|The Great Exchange, illustrated. Source: miamism.com|
A couple years ago, I thought American metro area demographic trends over the last 5-10 years pointed to what I called the Great Congealing, whereupon differences — economic, social, cultural — between city and suburb were melting away. Today, I’m leaning much more to what I’ll now call the Great Exchange — growing numbers of whites in cities coupled with growing numbers of minorities in suburbs, led by African-Americans.
I first noted signs of this almost two years ago by looking at some American Community Survey data on Detroit, but then I saw growing evidence of the same trend in many other cities. With the release of the 2014 ACS data by the Census Bureau last September, others saw the same trend, and I commented on it too. It may be a little early or premature to call the Great Exchange an actual enduring trend, but I suspect that demographers and researchers are now duly alerted to it.
When researchers do agree that it is indeed a thing (which, I think, will happen with the release of the 2020 Census data in 2021 or 2022 or so) most will acknowledge that the trend has its roots in the ’90s. That was the decade in which a handful of major cities began to shed their gritty, industrial and crime-ridden legacies in favor of creative economy-inspired revitalization. That was when cities like New York, San Francisco, Boston and Chicago reported population growth after decades of loss.
Early reports at the time rightly focused on the impact of accelerated immigration from so-called “new” minorities — Hispanics/Latinos from Central and South America, and Asians from East and South Asia. Researchers also acknowledged the growing numbers of white and affluent residents to cities, but noted they contributed little to actual population growth. What was largely missed or overshadowed at the time was that city growth was enabled in part by accelerating minority suburbanization, with black city residents leading the way.
In general, the changes taking place in cities — gentrification, a post-industrial economy, rising housing costs, displacement — have been explained in terms that miss the broader demographic shift that might really govern who we live. We’re presumably 20 years into the Great Exchange, and the impacts are evident. If the Great Exchange continues for the next 10-20 years, here are some impacts I see:
Cities — Home prices and rents will accelerate relative to suburban areas. We’ve seen evidence of this in cities nationwide already. Increased demand for housing is raising prices from Washington, DC to San Francisco, and calls to relax or reform zoning to allow for more housing units in cities are growing.
Suburbs — Home prices and rents will stagnate or decline relative to cities. The evidence here so far is a little mixed, but it tends to be more true of inner-ring suburbs (and their outlying city neighborhood counterparts) than of far out exurbs. This too is demand-driven; with a growing preference for city living among younger whites, fewer eyes are looking at suburban homes and the prices will reflect that.
Cities — Professional, creative and tech jobs will concentrate in cities. Many cities have a tremendous eds and meds (educational and medical institution) legacy that they’ve used to catalyze their rebound. Such anchor institutions will continue to support growth, and more professional, tech, finance jobs will join them. The highly educated people who hold those jobs will follow them.
Suburbs — Manufacturing and service jobs will concentrate in suburbs. This trend has been in place for some time, as businesses sought the lower land costs that that suburbs offer. However, in the future this will appear to accelerate as the professional office parks that currently inhabit much of suburbia leave for city locales.
Cities — Investment in infrastructure, particularly in transit, will increase. Many new city inhabitants may find this hard to believe, but growing political pressure from transit-riding residents will ultimately lead to more funding to support transit improvements. Other public works projects, such as bike lanes, urban trails, the development of parks, will also see wider funding.
Suburbs — The pie for highway funding will grow smaller, leading to political fights. For decades suburbs counted on federal and state funding to support their auto-dominant built environment. As future lawmakers figure out ways to help move more people more efficiently, suburbs could lose out.
Cities — Political leadership will change to represent its newest residents. Big city mayors have fully moved away from the political machine and identity types that defined earlier eras. While we’re still searching for a modern city mayor model, it could be argued that mayors who prioritize innovation are moving to the fore.
Suburbs — Political battles could emerge, and intensify, between longtime residents and newcomers. In suburbs with residents that have options, as newcomers move in many will elect to move into cities or further out to the suburban periphery. In other suburbs, however, many residents will elect to dig in and seek to protect their financial and social investment, in spite of calls for changes from new residents. The seeds of conflict will be sown.
In other words, if the Great Exchange continues, cities will increasingly be known for being diverse, inclusive and affluent. Suburbs will increasingly be known for being segregated, isolated, and eventually poorer. None of this is especially prescient; it’s an extrapolation of current trends.
There are, of course, many caveats to this. Not all cities will undergo such a transition, or all parts of it. Not all suburbs will, either. Nationwide, there are metro areas with core cities that are largely suburban in character, and while some will escape the trend, others that do exhibit its traits will be seen only for their decline and not for anything else. There are also metro areas that have urban characteristics that extend far beyond the core city borders, and suburban areas there could mimic the rebound taking place in cities.
The next five years are critical. If data between now and 2020 continues to support the notion of the Great Exchange, the impacts will deepen. At that point we’ll need to determine whether new policy ideas are necessary to extend the trend, or reverse it.