Posted in Charlotte Market, National Housing Market | Posted on 08-07-2012 | Written by Bill Miley
Perhaps you read it or saw it on a news broadcast. It was hard to miss. Most of the media, smart growth advocates, urban sociologists, carbon footprint zealots, champions of high density growth, and fossil fuel adversaries couldn’t wait to print or announce the newest census data released in June, 2012; “U.S. cities are growing faster than the suburbs for the first time since the 1920s.” Twenty-seven of the nation’s 51 largest metropolitan areas exceeded their suburbs in population growth in the twelve months between July 1, 2010, and July 1, 2011. Even Housing Secretary Shaun Donovan proclaimed, (no doubt with the Administration’s blessing) “We’ve reached the limits of suburban development.” The Associated Press, The Wall Street Journal, MSNBC and Time, to name a few, all trumpeted that “cities outpace the suburbs in growth.” Forbes reported, “2012 became the tipping point when cities finally overtook the suburbs.”
Many of these articles were written with such a political slant that it sounded as though it was just a matter of time before the suburbs became ghost towns and we all moved to the big city. Then, I remembered reading a few months ago that the 2010 Census revealed that Americans were continuing to disperse, and that we were becoming more ‘suburban.’ Now I was confused, so I found last year’s Forbes article and read “The 2010 Census reveals that, contrary to the “back to the city” message, suburban growth continues to dominate in most regions of the country, constituting between 80% and 100% of all growth in all but three of the 16 metropolitan areas reporting.”
It was clearly time to do a little investigative work. Brookings Institution demographer William Frey had researched the most recent census data to break down estimated growth in terms of cities and suburbs. According to his analysis of the 51 metropolitan areas with more than 1 million people, the primary cities in those metros grew an average of 1.1 percent, compared with 0.9 percent growth in the suburban areas between July 2010 and July 2011. So what was wrong with most of the reporting? It’s the deliberate misinterpretation and manipulation of the data to imply false trends. First of all, the central cities make up only a small portion of the metropolitan areas, and a faster percentage growth doesn’t translate into a larger numeric growth. The data revealed that Atlanta grew by 2.4 percent while its suburbs grew by only 1.3 percent. But Atlanta’s 2.4-percent gain meant 10,040 new residents, while the suburbs 1.3 percent gain meant 62,869 new residents. Numerically, suburban growth swamped the growth of the central cities. There’s another way that a city’s percentage growth can be guaranteed and inflated quite easily. It’s called annexation.
In regards to the Census data itself, it was collected for only one year time frame and was drawn from the American Community Survey, an annual census count that is less reliable than the full-blown, once-every-decade, door-to-door version. When the sampling is much smaller, the margin of error increases. To illustrate, look at the U.S Census Bureau News joint release of housing starts and new home closings to see what they don’t know. Their most recent report of estimated annual new residential sales is 350,000 as of July 25, 2012 “This is 8.4 percent (±12.4%) below the revised May rate of 382,000, but is 15.1 percent (±16.7%) above the June 2011 estimate. The margins of error exceed their estimates. It doesn’t exactly boost your confidence in their accuracy.
For much of the past decade, there has been a constant media drumbeat about the “return to the cities.” The new data proved in this “dramatic switch” as Time reported, that Americans have seen the light. The proof was in, young adults were dismissing homeownership in the suburbs for no-strings-attached apartment living, public transit, bicycles, and potential urban jobs. They want us to believe long-term changes such as decreased reliance on cars are here and that we like the ease of having amenities within walking distance. (Yeah, right. 75% of the days in Charlotte over the past two months have been above 90 degrees.) As Frey said in his analysis of the census data, “The real question is will cities continue to hold their own when the suburban housing market picks up? Many economists believe that the new “generation rent” will not last as young adults sort out decisions about jobs, finances, marriage and having children. Then there are the practical considerations such as better schools in the suburbs, and mortgage tax breaks for home ownership. Nonetheless, the urban greens want to jam everyone into a richer, more fulfilling and as they believe, a more sustainable lifestyle. The new American Dream is not a home in the suburbs with a white picket fence; rather it’s a fourth floor walk up apartment in the bustling city. They would like to disregard the May 2012 homebuyer poll released by TD Bank that revealed desires of homeownership are still quite alive in the U.S. The majority (84 percent) of today’s younger renting generation (ages 18-34) responded that they intend to buy a home. More than half of those surveyed stated homeownership is a vital component to defining the American Dream. The sample size of 1,303 had a margin of error of +/- 2.3 percent. The survey was conducted by the global research company Angus Reid Public Opinion.
I’m glad that many cities seem to be doing well and growing. I hope the trend (if there is one) continues as I, for one, enjoy driving into a clean modern Charlotte, NC occasionally for dinner at a nice restaurant or a fun evening at the different clubs in Uptown. I’m just not sure there is any evidence of a sustained urban trend. The ideologically motivated back-to-the-cities movement seems to be purely a wishful dream of many city planners, Uptown Chambers of Commerce and urban media advocates.