Nov 12, 2015

So Much For The Death Of Sprawl: America’s Exurbs Are Booming

It's time to put an end to the urban legend of the impending death of America's suburbs. With the aging of the millennial generation, and growing interest from minorities and immigrants, these communities are getting a fresh infusion of residents looking for child-friendly, affordable, lower-density living.

We first noticed a takeoff in suburban growth in 2013, following a stall-out in the Great Recession. This year research from Brookings confirms that peripheral communities — the newly minted suburbs of the 1990s and early 2000s — are growing more rapidly than denser, inner ring areas.

Peripheral, recent suburbs accounted for roughly 43% of all U.S. residences in 2010. Between July 2013 and July 2014, core urban communities lost a net 363,000 people overall, Brookings demographer Bill Frey reports, as migration increased to suburban and exurban counties. The biggest growth was inexurban areas, or the "suburbiest" places on the periphery.

Homes stand in this aerial photograph taken above New Jersey, U.S., on Wednesday, June 10, 2015. Photographer: Craig Warga/Bloomberg

Homes stand in this aerial photograph taken above New Jersey, U.S., on Wednesday, June 10, 2015. Photographer: Craig Warga/Bloomberg

How could this be? If you read most major newspapers, or listened to NPR or PBS, you would think that the bulk of American job and housing growth was occurring closer to the inner core. Yet more than 80% of employment growth from 2007 to 2013 was in the newer suburbs and exurbs. Between 2012 and 2015, as the economy improved, occupied suburban office space rose from 75% of the market to 76.7%, according to the real estate consultancy Costar.

These same trends can be seen in older cities as well as the Sun Belt. Cities such as Indianapolis and Kansas City have seen stronger growth in the suburbs than in the core.

This pattern can even be seen in California, where suburban growth is discouraged by state planning policy but seems to be proceeding nevertheless. After getting shellacked in the recession, since 2012 the Inland Empire — long described as a basket case by urbanist pundits — has logged more rapid population growth  than either Los Angeles and even generally healthy Orange County. Last year the metro area ranked third in California for job growth, behind suburban Silicon Valley and San Francisco.

To those who have been confidently promoting a massive "return to the city," the resurgence of outer suburbs must be a bitter pill. In 2011, new urbanist pundit Chris Leinberger suggested outer ring suburbs were destined to become "wastelands" or, as another cheerily described them, "slumburbs" inhabited by the poor and struggling minorities chased out of the gentrifying city.

In this worldview, "peak oil" was among the things destined to drive people out of the exurbs . So convinced of the exurbs decline that some new urbanists were already fantasizing that suburban three-car garages would be "subdivided into rental units with street front cafés, shops, and other local businesses," while abandoned pools would become skateboard parks.

This perspective naturally appeals to people who write most of our urban coverage from such high-density hot spots as Brooklyn, Manhattan, Washington, D.C., or San Francisco. And to be sure, all these places continue to attract bright people and money from around the world. Yet for the vast majority, particularly families, such places are too expensive, congested and often lack decent public schools. For those who can't afford super-expensive houses and the cost of private education, the suburbs, particularly the exurbs, remain a better alternative.

Even as Houston, like other Sun Belt cities, has enjoyed something of a renaissance in its inner core, nearly 80% of the metro area's new homebuyers last year purchased residences outside Beltway 8, which is far to west of the core city.

If you want to know why people move to such places, you can always ask them. On reporting trips to places like Irvine, California, Valencia, north of Los Angeles, or Katy, out on the flat Texas prairie 31 miles west of Houston, you get familiar answers: low crime, good schools and excellent access to jobs. Take Katy's Cinco Ranch. Since 1990, the planned community has grown to 18,000 residents amid a fourfold expansion in the population of the Katy area to 305,000.

To some, places like Cinco Ranch represents everything that is bad about suburban sprawl, with leapfrogging development that swallows rural lands and leaves inner city communities behind. Yet to many residents, these exurban communities represent something else: an opportunity to enjoy the American dream, with good schools, nice parks and a thriving town center.

Nor is this a story of white flight. Roughly 40% of the area's residents are non-Hispanic white; one in five is foreign born, well above the Texas average. Barely half of the students at the local high school are Caucasian and Asian students have been the fastest-growing group in recent years, with their parents attracted to the high-performing schools.

"We have lived in other places since we came to America 10 years ago," says Pria Kothari, who moved to Cinco with her husband and two children in 2013. "We lived in apartments elsewhere in big cities, but here we found a place where we could put our roots down. It has a community feel. You walk around and see all the families. There's room for bikes –that's great for the kids."

Here Come The Millennials

Potentially, the greatest source of exurban and peripheral revival lies with the maturation of the millennial generation. Millennials — born between 1982 and 2002 — are widely portrayed as dedicated city dwellers. That a cohort of young educated, affluent people should gravitate to urban living is nothing new. The roughly 20% who, according to an analysis by demographer Wendell Cox, live in urban cores may be brighter, and certainly more loquacious, than their smaller town counterparts, dominating media coverage of millennials. But the vast majority of millennials live elsewhere — and roughly 90% of communities' population growth that can be attributed to millennials since 2000 has taken place outside of the urban core.

To be sure, millennials are moving to the suburbs from the city at a lower rate than past generations , but this is more a reflection of slower maturation and wealth accumulation.

According to U.S. Census Bureau data released last month, 529,000 Americans ages 25 to 29 moved from cities out to the suburbs in 2014 while 426,000 moved in the other direction. Among younger millennials, those in their early 20s, the trend was even starker: 721,000 moved out of the city, compared with 554,000 who moved in.

This may well reflect rising cost pressures, as well as lower priced housing many millennials can afford. Three-quarters, according to one recent survey, want a single-family house, which is affordable most often in the further out periphery .

Future trends are likely to be shaped by an overlooked fact: as people age, they change their priorities. As the economist Jed Kolko has pointed out, the proclivity for urban living peaks in the mid to late 20s and drops notably later. Over 25% of people in their mid-20s, he found, live in urban neighborhoods; but by the time they move into their mid-30s, it drops to 18% or lower. In 2018, according to Census estimates, the number of millennials entering their 30s will be larger than those in their 20s, and the trend will only get stronger as the generation ages.

Some might argue that millennials will be attracted to more urban suburbs, places like Bethesda, Md.; Montclair, N.J.; or the West University or Bellaire areas of Houston, all of them located near major employment centers with many amenities. These suburban areas are also among the most expensive areas in the country, with home prices often in the millions. And a number of older inner ring suburbs, as we saw in the case of Ferguson, are troubled and have lost population — even as the number of residents in downtown areas have grown.

So when millennials move they seem likely to not move to the nice old suburbs, or the deteriorating one, but those more far-flung suburban communities that offer larger and more affordable housing, good schools, parks and lower crime rates.

Among the research that confirms this is a study released this year by the Urban Land Institute, historically hostile to suburbs, which found that some 80% of current millennial homeowners live in single-family houses and 70% of the entire generation expects to be living in one by 2020.

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