The reports of a reverse migration of average Americans from suburbs and the country to the cities appear to be greatly exaggerated.
Real estate data geek Jed Kolko crunched some Census Bureau numbers, and discovered that the percentage of Americans that lived in urban neighborhoods dropped slightly between 2000 and 2014. Around 21.7% of Americans lived in urban areas at the turn of the 21st Century; by 2014 that number had dropped to 20.1%.
Kolko also discovered that the population of the densest urban neighborhoods fell even faster. Around 7.4% of Americans lived in dense urban neighborhoods fell from 7.4% in 2000 to 7% in 2014.
These numbers cast doubt upon the claims of an urban renaissance, with Americans abandoning suburbia for hip urban areas. If Kolko is right, more Americans are moving out of urban areas than moved in to them.
The numbers involved are small and Kolko’s math is questionable, but the trend seems to be real. Kolko claimed that the percentage of Americans in urban areas dropped by 7% – I calculated it at 1.6%. He also claimed that the population of the densest urban areas fell by 5%, my math came to .4%.
Are Gentrification and Income Inequality Emptying Out our Cities?
If the trend is real what is going on here? Why are urban populations falling when cities seem to be more popular and fashionable and ever.
The most logical answers seem to be gentrification and income inequality. Gentrification is increasing housing costs in many urban areas, making them unaffordable for a lot of people. The average rent in Brooklyn was $2,723.46 a month in March 2016, according to MNS real estate.
The average rent within 10 miles of San Francisco was $3,770 in February 2016, according to Rent Jungle. During the same month the average one bedroom apartment in San Francisco rented for $3,096 a month and the average two bedroom apartment rent for $4,126 a month. Those prices indicate that more people than ever want to live in cities but they cannot afford to move there.
Income inequality makes it harder than ever for most Americans to afford those housing costs. The value of the average middle class family asset’s fell by 28% between 2001 and 2013 according to the Pew Income Study. The same study found that the average middle class family’s income was 4% less in 2014 than it had been in 2000.
Pew also shows us why rents are going up so fast in more affluent areas, there are more rich people around than ever before. Back in 1971, just 4% of Americans were in the highest income brackets, by 2015 that number had risen to 9%. At the same time around 21% of Americans could be classified as rich or upper class.
These figures show us that the housing market could simply be responding to demand. The middle class is shrinking and it has less money, in 1971; 61% of Americans were classified as middle class, by 2014 only 50% fit that percentage. The middle class also has less money, in 1971 the middle class controlled 62% of America’s wealth, by 2014 it only controlled 43% of the nation’s wealth. Meanwhile the upper class controlled 49% of the aggregate income.
The Upper Class Conquers the Cities
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
― Warren Buffett
It looks as if income inequality is changing the face of our cities. The upper class is monopolizing the more desirable areas and using its money as a weapon to drive out the poor and increasingly the middle and working classes.
America’s cities could soon mirror those in Europe, with the wealthy living down town and in a few affluent neighborhoods, the poor living in the nearer suburbs and the middle class living way out in exurbs. Recent trends such as heavy investment in transit, failure to construct affordable housing, increasing congestion and refusal to invest in public housing, will speed up gentrification and the urban population loss.
Another major trend will be a migration to more affordable cities such as Austin, Albuquerque, Colorado Springs, Buffalo, Pittsburgh, Las Vegas and Jacksonville. Those communities will grow as Americans seek affordable urban environments.
It looks as if income inequality is changing everything including the face of our cities and the places we live. One has to wonder when we will start dealing with this problem.