Posted on 07/16/2008 5:43:59 AM PDT by Diana in Wisconsin
Debbie Kelly and her husband, Tom, have been living the dream for years.
They've got a cozy home nestled in the Wyoming Valley, the bucolic Iowa County setting where architect Frank Lloyd Wright drew his inspiration.
Deer graze in the yard. Orioles flock to the bird feeder. When nights are clear, the Milky Way lights the sky.
It's a little slice of heaven -- save for the 45-mile commute to work.
It wasn't a big financial drain driving into Madison, even as gasoline passed $2 a gallon in 2004 or $3 last summer. But for Debbie Kelly, $4 fuel has been the tipping point.
Now, instead of driving all the way to her nursing job at the Dean Clinic on Fish Hatchery Road, Kelly will often park in Verona and ride her bicycle the rest of the way. One night a week, she camps in the back of her pickup truck at Lake Farm County Park, south of the Beltline on the shores of Lake Waubesa.
"They've got the hottest showers," said Kelly, 54, a mother of three.
Kelly admits she's thought about moving closer to the city. The time spent driving and the rising costs are beginning to wear. But she said her husband isn't budging.
"Tom will probably go with the property," she said. "I don't think he'll ever leave the valley."
Whether high fuel prices are going to affect where people in Wisconsin live remains to be seen. It's not that simple to just pick up and move, especially for those who already own a home.
Still, it's a question crossing the minds of many who chose to buy a home miles from their place of employment or school.
"It really hit me when it cost nearly $100 to fill up the truck last week," said Rich Eggleston, who lives in Fitchburg and commutes to his job downtown at the Alliance of Cities.
And there are early indications that life in the suburbs is starting to look less attractive to home buyers.
Consider the median price of homes sold in McFarland is down nearly 19 percent from a year ago, falling from $258,000 to $210,000, according to the latest figures from DaneCountyMarket.com.
In Mount Horeb, prices are down 14 percent. In Fitchburg, they're off 8 percent. In the New Glarus/Belleville/Monticello market along the Dane-Green County border, prices are down nearly 10 percent.
While real estate insiders say it's dangerous to draw conclusion from just a few months of data -- Verona, Waunakee and Sauk City, for example, have all seen prices climb in 2008 -- there seems a growing realization that gasoline prices are not going down again.
That's left some observers wondering if the drivable suburb -- the model for virtually all post-World War II development in Wisconsin and the U.S. -- has run its course.
"I think we're looking at a tremendous societal shift," said Steve Hiniker, executive director of 1,000 Friends of Wisconsin, a statewide group that advocates for better land use. "Urban areas such as Madison and Milwaukee will continue to fill in and modern transit will soon be a part of the urban setting. Suburbs will continue to lose value as gas prices hit the stratosphere."
Indeed, the future of the suburbs in the face of rising energy costs has sparked a flurry of national reports in the past months. Many have come from groups that would like nothing better than to see an end to sprawl and a reinvestment in mass transit and the urban core.
One study from Chicago-based CEOs for Cities argues that soaring gasoline prices are what really popped the nation's housing market bubble.
"The popular narrative on the collapse of housing prices has only blamed exotic lending practices," said the group's economist Joseph Cortright. "But the much more important story is about how higher gas prices have re-drawn the map of urban real estate values."
In another report, Arthur Nelson of Virginia Tech predicts the nation is facing a surplus of 22 million large lot homes (houses built on 1/6 an acre of more) by 2025. That represents roughly 40 percent of the "McMansions" in existence today, places like Bergamont, Bishop's Bay and Hawk's Landing in Dane County.
And long-time sprawl critics like James Howard Kunstler have cheered the higher fuel prices as finally bringing an end to decades of suburban madness. He said trying to find solutions to keep the "Happy Motoring" utopia running is naive.
"The truth is that no combination of solar, wind and nuclear power, ethanol, biodiesel, tar sands and used french-fry oil will allow us to power Wal-Mart, Disney World and the Interstate highway system -- or even a fraction of these things -- in the future," Kunstler said. "We have to make other arrangements."
Closer to home, not everyone shares the same doom-and-gloom scenario.
Madison Mayor Dave Cieslewicz said fuel prices haven't reached the point where Americans have been forced to make fundamental changes. Rather, he sees a more gradual shift to a balanced mix of transit, compact development, walkable communities -- and single-passenger vehicles.
"I just got back from Europe and people still love to drive but they have other options," he said. "Unfortunately we've created a physical environment in this country that makes us slaves to our cars."
Cieslewicz said those who oppose mass transit or improved rail service often argue that environmentalists want to take away the freedom to drive.
"People on the other side of this issue use scare tactics and say everyone will be forced to give up their cars," he said. "But there is actually more freedom in having the option to bike or walk somewhere without fear of getting killed."
Troy Thiel, who moved to Madison in 2003 from the Chicago area and narrowly lost a 2007 bid for a seat on the City Council, predicts the suburban housing market will weather the storm. He notes that many of the area's largest employment centers are no longer located downtown -- including Epic Systems in Verona, American Family on the far east side and Discovery Springs in Middleton.
A sales agent with First Weber West Towne, Thiel also questions whether fuel prices are having much impact at all on an already depressed real estate market. He notes that sales of homes and condos within five miles of the State Capitol were down 30 percent for the first six months of 2008 versus a 25 percent sales decline overall.
"People are choosing more efficient personal autos and will locate closer to their jobs, many of which are already in the 'burbs," said Thiel. "Rich folk are putting their SUVs in the garage. That way $4 gas looks like $3 gas and they're just fine with that."
Needless to say, those who can afford it don't feel the fuel pinch as acutely.
But rising oil prices are costing everyone plenty. The average American household will spend over $3,200 to fuel their vehicles this year, according to the Bureau of Labor Statistics, more than twice the cost of just five years ago.
In Dane County, drivers are now spending a combined $428 million more on gasoline than in 2004, according to professor Andy Lewis, community development specialist for University of Wisconsin Extension. That's money that could have gone to a lot of other uses, whether affordable housing or commuter rail.
Lewis noted that in 2006, when gasoline averaged $3 a gallon, households with incomes under $14,999 were already spending eight percent of their income on fuel versus three percent for households with incomes over $100,000.
"As expected, the lower income households are feeling the pinch more then wealthy households," said Lewis.
On the other hand, Alan Harvey, chairman of the town of Windsor, said Dane County enjoys the advantage of having a diverse economy -- a mix of both urban, rural and suburban development.
"Clearly, all of society is going to be looking at a period of adjustment," he said. "But I think we're pretty well-positioned since economic activity is spread throughout the county."
Harvey said the real impact is being felt in communities outside Dane County like Fall River or Pardeeville, where people have purchased homes because they got a lot more square footage for their dollar.
"Those advantages start to disappear when commuting costs get too high," said Harvey, who is skeptical about the ability of mass transit to solve the problem.
Madison Ald. Robbie Webber, who defeated Thiel in the District 5 council race, has championed higher density urban development and mass transit as the long-term solution. Despite the growth in the suburbs, she said Madison remains the engine that drives the area economy with its downtown and UW campus.
"Even lunch is easier to get to without a car in a dense area than in a suburban business park," she said.
Webber said the concern isn't so much with Middleton or Verona, two places where real estate values have been holding.
"What about Mount Horeb, Dodgeville, Lake Mills, Edgerton, Portage?" she said. "Those long commutes, with no hope of transit, are going to be pretty painful."
To that end, commercial real estate developer Terrence Wall says he realized several years ago that rising gasoline prices were going to dramatically impact Dane County. For that reason, he's pursuing mixed-use projects combining office, residential and retail at Tribeca Village in Middleton and the West End in Verona.
"I've been warning people for the last three years that demand for oil in China was going to send prices skyrocketing," said Wall, president of T. Wall Properties.
Dan Miller, a Realtor with Keller Williams who maintains the DaneCountyMarket.com Web site with colleague Shawn Kriewaldt, cautioned against drawing too many conclusions about the long-term impact of gasoline prices on the local housing market.
"For example, I just helped somebody sell a house in Madison and buy one in Mount Horeb because they work at Epic and wanted to be closer to their job," he said.
Miller said a few more months of data may help paint a clearer picture.
"I think we're on the early part of the curve right now," he said. "Most folks spend several months looking for a home before they make an offer, and once an offer is accepted, it can be another 1 to 3 months until the closing. Given the lag between the decision to buy and the actual purchase, my hunch is the data will become more telling later this fall and winter."
At this point, most commuters are just biting the bullet, trying to combine trips or share rides when possible.
Nicole Weisenberger, who drives 100 miles round-trip from Madison to her job as an occupational therapist in Beloit, has found a few ways to offset the high gas prices. One is purchasing a Pontiac Vibe, which gets over 30 mpg on the highway. The other is cutting back on doggy day care from three days to one day a week.
"To be honest with you, I think the dog has been suffering more than I have," she said.
“I’m criticizing people who feel a sense of entitlement about living in the suburbs.”
Nobody here has demanded “a sense of entitlement” to live in the suburbs. You’ve projected your liberal vomit onto the good citizens here at FR. People at FR talk about allowing the free market to work. You write like a 19 year old college freshmen sponge who just exited a lecture from a drooling Marxist professor.
Allow me to recommend to you “The Federalist Papers.” Get back to us after you’ve read it.
In terms of fuel, your statement becomes a non-sequitur. That's because, like I've pointed out to you in the previous posts, that so much of what we do requires oil. Our economy, our way of life, our military, the products we buy, the clothes we wear....all requires oil, and right now oil is the only feasible commodity out there.
This entire energy crisis is completely fabricated by socialists in government.
This entire energy crisis is completely fabricated by socialists in government.
Uh, no.
Notice that they use the term “acre” to conjure up some idea of a huge lot, rather than lot dimensions, which anyone with the slightest concept of land and real estate, would try to think in terms of.
I guess 1/6 acre is a lot in a third world country, which the Left feels that everyone should reference to. Perhaps Europe. The Soviet Apartments are what they really want everyone else to live like, while government officials have all the huge lots and domiciles.
It’s very simple — people are free to live wherever they want as long as they can afford it.
However, the gubmint is under no obligation to support any particular lifestyle, nor is anyone entitled to a specific lifestyle just because it suits them.
I’m not really against drilling, I just think it’s not really going to help. We’re going to have to figure out an alternative; better to do it now while we still have plenty of wiggle room rather than when we truly have no other option.
I don’t want to force anybody to do anything. I just want people to stop whining when gas prices go up and accept they’re only entitled to the lifestyle they can afford.
All government money is taxpayer money. The government only has the money they manage to steal from us. Whether it’s paying for roads or something else, the government takes money from us to spends it. I’m not sure the point you’re trying to make.
How dare you suggest that people should live within their means!
I guess we’ll find out. I’m pretty sure I’m not, though.
What have I said that’s remotely Marxist? The very thing I’m promoting is allowing the free market to determine what the best solution is.
If it’s fabricated, I guess we got nothing to worry about. It’s not like our whole economy depends on it...
I saw your posts and I was gonna warn you to get your flame suit on. I said what I originally said for the very reason that I get reactions like I’ve gotten. It’s amazing the levels of emotion that are set off by high gas prices. People panic like lunatics, start pointing their fingers, and never take responsibility for putting themselves in a situation where fluctuation of energy prices can become an economic hardship.
Global oil consumption is rising at about 1% annually, according to almost every energy source who studies the issue.
That rate of growth could be reduced or kept even without much angst, such as conversion to natural gas (auto conversion is relatively simple. We just need a powerful energy company to commit to having natural gas filling stations around the US, and in urban areas globally)
Also, nuclear electricity plants are not the evil monsters many thought some 40 years ago.
Clean coal is another abundant energy source, if only the wackadoodle environmentalists can be vanquished. Coal can be converted to truck diesel relatively easily, I've read.
Crude oil is necessary for jet fuel, and other transportation requirements. But with some adjustments in our energy use, the rate of crude oil consumption should even out, and perhaps even start to drop.
When that happens, the crazy mid-East countries will be falling all over themselves to sell crude oil more cheaply, just to keep up their extravagant way of life.
The tide could be turned, if we only have the willpower... and America will not have to lessen its good lifestyle one bit.
I'm a big fan of T. Boone Pickens, and am currently trying to convince my conservative Republican candidate for Congress to join up with Pickens, and invite him to our district next month for marketing his plan.
The entire GOP caucus, every 2008 candidate, should invite Pickens to their district to lend support to his plan.
To a great extent, you are correct. Though IMHO, it is not an energy crisis so much as a price crisis. I haven't seen a station run out of gas yet, like in the Carter days. I haven't seen lines of people waiting to get gas like in the Carter days. There's enough oil, despite the liberals telling us otherwise. There is no immediate crisis - yet.
The problem is that there's barely enough, and we're one incident away from a true energy crisis. Supply is tight but adequate. But it would be more than adequate had the socialist/democRATS and a few RINO's not voted repeatedly to prevent off-shore drilling as well as drilling in that useless frozen tundra known as ANWR.
Think about this for a second. We haven't been able to build much in the way of coal-fired power plants due to democrats. Nuclear is "too dangerous". Dams "harm the fish". Windmills "kill the birds" (and are pretty unreliable anyway, but that's another story). Instead, we start burning natural gas, which forces the price of natural gas through the roof. That $100 heating bill of 10 years ago is 3+ times that much now. Thanks to the democRATS, a few RINOs, and mostly the environazis.
Likewise, with oil - our nation's demand has increased over the last 3 decades, but the liberals have been die-hard against drilling. So naturally, while our nation's production has stayed relatively constant, it's proportion of our increasing demand has decreased as we make up for the domestic shortage by buying on the world market. this puts more leverage in the hands of foreign entities that supply us - entities like Hugo Chavez (whom I suspect the liberals like). That puts the US in a weaker position than it needs to be in.
Of course, the 'rats are claiming to save the planet, but I don't buy that BS any more. I've been listening to the enviromental extremists since the 1960's when they actually had a case. Today, they're inventing demons (global warming, anyone?) to legitamize their existence.
There's another great factor in the gas price issue - that is that the dollar's value on the world market is horribly low. In fact, I'd venture to say that the devaluated dollar is having more influence on the price of oil than any supply-demand issues.
And finally, there's a psychological angle as well. Like a hot stock, speculative investors have put their money into oil with the hopes of gaining an increase, but at some point, the price is no longer supportable as the value is much lower than the price (like housing in 2005). So what happens? The house of cards eventually crumbles as it always does. I think that we're close to that point - Bush merely reversed the executive order banning off-shore drilling and oil prices have dropped $10 per barrel in 2 days. That shows a bit of volatility.
Nuclear and coal are both good alternatives. Coal will eventually run into the same problem (finite supply) but it’s a lot further off. Besides, throwing everything we can on the table is a good idea. By the way, T. Boone Pickens thinks that the current high oil prices are a reality and here to stay. That’s mostly what I’ve said on this thread, but got some pretty hostile reactions.
T. Boone Pickens has made a substantial investment in wind power and wishes to recoup his investment along with some earnings. Nothing wrong with that, but it should be understood that there is personal gain involved.
Wind power has some definate disadvantages - it can't be regulated to match customer load, and it tends to be least available when it is most needed. On those super-hot summer days. It also is very land-intensive, requiring many many times more land for a 1000 MW installation than, say, a coal or nuclear plant of equal size.
That's not to say that there's no place for wind in the portfolio of power production. It's just to say that by it's nature, it cannot become a major source.
Now, connecting wind turbines to a pumping scheme for pumped water storage generation would be a nice idea, but that's pretty doggone expensive up front. Still, at least the generation could be controlled and put on the grid as needed rather than when mother nature decides that it should be windy.
I only brought him up because the original poster did.
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