Growth stops in the outlying suburbs

Kendall County, the nation's No. 1 fastest-growing county from 2000 to 2010, dropped to No. 236 by 2011, part of a trend of dramatically slowed growth in some outlying suburbs. Associated Press

In 2004, planners predicted Sugar Grove's population would surge to 60,000 people by 2030. Some even called it "the next Naperville," because there was so much building going on.

It was one of several outlying suburbs -- semirural areas known as "exurbs" -- that were doubling and tripling in size in the early 2000s.

Then the recession and mortgage crisis hit. Construction abruptly stopped. Developers walked away from projects, some half-finished. Newly built and foreclosed homes sat empty, their values having plummeted.

Two years after the recession technically ended, and despite faint signs of a rebound, new U.S. Census estimates as of July 2011 show the decades-long exodus to distant suburbs has leveled off.

The 2010 census put Sugar's Grove population at 8,997, and officials say the number hasn't budged much since then. Long-range population projections have since been reduced to the 30,000 range, said Village President Sean Michels.

Kaneland Community Unit School District 302, which serves towns like Elburn and Maple Park, built a second middle school in anticipation of the growth, but by the time it opened in 2009, it became clear only one school was needed. The middle school took over the new building, and the old one is used for a regional job-training cooperative.

Now, the annual rate of growth in American cities and surrounding urban areas has surpassed that of exurbs for the first time in at least 20 years, spanning the modern era of sprawling suburban development.

"The heyday of exurbs may well be behind us," Yale University economist Robert J. Shiller said.

Shiller, co-creator of a Standard & Poor's housing index, is perhaps best known for identifying the risks of a U.S. housing bubble before it actually burst in 2006-2007. Examining the current market, Shiller believes America is now at a turning point, shifting away from faraway suburbs in the long term amid persistently high gasoline prices.

Demographic changes also play a role: They include young singles increasingly delaying marriage and childbirth and thus more apt to rent and a graying population that in its golden years may prefer closer-in, walkable urban centers.

"Suburban housing prices may not recover in our lifetime," Shiller said, calling the development of suburbs since 1950 "unusual" and enabled only by the rise of the automobile and the nation's highway system. "With the bursting of the bubble, we may be discovering the pleasures of the city and the advantages of renting, investing our money not in a single house but in a diversified portfolio."

It's not all bad news for the Chicago's far suburbs. Houses in these areas are still selling, new businesses continue to open, and many planners still expect future growth and development in these towns.

"There's not a mass exodus from the rural community. I don't have people calling me saying, 'I want to move back to the city or move back to the suburbs,'" said Dee Wille, a longtime Century 21 Realtor in the Hampshire area. "(The building boom) is over everywhere, at least for now."

Wille saw growth peak from 2005-07 and come to a "screeching halt" in 2009, but she doesn't believe the exurbs are hurting any more than other areas. Record-high gas prices might make some homebuyers think twice about moving out a little further, but Wille sees a benefit to the growth plateau. It's kept housing costs a good value in semirural areas, such as a 5-acre, 3-bedroom "farmette" in Kingston listed at $185,000.

The slowdown also gives small suburbs a chance to catch up and recalculate their projections, so the explosive growth doesn't outpace their infrastructure.

"Maybe they have a bit of a breather to get caught up, rather than being inundated all at once," Wille said.

However, signs of longer-term bust are evident in places such as Kendall County. The nation's No. 1 fastest-growing county from 2000 to 2010, Kendall was part of an exurban wave that more than doubled Kendall's population. By the late 2000s, however, Kendall County's growth began to wane. By 2011, Kendall County's annual growth had stalled further at 1 percent, dropping its county growth-rate rank to 236th.

Things were especially turbulent over the past 10 years for real estate agent George Richter, who has worked in Kendall County for more than two decades.

"New home construction couldn't be built fast enough," he said. "A lot of us in the industry were very, very nervous about how fast and large the annual growth rate and property value were. We knew there's no way that something could continue on."

Now, he said, there's little new construction.

Jeff Wehrli, a longtime Kendall County board member who runs an excavating company, said the signs of the slowdown are most apparent from devalued homes, foreclosures and a general uncertainty among residents.

"It's going to take a while," he said, speaking of a local recovery that he acknowledges will never reach the same levels as last decade. "Our economy has got to get back to the point where people can confidently sign off on a 40-year mortgage."

Sugar Grove still has three major subdivisions left unfinished, leaving behind unsightly dirt piles, and exciting plans for a town center development have been indefinitely postponed.

But Michael sees a bright side. The unbuilt subdivisions provided excess water capacity for the village, and it now has time to widen roads, including Route 47, before growth takes off again.

Several new businesses, including a McDonald's, a Jimmy Johns, at least one bank, and a supported living facility, will be opening this year, Michael said.

"The early growth put us on the map," Michaels said. "Hopefully, residents see the new buildings have been going up, and things are filling up along Route 47. It's a good sign. It's reaffirmed to the village that we have a key piece of property that we need to protect in the long run. Things are pretty good in Sugar Grove."

• Daily Herald wire services contributed to this report.