in. I'm skeptical. I think they've overbuilt new condos and with more office building being converted to condos the condo market will tank.

Who's going to move into these condos? There aren't that many jobs downtown, so there isn't the big city dynamic at work--like in Northern Virginia--where people hate the traffic and want to move closer to downtown. The jobs are scattered around KC. Young urban professionals? Possibly. Empty nesters? More likely, but it's still cheaper to build a smaller rural dreamhouse than it is to move back into the city.

Families won't move into these condos because everybody thinks that the KCMO schools suck. Last summer I was helping a retiring Trotskyist professor get her house ready to be sold. She lived in a nice neighborhood near UMKC. The real estate agent told her bluntly that she would have a touch time selling the house, because most families would prefer houses in JOCO. The agent told my friend that only single people, young couples and Catholic families would consider her house.

Perhaps Krugman is right about Flatland having some insulation from economic shocks, but living in Flatland I can see and hear the cracks quite clearly. The houses may be cheap here and the crime rate low and schools excellent, but KCMO's Flatland is dependent on the automobile. I've long described Kansas City as the "L.A. of the prairie." We have a terrible problem with sprawl. You have to own a car here. The traffic here isn't bad, but you got to spend lots of money on gasoline and car repairs. Whenever the gas prices go up, I hear about it from my folks. Last September, during the spike in gas prices, ridership on buses in JOCO shot way up, which goes to show that people here may be middle class, but they are sensitive to even modest increases in energy costs.

The other looming problem with Flatland is social isolation. The Kansas City Star recently ran a series on why the dating scene sucks so badly here in Cupcakeland. They talked to lots of singles and polled them on why they thought dating was so tough. The geography of the area did get some votes, but I think this "problem" is a symptom of the social isolation in Kansas City caused by suburban sprawl, car culture, convenience, work culture, and new technologies. People here in Cupcakeland aren't just bowling alone, but they spent most of their days in isolation from other people. Kansas Citians go to work and they go home. They don't do much else, which is why the streets here are deserted after 7 p.m.

I dunno. I think people are going to get angry and frustrated one of these days and things will happen.

Chuck



More information about the lbo-talk mailing list