Cities Growing Faster than the Suburbs

7.3.2012 | Cities are on the move. For the first time in a very long time, core cities have grown faster than their suburbs, according to recent analysis by Brookings demographer, William Frey. The shift is caused, he speculates, by the housing slump, which has hit the suburbs particularly hard, and by the confluence of a slowed path into adulthood and the preference among young adults for cities. 

Major cities (with populations over 1 million) grew 1.1% between 2010 and 2011, while the suburbs of those cities grew 0.9%. And the trend is not dominated by just a few cities. A little more than half of the 51 major metros in the U.S. saw bigger population gains than in their suburbs.

DC, Denver, and Atlanta saw the biggest differences, each exceeding the suburban growth by 1%. But Chicago, New York, Philadelphia, Minneapolis, Austin, Salt Lake City, Tampa, and many others also grew.  As he writes:

“New data show a notable tipping point. Using the Brookings definition, core “primary cities” of the nation’s 51 metropolitan areas with populations exceeding one million, grew faster than the suburbs of those areas between July 2010-2011.  … This contrasts with suburban dominated growth in the 2000s, extending the pattern previous decades.

Driving the change, he says, is the fallout from the housing crash, both in an overbuilt suburban fringe and the new, tighter restrictions on obtaining a mortgage.  ”Young people, retirees, and other householders who might have moved to the suburbs in better times  are unable to obtain mortgages or employment,” he writes. “Many remain stuck in rented or shared homes that are more often located in cities.”

He also notes the trend of young adults increasingly opting for “hip” cities with high walkability scores and the lifestyle that young people seek.  He should also add the draw for empty nesters, who are downsizing and opting for a condo in the heart of the city over  a lawn and snow shovel.

Young people, of course, have always flocked to cities in their 20s. But what is different today is that they are more frequently staying there longer, adding to the young population overall. As I’ve written in Not Quite Adults, a book based on research from the MacArthur Network on Transitions to Adulthood, the path to adulthood has slowed dramatically in the last three decades. Where once young people finished school, got a job, bought a house, and started a family typically by age 25, today those milestones come much later, typically by age 35. Starting a family — often the precursor to a move to the burbs– is particularly delayed. Today’s New York Times reports the trends in pregnancy rates by age group. The pregnancy rates for those under age 25 have been steadily declining while the 30s is now the decade to start a family. Therefore, as young adults postpone marriage and family longer, they are more likely to continue to live in the city with their friends.

Some have begun calling this generation “Generation Rent,” for their proclivity for apartments over the commitment of a home. Homeownership rates have dropped for all age groups between 2000 and 2010, but none so as sharply as for young adults under age 35, according to the Harvard Joint Center for Housing Studies.

Nonetheless, this assumption may be premature, as the majority of young adults I and colleagues have interviewed still hold staunchly to the notion that renting is “throwing money away” and most see homeownership in their future.  ”Throwing money away”  might be a rationalization for remaining at home with their parents longer, but it’s nevertheless been a steady and common refrain, even after the housing meltdown.

And in many cases, they’re right: renting in some cities is throwing money away. Rents have been rising in the last year, such that in some cities, it’s smarter to buy than rent. As Forbes reports, in New York City, “A mortgage payment on a median-priced home in the metro area currently costs $217 less than a rent check.” The same is true for Minneapolis and several other major cities.

Yet despite the economics, a bigger pull for people young and old is that many cities are great places to live today. Mayors poured millions in to beautifying the downtowns, building parks and waterfront developments, not to mention giving the green light on high-end condos and lofts. Cities have come alive at night where they once were canyons of silence after the last train for the suburbs left the depot. Young and old are taking a second look at the suburban lifestyle, with its car-centric, nonwalkable, isolated patterns. The trends also hint at the shift that Enrico Moretti talks about in his book, “The Geography of Jobs.” Cities such as Austin, Portland, Seattle, and the Bay Area are drawing college-educated talent to clusters of specialty industry, like computing, medical tech, and others.

This emerging trend of city growth is a golden opportunity, Frey argues. “What may look like a temporary lull in the broad sweep of suburban development may turn out to be an opportunity for some cities to showcase their oft cited lifestyle and cultural amenities to a new generation of residents and developers, so that in some regions a new version of the American Dream could take root.”

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