ULI: Suburbs Positioned to Thrive
Suburban housing markets are evolving rapidly and are well-positioned to remain where most Americans live and work–even as many urban cores and downtown neighborhoods attract new residents the Urban Land Institute reported.
“What’s happening in America’s urban places is very exciting and important, but this report pulls back the lens and presents a much broader view and a better framework for understanding where people actually live in this country,” said Adam Ducker, Managing Director at RCLCO Real Estate Advisors, Bethesda, Md., which published the report, Housing in the Evolving American Suburb, with ULI.
Ducker said suburbs have evolved far beyond “monolithic” bedroom communities.
RCLCO and ULI describe different kinds of suburbs based on the key factors that define and determine their housing markets. The report classifies and compares suburbs in the 50 largest U.S. metro areas and examines key issues that will shape suburban residential demand and development in the years ahead.
Among the report’s key findings:
–America remains a largely suburban nation. In America’s 50 largest and most urbanized metropolitan areas, suburbs account for 79 percent of the population, 78 percent of the households and 32 percent of the land area. Interestingly, 75 percent of young adults aged 25 to 35 live in suburbs.
–Suburban growth has driven recent metropolitan growth. From 2000 to 2015, suburban areas accounted for 91 percent of population growth and 84 percent of household growth in the top 50 metros, the report said.
–A large majority of Americans still work in suburbs–although job growth has been more balanced recently. In 2014, 67.5 percent of the employment in the 50 largest metros was in suburbs. Between 2005 and 2010, employment in suburban areas remained stagnant, while it increased by 8.2 percent in urban areas. But between 2010 and 2014, jobs increased by 9 percent in suburbs versus 6 percent in urban areas.
–Suburban residents overall have higher incomes. The median household income in the suburbs equals $71,000, substantially higher than the $49,200 median household income in urban areas.
–The suburbs are “young” compared to their regions overall. The suburbs house 85 percent of children aged 18 and younger.
–American suburbs as a whole are racially and ethnically diverse. More than 75 percent of the minority population lives in the suburbs.
–The regional variation in home values between suburbs and cities is “substantial,” the report said. On average, the median home value in urban areas equals $365,000 compared to $305,000 in suburban areas. But there are major variations by region–for instance, in the New York metro area, median home values are 28 percent higher in urban areas than in the suburbs. But in the middle section of the country home values in the suburbs are significantly higher than those in urban areas.
“While the ascendancy of American suburbs starting after World War II came largely at the expense of cities, the recent revitalization of urban centers is in many cases complementary to the continued strength of their suburbs,” said ULI Terwilliger Center for Housing Executive Director Stockton Williams. “Suburban housing dynamics increasingly reflect some of the most profound issues shaping our society, including aging, immigration, economic mobility and evolving consumer preferences. As a result, suburbs will generate substantial residential development and redevelopment opportunities and challenges in the years ahead.”
