Pete Saunders: The “greatest locations to stay” might not be the perfect locations to stay
The newly released 2020 census data gives us a better sense of where Americans hold the best places to live. Cities like Phoenix, Dallas, Houston and Las Vegas continue to enjoy great popularity and maintain the rapid population growth that has characterized them for half a century. Others, like Buffalo and Cincinnati, have reversed decades of population decline, leading to proud urban revitalization claims. Even more so, like Detroit and St. Louis, people continued to lose, as they did for the past 70 years.
However, it is also clear from the data that population growth may no longer be the best way to measure the health of US cities. What looks like the “best places to live” may not be the best places to live.
Historically, the United States has presented two different models of urban growth. The first, which has existed for a century or more, could be called the demand model. In this case, a variety of factors, from jobs to an affordable lifestyle to a comfortable climate, attract people to new places. The most important examples are the sunbelt cities, which have grown dramatically over the past few decades.
The second is the asset model, which has grown in importance since the 1980s. In this case, older cities, well past their initial boom in development, have relied on their corporate, institutional, and amenities to attract people. They have bet on sectors of the economy where they were already particularly strong, such as technology, finance, universities, and medical centers, to halt their population decline.
Interestingly, the new Census data appears to show a third category of cities that are developing – metropolitan areas that are booming economically without adding new residents. I reviewed population growth and GDP growth per capita data for the 106 metropolitan areas with more than 500,000 residents in 2010. By 2019, the population growth of these 106 metropolises averaged 8.4%, while the GDP per capita growth averaged 32.3%.
Metropolitan areas such as New York, Los Angeles, Chicago, San Francisco, San Jose, San Diego, Portland, Seattle, Salt Lake City, Miami, Minneapolis / St. Paul, Boston, and Denver all had above average economies. Some, including Seattle and Salt Lake City, also saw strong population growth. In New York, Los Angeles, and several others, there were no dramatic population shifts.
Most surprisingly, a handful of Rust Belt Metros – Chicago, Detroit, Cleveland, and Pittsburgh, among others – exceeded average GDP growth per capita but actually lost population.
What’s happening? There used to be a fairly direct relationship between population growth and economic growth. Booming economies created more jobs, which attracted more people. Indeed, when the cities in the rust belt were in the middle of the 20th century, productivity was largely based on the number of people who could increase it.
This connection has since been severed. The meteoric rise of technology over the past 50 years has enabled economic productivity without a large workforce.
In the case of the cities of the rust belt, the production-driven demand model that worked for much of the 20th century fell apart. While the same is true of many other cities, the collapse hit the central part of the US particularly hard, where more than a third of all jobs were lost in a vanished manufacturing sector.
While struggling for years to save all sorts of factory jobs, these cities often overlooked their other virtues. Only in the past few decades have they successfully mimicked New York and Los Angeles, investing in knowledge sectors such as technology, finance, and eds and meds to suit today’s economic landscape. This has led to increases in productivity, even without adding more employees.
Conversely, many of the most popular cities across the country appear to be growing without a corresponding increase in economic productivity. Multiple Sun Belt Stars – Orlando, Lakeland, Tampa / St. Petersburg, Deltona / Daytona Beach, Jacksonville, Cape Coral and North Port / Sarasota in Florida; Dallas and San Antonio in Texas; Las Vegas and Phoenix – both saw average GDP gains per capita that were below the overall average for the 106 largest subways.
The places we traditionally refer to as “winners” – the major coastal cities and the Sun Belt subways – could be in trouble soon. The former are rapidly becoming unaffordable and displacing middle-class families. The latter could suffer from an oversupply of underqualified labor in an environment that increasingly requires highly skilled labor.
However, a number of cities in the center of the country are starting to create real economic opportunity while remaining affordable and livable. If they haven’t attracted new residents yet, they will soon.
Pete Saunders is the community and economic development director for the village of Richton Park, Illinois and an urban planning advisor. He is also the editor and publisher of Corner Side Yard, a blog focused on public order in America’s Rust Belt cities. He wrote this for Bloomberg Opinion.