Urban Neighborhoods Matching Suburban Growth
Mike Sorohan firstname.lastname@example.org
"Commuters give the city its tidal restlessness, natives give it solidity and continuity, but the settlers give it passion."
A new Urban Land Institute study finds the population of urban neighborhoods in many metropolitan areas is growing as quickly or nearly as quickly as that of suburban neighborhoods, reflecting ongoing consumer demand--particularly among younger households-for "highly walkable" living environments convenient to jobs, transit and urban amenities.
The New Geography of Urban Neighborhoods, prepared for ULI's Terwilliger Center for Housing by RCLCO Real Estate Advisors, noted for the first time in decades, population growth rates in urban neighborhoods of the nation's 50 largest metropolitan statistical areas are approaching suburban growth rates. Between 2010 and 2015, the growth rate of urban neighborhoods was 3.4 percent, compared to 3.7 percent for suburban neighborhoods. This is in sharp contrast to 2000 to 2015, when the growth rate for urban neighborhoods was 1 percent, compared to 13 percent for the suburbs.
"Our cities are evolving into places that are more diverse and more interesting than ever, with a mix of neighborhoods defined by distinct characteristics that are drawing different residents and workers for different reasons," said ULI Terwilliger Center Founder and Chairman J. Ronald Terwilliger. "There are very few urban areas in which housing is not mixed in or very close to commercial uses."
Terwilliger added these factors have "significant implications for development going forward--particularly affordable housing--in terms of building cities that are livable and attainable to people in a broad income range."
Key findings from the report:
--Currently, more than 29 million Americans live in urban neighborhoods. This represents 17 percent of the total population living in just 1 percent of the land area in the 50 largest metro areas.
--Urban places are now capturing more than their fair share of new job growth. Urban places accounted for 30 percent of existing jobs and 36 percent of new job growth between 2005 and 2015. Job growth was particularly strong in economic centers during this time.
--Upscale urban places are among the most racially and ethnically diverse types of neighborhoods. There is nearly even split between the white and non-white populations in economic centers and mixed-use districts, two urban neighborhoods with the highest average rents.
--Nearly one-third of urban households are headed by millennials. More than 29 percent of households in urban locations are under the age of 35, compared to 18 percent in the suburbs. Millennials are more likely to gravitate to dense, mixed-use places.
--Rental apartment development is now concentrated in urban locations. Between 2010 and 2017, the rental apartment inventory in urban neighborhoods increased by 32 percent, compared to 16 percent in the suburbs. However, apartment development within urban locations varied sharply, with 50 percent of the development occurring in high-end neighborhoods and economic centers; 42 percent in mixed-use districts and emerging economic centers; and only 8 percent in stable and challenged neighborhoods.
--Urban places continue to face greater housing affordability issues than suburban places. While average annual household incomes tend to be lower in urban areas than the suburbs--$66,000 versus $89,000--the average monthly apartment rent in urban areas is $1,650, far higher than the suburbs, at $1,275.
--Nearly 50 percent of people who live in urban areas commute by transit, walking, biking or carpooling, compared to 22 percent in the suburbs. People living in economic centers and mixed-use districts are the most likely to use alternative transportation, because these areas are the most likely to be located near public transit.
The report said Seattle has the largest percentage of residents (13 percent) living in economic centers (defined as 24/7 neighborhoods), followed closely by Washington D.C. and San Francisco (10 percent each). Jacksonville, Fla. has the most residents (12 percent) in emerging economic centers (defined as former single-family/low density areas evolving into new urban cores), followed by Birmingham, Ala. (11 percent).
New York City has the largest number (26 percent) in mixed-use districts (high-density housing/retail), followed by Chicago (23 percent). Seattle has the largest percentage of residents (53 percent) in high-end neighborhoods (upscale housing with access to shops/dining), followed by Austin (43 percent). San Jose has the largest number (82 percent) in stable neighborhoods (working-class neighborhoods), followed by San Antonio (71 percent). Hartford, Conn., has the most residents (68 percent) in challenged neighborhoods (lower home values and minimal new development), along with Detroit (67 percent).
"Recognizing this diversity is key to facilitating productive conversations about the economic, demographic, and societal trends occurring in each neighborhood and the impact these trends are having on real estate," said Adam Ducker, managing director with RCLCO.