By Jack Stubbs
As the nation – and, indeed, the world – emerges from the impacts of the still ongoing pandemic, there is perhaps no better time to examine the role of cities in how we live, both at the individual and collective level.
In January 2022, Washington D.C.-based nonprofit Urban Reform Institute (URI) released a report titled “The Next American Cities,” which explores how individuals’ relationships to cities continue to evolve due to changing standards around living preferences, affordability, amenities, transportation and geographic proximity.
The authors of the report – some of which included CEO of URI Charles Blain; Wendell Cox, Principal of Demographia, a St. Louis based international public policy consulting firm; and Executive Director at URI Joel Kotkin – visited various communities across the country, interviewed industry experts and local residents, and analyzed data to devise the concept of the Next American City. Theoretically, the Next American City conceptualizes places that offer everything that the urban cores of the nation’s major cities do, but minimize the downsides, namely around quality-of-life, safety, mobility and affordability, according to the report.
The report tackled several topics pertaining to America’s cities, including historical perspectives, economic and racial trends, and the impacts of the pandemic on remote versus in-person work, and changing perceptions of the importance of cities’ Central Business Districts (CBDs).
Cities are historically and presently shaped by a number of variables including demographics, technology, and economics, notes the report, which explored historical trends about people’s preferences of living in an urban versus suburban environment.
In 1950, the country’s core cities accounted for nearly a quarter of the U.S. population; today the share is under 15 percent, states the report. In contrast, the suburbs and exurbs grew from housing 13 percent of the metropolitan population in 1940 to 86 percent in 2017.
“Despite all the talk of “back to the city,” suburbs account for about 90 percent of all metropolitan growth since 2010. Between 2010 and 2020 the suburbs and exurbs of the major metropolitan areas gained 2 million net domestic migrants, while the urban core counties lost 2.7 million,” states the report.
In terms of transportation and accessibility, roughly 80 percent of the nation’s metropolitan population lives in auto-dependent suburbs and exurbs. Just eight percent live in the urban core, while another 13 percent live in traditional transit-oriented suburbs, according to a recent MIT study, with the development of autonomous vehicles expected to accelerate this trend.
Houston stands as one notable bellwether by which to analyze trends around urban versus suburban. While the city of Houston itself saw 17.3 percent population growth from 2010 – 2020, according to Census Bureau Data, the city’s suburbs accounted for 82.7 percent of the population growth.
At the national level, housing affordability continues to play a key role in people opting to live in an urban versus a suburban environment. From 2010 to 2019 in the nation’s major metropolitan areas, cities’ urban cores accounted for 1.4 percent of population growth, while cities’ outer suburbs accounted for just over 49 percent of population growth.
Partially a result of the pandemic, the country’s CBDs are – perhaps contrary to historical belief – dwindling in terms of their general desirability. The average downtown in the major metropolitan areas supplied less than 10 percent of employment in 2008, and in New York, which has by far the nation’s largest CBD, the share was only 22 percent. This percentage is likely to shrink even further, according to the report.
Since the start of the pandemic, tenants gave back around 200 million square feet, according to data from California commercial real estate advisers Marcus & Millichap, and the office vacancy rate stands at 16.2 percent, matching the peak of the financial crisis, the report states.
“The pandemic has revealed how the CBD’s reliance on high-end business service work left them dangerously exposed. Even San Francisco, with one of the nation’s strongest CBDs, continues to see rising office vacancies, three times the pre-pandemic levels; enough to fill the Salesforce Tower, the city’s tallest building.”
Looking ahead, it is perhaps unsurprising that much of the conversation – in terms of individual and general shifts from urban to suburban, and vice versa – revolves around the potentially long-lasting impacts of the pandemic. The worst results, except for some isolated cases, have been in areas with the highest urban densities (10,000 and over), states the report. These areas, in spite of severe lockdowns, have experienced upwards of two times or more overall adjusted COVID-19 fatalities. Lower fatality rates are generally in car-dominated places, particularly in suburbs, where people can afford space, key to reducing “exposure density” to the disease.
The pandemic has precipitated what Zillow calls “the great re-shuffling,” an acceleration of an already-decided trend towards suburbs, the sunbelt and smaller cities, the report details. Between 2019 and 2021, preference for larger homes in less dense areas grew from 53 percent to 60 percent, according to Pew Research Center.
Undoubtedly, and very much tied to the after effects of the pandemic, individuals’ choice of whether or not to work from home will play a role in preferences around living in a more urban or suburban area – largely driven by working from home versus at the office. Early in the pandemic, around 42 percent of the 155 million-strong U.S.labor force was working from home full-time, up from 5.7 percent in 2019, according to the report.
Along these lines, future preferences for urban versus suburban will likely revolve around the trajectory of the pandemic. New research from Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis suggests that, once the pandemic ends, a “residual fear of proximity” and the preference for shorter commutes – or none at all – will mean that roughly 20 percent or more of all work will be done from home. This figure is almost four times the already-growing rate before the pandemic.