Is the Future of America’s Cities in the Suburbs?

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America’s suburbs are emerging as cities in their own right, according to Joel Kotkin and Wendell Cox, authors of “The Next American Cities,” a report from the Urban Reform Institute. Americans have been migrating to the suburbs for a decade, a pattern that was accelerated by the pandemic.

Kotkin, executive director of the Urban Reform Institute, and Cox, founding senior fellow at the Urban Reform Institute, participated in a discussion hosted by real estate consulting firm RCLCO and moderated by managing director Gregg Logan. The discussion also included Charles Blain, CEO of the Urban Reform Institute, Craig Collin, COO of Tavistock Group, and Jim Carman, President – Houston Region of The Howard Hughes Corporation.

When analyzing what the next American cities might look like, the researchers concluded that these cities won’t actually be cities at all. Instead, the population is shifting to “cities” that look more like master-planned communities than traditional urban cores.

Kotkin said that one obstacle to the development of master-planned communities that can provide the type of housing and lifestyle that middle-class and working-class families want is planning boards. He said these boards tend to promote higher-density living, but families typically prefer a little more space in their homes and communities.

Cox presented some of the data that supports the theory, showing that net domestic migration has declined in core urban counties since 2012 while steadily rising since then in suburban counties. Population growth in outer suburbs was 54% between 2010 and 2020, compared to 24% in inner suburbs, 6% in the urban core and inner ring of cities and under 2% in central business districts in the urban core.

The researchers found evidence of domestic migration away from cities even in the Pacific Northwest and Sunbelt cities, not just the usually cited New York, San Francisco and Los Angeles.

In addition to looking at population changes, Kotkin and Cox looked at employment factors and found that only about 10% of jobs are in central business districts. Employment is dispersed not just from the urban core to the edge of cities but beyond into suburban centers. Based on a recent McKinsey survey, just 31% of employees want to work in an office five days per week. Working primarily or frequently from home makes it easier to live within as much as two hours from the office.

New suburbs resemble urban areas

The newer suburbs, which Kotkin and Cox refer to as “new cities,” are different from traditional suburbs in several ways. These planned communities are less attached to a traditional urban business center and residents are less likely to commute into the city. Instead, they’re more likely to work at home or work in a location within the community or in another nearby suburb.

These communities are designed with a strong amenity culture and to provide a safe, affordable place to live with good schools and a diverse population. Demographic analysis found that the percentage of racial, ethnic and foreign-born populations all increased in the 50 fastest-growing counties in the outer suburbs over the past decade. That diversity, which was more commonly found in cities, will inform the culture of these communities as they grow.

The rate of homeownership is higher in the suburbs compared to the urban core for all racial groups. Among non-Hispanic whites, 47% own homes in the urban core compared to 74% in the suburbs. Among Blacks, 31% own homes in the city compared to 44% in the suburbs. Among Asians, 40% own homes in the city compared to 65% in the suburbs. The gap is wider for Hispanics, with 24% owning a home in the city compared to 50% in the suburbs. A prime focus of developers on the panel is attainable, affordable housing, including some higher-density multifamily housing for young people and empty-nesters clustered around the town center of these planned communities. As these communities increase in population, add more commercial businesses and become more urbanized, the demand for multifamily housing is anticipated to increase.

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