The New Shame of Our Cities

The New Shame of Our Cities

by Joel Kotkin

A metropolitan economy, if it is working well, is constantly transforming many poor people into middle-class people, many illiterates into skilled people, many greenhorns into competent citizens. . . . Cities don’t lure the middle class. They create it.

                        —Jane Jacobs

Perhaps no song has been belted out more often than the one that claims that America is moving “back to the city.” Newspapers, notably the New York Times, devote enormous space to this notion. It gained even more currency when the Obama administration sec­retary of Housing and Urban Development, Shaun Do­novan, pro­claimed that the suburbs were “over” as people were “voting with their feet” and moving to dense, transit-oriented urban centers.

This celebration perhaps reached its crescendo when Amazon initially announced its move to Crystal City, Virginia, and Queens, New York. “Big cities won Amazon and everything else,” Neil Ir­win of the Times predictably enthused. “We’re living in a world where a small number of superstar companies choose to locate in a handful of superstar cities where they have the best chance of re­cruiting superstar employees.”

In fact, however, these views are more aspirational, or even delusional, than reflective of reality. Overall, data suggests that we are not seeing a great “return to the city” but, with few exceptions, a continued movement out to the suburbs and less dense cities, nota­bly in the sunbelt. The spurt of urban core growth that occurred immediately after the housing bust turned out to be remarkably short lived, with the preponderance of metropolitan growth—roughly 80 percent—returning, as has been the case since at least the late 1940s, to the suburbs and exurbs. Indeed, at no point did Census Bureau estimates show net domestic migration from suburbs to core cities, only a reduced rate of migration in the opposite direction. 

Even the country’s most influential urbanist, scholar Richard Florida, now suggests that the great urban revival is “over.” Rather than the usual belief that density leads to productivity and innovation, a new Harvard study demonstrates that, between 1970 and 2010, suburban areas have overall steadily increased their economic advantages: the share of suburbs making up the top ranks of all urban and suburban neighborhoods (measured as the top quartile) went from roughly two-thirds in 1970 to almost three-quarters by 2010.

Shifting Demographics:
Exaggerating the Urban Renaissance

Even at the peak of the urban “renaissance,” most of the population and job growth continued to occur in the suburban periphery. Cities achieved some parity in growth rates in the period between 2009 and 2011, as presidents Bush and Obama provided “a covert bailout”  to banks, universities, and government bureaucracies concentrated heavily in and around urban cores.

Yet as the rest of the economy improved, and urban land prices rose, population movement again shifted away from the dense inner city to less compact, more affordable locales. Analysis of census data by demographer Wendell Cox found that the core counties of the metropolitan areas with populations of more than one mil­lion, after losing only ten thousand net domestic migrants in 2012, experienced an outflow of nearly 440,000 by 2017.

This has occurred even in the most exemplary “creative class” cities. In New York, a city coterminous with five counties, the net domestic migration loss has been 1.1 million since 2010; and much of this is to surrounding suburbs, which account for five of the top seven destination counties in the nation for fleeing Gothamites. New York’s borough of Brooklyn, the acclaimed epicenter of early twenty-first-century urban dynamism, lost population in 2017 and 2018. In fact, in 2018, New York, Los Angeles, and Chicago all lost residents to the rest of the country. Net domestic migration has also plummeted in San Francisco by 80 percent since the early 2010s. The key here has been surging housing prices, which eat up much of the big-city wage premium that many boosters focus on.

Critically, this trend has taken hold among the generation that many predicted would sustain the urban “renaissance”: millennials.  In fact, as a new Brookings study shows, millennials are not moving en masse to large, dense cities but away from them. According to demographer Bill Frey, the 2013–17 American Community Survey shows that New York now suffers the largest net annual outmigration of postcollege millennials (ages 25–34) of any metro area—some 38,000 annually—followed by Los Angeles, Chicago, and San Diego. New York’s losses are 75 percent higher than during the previous five-year period.

By contrast, the biggest winner is Houston, a region many plan­ners and urban theorists regard with contempt. The Bayou City gained nearly 15,000 millennials (net) last year, while other big gain­ers included Dallas–Fort Worth and Austin, which gained 12,700 and 9,000, respectively. The other top metros for millennials includ­ed Charlotte, Phoenix, and Nashville, as well as four relatively ex­pensive areas: Seattle, Denver, Portland, and Riverside–San Bernardino. The top twenty magnets include midwestern locales such as Minneapolis–St. Paul, Columbus, and Kansas City, all areas where average house prices, adjusted for incomes, are at least 50 percent lower than in California, and at least one-third less than in New York.

Perhaps even more significant has been the geographic shift with­in metro areas. The media has frequently exaggerated millennial growth in the urban cores. In reality, nearly 80 percent of millennial population growth since 2010 has been in the suburbs. Even in the Bay Area, the tech industry’s global epicenter, suburban Silicon Val­ley has continued to grow its STEM base rapidly, while San Francis­co has recently seen a rapid slowdown in tech jobs. Perhaps density, massive homelessness, and filthy and disorderly streets, not to men­tion unaffordable living costs, lose their appeal as couples contemplate childbearing.

Dense, high-priced cities still attract young people straight from college, but many don’t stay long. The average resident in the down­town areas so popular with postcollege millennials has lived in the same house for approximately 2.4 years, compared with seven or more years in the suburbs and exurbs. As economist Jed Kolko has observed, the perceived “historic” shift back to the inner city has turned out to be a relatively brief phenomenon. Since 2012, suburbs and exurbs, which have seven times as many people, are again grow­ing faster than core cities. Suburbs are also seeing a strong net move­ment among educated people, those earning over $75,000, and espe­cially those between the ages of 30 and 44.

Progressive Politics, Regressive Economics

During the last decade, several urban cores—notably New York, Boston, Seattle, Denver, and San Francisco—have enjoyed significant growth. Yet at the same time, as Florida notes in his New Urban Crisis (2017), this process has served to enlarge “deepening economic segregation between a prominent elite and stubborn pov­erty, as well as a shrinking middle class.”

In the past, the traditional urbanist notion, advanced by the late Jane Jacobs, maintained that cities grew best not by “luring” talent but by “creating” a middle class from its existing residents. Yet now, according to two recent Oregon studies, lower-income people in cities experience less upward mobility than people from rural areas. Indeed, according to Pew research, the largest gaps between the bottom and top quintiles can be found in some of the most progressive metropolitan areas, such as (in order from largest to smallest divides) San Francisco, New York, San Jose, Los Angeles, and Boston. In all these “superstar” cities, the middle-class family is rap­idly disappearing, even as poverty remains stubbornly high.

This reflects national phenomena. Research by urban analysts Joe Cortright and Dillon Mahmoudi shows that the number of high-poverty (more than 30 percent below the poverty line) neighborhoods in the United States has tripled in the last half century, from 1,100 in 1970 to 3,100 in 2010. Despite some steady growth of poverty in suburbs, the ratio of the impoverished, according to the American community survey, is still two-thirds higher in urban cores than in the suburbs. Thus recent growth in the cores seems to have done little to address poverty or inequality.

A new study by the Center for Opportunity Urbanism found that, in most cities, unbalanced urban growth has exacerbated class divisions, while doing little to address the decline of middle-class households. Philadelphia’s central core, for example, rebounded be­tween 2000 and 2014, but for every one district that gained in in­come, two suffered income declines. In 1970, half of Chicago was middle class; today, according to a new University of Illinois study, that number is down to 16 percent. Meanwhile, the percentage of poor people has risen from 42 to 62 percent. Urban analyst Pete Saunders describes the city today as “one-third San Francisco and two-thirds Detroit.” 

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