City or Suburbs? What Do Millennials Really Want?

Turns out, the answer isn’t either-or. Rather, it’s a question with 80 million answers.
April 2018
(Wisconsin Economic Development Corporation)
Alan Ehrenhalt
By Alan Ehrenhalt  |  Senior Editor

If you live in Chicago and spend time on any of the big social media sites, you may notice some rather unusual ads: streaming commercials telling you that if you’re a millennial, you should pack up and move to Wisconsin.

There are four of these spots. Each is a slick 20-second polemic. One of them starts by showing a frazzled young woman in a crowded and messy studio apartment somewhere in Chicago. The narrator reminds us that rents in Milwaukee average 42 percent less than what she’s paying now. For the price of a tiny, cramped third-floor walkup in the bigger city, she could have a spacious loft in Milwaukee’s gentrified Third Ward. And the overall cost of living would be at least 20 percent lower.

The ads aren’t just on social media. The Wisconsin Economic Development Corporation has spent a million dollars placing variations of them on Chicago’s elevated trains, in gyms and on drink coasters in bars. They all talk about how short the commute would be if you just relocated 90 miles up the road to live and work.

So far, there are no reports of hatchbacks crammed with hipster possessions causing traffic jams on northbound Interstate 94. But Wisconsin’s promotional team thinks it is on to something. They have concluded that the two things millennials worry about most are commuting times and the cost of living. Wisconsin believes it can use those issues to attract younger Chicagoans across the state border to a cheaper, more efficient and more relaxing life.

Will it work? There are reasons to be skeptical. Much of the target audience knows that Milwaukee isn’t exactly a utopia. Moving there may reduce commuting time, but it won’t be an escape, for example, from crime or racial tension. Those are about as bad in Milwaukee as they are in Chicago.

Still, the whole exercise calls forth some larger questions about the needs and wishes of the country’s largest generational cohort. There are about 80 million millennials, if you accept the common definition of those born between 1980 and 1999; they moved past the baby boom generation in size a couple of years ago. What do millennials really want? And how do planners and governments go about giving it to them? Those are hard questions. But maybe there are rewards for communities that get the answers right.

For the first few years of the current decade, there seemed to be a clear solution to the millennial puzzle: Young people, many millions of them, wanted to live in cities. That conclusion was supported by some solid numbers. Boston, Los Angeles, San Francisco, Seattle and a lot of other cities were seeing more population growth than the suburbs around them, and that was thanks mostly to millennials.

The “urban millennial” idea was pretty convincing until mid-decade, when researchers began to notice that the trend was starting to reverse itself. Not only were the hot cities failing to maintain their millennial growth spurt, but several of them were actually losing younger residents. Dowell Myers, the influential demographer at the University of Southern California, coined the term “peak millennial” to describe the phenomenon of stagnating urban millennial numbers.

In Myers’ view, young people had been staying in cities because they couldn’t afford to move anywhere in a sluggish economy. Once the economic picture improved, they began to head out to the suburbs. That was why suburban populations began to grow again after about 2013.

The next couple of years appeared to lend some credence to Myers’ hypothesis. In 2016, Boston lost 7,000 millennials. Los Angeles lost 2,500. Chicago managed to stay even, but just barely. The notion that most millennials secretly covet a suburban lifestyle began to approach conventional wisdom. A few months ago, Time magazine opined that America’s big cities “have already reached peak millennial as young people begin to leave.”

But there is a problem with the peak millennial idea, as the urban economist Joe Cortright was first to point out. The entire millennial cohort, like the rest of us, is getting older. A decade ago, the oldest millennials were still in their 20s. Now the oldest of them are 38. Of course many of them will move to the suburbs; people in their late 30s can be expected to do that as they marry and have children. But their interest in suburbia tells us nothing about whether younger adults -- those under 30 -- have lost their urban fascination.

Actually, there is some evidence that they haven’t lost it at all. The urbanist Pete Saunders looked at the numbers recently and found that in 33 core metro areas, educated young millennials were choosing cities over distant suburbs by a ratio of 1.5 to 1. This was certainly the case in Chicago. It was also true in Cleveland, Detroit, Pittsburgh and St. Louis.

Young people who opt for the suburbs aren’t suffering from some mysterious form of urban ennui. They are reacting to the absence of sufficient, affordable housing in or near the city center to meet the demand. Cities could stave off whatever level of peak millennial shrinkage actually does exist by promoting the construction of such housing, and especially of units with two and three bedrooms for families with children. But there is little sign that many cities are doing this.

So if millions of younger millennials are squeezed out or priced out of downtown, and don’t want to move 30 miles beyond the city limits, what are they likely to do? One answer is that many of them will be drawn to close-in suburbs that have been reconfigured to look as much like urban neighborhoods as possible. Real estate developers, who are generally ahead of policymakers on these questions, have been betting on this trend for the past decade.

June Williamson of the City University of New York, a diligent student of urbanized suburbia, estimates that a decade ago there were about 80 projects in the country that fit that description. Today, she thinks, there are more than 1,500. Many have been built on the ruins of conventional suburban shopping malls of the 1970s that have gone out of business. Nearly all offer outdoor shopping districts with apartments and condos above and adjoining the retail units. No one has the illusion that these developments recreate traditional city neighborhoods, but their rising property values suggest that they are attracting a sizable share of millennials willing to leave the city but unwilling to tolerate a long exurban commute.

But as promising as the developments of urbanized suburbia have been so far, there will be millions of millennials who don’t want it, who see it as a clever but unsuccessful attempt to make something look like a city when it isn’t a city. Is there still another option for these people?

There may be one more. It’s the one that the Wisconsin Economic Development Corporation believes it can cultivate. It’s the option of moving from an expensive big city to a smaller, cheaper and perhaps less nerve-wracking place -- for example, the option of picking Milwaukee over Chicago.

The evidence that this might work is almost entirely anecdotal. But it does exist. In January, Stateline took a close look at Columbus, Ind. Columbus is a prosperous town of 45,000 with an enlightened industrial corporation as its dominant presence and a large collection of striking modern architecture. Columbus has been seeking to attract educated millennials, and has done it. The number of Columbus residents between 25 and 34 who possess college degrees increased 62 percent between 2010 and 2017. On average, they spend less than 20 percent of their income on housing. Most homes cost less than $150,000. One-bedroom apartments in the compact, appealing downtown rent for an average of $750 a month.

Columbus is such an unusual place that it might not be the most instructive example of millennials going small. But there are others. The mortgage data firm Ellie Mae looked at millennials’ home-buying and found that the champion at attracting them was Athens, Ohio, a town of 25,000 with a nice university campus but not much else. As of 2017, millennials were buying 59 percent of the homes in Athens, more than in any other city in the study. The average list price of a house in Athens was $189,000.

Milwaukee, with a population of nearly 600,000, isn’t exactly a bucolic small town. But it might feel like one to a young person who has been living with Chicago’s congestion and housing costs. Or so Wisconsin economic development officials have come to believe. Their campaign may or may not bring in large numbers of millennials, but it’s probably worth a try. At the very least, it’s an interesting experiment.

As for what millennials “really want,” I think there is a simple answer. The answer is all of the above. Out of a cohort of 80 million people, there will be enough to keep most urban city centers vibrant, enough to make the projects of urbanized suburbia profitable, and enough to invigorate a decent number of smaller towns that have attractive amenities and can mount clever promotional campaigns.

All of this is promising news. The one big mistake you can make is to assume that most millennials will want the same thing. Baby boomers weren’t like that, despite the best efforts of the media and social pundits to stuff them into a few rigid stereotypes. What are the members of the millennial generation really looking for? In the end, it just depends on which one you ask.