In 2011, experts were crowing that urban counties were growing faster than suburbia. That lasted a year. Now, the largest cities in the U.S. are slowing in growth, and people are leaving for secondary cities, primarily because of the cost of entry in the housing market. For example, in the San Francisco Bay Area, the average household income of people leaving the area is $81,000 – and the median home price is $1.61 million.
This is according to Greg Lindsay, senior fellow at NewCities Foundation and keynote speaker at the National Forums Symposium 2018, held in New York City this week.
Wages are rising faster in cities in large metros/urban counties. There’s a pattern in development, said Lindsay, with intensive pockets of development in the urban core and big growth in the metropolitan periphery; the slowest growth is in the inner ring suburbs.
Lindsay cited metropolitan land use strategist Chris Leinberger’s hypothesis that walkable urban places are valuable – people will even drive to these areas just to walk around. In New York, these walkable urban places comprise $3.2 trillion of the city’s real estate and command a 150 percent premium in rent. There’s pent-up demand in the marketplace for these areas and, notably, this walkable urbanism matches closely with higher education and higher income.
This is becoming evident in big-growth cities like Nashville, which has seen an explosion in relocations by workers leaving larger cities. Amazon HQ2 is the greatest litmus test for demand for walkable urbanism. Their requirements for the highly-anticipated new headquarters city:
- Sizeable and highly educated workforce
- Community and quality of life
- Ground transportation
- Air transportation
- A LOT of room to grow
Lindsay says that cities are always created around whatever the state-of-the-art transportation device is at the time, citing the growth of cities from horse and buggy through today’s rent-it-as-you-need-it bike. Mobility is a service, too, with mobile apps that combine booking, mapping and payments into one simple click.
Intel’s “Passenger Economy” is estimated to reach $7 trillion in value 2025 as autonomous vehicles become mainstream and mobility-as-a-service disrupts long-held patterns of car ownership, maintenance, operations and usage. This trend carries worldwide: Japan plans to deploy robo-taxis by 2030 as a way to keep its increasingly aging population mobile. By 2035, electric autonomous delivery drones – floating warehouses or “sky malls” – will fulfill e-commerce demand in China.
Lindsay said that the sharing economy is different, and there’s value in flexibility. This is leading people to think about how they use office space. A CBRE study cited that one-third of coworking facility users say they’ll never leave the concept for a traditional lease. Coworking center users create networks of business in collaboration in these spaces, doing business with one another.
Coworking isn’t limited to the big providers, and Lindsay shared that one of his favorite places to find a workspace is through Spacious, which partners with Manhattan’s best restaurants to open the doors to beautiful spaces in the hours they’re not being used. According to their website, members pay a monthly fee for “access to every space in the network to meet, relax, connect, and enhance their lives.”
WeLive has two locations in Northern Virginia, redefining housing by combining residential and coworking space into one building. Furnished, flexible apartments are literally “above the store,” as residents can utilize shared amenities for both their home and office.
When it comes to urban revitalization, how people live is as important as how they work and move. “Placemaking” is the creation of places to bring people together, and Lindsay cited Quick Loan’s $400,000 investment in revitalizing downtown Detroit that includes public art installations, pedestrian walkways, food trucks, comfortable seating, live entertainment and other attractions.
Kathryn Hamilton is Vice President for Marketing and Communications at NAIOP Corporate.