After several years of flocking to cities, raising hopes of an urban revival, young Americans have reversed their brief preference for downtown living and are moving out to the suburbs — even on the East Coast, writes economist Admir Kolaj, in a report for TD Bank.
Kolaj compared annual census estimates, housing starts, and other growth data for the 13 largest metro areas from New England to Florida. In all but one of those regions, suburban populations grew more rapidly than in urban areas last year. The exception was Philadelphia, which still grew slightly faster than its mostly anemic suburbs in 2017, though even that margin has been closing.
Urbanists like Brookings demographer William Frey were energized when census estimates picked up a surprise increase in downtown populations, while their suburbs stalled, starting in 2009.
Supporters of an urban sustainability ethic, in which young Americans would choose to live in efficient, crowded downtowns instead of wasteful, traffic-choked hinterlands, were encouraged by the results of National Association of Realtors studies confirming that many young people wanted to live in attached homes, from which they could walk to shopping and trains. In those years, East Coast cities added residents faster than their suburban counties — nearly twice as fast in 2011.
Philadelphia still grew slightly faster (0.4 percent) than its suburbs (0.2 percent) last year, though even that margin has been closing. Demographers at the Federal Reserve Bank of Philadelphia say the city's leading employers — hospitals and colleges — tend to hire and cut back jobs more slowly than more economy-sensitive industries such as manufacturing and technology, which are underrepresented here.
Despite leading its suburbs, the city trailed last year's population growth estimates for Boston, Washington, Atlanta, Charlotte, and the big Florida cities, though it grew slightly faster than New York. Baltimore and Pittsburgh city populations have declined in each of the past three years, as have many of the large Midwestern cities and some Southwestern cities.
Instead of staying downtown, census reports show that 25- to 34-year-olds are now the "biggest contributors" to suburbanization, and construction data show the proportion of housing starts that are in the suburbs has recovered nearly to prerecession levels, according to TD.
Kolaj attributes the suburban trend to the improved job market, which is making it easier for young people to buy homes and start families, and to the rise in "telecommuting," which makes it less necessary to live near downtowns and other labor centers. He cited a Gallup poll that says the share of employees working from home at least four days a week has risen to nearly one-third in 2016, from nearly one-quarter in 2012.
Indeed, East Coast "exurbs" — the farthest suburbs — are lately showing "the largest pickup in population growth, increasing more than 1 percent last year, more than double the rate of the urban core." (In 2011, by contrast, the "urban core" grew more than 1 percent, while the total "exurban" population in the East actually declined.)
With all this hindsight, the suburban decline of the late 2000s and early 2010s now looks not like a permanent economic and cultural shift back downtown, but like a temporary product of the "Great Recession."
The recession hit heavily at two leading suburban industries — retail stores and home construction — eliminating jobs in malls and strip shopping centers, bankrupting builders, stalling projects, and making it tougher for the people who lost their jobs to stay in the suburbs. Many cities now have lower unemployment rates than their suburbs, reversing old patterns.
Baltimore and Philadelphia are the two East Coast metro areas where city unemployment remained stubbornly higher than in the suburbs throughout the urban recovery. Both have large populations of poor people. Kolaj said he tried to calculate whether the relatively high crime rates in Baltimore was a factor in driving jobs away, but those numbers are "incomplete and inconsistent across counties," making it tough to compare.
In Eastern cities, with zoning rules and city development practices slowing construction, job demand in some cities outstripped worker supply, driving up housing prices and making the cities less attractive to young people. In Boston and New York, city home prices are now 40 to 50 percent higher than in surrounding suburban counties, TD reported. As younger people move to the suburbs, they will likely be accompanied by restaurants and bars, coffee shops and gyms — which often find it easier to find good sites outside the downtown.
In Philadelphia, by contrast, urban housing prices have not surged past suburban levels, Kolaj told me.
The TD report warned cities not to plan on a continued influx of young taxpayers, homeowners, or small businesses.