A Shift in the Way we Look at Housing: the Idea of an American Dream – a Home with a White Picket Fence, a Dog, and Two Children

After gold was found at Sutter’s Mill, treasure seekers from all over flocked to California. Even though most did not find the wealth they were looking for, the settlements that were created and survived became cities. This population influx played a key role in the territory’s rapid ascent to statehood.

With the transcontinental railroad being completed in 1869, the pace of urbanization, industrialization, and agricultural development increased rapidly. The state’s population exploded from 380,000 in 1860 to almost 3.5 million in 1920, largely due to swelling immigration pulled by dreams of economic success as promised by state boosters. Since then, California has seemingly been in a population explosion as it just hit the 40 million mark, and some say is expected to hit 60 million by 2050. However, as of 2017, California’s population grew at a rate of only 0.7%, three times lower than that of the 1980s. As population continues to increase, the rate of growth varying in relation to numerous economic factors, the creation of new household configurations and the demand for residential rentals and sales will arise to meet the needs of a growing California. Mass migration to suburban areas was a defining feature of American life after 1945 and up through 2010. Before World War II, just 13% of Americans lived in the suburbs. By 2010, however, suburbia was home to more than half of the U.S. population. Economic, political, and social changes drove the national shift from city dwelling to life in the suburbs just after 1945. The move to the suburbs was also reflective of the emphasis placed on the nuclear family post World War II, and the idea of an American Dream that featured a home with a white picket fence, a dog, and two children. Since 2010, movements within the economic, political, and social spectrums are creating a change in perspective, which is resulting in societal shifts towards different living arrangements. Growth of a state’s population is a necessity for a housing market to be stable. Even though the population growth rate in California may vary, a year without growth is almost unheard of. In the 1990s, the population growth rate was on average 1.3%. This ranged from 1.8% in 1990 to 0.7% in 1994 and 1995, these years becoming the first progression of recovery after the 1990 recession. In the 1990s and 2000s, growth was way below that of the 1980s, which featured an average rate of 2.4% over the course of the decade, the highest rate of growth for a single year being 3.4% in 1989. The low growth rates of 1994 and 1995 seemed to be just an anomaly caused by the recession of 1990. As the nation entered the last decade of the millennium, housing prices were at one of their highest points, these prices being driven by the real estate boom of the 1980s; however, the economic crisis of the 1990s saw a significant decrease in people’s spending abilities which translated directly to the housing market. The crisis resulted in a population slowdown as people’s faith in the economy turned bleak, making these growth percentages the new norm in the mid-1990s. Less people had the available funds necessary to sustain a growing family and deal with the potential for unplanned expenditures. In the first ten years after the turn of the century, the population growth rate averaged around 1%. Right before the recession in 2000 however, the growth rate was 1.48%. Similarly, an increase occurred in 1989, just before the 1990s recession, when California’s population rose by a staggering 3.4%. Contrary to previous trends which saw a steep increase in population before a recession, when looking at the years before the 2008 recession, at the peak of the economic boom of the early 2000s, the population’s growth rate decelerated to 0.5%, the lowest since WWII. Unlike recessions previously, the 2008 crash seemed to have had a contradictory effect on California’s rate of population growth.

Rather than the rate of population growth decreasing after a recession and then stabilizing at the new lower rate, the years following the recession of 2008 saw an increase in population rate. This increase might seem insignificant, going from 0.5% to 0.7% and yet this is the greatest increase that California has experienced any time since 2003. The difference between this last recession and those in the 1990s and early 1980s, was the 2008 one experienced a dramatic decrease in the price of housing.

These new prices were a sign that the market was being corrected and returning to the trend seen previously in history of slow yet dependable increases. In the first half of the 2000s, people were driven away from California by these inflated prices, but the dramatic drops of the recession created an even playing field in the real estate world and opened up an opportunity for those that wanted to move west. A number of factors influence the rate at which California’s population rises, the economy being at the forefront of those reasons. When an area is affected by a weak economy, people are discouraged from moving to that location, causing them to either stay in place or look for employment opportunities elsewhere. Early in the 1990s when the recession hit, both birth rates and migration played a key role in understanding the decrease in California’s population growth rate. (After this fall in growth rate of the state’s population, the peak in 1980s when many of the baby boomers were starting to create families in houses scattered throughout the state has gone unmatched.) When the economy is good, jobs are numerous, and housing is available at reasonable prices and people can realize their dream of becoming residents of the golden state. When the economy is strong, an incentive in created for immigration both within the states and on an international level.

When the housing market of California adjusted after the 2008 recession to reflect national averages, despite the weaker economy nationally, the opportunity arose to move to what many considered to be a more desirable location. Immigration, both authorized and unauthorized, is a critical driving force in the ever-increasing population of California, including migration form other states and nations. According to the U.S. Census Bureau, in 2013, almost 40% of the population was Hispanic, much of which has to do with the close proximity to Mexico. This number is not a surprise as it has increased over the last twenty years as people seek to obtain new opportunities than what they currently have. Lately, there has been a large swing in a trend towards more people from Asian nationalities coming into California. The immigration numbers can be seen to have a significant effect on the total population as the two tend to fluctuate at around the same rate.

Other factor such as birth rate and emigration statewide are both important influences on the state population, however, in the last 25 years immigration on average has made up around 58% of the yearly increase in California’s population. California’s high rate of immigration affects the economy in positive ways that allow for the continuation of better living standards as new ideas and employment opportunities are created. As President Obama put in when he attended a naturalization ceremony,” The lesson of these 236 years is clear, immigration makes America stronger. Immigration makes us more prosperous. And immigration positions America to lead in the 21st century.” With the increase in businesses and production, the resulting impact is a greater increase in wealth across the state. In the real estate market, immigration plays a huge role as these new people bring with them an ability to buy property, pay general taxes, and overall contribute the California economy. The idea post WWII of living just with the nuclear family is becoming more distant as we see a shift in the way people live. With the top-heavy population that looms in California, senior citizens will begin to change their residences more in the years to come as they start to transition from the work force to being retired. It is estimated that by 2036 the percentage of the population over 65 will increase from 14% to a staggering quarter of the total populous.

The slowing trend in birthrates in conjunction with longer life spans (from medicine, technology, and overall living improvements) create an aging population. The generation known as the baby boomers will become such a large part of the population that by 2030 estimates say they will exceed those under the age of 18. Once retired, much of this generation of boomers will continue to be homeowners as they always have, whether that be in their local community, or in new ones that they move to. However, there will be those that choose to rent in locations that are more convenient to them, so they may be closer to family or to the coastal region. With this increase in the aging population needing more assistance than the young, a trend towards the grandparents living with the family is seen. With the sheer size of the baby boomer population, even if only a small portion of these people retiring decide to rent it will still be a substantial increase in demand on the market. That coupled with the young population now switching from trying to live in a suburban home to just renting a place will shift the dynamic of the years to come. Along with the baby boomers shaping the new formations of living situations, immigrants bring with them their traditions and beliefs. In the Hispanic culture, it is the norm to be very family oriented.

The new influx from the Asian countries also bring in similar ideas of family and taking care of the elderly. This driving force will shape the way people live in much the same way that the baby boomers will, and the old idea of living will shift. The growing number of people in the state has led to dramatic rises in some counties.

Riverside County saw the most gains during the boom years of the early 2000s upwards of 41.7%. With less than half that, San Bernardino grew at a rate of 19% coming in second. This population explosion can be explained when taking a closer look at the housing market. With coastal cities such as Los Angeles and San Diego housing prices rising through the roof, Riverside grew at a much steadier and more affordable rate. Many businesses and thus jobs are located near these big city hubs and Riverside resides just outside the epicenter.

This proximity allows residents to still share in the pleasant weather, local jobs, and cultural festivities that those who live in the city experience. For much the same reason San Bernardino also reaped the rewards of the same combination of advantageous factors. When the recession of 2008 hit Riverside however, the growth it had experienced it its population backfired as the economy was left in ruin with some of the worst unemployment, job loss, and financial problems in the state. Places that grew at a less explosive rate were able to fight off the recession better and recover quicker. The housing crash that brought many into financial hardship made it so that first-time homebuyers would be a little more hesitant to buy property in similar locations to Riverside, since the once suburban success stories of owning a home in these places had been replaced with despair. The suburban way of life will begin to decrease as people are less likely to pursue the white picket fence homes, opting instead for more centralized urban developments.

This shift will cause a significant increase in the rental property, condo, and townhome sales that are prevalent in the city. Urbanization will take over the once popular suburban lifestyle. The changes in the way people live are evolving. Economics is the driving force for urbanization as the ideas of a suburban home life developed after WWII have been squashed. First time homebuyers, scared of losing their investment that was seen from the Great Recession, will look to city centers and rentals to provide for their need as the want for a “traditional” home is diminished.

The baby boomers only act as an accelerant in this shift to rentals and cities, along with the immigrants that bring with them their ideas of family. Even though the future is unknown, California will flourish and continue to grow as it has done in the past. With the likelihood that the population will reach new unimaginable heights, this will change the economy not only with new opportunities and new talent, but with many obstacles in water management, energy, and the housing sector to overcome. California can only grow more as the wealth, resources, entrepreneurial spirit and innovative history coupled with urban cities opportunities creates an appeal unlike any other. BIBLIOGRAPHY Obama, Barrack. ‘Remarks by the President at Naturalization Ceremony.’ National Archives and Records Administration. Accessed September 26, 2018. https://obamawhitehouse.archives.gov/the-press-office/2012/07/04/remarks-president-naturalization-ceremony. Crane, Fred. ‘Golden State Population Trends.’ First Tuesday Journal. September 19, 2018. Accessed September 20, 2018. http://journal.firsttuesday.us/golden-state-population-trends/9007/. ‘Boomers Retire and California Trembles.’ First Tuesday Journal.

July 18, 2018. Accessed September 30, 2018. http://journal.firsttuesday.us/boomers-retire-and-california-trembles2/8531/. Sherbinin, Alex De. ‘Population and Environment.’ U.S. National Library of Medicine. December 14, 2009. Accessed September 27, 2018. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2792934/. Turner, Adiar. ‘Population Priorities: The Challenge of Continued Rapid Population Growth.’ U.S. National Library of Medicine.

October 27, 2009. Accessed December 1, 2018. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2781841/. ‘U.S. Census Bureau QuickFacts: California.’ Census Bureau QuickFacts. Accessed December 6, 2018. https://www.census.gov/quickfacts/fact/table/ca/AGE775217#AGE775217. Data Access and Dissemination Systems (DADS). ‘California.’ American FactFinder – Results. October 05, 2010. Accessed December 6, 2018. https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml?src=bkmk.

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