The last decennial census showed, if anything, that suburban growth accounted for something close to 90 percent of all metropolitan population increases, a number considerably higher than in the ’90s. Although core cities (urban areas within two miles of downtown) did gain more than 250,000 net residents during the first decade of the new century, surrounding inner ring suburbs actually lost 272,000 residents across the country. In contrast, areas 10 to 20 miles away from city hall gained roughly 15 million net residents.
I had the opportunity to discuss urban economics with Phil Longman the other night. He had many interesting points.
1. The distribution of income both within metro areas and across metro areas is much wider than it was in the 1970s. In the 1970s, Manhattan was not so much richer than Staten Island. New York was not so much richer than Detroit.
2. Some cities are now “colonial economies” in the sense that they are dominated by businesses owned elsewhere, with few local-owned businesses. He cited St. Louis as an example. When I grew up there, we had McDonnell-Douglas and Monsanto. Now even Anheuser-Busch is not locally owned.
3. So many venture capitalists are in San Francisco that it’s not clear that San Jose is still the capital of Silicon Valley.
4. Whatever happened to the death of distance? It seems that people will pay up to live in cities.
Of course, my theory is that cities are dominated by the New Commanding Heights of universities and hospitals. This brings in highly-paid professionals. So cities that were blue-collar in 1950 and became ghetto by 1980 are becoming yuppie now.
Kotkin’s finding of growth in outer-ring suburbs is really counter to the anecdotal picture of people being attracted by the new urbanism. I think it might be best to think about location choices in the aggregate as driven by supply elasticity. Take it as given that development in cities and close-in suburbs is restricted. If the overall trend is to move away from small towns and rural areas, then the increased demand shows up in P in the city and the close-in suburbs, while the Q shows up in the last place the pundit class would expect it–the distant suburbs.
Increasingly it will be a matter of transportation. People who need work that will be low paying in nature are no longer as able to maintain automobiles, particularly when the commute is a long one. Hence some are probably moving back to cities at a time in life when it otherwise would not have been expected. Any areas already close to other forms of city transportation (and wider transportation networks as well) will likely increase in value in the coming years.
One other factor that might affect the numbers for “core” and “inner ring” population movements: retiring boomers leaving those core and inner ring suburbs for areas with lower property taxes. This has, so I’m told, become a bit of a trend in the Chicago area. Property taxes are so high in the city and basically all over Cook County that it makes no sense to live there if you’re not working, so many people hit their 60’s retire, and move downstate.
Atlanta seems to have satellite cities. Marietta, Norcross, Roswell, Tucker, and others “outside the perimeter” are already thriving in their own right, while still drawing on the energy from “orbiting,” if you will, a major metropolitan area. Several more areas to the south of the city are heading that way, too. People increasingly live further out (Kennesaw, Buford, Peachtree City), and commute to the satellite city instead of downtown. If you’re based in the satellite city, driving into Atlanta is on company time.
San Jose hasn’t been the center of Silcon Valley since before the dot.com boom – it’s been moving north for decades. As tech companies become less dependent on hardware (foundries became datacenters, which became colocation, which became XaaS), they’ve “fit” in denser and denser environments, so SF has become a viable option as long as you don’t have 1000s of employees, like Google, or Apple.
It’s really a Mountain View (Google/FB) -> SF axis now with a secondary center of gravity in Palo Alto/Sand Hill.
Most of the VCs I meet these days live in SF, even if their office is down south, because so many startups are based there, it’s easier than driving up. I don’t know how it will work as the current crop of tech employees age; San Francisco is expensive, but it’s murderously so with children.
Aaron Renn has the answer:
http://www.urbanophile.com/2014/09/14/the-new-donut/
Density provides quick access to structured environments like restaurants, festivals, and nightlife.
Open space provides quick, safe access to open space. This is good for kids.
The core city is optimized for the lifestyles of well-off childless adults with disposable income, who push the poor out due to the high prices and parents out due to the lack of open space.
The outer suburbs become optimized for the lifestyles of well-off suburban adults, who push the poor out due to the lack of mass transit and social programs, and childless adults out due to the lack of easy culture access.
The poor end up in the middle of the donut, close enough to the core city that they can use mass transit and social programs, but not actually in it where they cannot afford to live.
Recently, I was watching a discussion between Paul Romer and Edward Glaeser on Rapid Urbanization. They made a few good observations that I think offers some insight here. One, manufacturing makes no sense in the urban core as it takes to much “costly” space. So what manufacturing is building is in the outer core with workers commuting over or out instead of in for work. Although, fewer are employed in manufacturing as the square foot per employee is around 2000 today whereas it was 200 in the early and mid-20th century (much like other industries).
While cities are places for inventive people to interact, they really aren’t places for your routine worker, i.e., unskilled. So what we are ending up with is the urban core being made up of the wealthy and innovative, the “make up stuff class” (I’m not a fan of creative since artists aren’t really the economically productive types). And also, in government housing the paupers, those wholly dependent on government support. The working poor are out on the outer rings, finding jobs in manufacturing and other “make stuff” businesses.
There is a chance that the urban cores will become places for the elderly who will use the public transportation and other services. This will be dependent up on controlling crime which somewhat explains the growing trend to move the paupers out of the inner city government housing to the outer suburbs in “mixed” neighborhoods which is a fancy way of saying criminal class dumping.