Rural Exodus?
Sharon May 2nd, 2007
For a while now, I’ve been arguing that the first phase of peak oil will see a lot of people leaving rural and exurban areas to live closer to jobs/schools/public transportation. Even though that’s the exact opposite of what we need to have happen, it seems to me inevitable. We’re seeing preliminary signs here, including a group of 8 butt-ugly McMannsions that have now been on the market 14 times in less than 6 years, and a reader in Vermont may be the real canary in the coal mine. She lives in a rural town a good ways from a major city, and she reports that at a recent community event, many of her friends told her they were either moving or planning to move because it was simply too difficult and expensive to commute to work, drive the kids back and forth to activities and school, etc…
This isn’t at all surprising, of course, that people would start feeling the pinch. Gas and oil prices are rising steadily, with $4 predicted for this summer. At the same time, real wages have fallen or remained stagnant for the last decade, so people’s paychecks aren’t going as far s they used to. Food prices are also rising steadily, in part driven by ethanol production, and 23% of our current economy has been driven by the housing market – a market now in serious trouble. Despite the claim that we’ve bottomed out, foreclosures in California are expected to rise by *4000* percent by the end of next year. And the problems of the Alt-A market have barely begun. Even the stock market rise is largely fueled by the fall of the dollar and inflation – none of them very good for your average consumer.
The way that Americans have been paying for these rising costs is by increasing their debt. Americans now have a negative savings rate and personal debt has risen steadily over the last decade – the average American carries 14K of consumer debate, not including car, student and housing loans. We have no reserves to tap – our houses can no longer serve as our bank accounts and we can’t rely on our savings. Even the people who profited the most over the last decade, the baby boomers have, on average, less than 10K saved for retirement, and boomers are being foreclosed upon at a rate 3 times the national average. And so far mortgage interest rates have remained stable – a rise in interest rates will be disastrous to millions of people carrying adjustable or interest only mortgages.
The people who are struggling the most, however, are younger families, in their 20s and 30s, who often were never able to buy into the housing market before it spiraled out of their range, and who are came out of college with tens of thousands of dollars in debt. In _Generation Debt_ X documents that people my age and younger are overwhelmingly doing less well than the boomers at the same age. Not coincidentally, these young families are the ones who are leaving their comfortable rural neighborhood to move closer to things.
And most of the people who moved to the country over the last two decades weren’t people seeking to homestead or farm, or even live the country lifestyle. They were people who wanted cheap housing, or natural beauty, or privacy, but expected their lives to come with the full complement of cheap energy goodies. While some of these people came to fit in, others are the ones who moved in next to dairy farms and complained that they could smell manure, or that they heard roosters crowing. It may be, in the end, that some people who leave the countryside are better suited to population centers. But not all of them, and if the move is done badly, it could cripple agricultural communities for a long time.
On the face of it, moving inwards sounds like the right thing to do for most people – after all, don’t we all need to drive less and consume less? But the problem is, as my correspondent wisely observed, that they are assuming that the only thing that will change is energy prices – they aren’t thinking in the long term. Their assumption is that they will keep their jobs, keep sending the kids to swimming lessons and soccer practice, keep driving to school – that essentially, life will go on as it has in the past. And that’s an understandable, but potentially dangerous assumption – both for the people who leave rural communities and those who stay.
Why is it dangerous? Let’s play the scenario out, and think about what the consequences for the nation as a whole and the future might be. Now let us also note that I’m not an economist, a real estate professional or a psychic – things might not go this way. The best I can offer is my own version of common sense reasoning. So let us imagine. In the very short term, a migration from outer suburbs and rural areas might seem like a good thing – more people buying and selling houses might fuel the market a bit more. But wait.
Up to now, the strongest declines in housing prices have occurred in cities, especially in poor cities and in the most inflated markets like San Francisco, New York and Boston. But what if there is a mass movement of people who are finally grasping that higher energy prices are here to stay, but don’t see the full implications of peak oil and climate change? Assuming that the whole housing market doesn’t crash (in which case we’d expect to see a lot of people staying put, unable to sell at all) immediately, what you might begin to see is a lot of people from the outer suburbs and rural areas moving into urban centers and suburbs just outside them, especially those that offer public transportation.
But here’s the thing – the young families that moved out to the country to buy houses most likely did so for several reasons, but a big one is because they could afford it. Real estate agents call it “drive till you can buy.” The less money you have, the further out you have to go – in some extremes, that means people working in New York City commuting 3 hours to Pennsylvania. In many places, it means living in formerly rural areas that had small economies, and commuting into population centers. Even if they didn’t choose where they lived because of money, in many cases, they won’t have seen the large equity gains that urban areas did – even compensating for the fall in urban prices, the sale of most country houses won’t buy a comparable one near many large population centers.
If many of these families want to move closer to cities, they will find that even in these economically declining times, the houses they sell don’t buy as much housing nearer urban centers. That means that this movement away from rural areas will put pressure on the bottom end of the housing market – these young families leaving rural towns aren’t going to be competing for the best place in town, but for the cheaper part of the market.
And this is likely to have several results. One is that if possible, I suspect a lot of people who are uncomfortable having their standard of housing and living decline, will take out bigger mortgages and more debt in order to have a home that isn’t a big step down. Keeping up appearances drives a lot of us more than we’d like to admit – someone who owned a comfortable home in the country is going to have a tough time going to the rattiest ranch in the neighborhood. So they’ll probably push their financial limits, which is likely not to be good for them or the economy as a whole.
The second issue is that a large movement of people away from rural areas towards urban ones will crash rural housing prices. The first folks to make the move will probably do fine, just take out a bit more debt, but what about those who see housing prices fall and houses stall for years on the market? Many of them will probably either take a further step down in housing quality, or they will rent. That means some pressure on rental markets, which haven’t grown anywhere near as quickly as ownership. And if that’s true, that means that poorer urban folk are likely to feel more economic pressure. In the longer term, they may well end up living in rural areas, commuting four to a car into
the city. Which means those rural areas are likely to see a permanent decline in their property taxes, a rise in need for services, etc… Because the cost of energy and commuting will mean all those poor people get a little bit poorer every year.
My correspondent in Vermont was grieved because she stands to lose her community, including her peak aware friends. Because it is young families leaving, she’s worried about her small local school closing, the loss of her food coop, and the economic decline of her town. And she’s right to worry. Aging populations (since older folks won’t feel the same pressure to move), rising foreclosures, falling property taxes, closing shops, disrupted communities are probably the name of the game for those of us in the country.
But let’s play out the scenario a little bit further – what happens when rural areas and exurbs lose their commuters, housing prices out in the middle of nowhere drop like a stone and everyone wants to go live near the public transport and their jobs? In the short term, it may even give a flagging economy a boost, but as the inexorable realities of peak oil and climate change begin to strike, the move starts looking like less of a good idea. Most people simply don’t grasp that the long term economic consequences of peak oil and climate change are poverty – much more poverty, affecting people who simply don’t see themselves as becoming poor, because they never have been. That means all of us.
If, in fact, we are near or at peak, we can expect over the next decade to see the job we moved towards disappear, and the centralized schools we move closer to begin to close because they can’t run the buses or heat the buildings (school closings were common during the 1970s oil crisis, which resulted from only a 5% decline in energy assets – we can expect a 2-3% decline per year). We can expect the cost of food and energy, housing and the servicing of our enormous debt to rise, while wages fall and jobs get scarcer. It isn’t just an issue of moving closer to the things you are accustomed to in your middle class existence. It is matter of a real and fundamental change in lifestyle.
And for many of us, our economic security will depend upon our ability to meet our needs outside the official economy – that is, when unemployment and poverty rise, our ability to eat is dependent either on the charity of others equally caught up in the crisis, or in our ability to grow food. As energy prices drive inflation, everything costs more – and the things you don’t have to buy are the most affordable ones. If you can heat your home and feed your family without money, you can use that money for things like avoiding foreclosure, and buying shoes – even as the price rises.
And the unfortunate reality is that not only is there less land close to urban centers, but the people who move away from the country will probably have bought the houses in their neighborhoods with small yards and little growing space – because that’s what their equity from the country could afford. So while in the short term, reduced gas consumption seems like an economically viable idea, in the long term, these people are risking a long term decline, potential foreclosure and in many ways, becoming less well off than they were before – while involuntarily trashing the economies and cultures of the communities they left behind.
I have long said that even very dense cities can grow much more of their food than they do – and indeed, many Asian and African cities produce between 1/2 and 1/4 of their produce and meat within the city limits. This is not intended as a screed against urbanism or moving inwards per se. But I tend to think that for people my age and younger, moving inward represents a long term potential fall in security and comfort. I believe that many cities and regions can feed themselves, or at least meet part of their needs from the cities and immediate suburbs. But some of our food will always have to come from the countryside – every region is going to need people who are producing food on a larger scale than 1/4 acre. And more densely packed populations far away from where food is produced means that people are more and more reliant on energy-powered infrastructure for basic needs like food.
Now at some point in this process, it will become obvious to people that land=security. In most places in the world, that connection was never erased, but here, land represents something to show, a revelation of one’s wealth, but not an enhancement of it. Right now, land says “I can afford lots of property taxes and a landscape service.” But the time is rapidly approaching when land says, “I can feed my family. I can heat my house.”
The thing is, no one’s interests (except, perhaps, in the worst case scenario the interests of large corporations) are served by rural depopulation. Those who stay become less able to produce food because their populations age, their tax base collapse and their community structures fail. Those who move, at a minimum, are now dependent in part on communities left behind, as are the great mass of urban and suburbanites who will never meet their whole food needs.
And the question becomes, as rural land is devalued by a move to the cities, who will buy it up. Who will buy land from the farmers, whose average age is in their late 50s and early 60s, and who will be ready to retire soon? Their wealth is in their land. Who will buy the country property that rich urbanites and suburbanites have been using for their gasoline powered projects, like ATVing and snowmobiling – that are now unaffordable? Who will buy the houses on five acres and the old farmhouses half renovated on 50?
My prayer is that the urban poor, especially immigrant populations, will mostly do this. This would be good for rural communities in many ways, although difficult to adapt to in others. But what I worry about is that the land will be bought up by those who see the opportunity to hold a new source of wealth. And when the young families who sold out to begin with realize their future is in the country, with more affordable housing and land to grow food for their families, they will no longer be able to buy in. Instead, new serfdoms will arise, and large landowners will find that sharecropping is remarkably profitable in this new economy.
This has happened in other nations – during economic crises in South America in the 1990s, large landowners took advantage of out migration to consolidate holdings into private hands in many cases. We have seen the colonization of industrial agriculture by Cargill and Monsanto, who now often own the grain elevator, the tractor dealership, the bank, the pigs, the farmer’s building, the feed store, the feed and the seed – and effectively own many farmers themselves. Will we see a similar transformation of the countryside into private, corporate hands?
Perhaps none of this will happen. I don’t claim to have a useful crystal ball or psychic powers. But it seems to me that we are just beginning to take the first steps on a path that leads, in the long term, to consolidation of rural lands, the destruction of rural communities, the loss of young workers from rural areas, and the further impoverishing of a generation. All of these are bad things.
If we are to ask people who live in rural areas to change their lives and begin producing food, we must offer something to them. That is, we must make it possible for them to make much or all of their living from their land. We must strengthen the urban-rural connection, so that people who live in and around cities have a real relationship with the people 50 miles away who grow their food. The CSA model is one way to do this, but it is tough to make weekly deliveries this way. We need, among other things, a vast expansion of the CSA model – so that grain farmers are growing grain directly for families, and sheep farmers deliver wool, or blankets or sweaters to people who have already invested in them. We need to think about
ways to link urban, suburban and rural communities around a central population center not into communities of us and them, but into a shared way of thinking about the massive project of feeding and living together.
I’m no economist, I’m not an expert on real estate, and you should take my advice for what it cost you. But common sense can get us some surprising places, and frankly, taking the advice of economists and real estate experts the last few years is what got us in this mess to begin with.
So use your own judgment. If it were me (and it is me – I live out in the country too), I’d sit tight if possible. I’d do it even if it meant giving up a lot of family activities, homeschooling, advertising for fellow carpoolers, or even spending one night per week at the office or in a friend’s apartment nearer work. The problem is that many of the people who moved out to the country to begin with did so with the expectation that their lives would be no different from the lives of their suburban counterparts. But country life is different, and we’re going to have to go back to living the country life. Instead of expecting your kids to keep up with the neighbor kids, you’ll need to find other things to value – instead of their skill at soccer, value their skill at raising livestock. Instead of swimming, send them out of chop wood or climb trees.
I don’t minimize the price of this – I recognize that I’m suggesting people endure real inconvenience and cost. I don’t doubt many older children will be angry that their parents expect their lives to change. But it is important to remember that in many ways, the things that we now take as essential to the world of childhood and work are things that are *substitutes* for the things country life provides. That is, shopping is substitute for growing your own, not a virtue in itself. Sports are great, but in part they are commonplace in children’s lives because children are now so inactive – but country children have plenty to do. The same is true with the gym – give up the weight lifting, get rid of the riding mower and start mowing your lawn by hand.
It is possible to create in the country a viable, different, rural culture that is less car dependent than the one we have now. For example, in my neighborhood we have had homemade summer camps, in which parents put together “Camp Days” with activities, each family trading off one day to take all the kids. Adults got free time, kids got social exposure and fun activities, and no one spent any money. It is possible to value and validate what you have in rural areas, and it may well be worth preserving them, even at some cost to yourself. In the end, someone is going to hold that land and have the security and resources it offers – who better than you?
This is a choice every family must make for themselves, and there are clearly those who will have no choices – they are too far indebted. But the key to food sovereignty and real food security lies in the tremendous resource of soil around us. Without loving owners to husband that soil, and care for it, we can expect a far bleaker future.
Sharon