WASHINGTON – During the housing bubble, Americans moved in droves to the exurbs, to newly paved subdivisions on what was once rural land. Far-out suburbs had some of the fastest population growth in the country in the early 2000s, fueled by cheap housing and easy mortgages. And these places helped redefine how we think about metropolitan areas, pushing their edges farther and farther from the traditional downtown.
In the wake of the housing crash, these same places took the biggest hit. Population growth in the exurbs stalled. They produced a new American phenomenon: the ghost subdivision of developments abandoned during the housing collapse before anyone got around to finishing the roads or sidewalks.
These scenes and demographic trends left the impression that maybe Americans had changed their minds about exurban living. New Census data, though, suggests that eight years after the housing crash, Americans are starting to move back there again.
The fledgling trend, captured in data through 2014, raises questions about whether American preferences for where and how to live truly changed much during the housing bust or if we simply put our exurban aspirations on hold. At the same time, the shift calls into question a parallel and popular narrative: that Americans who once preferred the suburbs would now rather move into the city.
Demographic data over the last three years have tentatively supported this argument, with implications for the type of housing Americans want (smaller homes over large McMansions), the type of communities they prefer (“walkable” over car-dependent ones) and where developers should plan to build. The evidence: From 2011 until 2013, dense counties at the center of large metropolitan areas in the U.S. saw faster population growth than the exurbs, a fact cheered by city-lovers as a sign that urban living was on the rise again.
The updated census county population estimates released in February, though, show the exurbs are now again growing faster than more urban places, according to Brookings Institution demographer William Frey.
That picture doesn’t mean that more Americans now live in exurbs than what Frey calls the “urban core,” nor that cities are even shrinking. It means, rather, that the most urban counties are now growing more slowly than counties containing the far-out suburbs.
“It’s not going to be reverting back to the early part of 2000s when we had this maniac exurban and suburban growth,” Frey predicts. But it does appear now that the last three years were atypical.
Demographers have been waiting for new data about migration patterns and population growth because our understanding of what Americans want has been clouded by the weak economy. Did far-flung suburbs stop growing because fewer families wanted to live there, or because fewer families had the means to move (and fewer builders the demand to build)? Likewise, have people been staying in cities because they want to be there or because they haven’t been able to leave?
Frey is still cautious about what these trends mean in the long run, in part because Americans are still moving at much lower rates than usual. During down times in the economy, we’re more likely to stay put wherever we are because we’re not moving for new jobs, or to buy new homes, or because many of us are putting off major life transitions like having a family or moving out on our own.
This picture of where Americans want to move is also partly complicated by policies that make it easier for developers to build new housing in the exurbs than in the heart of dense cities.
Development set on Denver’s fringe
WATKINS, Colo. (AP) – Burt Eaton left Aurora more than 20 years ago, moving east to seek peace and quiet on a windswept piece of prairie not far from Watkins.
Now urban life is creeping up on him as plans for an expansive 9,000-home community, dubbed Prosper, take shape on more than 5,100 acres of farmland surrounding his house.
The $600 million mixed-use project, which got preliminary approval from Arapahoe County earlier this year, is just one of several giant residential communities poised to rise from the ashes of one of the worst housing implosions in generations.
It joins 12,000-home Sterling Ranch, the first phase of which was approved by Douglas County in January, and 10,000-home Green Valley Ranch East in Adams County as the latest mega master-planned developments to put outward pressure on metro Denver’s footprint.
All told, there are more than 31,000 home lots in the metro area’s residential pipeline, according to Metrostudy. All but 2,600 of those lots are in the suburban counties ringing Denver.
But developers of Denver’s next fringe communities aim to dispel the notion that their plans represent nothing more than the next wave of suburban sprawl, insisting that these future communities will be designed with an eye toward walkability, connectivity and community.
For Eaton, 68 and retired, the specter of an expanding metro area into places as yet untouched by suburbia presents a direct encroachment on his quality of life.
“I don’t like it, but I don’t think there’s a lot I can do about it,” he said as he attached a reflector to a post near his driveway off South Watkins Road. “I don’t think anyone out here likes it – but money talks.”
Eaton is like millions of others living on the edge of America’s cities, shielded from the noise, traffic and urban density by tracts of open land. That solitude was buttressed for the better part of a decade by a down economy that put homebuilding plans on hold.
But as the economic picture brightened considerably in the past couple of years, the Denver market finds itself with record low home inventories, skyrocketing rents and galloping housing prices.
That means residential projects that had gone dormant are being dusted off and put in play – particularly those out on the suburban fringe. Most have 20- to 30-year horizons to completion.
“We’ve been in a major slowdown for the last five years, so it looks pretty good right now,” said Brad Calvert, Metro Vision manager for the Denver Regional Council of Governments. “There’s tons of pent-up demand.”
Recent market data bear that out. Just 4,079 homes were available for sale at the end of February, according to the Denver Metro Association of Realtors, which uses a wider 11-county definition of the metro area. That’s only a quarter of the 12-year average of 16,717 homes available for sale at year’s end.
A home’s average time on the market plummeted to 45 days in February, compared with 108 days in 2011, and led to fierce bidding wars among buyers.
Meanwhile, the median home price in the metro area has increased to $286,500, according to Zillow. That’s a 14.7 percent jump in one year. By contrast, the median value of a home nationwide is $178,500.
The rental picture is even more frenzied. Zillow reports that metro Denver rents, including homes and apartments, rose more than triple the U.S. annual average in January – 10.2 percent versus 3.3 percent. The average monthly rent in the metro area is now $1,827.
With a DRCOG projection of 4.3 million people in the metro area by 2040 – there are 3.1 million now – housing experts suspect that the nearly 1,000 square miles the city and its suburbs occupy today is primed to expand.
And much of it will need to be absorbed by the millennial generation – the 75 million-strong cohort born largely in the 1980s and 1990s.
Despite millennials’ urban-hipster reputation, Joel Kotkin, a fellow in urban studies at Chapman University in California, said they are not much different from previous generations.
“Millennials are getting into their 30s and want to settle down – and places close in are very expensive, and the schools may not be so good,” Kotkin said. “They are going to move out for the same reasons people always have.”
A National Association of Homebuilders survey released this year found that 66 percent of millennials want to live in the suburbs, 24 percent seek a rural home and 10 percent are sold on the city center. The main reason cited by those favoring the suburbs in the survey is the desire for more space.
That’s what prompted Mark Kluth, a 29-year-old expectant father, and his wife to ditch their 900-square-foot home near Olde Town Arvada last year for a much larger and newer house in the Buffalo Mesa neighborhood in Commerce City.
“We wanted a bigger house to have room for our growing family, and the house size we wanted we just couldn’t afford in (the closer-in suburbs of) Arvada and Westminster,” Kluth said.
His commuting time to his state job in downtown Denver has nearly doubled compared with where he used to live, but he said it’s a small price to pay for more room and a neighborhood where plenty of other couples their age are raising young children.
“It’s been great,” he said. “I think it’s a great place to have a family.”
Millennials, however, won’t be satisfied with the suburbs of their grandparents’ era, warns Chris Leinberger, a land-use strategist. They want a walkable and amenity-rich area with a more urban-style feel and alternative transportation options.
As proof, he points to today’s hefty price premium for homes in Denver’s Highland neighborhood versus homes in suburban Highlands Ranch – a dynamic that was the reverse 30 years ago when the Highland neighborhood was beset by urban problems.
But Leinberger isn’t convinced that builders are ready to abandon the cookie-cutter suburban sprawl model that has been panned by urban planners for years.
“Homebuilders are not producing what the market wants because they don’t know how to do it,” he said. “It’s building buggy whips when the market wants cars.”
That jeopardizes the long-term viability of distant suburbs, he said.
Susan Daggett, executive director of Rocky Mountain Land Use Institute, said it comes down to how new neighborhoods are designed.
“If they’re not transit-oriented and people have to get in their cars to get to work or the grocery store, they can’t really be called self-sustaining,” she said.
Admittedly, Daggett said, housing in Denver is costlier than comparable units on the fringe, but if the greater transportation costs of living in suburbia are factored in, “suddenly the somewhat more expensive housing (in the city) is more affordable.”
