The migration of population from suburbs to urban areas may be progressing more quickly than imagined.
According a report released by the Urban Land Institute (ULI) and RCLCO real estate advisers, population growth in urban areas is tracking alongside suburban growth for the first time in decades.
Between 2010 and 2015, population in urban neighborhoods increased 3.4%, compared to 3.7% in the suburbs. This contrasts sharply to the period from 2000 to 2015 when urban population grew just 1% versus 13% in suburbs.
More than 29 million Americans now live in city neighborhoods, placing 17% of the United States population in just 1% of the land area in the 50 largest MSAs. Young people are leading the charge. Almost one-third of urban households are headed by person under 35 compared to only 17% of households in the suburbs.
Cities are increasingly where the jobs are. Urban areas accounted for 30% of existing jobs and 36% of new job grow the between 2005 and 2015, according to research by ULI, a nonprofit research institute funded by 40,000-plus members of the real estate community.
Chicago is a case in point. Walgreens recently announced it would relocate 1,300 jobs to The Old Post Office building in downtown Chicago from its headquarters in Deerfield, Ill. Google has its Chicago HQ in the West Loop, and McDonald’s just opened its new headquarters there after 47 years in Oak Brook.
A corresponding increase in downtown retail centers is not likely to be as dramatic, according to Paul Bryant, director of the urban team at Mid-America Real Estate.
“There’s certainly a shift [to urban areas] from a commercial standpoint. Five years ago in the West Loop, you didn’t see an Anthropologie or a Free People,” Bryant said.
“But are you going to see a Tom Ford or a Dolce & Gabbana?” Ford posed. “Probably not. What you’ll see are affordable luxury brands.”