The Brookings Institution Metropolitan Policy Program Robert Puentes, Fellow

The Brookings Institution Metropolitan Policy Program Robert Puentes, Fellow A Review of New Urban Demographics and Impacts on Housing National Multi Housing Council Research Forum March 26, 2007 St. Louis, MO

A Review of New Urban Demographics and Impacts on Housing CONTEXT FOR THE DISCUSSION Five broad demographic trends Affect of those trends on metropolitan areas Thoughts on metropolitan housing demand

Profound demographic, economic, social, and cultural forces are reshaping the nation Demographically, the country is growing, aging, and diversifying. Economically, the nation is being transformed by globalization, deindustrialization, and technological innovation. Culturally, the nation is changing its attitude towards cities and urban living.

The result: Cities and first suburbs have an opportunity to attract and retain young professionals, childless couples, baby boomers, new immigrants and the assets of the knowledge economy

A Review of New Urban Demographics and Impacts on Housing Context for the discussion FIVE BROAD DEMOGRAPHIC TRENDS Affect of those trends on metropolitan areas Thoughts on metropolitan housing demand

Population Growth Immigration Aging Household Internal Migration Formation

The 1990s presented the strongest growth in four decades. And it continues through the current decade. US population growth 1900-2007 35 30 25 20 15 10 5 25% 20% 15% 10% 5% 0 19001910192019301940195019601970198019902000 Decade 0% Source: Census Numerical increase (in millions) Percent Increase

Single person households made up -- by far -- the largest increase in household type since 1980. Other family, 1,758,377 Nonfamily, 3,416,246 1-person household, 11,825,702 Absolute change in households, 1980-2005 Single female w /kids, 4,680,913 Single male w /kids, 2,165,939 Married no kids, 5,476,979 Married w /kids, 1,376,788 Source: Frey and Berube, 2003 and updated

Despite a decade of rapid immigration, the share of the U.S. population that is foreign-born is lower now than in the 1900s Total foreignborn and percent, 1900-2005 Population in Millions 40 30 20 10 13.6% Foreign Born Population (in millions) Percent of Total Population 14.7% 13.2% 11.6% 8.8% 6.9% 5.4% 4.7% 6.2% 7.9% 11.1% 12.4% 16% 12% 8% 4% Percent of Total Population - 0% Source: Singer 2005 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2005*

At the same time, the U.S. population is aging rapidly. US Age Distribution, 1970 vs. 2000 1970 2000 85+ 85+ 85+ Male Female Male Female <5 <5 <5 10% 5% - 5% 10% -10% -5% 0% 5% 10% Source: Census

Minorities, however, have younger age structures than whites, and differences will become more pronounced US Age Distribution Non-Hispanic White Hispanic 2000 Non-Hispanic White Hispanic 2025 Source: Census

Demographic change is also being driven by couples delaying marriage and having fewer children Age at first marriage, 1900-2020 Source: U.S. Census Bureau 28 27 26 25 24 23 22 21 20 Men Women 1900 1920 1940 1960 1980 2000

As men and women are delaying marriage and having fewer children, household size is declining Household Size 5.0 4.5 4.0 3.5 3.0 Persons per household, 1950-2000 Source: U.S. Census Bureau 2.5 2.0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2005

The demographic components of change reveal increasingly sharp differences between states. Source: Frey, 2002 New Sunbelt Melting Pot Heartland States

The demographic components of change reveal increasingly sharp differences between states. 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Immigration Domestic Natural New Sunbelt Melting Pot Heartland Demographic components of change, 1990-1999 Source: Census Arizona Colorado Georgia Texas California New York Minnesota Missouri Pennsylvania

A Review of New Urban Demographics and Impacts on Housing Context for the discussion Four broad demographic trends AFFECT OF THOSE TRENDS ON METROPOLITAN AREAS Thoughts on metropolitan housing demand

City resurgence Uneven growth Racial diversity Job sprawl Geography of poverty

Recent demographic and market changes have already led to a surge of population in cities and downtowns. 10% 8% 6% 4% 2% Total population, 45 U.S. downtowns, 1970-2000 0% -2% 1970s 1980s 1990s 2000s 1,000,000 750,000 Population growth in 50 largest cities, 1970-2005 500,000 250,000-1970 1980 1990 2000 Source: Census

The majority of downtowners in 2000 lived alone; the next largest group contained young couples and empty nesters Downtown households by type, 2000 Other nonfamily 11% Married with kids 6% Married without kids 14% Other family with kids 5% Other family without kids 5% Living alone 59% Source: Birch, 2005

Younger workers (age 25-44) form the largest number of downtowners, but older workers (age 45-64) are catching up Downtown residents by age, 1990-2000 Source: Birch, 2005 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 1990 2000 - Kids Students Younger workers (Under 18) (18-24) Older workers (25-44) (45-64) Seniors (Over 65)

The primary determinant for how a city grows is based on the metropolitan area it is in. City Category Number of Cities City Population Change Metro Population Change Rapid Growth (over 20%) 18 31% 26% Significant Growth (10 to 20%) 23 15% 22% Moderate Growth (2 to 10%) 33 6% 13% No Growth (-2 to 2%) 6 0% 11% Loss (below -2%) 20-7% 6% Source: Berube, 2003

City resurgence Uneven growth Racial diversity Job sprawl Geography of poverty

Population is continuing to decentralize in nearly every U.S. metropolitan area Selected cities and suburbs, population growth 1990-2000 50% 40% 44% 37% City Suburbs 30% 22% 20% 16% 19% 18% 10% 6% 4% 7% 9% 0% Atlanta Chicago Denver Memphis Top 100 Source: Census

Every household type grew at faster rates in the suburbs than in cities 45% 35% Central City Suburbs Population growth, 1990-2000 25% 15% 5% Source: Frey, 2003-5% All Households Married - no children Married - with children Other Family - no children Other Family - with children Nonfamily

While many cities are healthy and vibrant, others are not Nearly 17 million Americans live in a weak market city Source: Wolman and Furdell, George Washington University Weak market cities rank in the bottom 3rd across a range of economic indicators (ex. unemployment, poverty, income)

From 1980 to 2000 the states with the highest rate of rural land loss were concentrated in the Northeast and Mid-Atlantic. Loss in developable rural land, 1980-2000 >20% 10-20% 2-10% <2% Source: Theobald, 2005

City resurgence Uneven growth Racial diversity Job sprawl Geography of poverty

The country is becoming increasingly diverse Black 11.7% Asian 2.8% Hispanic 9.0% Native American 0.7% Other 0.1% Hispanic 14.4% Native American 0.7% Asian 4.3% Two or more races 1.3% White 75.6% Black 12.2% 1990 2005 White 66.9% Share of population by race/ethnicity, 1990 and 2005 Source: U.S. Census Bureau

In aggregate, the racial makeup of the 100 largest cities has shifted. The top hundred cities are now majority minority 7% Share of population by race and ethnicity, 2000 White Black Hispanic Asian Multi-racial 23% 44% 24% Source: Census

The percent of each racial/ethnic group living in the suburbs increased substantially Share of population by race and ethnicity, 1990, 2000 1990 2000 39% 51% 55% 46% 50% 33% Source: Census Blacks Asians Hispanics

If not for immigration, several of the nation s largest cities would not have grown during the 1990s 20% 15% 18.1% Overall Without immigration Population growth with and without foreign-born, 1990-2000 10% 9.4% Source: U.S. Census Bureau 5% 1.7% 4.6% 4.0% 2.6% 0% -5% -1.4% -3.9% -1.7% -3.9% -10% Dallas New York Minneapolis Chicago Boston

Yet in many metro areas, the locus of immigration is shifting from the central city to the suburbs 100% 75% 50% Percent of foreignborn population in suburbs, 2000 In the U.S. 48% of all immigrants live in suburbs 25% 0% Atlanta Washington Miami Las Vegas Portland Chicago Los Angeles San Francisco Charlotte New York Source: Singer, New Immigrant Gateways, Brookings, 2003

Older, inner-ring first suburbs are now home to a large and growing number of foreign-born residents. 10,000,000 First Suburbs Primary Cities New er Suburbs 8,000,000 6,000,000 Foreign-born population, 1970-2000 4,000,000 2,000,000 0 1970 1980 1990 2000 Source: Puentes and Warren, 2006

City resurgence Uneven growth Racial diversity Job sprawl Geography of poverty

Over half of all jobs in large metropolitan areas are located more than 10 miles outside of downtowns. Share of jobs within 3-, 10-, and greater- than-10- mile radius of center, 2002 52% Outside 10 miles 17% Inside 3 miles 31% Between 3 and 10 miles Source: Berube, undated

But the level of employment decentralization varies widely across metropolitan areas. Portland Minneapolis New York San Francisco Denver Chicago < 3 miles 3-10 miles >10 miles Los Angeles Houston Atlanta Source: Berube, undated

In many metros, an exit ramp economy dominates office development. Share of metropolitan office space (SQ FT), 1999 60% Central business district Edge cities Edgeless space 40% 20% Source: Lang, 2003 0% Chicago Denver Los Angeles San Fran

City resurgence Uneven growth Racial diversity Job sprawl Geography of poverty

Most of America s poor live in large metropolitan suburbs. But residents of large cities are twice as likely to be poor. Below-poverty population by location, 2005* Percentage of people in poverty, 2005 16.7 18.4 14.0 9.4 Source: American Community Survey * Estimates are roughly +/- 0.5 % pts. Large Suburbs Smaller Cities/Towns Micropolitan/Rural Large Cities

During the 1990s, the number of high-poverty neighborhoods in central cities dropped significantly In Chicago, the number of high poverty tracts fell from 187 to 114. 1990 2000

While the number of high-poverty areas is dropping sharply in cities, it is increasing at an alarming rate in first suburbs 10% Percent of census tracts in first suburbs exceeding specified poverty thresholds, 1970-2000 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Tracts with 20% poverty rate Tracts with 30% poverty rate Tracts with 40% poverty rate 1970 1980 1990 2000 Source: Puentes and Warren, 2006

A Review of New Urban Demographics and Impacts on Housing Context for the discussion Five Broad Demographic Trends Affect of those trends on metropolitan areas THOUGHTS ON METROPOLITAN HOUSING DEMAND

Five key takeaways In 2030, about half of the buildings in which Americans live, work, and shop will have been built after 2000. Household formation will have profoundly important impacts. Childless married-couple and single-person households will grow rapidly. Older, inner-ring first suburbs will figure prominently in conversations about metropolitan growth and development. The nation will continue to get much more diverse and multi-cultural. Suburbs especially will have to adapt. Demographics are not the only determinant of our urban future: economic restructuring, globalization, energy, education, governance.