Do Millennials Want to Call Your City ‘Home’?

Millions of millennials will soon be putting down roots. Cities and suburbs that are less attractive to them have a limited window to turn things around.
by | November 2012

William Fulton

William is a Governing columnist, director of the Kinder Institute for Urban Research at Rice University and former mayor of Ventura, Calif.

I knew the “brain drain” problem had reached a crisis point when they started talking about it in Boston.

You know the story: Kids move to where they want to live and then look for a job, not the other way around. They’re drawn to a small number of hip metro areas (D.C., San Francisco, Seattle) and smaller cities (Boulder, Colo.; Missoula, Mont.; Palo Alto, Calif.) around the country and hip employers follow them. The result is an upward cycle of talent and jobs and business growth in the fashionable places, and a downward cycle everywhere else.

It’s not unusual to hear people complain about this problem in Middle America, or in second-tier cities without a big university, or in populous but aging suburban locations such as Long Island, N.Y. But it’s not a common thing to hear about in a place like Boston, which has the greatest concentration of universities in the country, lots of cool neighborhoods and a big chunk of the innovation economy.

The problem, Massachusetts economic development folks say, is that metro Boston is so expensive they can’t keep the kids, especially after those kids begin to have their own kids. Yes, they can live in tiny city apartments, or maybe in a pleasant older suburb like Newton -- if they can afford it. After that, they are living somewhere beyond Interstate 495 and the reach of most commuter rail lines. What Boston needs, the experts say, is more starter homes in interesting, transit-rich locations.

Don’t we all. If Boston can’t stop the brain drain, is there any hope for the rest of us? Yes, but it requires a concentrated effort to create compelling places to live and work -- and fast. Because of the demographics of young talent, the cities and suburbs on the downward cycle have a limited window to turn things around: ten years at most, and maybe no more than five.

Here are the facts most people know: For the foreseeable future, the so-called millennials (currently ages 18-30) will drive both the housing market and the fast-growing innovation economy. It’s a huge cohort of about 70 million people. And as I mentioned above, they are gravitating toward a select group of metros and small cities.

But there are a couple of other facts that we don’t usually think about. Most people settle down by age 35, and usually don’t move from one metro area to another after that. And the demographic group behind the millennials is a lot smaller. Just like baby boomers, the preferences of the millennials will drive our society for two generations. They’re making location decisions based on their idea of quality of life. And they’re going to make all those decisions in the next few years -- by the time they’re 35.

So if you’re not one of the hip places today, you have only a few years -- the length of one real estate cycle and the time horizon for planning an infrastructure project -- to become hip enough to keep your kids and attract others.

This might seem like a daunting, if not insurmountable, challenge, but frankly I’m encouraged by what I see. Over the last six months I’ve been to many second-tier cities -- Omaha, Neb.; Oklahoma City; Richmond, Va.; Syracuse, Buffalo and Rochester, N.Y.; and Manchester, N.H., among them -- that would not to be good candidates for a hip urban core. Yet they’re all developing one.

Nebraska’s conservative Republican governor, Dave Heineman, took the opportunity of hosting a National Governors Association event in Omaha to show off downtown lofts and restaurants. In Oklahoma City, Republican Mayor Mick Cornett, who lives a block from City Hall, has championed urban reinvestment -- one of his latest projects is a streetcar line. In Manchester, the old mills bordering downtown are being refurbished. In Syracuse, where the urban core is adjacent to a prominent research university, several hundred housing units have been created in historic buildings, attracting many new downtown residents, including my onetime roommate, who moved back downtown after 20 years of living in a ritzy, cutesy suburb.

The lesson for me is that even though the window is short, there’s still time for second-tier cities and older suburbs to create the compelling places that will be required to succeed in the 21st-century economy. Most people -- even millennials -- want to live near their families and near where they grew up, meaning that if you can create interesting places, they’re likelier to stay. And you don’t need the endless hip urban fabric of New York or D.C. to compete. You just need a few great neighborhoods for people to live and work in. For most cities, that’s an achievable goal.

In his recent book, The New Geography of Jobs, economist Enrico Moretti of the University of California, Berkeley, noted that the current pattern of winners and losers is good for the national economy even if it’s bad for most cities, because the innovation economy thrives on agglomeration. That’s probably true, at least in the short run. But in the long run, it’s surely better to have more compelling places -- large and small -- that can attract their share of young talent and economic buzz. America’s prosperity will be more enduring as a result.


More from Economic Engines