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[The Hall Monitor] Oil And Water DO Mix

Todd Huttunen began appraising more than 20 years ago with a few years off in between to pursue a career in cabinet making. He relegated that to hobby status and is currently an appraiser in an assessor’s office. His best friend dubbed him The Hall Monitor because of his rigidity and respect for rules. He offers Soapbox readers tongue-in-groove insight on appraisal issues.

When you mix oil and water, you can see a rainbow. …Jonathan Miller

Contrary to what you’ve been told, oil and water do mix, at least in regard to the deleterious effect that a shortage of one and/or the other will have on the future viability of suburbia. In his 2004 documentary film The End of Suburbia [1], Canadian director Gregory Greene examines the history of suburban development in North America and questions its future sustainability. The basic premise of the film is that the North American suburban model, which is based on the automobile as the primary mode of transportation, is predicated on cheap and abundant energy. And a phenomenon known as “Hubbert’s Peak” or “Peak Oil [2]” argues that the days of cheap and abundant energy, specifically oil, are behind us. “Peak Oil [2]” basically suggests that we have reached, or soon will reach, the point at which half of the world’s oil reserves have been exhausted. It will not be possible to increase productivity beyond current levels, indeed future extractions of oil will be more expensive and less efficient. Combine this leveling off in supply with the increasing demand generated by China and India as their economies grow and you get increasing energy prices worldwide.

As to supplies of water, well (no pun intended), this is clearly an issue in the southeastern and southwestern United States, which are both currently experiencing severe drought conditions. Until the recent downturn in the market, these areas were also among the fastest growing, in terms of new housing construction, in the country. From a recent article in the New York Times Magazine, The Future is Drying Up [3]

A report by the National Academies on the Colorado River basin had recently concluded that the combination of limited Colorado River water supplies, increasing demands, warmer temperatures and the prospect of recurrent droughts “point to a future in which the potential for conflict” among those who use the river will be ever-present. Over the past few decades, the driest states in the United States have become some of our fastest-growing; meanwhile, an ongoing drought has brought the flow of the Colorado to its lowest levels since measurements at Lee’s Ferry began 85 years ago.

For most of us water is something we don’t even think about – turn on the tap and there it is. As a child I remember watching my father go around the yard with the garden hose watering the plants and lawn. And once the green things had their fill he would finish up by hosing down the sidewalks and the asphalt driveway! Then he might announce, “let’s all go for a drive” and we would pile into the station wagon and head out with no particular destination in mind. Yes, this was forty five years ago but I’m sure mine was not the only family doing this, and I don’t think very much has changed in terms of how we value these precious resources. Certainly not when you look at the sizes of our cars and houses. Gas prices in this country [4], while now averaging over three dollars a gallon, are still a bargain when compared with those in Europe (over six dollars a gallon in Switzerland) and most of the rest of the world.

“The End of Suburbia” is, as you might expect given the title, more Cassandra than Pollyanna but it holds out hope for a solution in what it refers to as New Urbanism [5]. And if nothing else, the issues of oil and water might put the “crisis” of sub-prime mortgages in its proper perspective.