An extensive report in the Atlantic that concludes many suburban developments may turn into slums discusses the role reversal occurring between the city centers and their outlying communities. They attribute a wide range of factors leading to this conclusion. These include a shift in demographics and life styles, the economy and sub-prime loan debacle, driving times and fuel prices, and the over supply of product and tighter lending practices.

The post war baby-boomers are an ever decreasing factor in the home market as their kids move out. Those kids are getting married later in life and having smaller families so demand is shifting.

Traffic congestion and commuting long distances is right up there with taxes and mosquito's in terms of being unpleasant, so those that can afford to move closer to work are doing so. This is also being stimulated further by the rapid increases in gas prices affecting all of us. For many years developers have been building homes in the suburbs because of cheaper land costs, but rarely has there been parallel growth in local jobs so most people had to hit the roads.

Now with lender requirements becoming stiffer and less capital available in general, it is harder to finance homes in areas where prices are less stable. In some communities where the amenities are less, and jobs are less, but the home prices have been affordable, people of lesser means have aggregated over time. This has lead to poorer care of the properties, more absentee landlords, and more gangs and crime. These are qualities long attributed to older urban areas. Now these areas are on the mend.

There has been a renaissance in many cities and property values have gone up much more rapidly than in the suburbs and been more stable during the recent downturn in housing prices. All indications are that this condition will continue for a while.

Developers feel much safer investing within urban centers doing infill projects knowing what they produce will be somewhat limited in supply, rather than building outside of town where a competitor can build on the next parcel, and the next, until supply and demand are out of balance. This too is to blame for the current situation and also leads right back to the abundance of cheap capital and ridiculous lending standards.

As an architect, investor, and sometimes developer I see this trend first hand, and I expect it to continue for a generation to come, at least. The one exception is those areas where enough of a nucleus has been established that the suburban area has at least become a satellite or a node (read -- 'mini city') allowing for a distinct community with jobs and a solid tax base.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.