Over the past two decades America’s largest urban areas enjoyed a heady renaissance, driven in large part by the in-migration of immigrants, minorities and young people. But even as a big-city dominated press corps continued to report on gentrification and displacement, those trends began to reverse themselves in recent years as all three of those populations started heading in ever larger numbers to suburbs, sprawling sunbelt boomtowns and smaller cities and out of the biggest ones.
That shift preceded the COVID pandemic, but has rapidly accelerated with the expansion of remote work, which has undermined the economic basis for high-end urban and post-industrial economies. Meanwhile, the severe lockdowns Democratic governors and mayors favored devastated the service and small business economies that had provided sustenance to immigrant and minority entrepreneurs and workers.
The same “canaries in the coal mine” that spurred America’s urban renaissance have been leaving its big cities in growing numbers since 2014, notes demographer Wendell Cox. New York, Los Angeles and Chicago have all begun to lose population while people have flocked to new employment hubs like Austin, Dallas, Phoenix, Columbus and Nashville that have led the way in terms of both overall new jobs and high-end business and professional service jobs.
Nowhere is this shift more evident than with immigrants. The share of the foreign born settling in big coastal “gateways” has plunged from 44 percent in 2010 to barely 35 percent in 2019. Foreign-born populations, notes Cox in research for the think tank Heartland Forward, stagnated or even declined in New York, Los Angeles and Chicago as they surged in Houston (over 25 percent growth), Dallas-Ft Worth (30 percent) Charlotte (nearly 40 percent) and Nashville (a remarkable 44 percent).
Houston, in fact, is now the most diverse major metropolitan area in the country. In 1960, Harris County, which includes Houston and many of its suburbs, was 70 percent white, non-Hispanic and 20 percent African American. Today, the county's total population is 31 percent white and non-Hispanic, 42 percent Hispanic, 19 percent Black and 8 percent Asian. The share of foreign-born Houstonians now approaches one-fourth of the population—almost twice the average for the nation’s 50 most populous metros.
More surprising still has been the equally rapid move of immigrants to smaller cities such as Fayetteville, Ark., Knoxville, Tenn,; Cedar Rapids, Iowa, Springfield, Mo., and Fargo, N.D. The fastest growth in foreign-born populations has been in areas with traditionally low immigrant concentrations. Where the foreign-born population grew by 10 percent nationally in the last decades, in states like Georgia, Kentucky, South Carolina and the Dakotas it has expanded by 30 percent.
Racial minorities, too, are heading increasingly to the sunbelt boom towns, the south and to smaller cities. The surges in Latino, Asian and African American growth are not in Los Angeles, New York, Chicago, or the Bay Area, according to an analysis by Wendell Cox for the Urban Reform Institute, but in Atlanta, Boise, Salt Lake City, Phoenix and Las Vegas.
Again, economics is a key factor. Middle-class job creation has been generally stronger in these communities and, due to less regulation and lower taxes, costs are lower. African-American real incomes in Atlanta are more than $60,000, compared to $36,000 in San Francisco and $37,000 in Los Angeles. The median income for Latinos in Virginia Beach-Norfolk is $69,000, compared to $43,000 in Los Angeles, $47,000 in San Francisco and $40,000 in New York City. The highest Asian median household incomes are in Raleigh, Jackson, Fayetteville (AR-MO) and Austin.
The ability to buy homes seems to be playing a big factor in where people choose to live. Homes today account for roughly two-thirds of the wealth of middle-income Americans and home owners have a median net worth more than 40 times that of renters, according to the Census Bureau. And home ownership, notes Cox, is in reach of many more people in the south and parts of the Midwest than it is in the ultra expensive markets in the Northeast and the West Coast.
And the young, too, are leaving for more affordable regions, again in a trend that began before but was accelerated by the pandemic and the shift to online work. Over the last decade metropolitan areas like Nashville, Austin, Detroit, San Antonio, Grand Rapids and Dallas-Fort Worth have gained populations aged 25 to 34 while their numbers have been declining, notes Brookings, in coastal “magnets” such as New York, Los Angeles and the Bay Area. According to an analysis of Census data by Smart Asset, New York City lost a net of almost 40,000 millennials in 2019 and Chicago lost more than 11,000. Los Angeles, San Diego, Boston and Miami were also big net population losers.
These changes are impacting the growth of tech, which many have seen as key to urban growth. Housing shortages in the San Francisco Bay Area and other high-demand locations become a significant barrier to innovation and economic growth and spurred greater inequality levels. In 2019, according to one survey, two in five tech workers in the Bay Area were considering a move elsewhere.
COVID has accelerated this trend, too, as major tech firms including Oracle, Hewlett Packard Enterprise, McAfee, Tesla and Dropbox have moved all or part of their key operations from the Bay Area to sprawling sunbelt suburbs. The largest gains in tech workers last year, according to a study by Big Technology, went to places like Madison, Wisconsin while leaving the Bay Area. Even the countryside may be poised for a demographic comeback; between 2018 and 2020 the percentage of millennials who said they want to live in rural areas shot up from 29 to 39 percent.
Do big cities have a future? Great and exciting places like New York will continue to attract educated young people, at least before they start families. These places will likely retain both the poor who have few options to leave and the rich who can buy their way out of the worst aspects of urban life by living in secure buildings, sending kids to private schools and absconding to second or third homes elsewhere.
But for cities to come all the way back, greater emphasis needs to be placed on making core cities more livable, healthier, safer and friendly to grassroots businesses. One partial solution would mean dispersing the economy to where people live; for example, allowing more work to be done in Brooklyn, Queens and other outlying areas than forcing people to commute into Manhattan.
What matters most now for cities, more than anything, is the realization that the world is changing, and was doing so before COVID. A return to the high-growth and high-density economy seems unlikely in the near or mid-term, but an improved city, cleaner and more human scaled, could emerge, ushering in not a bigger grandiose urban future but a more human one.
