Urban markets continue to grow and thrive — but don’t count out the suburbs yet, according to a new Cushman & Wakefield report.
The migration that has spurred development and rising property values in such 24-hour cities as New York, San Francisco and Chicago is now taking place in smaller cities, notes the report, Cool Streets.
America's urban population "capture rate" more than doubled to 21 percent between 2010 and 2015, compared to 8 percent between 2000 and 2010
“There has been an explosion of overall growth (including Cool Street neighborhoods) in metropolitan areas considered secondary or even tertiary markets,” it reports. Cool Streets cites such 18-hour cities as Boise, Id., Charlotte N.C., Denver, Nashville, Tenn., and Portland, Ore.
Secondary cities such as Portland and even tertiary cities are now booming
Between the 1970s through 2010, suburban communities captured most (69–70 percent) of the population compared to 6–10 percent for urban locales and 14–23 percent for rural areas. This changed dramatically after 2010, when the urban capture rate rose to 21 percent between 2010 and 2015 as cities added roughly 15 million people. During the same period, the suburban capture rate declined to 71 percent and that of rural areas stood at just 8 percent.
But don’t give up on the suburbs yet. Millennials are now in their prime family-rearing years, and a good many of them will be headed to the suburbs in pursuit of more space, affordable housing and good schools. And when they do, these areas can expect to see the same kind of live-work-play mixed-use development that has benefited cities in recent years, the report observed. According to demographers at John Burns Real Estate Consulting cited in the report, the urban capture rate will decline from 21 percent between 2010 and 2015, to 15 percent between 2015 and 2025.
Millennials, now in their prime family-rearing years, will look to the suburbs for more space and good schools
But don’t give up cities either: millennials don’t determine their fate, the report points out. In fact, while affluent millennials are often credited with the surge in urban growth, in reality just a third of the 15 million urban migrants between 2010 and 2015 belonged to this cohort; empty-nest baby boomers accounted for 10.3 million of these new city dwellers.
Millennials can't take most of the credit for the urban living boom — baby boomers account for just over two-thirds of the 15 million people who moved to cities between 2010 and 2015
What’s more, as millennials start to return to the suburbs, Gen-Xers are increasingly likely to move to cities as they become empty nesters. And behind them, eventually, Gen Z (those born after 1997) will follow to the cities — when they can afford to.
By Edmund Mander