America's Future: Say Goodbye to the Car and House

The American dream used to mean a Chevy and white picket fence. So much for that.

Richard Florida, Atlantic contributor and author of The Great Reset, thinks the American dream might get a divorce from the house and car. Cars make sense for suburbanites commuting into a dense big city on cheap gas and open roads. The future of America is crowded with expanding mega-tropolises and mega-regions stitched together with public transit and high speed rail.  Houses make sense when you're rooted, financially and geographically. The future of America is itinerant, flexible, and wary of burying money in an immobile "economic trap." Throw in the 100 million Americans we're expected to add in the next four decades, and you've got a congestion problem that suggests we should replace front lawns and sedans with apartments and trains.

These are startling paragraphs:

We've reached the limits of what George W. Bush used to call the "ownership society." Owning your own home made sense when people could hope to hold a job for most or all of their lives. But in an economy that revolves around mobility and flexibility, a house that can't be sold becomes an economic trap, preventing people from moving freely to economic opportunity. Not only has that piece of the American Dream grown dark, but it's also clear that financial excess in the housing sector was one of the central causes of the economic crisis. The rate of home ownership has been on the decline for some time now. Many of those who still choose to buy homes will choose smaller ones, while many more will opt for rental housing.

Our new way of life is likely to depend a whole lot less on the car. In October 2009, The New York Times reported "...After more than a century in which an automobile represented the American dream, car enthusiasm may no longer be a part of Americans' DNA." Car culture no longer exerts the powerful pull it once did. More and more families are deciding to share cars, and young people are putting off buying them and using public transit, bikes, their feet or Zipcars (membership-based, easy-access short-term car rentals) instead. It's not just that oil and gas have become expensive, it's that traffic and gridlock have become a deadweight time cost on us and our economy.

A few observations to spice up the analysis:

1. The Millennial generation (born between 1980 and 2000) is entering the workforce as the freelance economy takes off. That's an argument for a more mobile work force. But for now, we're also extremely cautious about finding stable jobs, because we're sensitive to the challenges of today's fragile job market. It will interesting to watch whether the recession teaches us to be jealous of our jobs, or whether the creep of independent contract work makes us a more fluid labor force for whom houses are imprudent investments.

2. Historically, cheap gas fuels America's love-affair with the car. When gas prices go down, we can afford longer commutes. (One partial explanation of the recession is that cheap gas allowed Americans to build big houses away from the city, but that the oil shock created ghost-exurbs since middle-income Americans could no longer afford the commute.) It's inconceivable that gas will ever stay at its 1990 levels with the growing demand of China and India's economies, which should wean some Americans off cars. But it's also inconceivable that Americans will abandon the car en masse. The ability to control your own transportation seems quintessentially American. The bus might be better bang for our buck. But is the American ethos ready yet for en masse public transit?

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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