Is the Urban Growth Machine Slowing Down?


Over the last decade, sky high levels of job growth and housing costs in New York and other major cities have reinforced beliefs that the urban revival is a juggernaut that will keep charging ahead.  Last week, two intriguing reports raised important questions about how durable these trends really are.

The Geography of Jobs by the New York City Department of City Planning is a detailed look at job trends in the metropolitan region since the 2007-2009 recession. The report confirms just how much recent job growth has been concentrated in New York City and doesn’t show any data that would indicate the trend is slowing. But it strongly implies that current patterns may be unsustainable. It notes an imbalance in job, population and housing growth, especially with nearly all of the housing growth outside of the five boroughs taking place in northern New Jersey, driving up commutation across the Hudson on an already overburdened transportation network. It closes with the observation that “The addition of jobs as well as housing in highly accessible, transit-oriented locations outside the core of Manhattan offers the opportunity to relieve some pressure on Manhattan-bound commuter capacity, while improving access to job opportunities for residents of the region.”

From the other side of the Hudson, James Hughes, Joseph Seneca and Will Irving from Rutger’s Bloustein School speculate on whether last year’s U.S. Census population estimates are a sign that the tide is turning back toward suburban growth.  The “Burbs” Bounce Back: “Trendlet” or “Dead Cat Bounce” contrast population growth from 2010 to 2016, when three-quarters of added population in the metropolitan region took place in the urbanized core and population in the outer ring of counties actually declined, with 2016-2017 when suburban counties accounted for 62% of population growth and looked much more like the postwar historical norm. The authors, who have a long and solid track record in discerning regional trends, say all the right things about not overinterpreting a single year’s worth of data and listing all the possible explanations, including that it may just be statistical noise. Still, the data is striking enough that it bears watching.

While it is clearly too soon to tell, the imbalances noted in NYC Planning report suggest a probable explanation for the suburban turnaround noted in the Bloustein report. Without a dramatic increase in housing supply and transportation capacity, rapid growth in the urban core simply can’t be sustained. The city just becomes too expensive for the people who want to live there. Some are simply pushed out of neighborhoods they can no longer afford and move to cheaper housing farther from the center. For those with means, the relative cost of living in a smaller city or suburb attracts enough residents with flexible preferences.

A quick look at home prices from Zillow suggests that this might be the case. From the end of 2010 to the end of 2016, home prices (including single family, condos and coops), increased 53% in Brooklyn, 46% in Manhattan and 39% in Queens. By contrast, they increased 18% in Nassau and Hudson counties, 10% in Westchester and 6% in Bergen, and were flat in Fairfield.  While lots of other cost and quality of life factors go into location decisions, these types of price differences lead to more people choosing a house in place like Tarrytown over an apartment in Brooklyn.

This seems far more plausible than a fundamental change in the economic and demographic forces that have been increasing demand for living in cities and downtowns. The story on Millennials flocking to cities was always oversimplified and overhyped, but trends including delay in having children, less interest in driving, and the clustering of high value jobs in urban centers show no signs of abating. They may shift at the margins, but changes in population and job growth are more likely to be driven by supply than demand for the foreseeable future. The places that provide affordable housing, reliable transit, good schools and attractive downtowns will grow. The pendulum will swing between city and suburbs to some degree as prices adjust, but the enduring trends for both jobs and people favor walkable communities near transit, whether they be in places like Manhattan, Newark or Norwalk.

Achieving balanced growth that expands job opportunities and housing choices throughout the region is an underlying premise of RPA’s Fourth Regional Plan. The recommendations for housing, jobs, transit and open space are derived from a vision that maintains a thriving urban core while reviving smaller cities and suburban downtowns. Regional actions, particularly investments in a modern transportation network, are essential. But the ultimate outcome will also be determined by the zoning, land use and investment decisions of hundreds of villages, towns, cities and counties.


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