About those swelling suburbs – City Observatory

Faster suburban population growth doesn’t signal a preference for suburbs: Here’s why

Last week, the Wall Street Journal reported suburbs growing faster than cities. The article, “American suburbs swell again as a new generation escapes the city.” The article looks at Census data showing that some of the nation’s fastest growing cities are sunbelt suburbs. The article notes:

After several years of surging urban growth, Apex [North Carolina] and suburbs like it now account for 14 of the 15 fastest-growing U.S. cities with populations over 50,000, according to the census.

Millennials priced out of popular big cities are flocking to Frisco, Texas, Nolensville, Tenn., Lakewood Ranch, Fla., and Scottdale, Ga. — not exactly household names but among the fastest-growing destinations in the U.S.

“The back-to-the-city trend has reversed,” said William Frey, a demographer at the Brookings Institution, citing last year’s census data.

Millennials, the generation now ages 23 to 38, are no longer as rooted as they were after the economic downturn. Many are belatedly getting married and heading to the suburbs, just as their parents and grandparents did.

There are no reasons to Census population counts, but there are good reasons to question the superficial claims that some have made that these population trends signal Millennial disenchantment with urban living or a newfound love of suburban tract homes. Here’s why:

1. Today’s young adults, especially those with college degrees are vastly more likely to choose to live in close-in urban neighborhoods today than their predecessors in earlier generations. As our reports on the Young and Restless show, the number of well educated young adults is increasing twice as fast in close-in urban neighborhoods than the rest of metropolitan areas.

2. Simply counting heads doesn’t reflect the demand for urban living. High and rising rents & home prices in urban centers show demand is outstripping supply. Higher relative prices for city homes v. suburban ones is the most powerful evidence of consumer preference for cities. As we’ve demonstrated in our posts on the “Dow of Cities” urban homes now command higher prices relative to suburban ones.

3. Cities were able to grow population robustly up to the point where their housing market slack was exhausted. Now city growth is limited by how fast we can add new housing, which is not fast enough. The failure of cities to grow as rapidly as suburbs really points to a shortage of supply, not a lack of demand. You have to assume that housing is equally and essentially infinitely elastic in both cities and suburbs in order to interpret simple comparisons of population data as measure of revealed preference.

Rising rents and suburban growth mean we’re not doing enough of this.

4. The long term trend shows that cities have improved their historical growth compared to earlier decades, while growth in suburbs is lower now than in the 90s or the aughts. Focusing on the year-over-year “horse-race” comparison of annual population growth rates misses the point that suburban growth is lower than in the 2000-2010 decade, and urban growth is higher than in that previous decade.

5. Ultimately, the policy implication of all this is not that Americans, especially younger ones, are disenchanted with cities and want more suburbs. In fact, it’s exactly the opposite. The unrequited demand for urban living indicated by high rents and home prices, and the complaints about having to move to suburbs to afford homes signals that policy needs to respond by creating more housing in cities. When we finally make it as easy to build new housing in cities as we do in suburbs, for example, by allowing missing middle housing to be built, we’ll see urban population grow more rapidly.

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