Central cities now growing faster than suburbs, confirming trends for walkable lifestyles, shorter commutes

For the first time in a century, America’s largest cities are growing faster than their suburbs.  An Associated Press story widely covered in the media yesterday, including in Time, said the findings from new 2011 census estimates reveal a “dramatic switch” from the previous pattern of suburban dominance.

Indeed, in our 1999 book Once There Greenfields, Don Chen, Matt Raimi and I reported that, between 1980 and the mid-1990s, suburban population had grown a staggering ten times faster than central-city population in our largest metro areas.  Between 1988 and 1996, central cities together had suffered an net outmigration of over two million people in each year, while suburbs experienced a collective net gain of between two and three million people each year.

A lot has changed since those bleak times for cities, from revitalization of declining neighborhoods to transit investment to a disaffection among suburbanites with long commutes and rising gasoline prices.  The recession and its aftermath have certainly underscored the last of those factors.  But the biggest change of all may be demographic:  the portion of the housing market claimed by families with children, the prime market for suburban living, has been shrinking at the same time as the Millennial generation, which strongly favors walkable lifestyles and urban living, has been coming of age.  Retiring baby boomers are also in many cases giving up large-lot living in favor of city life.

The AP story suggests that the shift to city living will be temporary, driven by unemployment and the reluctance of young adults to invest in the housing market.  While I have no doubt that the seriously dampened economy is part of the resurgence in rental housing (also reported in the story), the larger trends driving the central-city renaissance have been in effect since well before the recession hit.

As I have reported before, Dr. John Thomas of EPA has examined the geography of building permit issuance and found that urban core cities have been increasing their share of total regional building permits dating back to the 1990s, with a particularly strong increase between 2002 and 2007, before the recession hit.  In 15 of the 50 regions studied by Thomas, the central city’s share more than doubled between the 1990s and mid-2000s. 

Even among those who are buying homes rather than renting, there is a strong preference now for close-in locations, where sales prices driven by demand have increased while those in outer suburbs have plummeted.  Where home purchase prices are still recovering, the recovery has been much stronger in inner, urban locations than in outer suburbs.

A quote in the AP story highlights the new values of the current generation of younger adults:

"’I will never live in the suburbs,’ said Jaclyn King, 28, a project director at a Denver hospital.  King, who grew up in the Denver suburb of Littleton and attended Columbine High School, still remembers her parents' 45-minute train commute to the city each day for work. She now rents a Denver house with her fiancée.

"’I just like being connected to everything down here — concerts, work, restaurants, all of it. This is where everything's at,’ said King, who biked 6 miles to her job on a recent morning.“

The story also notes that the share of 16- to 39-year-olds with driver's licenses has declined markedly.

Roughly 52 of the 73 US cities with population of greater than 250,000 showed faster annual growth (or slower rates of losses) in 2011 than their average growth over the last decade.  Primary cities in large metropolitan areas with populations of more than one million grew by 1.1 percent last year, compared with 0.9 percent in surrounding suburbs.  Cities switching from declines to gains included Pittsburgh and Milwaukee, both previously written off by some as “shrinking cities” because of what was perceived as irreversible decline because of the loss of manufacturing. 

Striking a less skeptical tone than the AP, Don Lee writes in the Los Angeles Times that “cities are retaining more residents, especially young people, as downtowns have been cleaned up and attractions have sprouted.”  Lee’s story quotes Brookings Institution scholar William Frey to the effect that the shift to central-city growth is pervasive across the country.  Three years ago, Frey began to observe a rebound particularly in older cities.

In the city of Washington, DC -- whose region has low unemployment compared to much of the country -- steady population decline began to flatten in the mid-1980s after several decades of loss, and stopped declining in the 2000s.  The District’s population began to grow in 2009.

I’ve been following real estate industry analyses and forecasts for about 15 years, and most have been remarkably consistent with a slowing of sprawl and gains in centrally located, walkable, amenity-rich neighborhoods.  The Urban Land Institute’s lengthy report, What’s Next? Real Estate in the New Economy, for example, was published late last year.   It predicts that employers will favor 24-hour urban centers over more remote suburban workplaces; that the Millennial generation (also sometimes called Generation Y, now in their teens through early 30s, “are comfortable with smaller homes and will happily trade living space for an easier commute and better lifestyle”; that seniors will increasingly seek homes near medical services and integrated into neighborhoods with shops, restaurants and services; and that sustainable design will become an increasingly necessary attribute to avoid property obsolescence. 

While I am pleased by the new census data -- strong cities and a growing portion of the market interested in alternatives to sprawl are great for the environment -- I am not really surprised.  The signs have been pointing in this direction for quite a while.  And, although the numbers might shift a few percentage points one way or another as the economy recovers, expect central locations and walkable neighborhoods to continue to be on the rise for a long time.

Related posts:

• New housing forecast mostly good for walkable communities (May 17, 2012)
• How the evolving housing market will help sustainable communities (April 4, 2012)
• Geography of housing recovery favors cities and walkable neighborhoods (October 26, 2011)
• Housing preference analysis: we have too much large-lot housing, too little urban housing to meet demand (May 2, 2011)
• Housing market strengthens for smart growth: dramatic new data from the DC area (April 26, 2010)
• Major real estate report: shift to urban living is “fundamental,” outer suburbs may “lack staying power” (November 10, 2009)
• Strong central cities may help in weathering the recession (March 30, 2009)
• Sprawl's share of new US housing starts has declined dramatically, says EPA (March 3, 2009)

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