Despite Upswing in City Population Growth Rates, Suburbs Still Outpace Cities in Numerical Growth

by George Masnick
Fellow

The Census Bureau recently released 2012 population estimates for cities and towns to complement the 2012 population estimates for metropolitan areas released in March.  With these two sets o f data it is possible to examine the split between primary city and suburban population growth trends.  My favorite blogger about census data, Bill Frey of the Brookings Institution, quickly released a commentary on these new data with the lead sentences: “Big cities could be making a growth comeback after a rocky decade. Their growth rates are rising and, for the second year in a row, they are growing faster than their surrounding suburbs.” 

He goes on to note that: “Among the 51 metropolitan areas with more than one million residents, 24 saw their cities grow faster than their suburbs from 2011 to 2012. That was true of just 8 metro areas from 2000 to 2010. Metropolitan areas exhibiting the largest city growth advantages included Atlanta, Charlotte, Denver, and Washington, D.C.”

Frey based his analysis entirely on growth rates, but it is the growth numbers that are more relevant for understanding city versus suburban housing demand.  When population growth numbers are examined, only 12 metros had greater numerical growth in the cities versus in their suburbs. Only seven metros on Frey’s list of 24 cities with higher growth rates than their suburbs also had higher numerical growth (Austin, Columbus, Louisville, Nashville, New Orleans, New York and San Diego).  Cumulatively, overall suburban population growth in the nation’s 51 largest metro areas outstripped overall primary city growth for 2011-2012 by a ratio of almost 2:1 (Table 1).  Atlanta, Charlotte, Denver, and Washington, DC, the four metro areas Frey singled out for their large city growth advantage, had suburban growth numbers that exceeded city growth numbers in 2011-2012.  (Click table to enlarge.)

Sources: http://www.census.gov/popest/data/metro/totals/2012/index.html
 http://www.census.gov/newsroom/releases/archives/population/cb13-94.html 

** Abbreviated name.  Primary cities are defined as the metropolitan area’s largest city and up to two additional cities with populations exceeding 100,000.

Nor are the places where cities have a numerical growth advantage necessarily trending to increase that advantage. Of the 12 metros where cities had more absolute growth in 2010-11, six didn't sustain that advantage in 2011-12, and four saw a decline in the advantage.  Only two metros had city growth advantages that increased in 2011-2012 (data not shown).

The key to explaining the differences between growth rates and growth numbers, of course, is the fact that for most large metro areas the suburbs have more people than the cities. Of the nation’s 51 largest metro areas, only five had greater primary city populations in 2012.  Three are sprawling metros located in the South and West (Austin, San Antonio and Jacksonville), and the remaining two in this category butt up against other metros and geological barriers to suburban growth (San Jose and Virginia Beach).  The vast majority of suburbs contain more population than primary cities, with Atlanta having more than 11 times as many people living in the suburbs; Hartford, Orlando, Providence, and St. Louis around eight times as many, and Washington, DC over 6 times.  Percentage rates of growth calculated on such disparate population bases are really not comparable.

Primary city population growth has been reinforced in recent years by the aging of the echo boom into the young adult population, because young adults often move to cities to go to college or to work.  Large gains since 2005 in the 18-34 age group have helped turn city growth rates positive in many cases.  There were 3.8 million more 18-34 year olds in 2011 than there were in 2005.   Young adults who move to primary cities of large metros have made the 18-34 age group the largest of the three age groups plotted in Figure 1.  In the suburbs of these metros, the 55+ age group is the largest. 

Source: 2010 Decennial Census.  For a list of metro areas see Table 1.

There are three main demographic drivers of population change in the suburbs of large metropolitan areas.  First, and most important, is the aging of the suburban population. An aging population creates two pressures for population growth to slow.  The children of these households are themselves becoming adults, fleeing the nest and often heading for the city or to places outside of the 51 largest metro areas.  As these suburban households age, deaths also increase and births decrease. 

The second driver of suburban population growth is the housing turnover of aging baby boomers.  Household dissolution from death or divorce could create opportunities to boost population growth from younger and growing households who replace them. Life cycle migration out of the suburbs of large metro areas by smaller baby boomer households as they enter the empty-nest stage or retire from the labor force does the same.  However, the Great Recession and its slow recovery has dampened housing turnover in recent years through a variety of mechanisms.  Among the most salient of these are high unemployment and slow wage growth; owners who would like to sell but are underwater with their mortgages; tight mortgage lending by banks; more people working past age 65; loss of home equity wealth that was counted on to partly fund retirement plans; and lower immigration levels reducing housing demand.

The third driver of population growth in the suburbs has historically been new housing construction that attracts in-migrants.  Again, new construction during the Great Recession and its slow recovery has been at historic lows, and suburban growth has slowed as a consequence. 

Looking forward, the aging of the baby boom will continue to dampen population growth in the suburbs.  Most baby boomer households will simply age in place and decline in size. Over the next two decades, some housing that is freed up by household dissolutions by cohorts born before 1945 and by the oldest boomers, or by housing released by these cohorts who do retire to other places, will help mitigate population loss in the suburbs because those buying their houses are likely to be younger than the sellers and have larger household sizes.  But the greatest opportunities for housing turnover in the suburbs will not take place until baby boomer households dissolve in significant numbers beginning in 2030.

During the next decade, some of the factors that have depressed housing turnover in the suburbs in recent years should run their course.  New housing construction will be needed to accommodate adult population growth from aging echo boomers, and possibly the next wave of immigrants. This should largely take place outside of primary cities - where land is more readily available. 

While I do concur with Frey’s point that large city population growth is a welcome positive for their health and vitality, I also agree with his suggestion that a rebounding housing market could lure echo boomers, immigrants, and retirees out of large cities in the future.  While suburban growth rates will never approach the levels experienced in their earlier years, the suburbs should continue to grow in population now and well into the future.

Childless Households Have Become the Norm

by George Masnick
Fellow

In 1960 almost half of all households were families with children under 18.  Since then, the number has fallen to under 30 percent (Figure 1).  By definition, the declining share of family households with children exists because households without children have increased more rapidly (Figure 2).  There are many reasons for this trend: delayed age at marriage and later age at childbearing, smaller family sizes, higher divorce rates, and more couples choosing not to have children (Table 1).  The changes in each of these measures over the last few decades are quite striking. In 1960 the median age at first marriage was 22.8 for men and 20.3 for women, compared to 28.6 and 26.6 in 2012.  The share of households with four or more people in 1960 was over 40 percent, falling to just under 23 percent in 2012.  Women who were 25 in 1960 ended their childbearing years in the mid 1980s with only 8.5 percent of them remaining childless. Women born in 1960 finished childbearing in 2010 with nearly twice as many of them childless (16.3 percent). In 1960, only 13 percent of all households were single persons, but by 2012 that percentage had risen to 28. All of these trends result in households having fewer children and fewer households having any children at all. (Click charts to enlarge.)

Source: Current Population Survey March and annual Social and Economic Supplement, 2012 and earlier. Table FM-1.  Minor children numbers from Census Bureau's population estimates for July 1 of each year.

Source: Current Population Survey March and annual Social and Economic Supplement, 2012and earlier. Table FM-1

Source: Census Bureau Current Population Survey historical tables.

The interesting aspect of this long-term trend is that it continued in spite of the strong upswing in the sheer number of American children, which grew after 1990 (also Figure 1).  That increase is due to the largest baby boomers having their own children (the echo boom) and to childbearing by the flood of immigrants who arrived between 1985 and 2005.  (Note that in 2012, fully 87.5 percent of children under the age of 18 who have an immigrant parent were themselves born in this country.) 

To be sure, baby boomer and immigrant childbearing did increase the actual number of households with children.  For example, the number of households with children under the age of 18 increased from 33.3 million in 1985 to 38.6 million in 2012. This 5.3 million increase was far less than the 11.3 million increase in total number of children in the population over this period because many households with children contained two or more children under the age of 18.  More importantly, however, the increase in households without children surpassed the 5.3 million growth of households with children by a considerable margin.

Two key reasons for the recent increase in childless households have been the aging of the population and increasing longevity. The large baby boom generation (age 45-64 in 2010) is now entering the empty nest stage (at least regarding children under 18). Between 2002 and 2012, households with at least one child, headed by today’s 45-64 year old cohort, declined by 12.3 million. There are still 11.5 million 45-64 year old headed households with children, and most will become households without children over the next decade.  Furthermore, empty nest households headed by those over the age of 65 are surviving longer and longer, making it likely that the trend in the decline of households with children will continue well into the future.

Significantly, the decline in the number of households with children accelerated after 2007.  Much of the decline can be explained by the sharp drop in the number of births. Annual births rose from just over 4 million in 2001 to over 4.3 million in 2007, the highest on historical record, but then fell to just below 4 million in 2011.  The total fertility rate (births per 1000 women age 15-44) fell from 69.5  (a 17 year high) to 64.4, a decline of 7.3 percent over this same period. Both the decline in births and the drop in the fertility rate are linked to the decline in immigration that followed the Great Recession. Because newly arrived immigrants are concentrated in the childbearing ages, and because immigrants have higher fertility than the native born, the loss of immigrants has had a disproportional effect on declining fertility.  The effect of the Great Recession on lowering fertility among the native born is also of importance, but this decline could be temporary.  The echo boom generation began to turn 25 in 2010, and has most of its childbearing years yet ahead of it. A return to higher levels of immigration and/or a rebound in fertility could reverse the decline in number of births and ease the long-term decline in the share of households with children, but will not likely reverse it.

Defining the Generations

by George Masnick
Fellow

Demographers and other analysts have yet to reach a consensus about how we define post-WWII generations – regarding both naming the generations and defining the age spans that each generation covers.  Yes, there is general agreement that the oldest of these generations are called baby boomers and that they were born between the mid-1940s and mid-1960s.  Some choose 1946 to 1964 to correspond with the period of increasing birth rates, but some choose 1945 to 1964 to produce a cohort that better lines up with typical age groups published in census and survey data, say 15-34 year olds in the 1980 census.

The generations that come after baby boomers are much less consistently defined.  The next youngest was first called the baby bust to identify cohorts born during the period in which birth rates and the number of births were rapidly declining. When this generation became teenagers and young adults, it was discovered that the baby bust would likely behave quite differently from the baby boomers that preceded them in the age structure. Pundits on Madison Avenue and in the media rebranded it Generation X.  Some analysts claim that this generation arrived in the early 1960s (perhaps as early as 1961) and that its youngest members were born in 1981 or 1982. Others chose sometime in the mid-1970s as the date at which the youngest of the baby bust came into this world.

The next youngest generation, called Generation Y by uncreative verbivores, and millennials by a more hip crowd, is even less consistently defined by starting and stopping birth years. Called echo boomers by many demographers, birth years can be anywhere from the mid-1970s when the oldest were born to the mid-2000s when the youngest were. 

The problem with these differing birth year definitions is that either the generations overlap or they cover different age-spans, making data analyses very complicated.  For much of the research done at the Joint Center for Housing Studies, we define the baby boom as the cohort born 1945 to 1964, the baby bust from 1965 to 1984, and the echo boom from 1985 to 2004.  The primary reason for choosing these dates is to have the three generations cover equal 20-year age spans, and have age ranges that line up with typically published age groups.  And, not coincidently, these chosen years line up nicely with levels of annual births (see figure below).  Early baby boom cohorts quickly move to annual birth numbers in the 3.7 million range, and the youngest baby boom members are from a cohort when births returned to approximately this number. The baby bust ends when annual births returned to these same levels.  The echo boom begins and ends with numbers consistently above 3.7 million.

Though it is the number of births used to fix the year of birth of the oldest and youngest members of each generation, the size of each generation moving forward in time is also determined by immigration.  Thus, the baby boom generation arose from approximately 79.3 million births over the 1945 to 1964 period, but by 1985, when the generation was age 20-39, it was over 80 million in number, having been inflated by immigration that more than offset Vietnam War era baby boom deaths.  The baby bust generation contained only 69.7 million persons born in the United States, but high immigration flows from persons born abroad resulted in a cohort size that just surpassed the size of the baby boom when each was age 20-39.  Finally, while the echo boom has about the same number of U.S. births for its base as the baby boom, it will surely further surpass the size of baby boomers as young adults.  The current set of low immigration household projections from the Joint Center are based on population projections that estimate 86.5 million persons age 20-39 year old in 2025. 

Sources: United States Census Bureau and the National Vital Statistics Report

It is not uncommon to hear the claim that the baby boom is being succeeded by a much smaller cohort.  But this is simply no longer true if the comparison is among similar 20-year deep generations. Immigration has backfilled the birth deficit that created the baby bust and it is now larger than the baby boom.  The 2010 decennial census counted 81.5 million baby boomers and 82.1 million baby busters. But perhaps the most relevant comparison generation to aging baby boomers should be the echo boom.  It is this generation that will largely be buying baby boomer housing and making significant contributions to their Social Security and Medicare benefits when all boomers are over the age of 65. After 2030, when the ever-smaller cohort of surviving baby boomers are age 65-84, the echo boom will be age 25-44, and far fewer from this still expanding generation will have died.