In a reversal, cities outgrowing suburbs
For the first time in a century, most of America’s largest cities are growing at a faster rate than their surrounding suburbs, as young adults seeking a foothold in the weak job market shun home-buying and stay put in bustling urban centers.
New 2011 census estimates released Thursday highlight the dramatic switch.
Driving the resurgence are young adults, who are delaying careers, marriage and having children amid persistently high unemployment. Burdened with college debt or toiling in temporary, lower-wage positions, they are spurning homeownership in the suburbs for shorter-term, no-strings-attached apartment living, public transit and proximity to potential jobs in larger cities.
While economists tend to believe the city boom is temporary, that is not stopping many city planning agencies and apartment developers from seeking to boost their appeal to the sizable demographic of 18-to-29-year olds. They make up roughly 1 in 6 Americans, and some sociologists are calling them “Generation Rent.”
The last time growth in big cities surpassed that in outlying areas occurred prior to 1920, before the rise of mass-produced automobiles spurred expansion beyond city cores.
New Orleans, which saw its population shrivel in the mid-2000s due to Hurricane Katrina, saw the biggest rebound in city growth relative to suburbs in the last year, 3.7 percent vs. 0.6 percent. Atlanta, Denver, Washington, D.C., and Charlotte, N.C., also showed wide disparities in city growth compared to suburbs.
Other big cities showing faster growth compared to the previous decade include Boston, Chicago, New York, Philadelphia, Minneapolis and Seattle.
“I will never live in the suburbs,” said Jaclyn King, 28, a project director at a Denver hospital. Ms. 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 fiance.
“I just like being connected to everything down here concerts, work, restaurants, all of it. This is where everything’s at,” said Ms. King, who biked six miles to her job on a recent morning.
Businesses are taking notice.
“Companies are really seeking to meet the need of younger people who are choosing to live in cities,” said Royal Shepard, an analyst with S&P Capital IQ in New York, who tracks the residential and commercial real estate market. The ratings agency has a “positive fundamental outlook” on residential real estate investment trusts, particularly those with holdings in multifamily apartment buildings, citing in part a demographic shift.
Katherine Newman, a sociologist and dean of arts and sciences at Johns Hopkins University who chronicled the financial struggles of young adults in a recent book, said they are emerging as a new generation of renters because of stricter mortgage requirements and mounting college debt. From 2009 to 2011, just 9 percent of 29- to 34-year-olds were approved for a first-time mortgage.
“Young adults simply can’t amass the down payments needed and don’t have the earnings,” she said.
In all, city growth in 2011 surpassed or equaled that of suburbs in roughly 33 of the nation’s 51 large metropolitan areas, compared to just five in the last decade.
“City growth in recent years clearly has ramped up faster than suburban growth has declined, suggesting an increased attractiveness of cities,” William H. Frey, a demographer at the Brookings Institution, said.