America steadily looks more urban. Once leafy suburbs build up. Atlanta "manhattanizes" from north of downtown through its midtown into uptown Buckhead--highrise apartments and condos spring up. Texas cities begin to embrace in-town lifestyles--uptown Dallas and Houston commercial nodes grow more vertical and residential. Downtown LA features more residential towers too. Along subway and light rail stops outside Washington DC and Denver, apartment projects go up. Developers target future mixed use retail-residential around regional malls. Fast growing suburban-oriented metro areas of the past 50 years realize that future growth means focusing on more dense infill locations and discouraging building out at the fringes. How else can the country accommodate the expected 100 million in population gains over the next 30 years?
In fact, government no longer has the funds to subsidize road building and water/sewer systems for far flung projects. When developers crunch the fully-loaded numbers, it's becoming more cost effective to build up closer to urban cores and in place infrastructure than out at metro perimeters. People are also looking to move closer to urban centers, seeking greater convenience and lifestyle efficiency. Gas costs may be plunging after record increases, but the downturn appears to be temporary, a salutary result of worldwide recession cutting into energy demand. One way or another people feel poorer and have less to spend at the pump.
Congestion, meanwhile, takes its toll--people are fed up with car dependency and shuttling everywhere in their cars. They want to live closer to work, stores and recreation. If a family can dump a car or two by moving closer-in, they realize they maybe saving money. Infill housing may be smaller and more expensive, but convenience has its benefits, and who wants to be saddled with heating and cooling newer generation houses built on steroids. Is it a coincidence that home prices are falling faster at the fringes?
Now the country also has a President-elect powered into office by urban and in-close suburban voters. All the nation's primary gateway cities voted mostly overwhelmingly for Obama, the first President arguably in generations to come to power from a traditional urban political base (Chicago). Recent Democrat Presidents--Clinton, Carter and Johnson--rose to power out of Southern backwaters and had no affinity for cities. On the Republican side, Nixon lived in New York for a short-time before he was elected in 1968. But he and subsequent Republicans Reagan and the two Bushes largely ignored urban issues and helped fuel suburban growth through policies that kept gas prices and car fuel efficiency standards low and favored road building over mass transit. Those policies are headed for reverse and Obama can be expected to shift funding priorities to help the major metros handle future growth. Transit and affordable housing outlays will get a boost eventually--once we dig ourselves out of the current fiscal morass.
It will take at least another generation for urbanizing trends to take greater hold in many recently suburban places, but the shifts-economic, social and political--are unmistakable.
Well, Manhattan once was forest land too.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
