Over the past couple days we’ve been debating in the comments whether the increased demand for urban living among young people is a trend that will be with us for a long time, or whether the exurban growth the Lehigh Valley experienced during the aughts is going to return as the economy recovers.
Here is an earlier post on why I think the exurban trend is largely over, but consider a few other points.
First, USA Today reports on the new Census data showing that demand for housing in far-flung suburbs is way down, and core cities are driving the growth:
Almost three years after the official end of a recession that kept people from moving and devastated new suburban subdivisions, people continue to avoid counties on the farthest edge of metropolitan areas, according to Census estimates out today.
The financial and foreclosure crisis forced more people to rent. Soaring gas prices made long commutes less appealing. And high unemployment drew more people to big job centers. As the nation crawls out of the downturn, cities and older suburbs are leading the way.
Population growth in fringe counties nearly screeched to a halt in the year that ended July 1, 2011. By comparison, counties at the core of metro areas are growing faster than the nation as a whole.
“There’s a pall being cast on the outer edges,” says John McIlwain, senior fellow for housing at the Urban Land Institute, a non-profit development group that promotes sustainability. “The foreclosures, the vacancies, the uncompleted roads. It’s uncomfortable out there. The glitz is off.”
Richard Florida adds more context here.
Second, a new US PIRG report shows that driving is on a long-term decline among young people. It’s not just the recession – the structural decline goes back to 2001. Here’s Angie Schmitt:
Driving is down: “From 2001 to 2009, the annual number of vehicle miles traveled by young people (16 to 34-year-olds) decreased from 10,300 miles to 7,900 miles per capita—a drop of 23 percent.”
Biking is up: “In 2009, 16- to 34-year-olds as a whole took 24 percent more bike trips than they took in 2001, despite the age group actually shrinking in size by 2 percent.”
Young people even reported consciously driving less to save the environment. “Sixteen percent of 18- to 34-year-olds polled said they strongly agreed with the statement, ‘I want to protect the environment, so I drive less.’ This is compared to approximately nine percent of older generations.”
The trend toward non-automobile transportation options was even more pronounced among higher-income Americans, notable because this group is less likely to be motivated by economic concerns. “From 2001 to 2009, young people (16- to 34-year-olds) who lived in households with annual incomes of over $70,000 increased their use of public transit by 100 percent, biking by 122 percent, and walking by 37 percent.”
A number of factors are thought to be contributing to the trend. Some states now require “graduated” driver’s licensing, making young people pass multiple driving tests and hold learner’s permits longer before they earn full privileges. Higher gas prices, obviously, help put owning a car out of reach for many younger Americans, especially as the age group struggles in a less-favorable job market. Finally, technology, specifically smartphones, and their incompatibility with (safe) driving, help make alternatives that much more inviting.
Third, there’s an ongoing structural End of Retail scenario where the Internet is putting traditional big-box retailers out of business. Matthew Yglesias has been all over this trend for a while now:
Tolstoy wrote that each unhappy family is unhappy in its own way, but while each troubled big-box chain has a unique story, there’s a common enemy: the Internet.
Online retail sales this past November and December were up 15 percent compared with late 2010. In the third quarter of 2001, e-commerce sales were 3 percent of all retail (including food) sales in America. By the third quarter of 2011 (i.e., before the Christmas surge was fully incorporated into the data), that was over 12 percent. The move toward online shopping is relentless, driven by both convenience and the ability of Web-based retailers to largely avoid paying sales taxes. As mobile devices become even more useful for shopping, online retailers will grow faster.
There has been a furious recent debate about whether or not to lament Amazon’s ability to put your local independent bookstore out of business, but the debate itself shows what a bad position major chains are in. Some people feel sentimental about independently owned neighborhood stores, and many of them will find ways to turn those good vibes into a viable business strategy. But nobody feels sentimental about Kmart and Sears. That’s why the mall vacancy rate is still near its recessionary high point, even though retail sales have revived. Individual big-box retailers may still prosper, of course. Wal-Mart, for example, may well succeed in its effort to push into the big city markets that have thus far eluded it. But that kind of growth will come largely at the expense of existing supermarkets and other incumbents. As a whole, the big boxes will find themselves fighting over a brick-and-mortar retail pie that will almost certainly be stagnant or shrinking even if overall economic growth strengthens. Sears may go down sooner than some of its competitors, but at least, like Woolworth before it, it’ll leave an iconic skyscraper behind as its legacy. Most will simply vanish without a trace.
Finally, suburban office vacancies are still quite high as space near the core is filling up. Businesses are increasingly opting for central locations.
All these trends have certainly been accelerated by the Lesser Depression, but none of them appear to have been caused by the economic slowdown. They are all trends that were already underway, and the downturn simply pulled the inevitable changes forward in time.
The task now is for policymakers, especially at the local level, to recognize that things are not just going back to the way they were. Current land use policy and municipal finance practices are built around the expectation that development and investment will continue flowing from the center outward to the periphery. Now the tide is turning, and investment and development want to flow back toward the center. Policymakers need to accommodate this sea change by relaxing zoning restrictions on dense infill development in the core cities and inner-ring suburbs. Otherwise, they are going to miss out on the next boom in multi-family housing.