You may have heard that millennials and Gen Xers are fleeing big cities to more affordable suburban markets. 2018 marks the fourth year in a row that cities with at least half a million people saw a drop in residents age 25 to 39 from the previous year. Census data shows that most of those people leaving are calling nearby suburban areas home. Some smart growth advocates have begun fearing the worst – the rebirth of suburban sprawl, in all its endless glory.
But let’s not get ahead of ourselves. The idea that millennial migration to suburban communities will emulate post WWII growth patterns is a false one. Young adults may be fleeing to the suburbs to get more bang for their buck but what they’re willing to spend that buck on has completely changed. Market trends have shifted. Meanwhile, denser development is vital to mitigating environmental and municipal service costs. Suburban communities should begin considering what both of these facts mean for their own growth moving forward.
First, let’s consider where employers prefer to locate. The fact that people age 25 to 39 are moving out of cities into suburbs does not mean that employers need to follow. Unlike the peak of suburban office development in the 1980s and 1990s, employers have invested heavily in downtown campuses and offices over the past decade. This is partially due to the influx of people moving into the city but also due to the benefits that can be shared in dense, urban areas. In the book “Who’s Your City?”, Richard Florida argues that there’s a benefit to being close to large numbers of other creative professionals. Daily proximity to other people multiplies the probability of unique ideas and partnerships being generated. This leads to a more productive company and economy. Additionally, an employer with a downtown office provides employees with access to nearly endless amenities that the employer does not have to pay to maintain or operate. This includes transportation, gyms, restaurants, and parks, all within walking distance. Lo and behold, suburban office vacancy lags behind urban office vacancy despite the lowest unemployment rate in years and the urban exodus of young professionals. The most successful suburban office communities are dense, mixed-use developments accessible via public transportation, like Bethesda and Tysons Corner.
Second, young adults age 25 to 39 still prefer dense, walkable neighborhoods with access to public transportation. Of course, the 600 square foot studio for $1800 per month isn’t going to cut it when starting a family but neither will a four bedroom McMansion located a 15 minute drive from town. Data suggests that walkable communities lead to a healthier lifestyle and more social cohesion. Young adults want to raise a family in a neighborhood where you can walk to the park, grab some groceries, and pick up a prescription all in one trip. Additionally, families are getting smaller. This means less demand for large homes and more demand for small homes, townhomes, and condominiums. According to data from the Department of Housing and Urban Development (HUD), the preference for mid-size housing options has increased since 2014. Most of this shift is due to the influx of first-time homebuyers entering the market.
Public transportation remains a big draw for young suburbanites. Data from the American Community Survey shows people age 25 to 39 concentrating near public transit stations, even in suburban counties. One such county is Montgomery County, Maryland, outside of Washington, D.C.
Montgomery County is just one example but similar clustering occurs in other suburban counties bordering expensive, transit-forward cities, like Chicago, New York, Philadelphia, and San Francisco. Access to an urban center for work or leisure is important. Young adults have not shunned the car – whether it be a personal vehicle or car-share – but for travel into and out of cities, public transit remains a cost-effective and time-efficient option. Some suburbs are already built for this and seem to be cashing in on what is being called the “hipsturbia” movement but there are many more low density suburbs with a multi-modal transportation network that could stand to benefit from a zoning code that incentivizes transit-oriented, mixed-use development.
We are beginning to understand the costs associated with sprawl as well. An illuminating study published in October by Christopher Goodman, a professor at Northern Illinois’ School of Public and Global Affairs, found that more compact and dense development in the average county would result in less public spending. This makes sense. Public services like schools, police, fire, and waste management would all benefit from a reduction in distance traveled. Infrastructure costs would also rise significantly with more sprawl. Compact development means more people served per square mile of sewer and road. This doesn’t even include the negative externalities caused by sprawling development. Sprawl is shown to directly increase air pollution, water pollution, and greenhouse gas emissions. In the era of climate change, state and national governments are generally taking on stronger roles in reducing environmental pollution – a cost that is eventually passed onto the taxpayer. Cities and counties are a good place to start when planning a more sustainable society.
I’ve written before about one policy mechanism that’s been used to reduce sprawl: transfer-of-development rights (TDR). TDR market programs facilitate the exchange of zoning incentives from landowners in areas in need of preservation to developers in accessible, “development-friendly” areas. A TDR program encourages compact growth in areas most suitable for it. King County, Washington and Montgomery County, Maryland have both implemented their own TDR programs. Cities and suburban counties experiencing growth could do the same and direct development into smarter, denser, and more sustainable patterns.
The increase in adults age 25 to 39 choosing to live in suburban communities is not surprising. The pendulum was destined to swing the other way as the millennial generation grew into their family-rearing years and cost of urban living continued to rise. Nevertheless, the market does not indicate that this suburban growth will emulate the suburban growth of the mid-20th century. Young adults seek mid-size units in walkable neighborhoods with easy access to urban cores. Additionally, we now know the cost of urban sprawl – environmentally and municipally – is significant. Suburban communities and counties would be wise to begin developing new policy and planning frameworks that take advantage of this growing demand and simultaneously reduce the various costs that sprawling development causes.