Ryan Holeywell | February 22, 2016 The number of new Millennials reaching adulthood is now officially declining each year.

Ryan Holeywell | @RyanHoleywell | February 22, 2016

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A prominent demographer says that country has officially reached "peak Millennial." But what does that mean for cities?

We may be nearing the end of that generation's love affair with urban centers.

Last year, a little more than 4 million Americans reached age 25, according to data compiled by Dowell Myers, an urban planning and demographics professor at University of Southern California's planning school. That number matters: around age 25 is when young people start to get more serious about their careers, their housing, and their future.

Those people would have been born in 1990, which represented the peak year of births for the Millennial cohort, roughly defined as those born between the early 1980s and early 2000s. Each subsequent year, we'll see a smaller and smaller number of Americans from the Millennial generation come of age -- ergo, we've hit "peak Millennial."

Article continues below chart.


What's the significance of that figure for those who study and care about cities? Much has been written about Millennials' supposed preference for urban living. But now -- as Millennials get older and finally start to get more money -- Myers says it's worth rethinking the conventional wisdom that Millennials prefer city living to the suburbs.

What might actually be happening, Meyers posits, is that young people prefer cities to the suburbs, and Millennials are currently the young generation. The million dollar question, then, is whether Millennials represent something different, or will they follow the lead of other generations and move to the suburbs as they age.

Myers isn't totally convinced, but he's banking on the latter.

He theorizes that already, there's a quirk in the supposed urban trend. There are likely many Millennials living in cities who would have moved to the suburbs already if their circumstances were different. Because of the country's sluggish economy in recent years, both the job and housing markets have gotten "stopped up," essentially trapping some young people in low paying jobs and in urban rental units they can't leave, thanks to bad credit or inadequate savings.

It's well-known Millennials are delaying childbirth and marriage, in part due to financial reasons. Housing might follow a similar pattern.

"People can't buy houses, so they're staying in these apartments," Myers said during a presentation in Houston earlier this month. "The whole system's backed up. It's not pretty."

In other words, the trend we're seeing might not be Millennials enamored with living in urban centers. It may be that those who flocked there in previous years now lack the wherewithal to leave, even though they want to do so.

For cities, that's a significant problem for a couple reasons. First: those Millennials often become gentrifiers. "What do young people do if they can't find a middle-class apartment to move into? They raid lower-income neighborhoods," Myers said. "It's gentrification, and poor people take the brunt of it all."

Those young people aren't trying to become gentrifiers. Their circumstances are forcing them to find the best housing they can on very little income.

Second: they may actually start to leave the city, despite some urban leaders' insistence that the urban trend is real. Today, the economy is showing signs of life, and the stock of Millennials seems to be improving.

It's a fate other observers are projecting as well. Last year, the data-focused news outlet FiveThirtyEight wrote:

Millennials are moving to the suburbs at a much lower rate than past generations did at the same age. In the mid-1990s, people ages 25 to 29 were twice as likely to move from the city to the suburbs as vice versa. Today, they’re only about a quarter more likely.

But even that slowdown appears to be mostly about people delaying their move to the suburbs, not forgoing it entirely. Today’s 30- to 44-year-olds are actually heading for the suburbs at a significantly faster rate than in the 1990s.

The site crunched U.S. Census data and noted that despite the narrative surrounding Millennials' supposed love for cities, "across all ages, races, incomes and education groups, more Americans are still moving out of cities than in."

A survey published by the National Association of Home Builders last year found that most Millennials want to live in single-family homes outside of urban centers, even if they currently live in the city, according to the Wall Street JournalThe desire was in part due to their quest for more space: the overwhelming majority of respondents said they wanted a home with at least three bedrooms.  The survey, it's worth noting, only included respondents who had recently purchased a home or intended to do so in the coming years. It excluded  those who intend to rent for many years, either by choice or because they lacked the credit or cash to purchase a home.

And the Washington Post, speculating on the trend, notes that the growing cost of living in big cities isn't keeping up with wage growth, which will inevitably pressure some young families to leave.

The Post writes:

In Washington, for example, 25 percent of renters spend more than half their income on rent. In order to afford a median-priced apartment in New York, where two-thirds of residents are renters, a household must have an income of $53,000, or $12,000 more than the citywide median.

Despite all the ink spilled about repurposed lofts and bike lanes, it’s quite likely that if you’re scraping by as a graphic designer, writer or even nonprofit employee in a big city, you’re going to end up in the ‘burbs after all.

In other words, young people will eventually be moving to the suburbs not because cities are undesirable, but because they're so desirable to so many people they just aren't affordable for the typical young family.

But even if that does happen, Myers says the Millennials who grew to love urban living in their formative years may export some of the things they liked about the city -- namely, walkability -- into the suburb (the Post, commenting on the same likelihood, touts the possible emergency of "hipsturbia").

"Their urban preferences could be satisfied in many other walkable areas," Myers said. "It could be in inner suburbs. It could be in transit-oriented developments. We don't know where. But there's going to be a competition for Millennials as they move out."




The end of the article seems to point in a very different direction than the tone of the rest of it would suggest. If millenials starting families are priced out of centre cities because of high demand, that doesn't seem to spell disaster for the cities. Additionally, if they bring a preference for an urban built environment such as walkablikity, cycling for transport, public transport, etc., then it seems that the effect of millenials won't change so much as the places subjected to that change. A wave of millenials driving suburbs to become more urban, or gentrifying already urban suburbs is very different than what happened with previous waves of suburbanization. The urban/walkable vs car-oriented form of the built environment seems like a more meaningful distinction than centre city vs suburb.

Spot on. This topic is always framed as an either/or. It's both. The basic truth is that everything is becoming more urban. Suburbs will start to look more like city centers. People will buy the home that fits their current situation in life. the suburbs were never going away. But we aren't building subdivisions in greenfields anymore either.

@ Kurtisp
Yes, we are building suburbs in greenfields, with auto-oriented infrastructure, they are just further out! Take a drive around Fredrick, MD, or out toward Dulles, or anywhere around, but not in, Baltimore.

That being said, even in the new greenfield developments, the housing density is much higher than what was common in the '50's and '60's

Thanks for pointing out that the explanation of these trends should not be an either/or as far as cities or suburbs. The trend is more about walkable urban places, which can be located in center cities, towns or villages. Currently there aren't many walkable urban places, which is driving price and demand in center cities and walkable suburbs. The trick is using our knowledge of these places to plan for the future of all our cities.

I would argue that many millennials starting families are being forced out of the cities because of a lack of affordable family housing options in urban cores. Build more 3 and 4 bedroom housing options in cities and many more will stay.

The article says "Each subsequent year, we’ll see a smaller and smaller number of Americans from the Millennial generation come of age..." Well, if you look closely at the table, that's true for about seven (7) years - and then the numbers begin to RISE again. Indeed, births surge to a new "peak" at 2007. These are the iGens, and early indications are they like urban, too.

They'll have a successor generation as well, and here's another key point - there will continue be a "next" generation who, when young, will have a urban, walkable propensity. The young-age cohorts of successive generations - combined with their post-family downsizing counterparts - will maintain and grow urban market demand.

Maybe the next generation will have a propensity for urban living, but I don't know if that's a given. The people in the 2007 peak are only 9 years old at this point, so I don't think it's fair to say what sort of housing they'd prefer.




As I said, they are EARLY indications. And let's not also forget about those Millennials in their post-family downsizing years.

Perhaps it might be a research project for your Institute?

I don't think the subject of gentrification belongs in a specific discussion about the future of urban living. In other words the topic is important, but carries with it an entire subset of considerations that tend to muddy and obsfucate the discussion of how we move towards the liberation of urban living. Liberation from the isolation and dreary realities of our car-centric culture. State sponsored incentives to build low cost housing in the urban core will be fought tooth and nail by interested parties. Cities need a middle class. Builders make more money by going luxury. Conditions create perverse incentives to gentrify. Generations of people have now longed for more space and truth be told, want to shield their children from the "underclass" in the city. It's a complex mix of mythology, bias, bigotry and anecdote that drives Americans tilt to the suburbs. Maybe Millennials won't be prejudiced and will simply want more space for the money. What the real estate agent doesn't say is that there's a huge price. Commuting robs a person of dignity and sanity. No hyperbole. In the end what we need to do is live near where we work and near where we shop for food. Urban space with proper design can be inspiring and comfortable and safe. Add the rest: bars, restaurants, coffee houses, libraries, movie houses, retail, professional offices, schools, public transport, recreation areas, health clubs, government services and even light manufacturing ect. We can modify the cities or create villages from scratch. Either way or both. What we do now is nuts. Autos steal our time. Our most precious commodity.

So let me get this straight: this article claims
1. Millenials are moving to suburbs because they were priced out of the suburbs during the recession.
2. Millenials are moving to suburbs because they are priced out of the city.
1 could be true or 2 could be true. But I don't see how both can be true.

I think this article is missing one of the largest drivers for why people don't stay in cities...and that is the quality of schools.

Once people have children all sorts of priorities change and that 30-40 age bracket is now when many have school aged little ones. In DC, school quality is inconsistent across the city and that is a point where people have that "should we stay" discussion. Many leave.

Also, many times in urban environments how easy it is to get to a school is a factor. It's common for families to find families driving 30+ min one way just to drop off children. That's a hardship on any family which also turns people toward the relative ease of a in boundary suburban school system.

Keep improving school systems and more will stay.

Acknowledging the point regarding quality education, and by no means intending to diminish its value, in partial response it's important to recognize that households with children are now about 30% of all households - down from almost 50% in 1960 - and projected to go to near 25% of all households by 2025. Households with children are not the principal drivers of urban living. Here's a good research piece for further reading:


Why is school quality so rarely discussed in this and similar articles? For millennials who choose to have children and who care about good public schools, suburbs typically have better options than urban centers. I think that failing to discuss this is a severe oversight, especially considering the degree to which real estate prices and taxes are highly correlated with local public school quality. For most people who decide to have kids, good schools are essential. For me it's probably the only reason I can think of to leave my city...


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