Do Millennials Love Sprawl Now? Eh, Not Exactly

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Photo: " Brent Toderian

The “return to the city” movement is dead — or so say some news outlets after data from Brookings showed population growth in the suburbs outpacing that of cities, especially among millennials.

“American suburbs swell as a new generation escapes the city,” wrote the Wall Street Journal. Mother Jones piled on with “Millennials love the burbs.”

The exurbs grew at about four times the rate of urban core cities in 2016 and 2017, Brookings reports — a change from the previous several years, when core cities dominated. 

The trend, however, is neither surprising, nor does it represent a decline in cities’ allure, as Mother Jones’ Kevin Drum contends. Drum goes so far to say that “there never really was much of a back-to-the-city trend in the first place” and calls the notion that millennials are flocking to cities a “myth.”

For starters, the “trend” is partly a function of mathematics. Exurbs can grow faster than cities, percentage-wise, because they start from a much smaller population base. 

More importantly, though, we can’t really tell too much about what millennials prefer just by looking at population growth. Millennials, like people of all ages, simply respond to market incentives.

And cities are struggling to meet the demand for affordable housing, and convenient transportation, and largely falling short. (Take, for example, the famous struggles of New York’s subways and Washington’s Metro.)

American development system is still wired to produce mostly sprawl — so millennials are choosing, naturally enough, to move where they can afford housing, and commute with ease to their jobs

Reams have been written about the difficulty of adding housing units in cities such as San Francisco. Meanwhile, the sprawling  Houston metro area — one of the nation’s fastest growing — routinely adds more new housing a year than the whole state of California. Huge political battles are being waged now in the Golden State over the right to liberalize zoning and allow more housing construction.

Cities have not been able to produce new housing at nearly the scale of suburban areas in the sun belt, where the constraints on construction are practically non-existent. 

America really only has a few cities that offer an alternative to sprawl, where someone can live without a car and have a high quality of life. And those cities — New York, Seattle, Boston — are having a major affordability crisis right now.

So instead of seeing big growth in cities as the demand for urban living rises, we’re seeing prices soar. The average price of a one-bedroom in San Francisco now tops $3,500. Even the Wall Street Journal (whose editorial bent is decidedly anti-urban) mentions the urban affordability crisis as a reason for recent suburban growth among millennials.

Short of demographic growth, however, there is still a lot of evidence that Americans would rather live in cities. Pete Saunders analyzed demographic change across the U.S. in an article for Forbes this year. He found that suburban areas were, indeed, growing faster, but that growth masked some important underlying shifts.

Cities — including Chicago, Providence, and Salt Lake City — have grown wealthier compared to their suburbs.

Per-capita income rose in cities from $25,170 in 2010 to $29,490 in 2015, a gain of 17.2 percent, and from $28,919 to $32,715 in the suburbs over the same period, a gain of 13.1 percent.

In other words, the people with the most wherewithal and choice in the matter are choosing to live in cities over suburbs. Millennials — a diverse population of 83 million — are among them, as bustling millennial enclaves in cities such as New York, Atlanta, Austin, Portland, and San Francisco show.

What’s clear is that these wealthier people are, in some cases, displacing poorer people. Which is all the more reason cities must double down on building affordable housing so that people aren’t priced out.

8 thoughts on Do Millennials Love Sprawl Now? Eh, Not Exactly

  1. “cities must double down on building affordable housing so that people aren’t priced out.”

    So easy to say, but how do you pay for it when you do the math? California needs about 200,000 new units every single year, but units in the big cities cost roughly $500,000 each. There’s most likely 200,000 low income people who have been displaced over the past decade. How is the state going to raise 100 BILLION DOLLARS to build their affordable housing? Then keep building at least another 10,000 affordable units every following year at a cost of 5 billion dollars?

  2. Hope, your math is over dramatic.

    Most of people being pressured by the housing crises are employed, so don’t need free rent. They need subsidized rent/ mortgages. It seems reasonable that on average they could afford half the cost. So we are down to 50 billion subsidy required.

    Then there are costs saved. People who have housing keep jobs, pay taxes and require less government services. Businesses in California are sulfuring trying to hire at all income levels, easing the housing crisis means additional productivity, with that comes additional taxes.

    Housing built in cities reduces commuting cost to the people and transit and road subsidies costs to the government. I imagine that extra taxes paid, and government costs saved is another 10-30 Billion/ 10 years.

    Transfer tax on 100 billion of new housing is over a billion. Property taxes paid on 100 billion in new housing is another 10 billion/ 10 years.

    So less than 30 billion additional government costs to build the 100 billion in housing. That is 1% of the state GDP. I assume it would take 10 years to build. So 1/10 of 1% of the state GDP. We can afford it.

  3. I agree that this is over-hyped. My fellow Millennials and I have been relocating to suburbs here in the Bay Area because either (1) San Francisco is cost prohibitive unless you are part of the 1% or (2) it is almost impossible to raise a family in San Francisco. Everyone I know likes a mostly urban lifestyle, but unless you are a trust fund baby, they are not obtainable in 2019.

  4. Randyw,

    Transfer tax: Cities should be creating municipal community land trusts so land remains off the market from speculators and what people are buying are the subsidized condos built on the land, or renting them as low income apartments. Transfer tax will be proportionally lower. Property tax won’t be assessed on $100 billion in value either, only what people paid for their unit. CA passed Prop 13 because low income folks couldn’t afford property tax back then. Today low income folks also can’t afford property tax based on a value of $500,000 or more.

    Now include the annual number of affordable units the state needs to build each year to keep the problem from returning. We need perhaps 200,000 units this year, plus 100,000 more over the next ten years. If the 100,000 cost $25 billion instead of $50 billion using a 50% subsidy, that consumes the “10-30 Billion/ 10 years” in savings that you mentioned.

    So perhaps $45 billion is needed. GDP is only part of the story. The state budget is $215 Billion. Please identify what you will cut and what you will tax to pay for it. CA keeps raising taxes. It virtually never lowers taxes. Perhaps you think they should go higher still. So please identify the latest taxes to increase.

  5. The content is very practical, it gives me a lot of new ideas, I like the content of your article is great. I hope you will have many new articles to share with readers.

  6. A recent SF Chronicle article claimed a new housing unit (1BR apt in a complex) cost $700,000 to build in the Bay Area. (no breakdown of costs) This was in an article about Google’s plan to spend $1 billion on new housing near their campus. Costs to build a legal second unit on a homeowner’s parcel in Berkeley, were above $200,000 several years ago, mostly to provide extra septic, parking, obtain permits, and pay for construction.
    The lack of affordable housing is disastrous to local communities, but there is a glut of unaffordable housing here. Many of the houses in West Marin at the scenic end of the Bay Area, sit empty for most of the year, used on some weekends and holidays.

  7. *Everyone rushes in and buys every loaf of bread on the shelves, leaving them totally bare*

    See, sales of bread have stopped! People hate bread now!

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