WASHINGTON -- 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 homebuying 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 planners and developers are betting on young Americans' continued interest in urban living, sensing that some longer-term changes such as decreased reliance on cars may be afoot.
Cities Where the Future Looks Bright
U.S. Cities Boom as Young Adults Shun Suburbs
For years, Brooklyn took a backseat to its towering neighbor, Manhattan -- but no longer.
Today, Brooklyn is one of the fastest growing cities with a population of about 2.5 million, making it the most populous borough in New York and independently one of the largest cities in the U.S.
This hipster-friendly borough attracts young chefs, artists, entrepreneurs, families and more, who have opened farm-to-table restaurants, cool art galleries and boutiques, and trendy shopping areas like the Brooklyn Flea and Dekalb Market. With amazing cultural venues like the Brooklyn Academy of Music and the Brooklyn Museum, and the addition of the Barclays Center, NYC’s newest sports and entertainment venue, the area is bound to continue to develop and gentrify.
Seattle picked up momentum back in the ‘90s when Kurt Cobain popularized the grunge trend and a little coffee shop called Starbucks began to gain traction.
Today the city continues to attract young people and was recently ranked the best place for young professionals to thrive, according to mobile events company timeRAZOR, thanks to its high number of bars and restaurants (numbering over 6,000) and its high median income (the average college graduate there earns $53,185 annually).
Seattle was also ranked one of the 10 Cities With the Fastest Growing Wages in America. Home to major corporations Microsoft, Amazon and Boeing, and tech startups like Facebook and Zynga (which recently opened offices there), the city will continue to attract young, creative professionals in the next few decades.
This college town was recently ranked the Next Biggest Boomtown in the U.S. by Forbes.
It’s the third fastest-growing city in the U.S., according to the Census Bureau, with high rates of job creation.
Austin is also a hip, artsy college town that attracts artists, students, intellectuals and creative types. The thriving live music scene and Tex-Mex food add to the allure, ensuring that people will continue to call Austin home.
Boulder is fast becoming the newest tech center with a thriving community of startups, earning it the nickname of Silicon Flatirons.
In fact, there are so many new jobs here, with at least 50 tech companies hiring, that the organizers of Boulder Startup Week paid for people to fly to Boulder to fill these open jobs.
Boulder is widely regarded as one of the healthiest and happiest cities in the U.S., according to Gallup, thanks to the active outdoor lifestyle and the thriving intellectual community that comprises this college town.
According to a recent YPulse survey, more and more millennials are opting to live in small cities like Detroit.
These young idealists are moving back to Detroit, breathing new life into the downtrodden city with their small businesses, many of which are socially and environmentally responsible. The Urban Innovation Exchange showcases Detroit’s growing social innovation movement, promoting small businesses such as Recycle Here! and Food Lab Detroit. This type of optimism and innovation makes Detroit a city to watch.
The low housing prices, affordable lifestyle, and cool arts scene are attracting young people to Philadelphia.
These people are getting involved in the city through organizations like Young Involved Philadelphia and bringing a new sense of dynamism to it, with new restaurants, shops, galleries, and a cool music and arts scene.
The City of Brotherly Love has some of the best public art in the country. It's famous for its murals, which adorn buildings all around the city. The City of Philadelphia Mural Arts Program coordinates these murals, connecting artists to the community.
Walmart, the second biggest American corporation according to the Fortune 500, is headquartered in this relatively small city in northwest Arkansas.
The Walmart campus and Walton family play a big role in the Bentonville culture. Walmart heir Alice Walton spent $800 million on the Crystal Bridges Museum of American Art, which was designed by architect Moshe Safdie and houses her vast personal collection.
As the Waltons continue to invest and Walmart continues to thrive, Bentonville will become a top city.
This laid-back city epitomizes small-town charm, but it’s also emerging as a leader in sustainability.
Most restaurants here serve local organic fare, shops sell local Vermont-made products, and people shop for groceries in community-owned co-ops. Much of the food consumed in town comes from local farms or from the Intervale Center, a nonprofit organization that cultivates 350 acres of land to provide food for the city's residents.
This environmentally-friendly city has turned its focus on sustainability into a form of economic self-reliance -- a model which will become increasingly more important in the years ahead.
With its active healthy lifestyle, its beautiful mountainous surroundings, and its thriving job market, Salt Lake City, recently ranked One of the 10 Best Cities for College Grads, will continue to attract eager young college graduates.
North Dakota is experiencing an oil boom, which could make Williston and the nearby towns one of the largest sources of petroleum in the country -- and that means unprecedented wealth in the years ahead.
The population has exploded as people flock there in droves to seek their fortunes, and although the city is undertaking a building frenzy, it hasn’t been able to keep up with the influx of wannabe oil workers.
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.
"I will never live in the suburbs," said Jaclyn King (pictured above), 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 fiancee.
"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 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.
"The recession hit suburban markets hard. What we're seeing now is young adults moving out from their parents' homes and starting to find jobs," Shepard said. "There's a bigger focus on building residences near transportation hubs, such as a train or subway station, because fewer people want to travel by car for an hour and a half for work anymore."
"With all the Fortune 500 companies located here there are quite a lot of high-salaried individuals," said Shaun Bond, a professor of finance and real estate at the University of Cincinnati. "And the Midwest housing market has always been more affordable; there are fewer constraints on growth."
With median income at more than $71,000 a year, workers earn about 10 percent more than the national median. Meanwhile, median home prices have never exceeded $148,000, according to the NAHB.
"We don't have the kind of volatility in income or home prices that cities with more concentrated industries have," said Bond.
In the 20th century, Akron's economy grew in lockstep with the auto industry.
"It was the big rubber capital," said University of Cincinnati professor of finance and real estate Shaun Bond. Tens of thousands of local area residents went to work each day in the plants of Firestone, Goodyear, Goodrich and other tire manufacturers.
With factory jobs harder to come by, the Akron metro area has become a slow growth zone. The population has only increased by less than 7 percent since 1990, a period when the U.S. population soared by about 26 percent. Even favorite son LeBron James split town for fancy Miami.
And home prices are depressed, down 22 percent from their 2007 peak, according to NAHB. With family income just above the national median and such beaten down prices, most families can easily afford to buy a place.
Syracuse University, with its 20,000 students and 1,500 faculty members, helps keep the area's economy humming. Teachers, nurses and bank clerks far outnumber factory workers these days, according to the non-profit Syracuse Economic Development Corporation.
That has helped push the area's median income to a level that is slightly higher than the national average.
All of those jobs are not doing much to attract new residents, however. In fact, the metro area has seen less than a 2 percent increase in population since 2000, compared with nearly 10 percent nationally. As a result, there's very little competition for housing.
Those factors combined make buying a home in Syracuse very affordable. The current median home price of $106,000 is only 60 percent higher than the annual median income of a typical family.
Ogden's population has been rapidly expanding, thanks to the large families of Mormons that reside here, according to Jaren Pope, an economics professor at Brigham Young University.
Pro-business policies have attracted many private employers, such as FJ Management, an oil services company, Convergys, a business consultancy, and Autoliv, an automotive safety systems company, all of which are based in Ogden. And there's also the IRS, which runs a big facility with 5,000 workers.
A high growth rate, in both the population and the economy, isn't usually a recipe for affordable home prices. Indeed, home prices in Ogden slightly exceed the national median.
However, Utah's pro-business policies also extend to real estate developers. And, as a result, home building can be done much more economically.
The biggest problem in Ogden is finding land to build on since the town runs up against the Wasatch Mountains, said Pope.
Still, with the median home price at $166,000 and incomes high here, Ogden is one of the most affordable of all western markets.
A world away from the Big Apple -- one of the most expensive housing markets in the nation -- Buffalo is the most affordable major metro area to buy a home in the state of New York.
Part of the reason is that demand for housing is very low. The area's population has shrunk by about 5 percent since 1990 as its Rust-Belt manufacturers either closed shop or laid off workers.
As a result, demand for housing is very low -- and home prices reflect that. The median home price in Buffalo was only $94,000 for homes sold during the first three months of 2012, according to the NAHB. That's far below the national median of $162,000.
Fortunately for home buyers, incomes aren't as depressed. The median income here is at just about the national level, making it very affordable to buy a home.
As in many once-booming Midwestern cities, Grand Rapids was built up during an era of prosperity and high population growth. Now it's left with a large inventory of fine, old houses that are weighing on home prices.
In addition, several local non-profits are working to save area neighborhoods by renovating older homes and renting them out or reselling them, said Kara Wood, the city's director of economic development.
With population growth slowing over the past few decades -- the metro-area population grew at about half the national rate over the past 10 years -- there's more than enough homes to meet buyer demand.
Meanwhile, the city's economic base, which once relied heavily on the furniture-making industry, has become more diversified. Health care is now a driving force in the local economy, said Wood.
And there are plenty of good-paying jobs. Spectrum Health, which runs several hospitals in the area, employs more than 16,000 local residents, plus 1,500 physicians.
Modesto would make the perfect poster child for California's housing bust.
Construction and home prices both boomed prior to the 2006 peak, as buyers sought homes that were cheaper than those on the coast, according to Daren Blomquist, a spokesman for RealtyTrac.
"People bought there even though they worked far away, closer to the coast," he said. "They were willing to make that commute to get lower prices."
Much to those buyers' dismay, once the bubble burst the prices kept falling. Home prices in Modesto have sunk 67 percent from their 2005 peak to the current median of $127,000, almost $40,000 below the national level.
Foreclosures still plague Modesto. The metro area had the second highest foreclosure rate in the nation during the first quarter of 2102, with foreclosure paperwork filed on one out of every 60 homes, according to Blomquist.
Meanwhile, the unemployment rate stood at a very high 17.4 percent in March, more than twice the national rate. Families with working members, however, can easily afford the beaten down home prices in the area.
Located on an interstate highway between Tampa and Orlando, Lakeland's residents are used to people just passing through. But those who decide to stay don't find it very difficult to afford a place.
While both home prices and incomes have been hit hard here over the past several years, the decline in home values has far surpassed falling wages, said Ken H. Johnson, professor of real estate at Florida International University.
Home prices have fallen 58 percent since the housing bubble burst, to a median of $85,000. Taxes are also low. With today's low interest rates, a family who buys a house at the median price and puts 20 percent down would have a monthly payment of under $400, including taxes.
Meanwhile, the jobs picture is improving. Long a pit stop for travelers, Lakeland has recently become a destination, thanks to the opening of the Legoland theme park in October.
Legoland now employs 1,000 people. And a water park just opened this month, which should create even more jobs. That should help to further improve the unemployment rate, which fell to 9.5 percent in March, down from 11.3 percent the year before.
Dayton is shrinking -- or at least its population is.
The metro area lost about 1 percent of it residents over the past 11 years as businesses, like NCR Corp., moved out of town and others cut staff.
While that hasn't necessarily been a good thing for the local economy, it has kept homes extremely affordable. Since there's such an ample supply on the market, home prices have come down significantly. The median home price in Dayton is currently $81,000, about half the national level, according to the National Association of Home Builders.
Luckily, the employment picture is improving, too. The unemployment rate fell 1.2 percentage points over the past year to 8.2 percent, close to the national rate.
From its mainly manufacturing roots, the state's capital has greatly diversified, attracting employers in the health care, pharmaceutical and retail industries. Even tourism has become a big industry here, as sporting events like the famed Indianapolis 500 and the NCAA basketball championships draw crowds each year.
All of that has helped Indianapolis' population bring in a median income that is on par with the nation's as a whole. Housing, however, is much cheaper than the national average, making it a lot more affordable for local residents to buy.
Helping to keep prices down is the fact that there is so much room to grow. "There's an ample amount of land available for housing development any time there's a rise in demand for housing," said Kyle Anderson, a professor of economics at the Kelley School of Business of Indiana University.
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 due to 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. "They will be renting for a very long time."
The numbers are based largely on an analysis of census estimates as of July 2011 for cities and "primary cities," defined as boundaries of incorporated divisions and closely interrelated adjacent areas, by William H. Frey, a demographer at the Brookings Institution. They are supplemented with data from the New York Federal Reserve as well as Kenneth Johnson, a sociology professor at the University of New Hampshire.
Primary cities in large metropolitan areas with populations of more than 1 million grew by 1.1 percent last year, compared with 0.9 percent in surrounding suburbs. While the definitions of city and suburb have changed over the decades, it's the first time that growth of large core cities outpaced that of suburbs since the early 1900s.
During the mid-decade housing boom, city growth came close to a standstill as the wide availability of low-interest mortgages pushed new residential development outward.
In all, city growth in 2011 surpassed or equaled that of suburbs in roughly 33 of the nation's 51 large metro 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," Frey said. "The real question is, will cities continue to hold their own when the suburban housing market picks up? Cities that market themselves well to young people and that offer job growth, cultural amenities and access to rapid transit are likely to see continued growth."
In Denver, for instance, civic leaders have been actively promoting their city to young, educated professionals ages 25 to 34, touting in brochures the city's "walkable urbanism" including a newly formed Theatre District, pedestrian walkways, high-rise apartments, bicycle lanes and a variety of sidewalk cafes and restaurants.
Similar efforts have been under way in other larger cities across the U.S., including Chicago, New York, Philadelphia, San Francisco, Seattle and Washington, D.C., seeking to turn excess city asphalt to greenery with new planters, small parks and pedestrian plazas.
In recent years, the share of 16- to 39-year-olds with driver's licenses has declined markedly. The suburb also is no longer a refuge from poverty, now surpassing cities in numbers of poor people.
10 Best Cities to Live in Without a Car
U.S. Cities Boom as Young Adults Shun Suburbs
> Transit coverage: 69.4 percent (36th highest)
> Service frequency (minutes): 8.9 (16th lowest)
> Jobs reachable in 90 minutes: 30.2 percent (43rd highest)
> Walk score: 79.2 (third highest)
> Commuters who bike: 0.7 percent (21st highest)
The Boston-Cambridge-Quincy metropolitan area’s greatest strength for those without an automobile is the prevalence of dense, easily manageable communities. This makes it exceptionally easy for residents to reach amenities such as groceries, restaurants, shopping and schools. The metropolitan area’s primary city, Boston, has the third-highest walk score in the country. The area’s public transit also has a relatively high service frequency rate, making its use that much more convenient for the city’s residents.
> Transit coverage: 96 percent (second highest)
> Service frequency (minutes): 6.2 (second lowest)
> Jobs reachable in 90 minutes: 25.6 percent (69th highest)
> Walk score: 65.9 (14th highest)
> Commuters who bike: 0.87 percent (14th highest)
Los Angeles is the second largest city by population in the United States, and its metropolitan area is fairly spread out. Due to its extensive public transit system the area has avoided a complete automobile-based culture. The metro area’s 19 transit systems have more than 500 bus routes. As a result, 96 percent of neighborhoods are within 0.75 miles to a transit stop -- the second highest rate in the country. Better still, commuters can catch a form of public transportation from their nearest stop every 6.2 minutes.
> Transit coverage: 89 percent (eighth highest)
> Service frequency (minutes): 8.5 (11th lowest)
> Jobs reachable in 90 minutes: 58.9 percent (2nd highest)
> Walk score: 57.6 (29th highest)
> Commuters who bike: 0.78 percent (17th highest)
Utah’s population is expected to grow from 2010’s approximately 3 million to 4.4 million in 2030. Salt Lake County accounts for more than one-third of the state’s population. To accommodate this growth, the Utah Transit Authority has plans to add four more lines to its light rail system, TRAX, up from its current three lines. This investment is meant to improve transportation for the suburban and exurban population to the city. In the winter, the UTA runs ski transit lines in addition to its rail and bus services.
> Transit coverage: 83.7 percent (12th highest)
> Service frequency (minutes): 8.1 (10th lowest)
> Jobs reachable in 90 minutes: 47.5 percent (10th highest)
> Walk score: 60.4 (23rd highest)
> Commuters who bike: 0.79 percent (16th highest)
Denver has bus service, light rail lines and an airport shuttle service. The city is currently undergoing a multibillion dollar expansion of its transit system, called the FasTracks Expansion. This plan is meant to increase light rail, commuter rail and bus rapid-transit lines. The project, which is expected to be completed in 2019, currently faces a $2 billion shortfall.
> Transit coverage: 95.6 percent (third highest)
> Service frequency (minutes): 6.9 (fifth lowest)
> Jobs reachable in 90 minutes: 58.4 percent (third highest)
> Walk score: 54.5 (34th highest)
> Commuters who bike: 1.56 percent (seventh highest)
The San Jose-Sunnyvale-Santa Clara metropolitan area’s public transportation is overseen by the Santa Clara Valley Transportation Authority. Like Los Angeles, the area relies heavily on buses, running about 100 routes. Public transit covers 95.6 percent of neighborhoods, the third greatest in the country. Public vehicles also run under seven minutes apart, the fifth smallest frequency. The metro area also has the seventh highest rate of commuters who travel to work by bicycle.
> Transit coverage: 85.3 percent (11th highest)
> Service frequency (minutes): 8.8 (15th lowest)
> Jobs reachable in 90 minutes: 33.4 percent (35th highest)
> Walk score: 73.6 (sixth highest)
> Commuters who bike: 1.07 percent (ninth highest)
Seattle’s public transportation system not only includes bus and rail transit, but a monorail in the city center, as well as ferries. The city also has the sixth highest walk score in the country, due to its high number of easily accessible amenities. According to Bicycling magazine, Seattle is one of the most bike-friendly cities in the country and “has a 10-year, $240-million bike master plan that seeks to triple the number of journeys made by bike and add 450 miles of bike paths.”
> Transit coverage: 97 percent (the highest)
> Service frequency (minutes): 9 (18th highest)
> Jobs reachable in 90 minutes: 59.8 percent (the highest)
> Walk score: 63 (19th highest)
> Commuters who bike: 0.95 percent (12th highest)
Honolulu currently does not have an urban rail system, but its bus system helps cover 97 percent of neighborhoods — the highest rate in the country. Additionally, almost 60 percent of jobs are accessible within 90 minutes to those who live in neighborhoods covered by transit. This is also the highest rate in the country. Nevertheless, the city is planning a $5.5 billion rail project called the Honolulu Rail Transit Project. This will include 20 miles of track, connecting East Kapolei with the Honolulu International Airport and downtown Honolulu and will end at Ala Moana Center.
> Transit coverage: 89.6 percent (seventh highest)
> Service frequency (minutes): 4.5 (the highest)
> Jobs reachable in 90 minutes: 36.6 percent (25th highest)
> Walk score: 85.3 (the highest)
> Commuters who bike: 0.52 percent (32nd highest)
New York City and its surroundings rank first in the nation for total number of passenger trips and government spending per capita on public transit, according to U.S. News. It also has the highest rate of service frequency. The Metropolitan Transportation Authority’s 2010 operating budget was $13.4 billion. The average weekday ridership for the city is estimated to be over 8.4 million trips. The city also has the highest walk score on this list, thanks to the ability of city dwellers to reach just about any amenity on foot.
> Transit coverage: 83.5 percent (13th highest)
> Service frequency (minutes): 7.4 (eighth lowest)
> Jobs reachable in 90 minutes: 39.9 percent (16th highest)
> Walk score: 66.3 (13th highest)
> Commuters who bike: 2.23 percent (second highest)
Portland is such a good place for people to live without a car due to both its public transit system and the ease of walking and biking around the city. The metropolitan area is served by TriMet, which in addition to other services offers a Free Rail Zone — a region that includes most of downtown Portland and where light rail and streetcar rides are always free. The city has a number of benefits for bike riders, including designated bike-only areas at traffic signals and free bike lights. It has the second highest rate of commuters who ride bikes to work in the country.
> Transit coverage: 91.7 percent (fifth highest)
> Service frequency (minutes): 8.5 (12th highest)
> Jobs reachable in 90 minutes: 34.8 (30th highest)
> Walk score: 84.9 (second highest)
> Commuters who bike: 1.65 percent (sixth highest)
San Francisco is held in high regard for its many successful transit systems, including the San Francisco Municipal Transportation Authority and the Bay Area Rapid Transit district. These systems cover nearly 92 percent of neighborhoods -- the fifth highest rate in the country. San Francisco also has the second highest walk score and is excellent for bicyclists. Commuter rails within the city allow bicyclists to mount with their bicycles, and there is a bike shuttle across the Bay Bridge to help cyclists during rush hour.
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Still, some economists aren't so certain "generation rent" will last. They point to practical considerations such as better schools in the suburbs, continued government tax breaks for home ownership and subsidies for travel in rural areas, as well as rapidly rising downtown rents, that are likely to push young adults to the suburbs once they sort out decisions about jobs, kids and finances.
Symm Vafeades, 33, isn't so sure. Growing up in Denver, he briefly moved outside the city as an adult to experience suburban life. Before long, though, he was back in town. Vafeades said he likes being able to stop at his favorite shop for iced coffee and a breakfast burrito on his way to work instead of sitting in traffic. His commute to his job as an architect clocks in at just 2 miles.
"I much prefer living in the city," Vafeades said. "There's just a lot more you can do without having to drive everywhere."
• Roughly 52 of the 73 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. Cities switching from declines to gains included Pittsburgh, Milwaukee, Minneapolis and St. Paul, Minn.
• The city of Chicago added nearly 9,000 people last year compared to annual losses of roughly 20,000 in the last decade, having benefited as fewer moved to the outlying exurban areas of Will and Kendall counties. Detroit saw much smaller losses last year, a sign that its 25 percent decline over the past decade has bottomed out.
• New York remained the most populous city at 8.2 million, followed by Los Angeles and Chicago. The 15 most populous cities were unchanged since the 2010 census with the exception of Austin, Texas, which moved up from 14th to 13th, supplanting San Francisco.
(Wyatt reported from Denver.)
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