Much of the blame for the economic crisis has fallen on Wall Street, whose weapons of mass financial destruction helped inflate the housing bubble. A new exhibit at New York City’s Museum of Modern Art, “Foreclosed: Rehousing the American Dream,” goes further by linking the crisis to longer-term trends in housing and urban planning. The exhibit calls into question the American dream of homeownership and the way it has been packaged and sold in the form of a car-dependent, single-family house in the suburbs. Much of this show is based on an inquiry into the foreclosure crisis and the history of suburban sprawl prepared by Columbia University’s Temple Hoyne Buell Center for the Study of American Architecture.

The displays include placards with statistics that show how housing in five different suburban communities has become financially unsustainable and environmentally unsound. Wall-mounted texts feature excerpts from an imagined conversation between Socrates and one of his students—which takes place in a traffic jam—about how to change dominant cultural narratives that disparage public housing and public transportation.

Architectural models offer stylized solutions to suburban ills. Suburbs accessible by proposed high-speed rail corridors are retrofitted with high-density developments, which in some cases are stripped of streets. Instead of oversized single-family suburban houses narrowly tailored for the nuclear family, the show provides a variety of housing models for people in different groupings, such as empty nesters and extended families.

This exhibit comes at a critical time. Right-wing organizations like the Heritage Foundation have been churning out polemics against public transportation and zoning for higher-density development. A GOP-dominated Congress is also on the attack. Last year it cut funding slated for the 2009 stimulus bill’s signature infrastructure project, the high-speed rail initiative. House Republicans appear to have given up on their attempts to include a mass-transit-crushing amendment in their controversial five-year, $260 billion transportation bill. Still, a paralyzed Congress is on the verge of allowing the current bill to expire on March 31 without any new legislation for continued funding.

As the “Foreclosed” show indicates, many Americans can no longer afford car-dependent suburban life. According to the US Census, the median household income has been stagnant since 1989, while household incomes near the bottom of the spectrum flatlined after the late 1970s. A debt-financed spending binge tied to the increase in housing prices allowed Americans to live beyond their means in recent decades, at least until the crash brought everything to a halt. According to Harvard’s Joint Center for Housing Studies, in 2009 an unprecedented 19.4 million families spent more than half their annual income on housing.

Much of the increase in consumption was tied to the growth in sprawl. To find more affordable homes, families have moved to suburbs farther and farther from their workplaces. But for every dollar saved by living in more affordable neighborhoods, Americans were spending 77 cents more on transportation, according to a 2005 study by the nonprofit Center for Housing Policy. And commuting time lost to congestion has increased fivefold in the past quarter-century. As Housing and Urban Development Secretary Shaun Donovan put it in his keynote speech for the workshop phase of the exhibit, “Our affordable housing strategy was effectively, ‘If you can’t afford a home near a job or transportation, just keep driving. Drive until you find a home you can afford.’”

One of the main themes in “Foreclosed” is that the car-dependent suburban house is a form of public subsidy, since the federal mortgage tax deduction and low-interest government housing loans helped fuel the bubble. Although private developers built and profited from most of the sprawl, taxpayers subsidized its infrastructure with roads, utility lines and water mains.

Now the fallout from the crisis is evident everywhere, in the form of abandoned malls and decaying subdivisions. Instead of being an engine of social mobility, homeownership has turned millions of Americans into debt slaves tied to houses that are continuing to lose value five years after the bubble burst.

How can the design community help restore blighted suburbs? The exhibit invited five multidisciplinary teams led by architects to develop site-specific plans for five actual communities, with input from local residents. Models include familiar eco-friendly, sustainable initiatives, from light rail and co-generation electrical plants to recycling centers and community gardens. Some models include light industrial facilities and workspaces adjacent to residential areas to eliminate commutes. Most of the plans also include changes in predominant forms of homeownership. To make housing more affordable in Orange, New Jersey, the team headed by the firm MOS proposes portable mortgages, in which ownership is not tied to a particular space. To reduce real estate speculation, the team headed by Studio Gang proposes a limited-equity co-op in Cicero, Illinois, in which people own their dwellings but not the underlying land, which is owned by a trust. When they move, homeowners profit from their sweat-equity investments, but covenants governing ownership require them to sell their co-op shares back to the trust.

The teams also suggested changes in prevalent development strategies, encouraging such models as the public-private partnership. One team, Visible Weather, questioned the decision by the city of Temple Terrace, Florida, to sell a retail property to a private developer. The city could have created a real estate investment trust that would share rental income from the property with the municipality. This would not only have given Temple Terrace continuing income; by retaining control of the property, the city would have been in a better position to build a more environmentally sustainable development.

Several design critics have disparaged the MoMA show for some of its arty solutions, such as the nature corridors in Rialto, California, populated by elephants and the MOS design for Orange, which would put mixed-use buildings into existing streets, leaving little room for cars. However, as with many architecture exhibits, the elaborate models in “Foreclosed” should be seen as starting points for discussion rather than completed plans. The resounding message of this powerful exhibit is that we cannot go back to business as usual when it comes to our built environment.