With employment opportunities, options for transportation and walkability, Americans are drawn to living urban. Now, the demand for housing in urban areas is rivaling that of the suburbs, according to new research by the Urban Land Institute (ULI).
In the 50 largest markets in the nation, city population rates are speeding up toward those of the suburbs, the research shows. From 2010-2015, the amount of residents in the suburbs swelled 3.7 percent—aligning with, though higher, than the 3.4 percent observed in urban areas. By comparison, from 2000-2015, urban areas inched up 1 percent, lagging the 13 percent in the suburbs.
The explosion has given rise to specific types of “urban,” including the “challenged neighborhood,” which, as defined by the ULI, contains housing at lower prices and rents and few development projects; the “economic center,” which has historic neighborhoods and job prospects; and the “mixed-use district,” which has high-density housing in proximity to retail.
“Our cities are evolving into places that are more diverse and more interesting than ever, with a mix of neighborhoods defined by distinct characteristics that are drawing different residents and workers for different reasons,” says J. Ronald Terwilliger, chairman and founder of the ULI Terwilliger Center, which published the research. “There are very few urban areas in which housing is not mixed in or very close to commercial uses. This has significant implications for development going forward—particularly affordable housing—in terms of building cities that are livable and attainable to people in a broad income range.”
Across the 50 markets, there are more than 29 million residents in urban areas, with approximately 30 percent comprised of millennials, the research shows. Of the 29 million, their annual household income, on average, is $66,000—lower than the suburbs, at $89,000—and they have higher rents than the suburbs: an average $1,650 per month, compared to $1,275. Affordability, generally, is tighter in urban areas.
According to the ULI, there are areas expected to grow. Based on population statistics, Birmingham, Ala.; Jacksonville, Fla.; Austin and San Antonio, Texas; Hartford, Conn.; Washington, D.C.; Chicago, Ill.; Detroit, Mich.; New York, N.Y.; San Francisco and San Jose, Calif.; and Seattle, Wash.; are all on an upward track.
RCLCO Real Estate Advisors prepared the research for the ULI.