John Buntin: This decade looks likely to be the first in recent US history in which real median incomes actually declined. How will that affect the way U.S. metro areas grow?
Alan Berube: Like a lot of trends in this report, beneath a national trend lies a set of very diverse metropolitan trends. It is the case that most metropolitan areas saw a decline in median household incomes over the course of the decade. For some it was modest; for some it was quite severe. They were down 17 percent in the Detroit metropolitan area, for instance, a reflection of the fact that the recession for them started long before the Great Recession. At the same time, there were places in the Northeast, like Worcester, Mass. and the Washington, D.C. region that saw growth in incomes for people in the middle of the distribution.
We've always had regional disparities in the United States, but we've managed to resolve them over time. The South eventually caught up to the North on a lot of dimensions. I think this is a somewhat newer manifestation of regional inequality, and it's not clear if the market is really going to correct this over the long term or if that's just something that's going to lock in and send some places into an upward spiral and others into a downward spiral.
Buntin: Let's talk about the Sun Belt. I read last week that a quarter of mortgages in Florida are now behind in their payments. Has the severity of this recession called into question our very concept of the Sun Belt as this perpetual growth frontier?
Berube: There are certain parts of Florida that, for the first time, seem to be exporting residents to the rest of the United States as opposed to importing them. The economic model for Florida, for parts of Arizona, for parts of Nevada, was really just a migration model, right? They build more housing. That employs people. People move there. Those people get their real estate licenses and sell more housing. People build more housing. That's a bit of a caricature, but the share of the productivity of these places was tied up into housing and into this bet on growth. Migration was far, far higher than it was in other parts of the country. How does this look over the long term, once demand finally catches up with the supply? People aren't building new housing in these places right now, but this is a growing country. Eventually, the market will clear.
I don't think there is necessarily any long run threat to the continued growth of the American Sun Belt. However, I think that we've seen the limits of the type of growth in these metropolitan areas that's just farther and farther out in the hinterlands for affordable home ownership, with no real connection to other types of non housing economic opportunities, no connections to real urban centers with a sense of place and the kind of quality of life that people are seeing in other cities right now.
Bill Frey: Yeah, I agree. I used to write about the difference between the new Sun Belt and the old Sun Belt. The old Sun Belt was coastal Florida, coastal California, and Texas. Well, even in the '90s and in the later part of the '80s, faster growth was occurring in the South and West outside of those states ... Colorado, Utah, Georgia, and so forth. There's actually potential there. I think that's actually the frontier of America.
When we look at what's happened in this last decade: I don't think 2000 to 2006 was typical of the long term, nor was 2006 to 2010 typical. I mean, you had this bubble which was propped up, a lot of it, by financial instruments and greed propelling this kind of movement. People thought they could get cheap housing, and then the bubble burst. But, I would say the '90s is probably a better way to look at the future, which did show high rates of growth for all of these non-California, non-Texas and non-Florida parts of the South and West.
But, as Alan says, it really requires a broader economic activity to occur in a lot of these places. It has in places like Colorado, Georgia and so forth. People are going to want to not pay the high housing costs that are eventually going to come back to places like coastal California and other places.
There's another layer on this, which Alan can talk about more than I can, probably, and that is, within those urban communities, how much sprawl are you going to want to have? The one thing about living in Los Angeles, or San Francisco, or San Diego is that there is a city. There's some sprawl, but it's an urban environment. And you're going to want to recreate those kinds of urban environments in these new frontier type Sun Belt areas, as well. I think that's something that will require a federal and local [push].
Berube: It has to be more than just consumer demand. You're running up on natural resource constraints in some of these places. Arizona and Georgia have huge water problems, so I think the type of growth that they've facilitated over the past couple of decades in metropolitan areas like Phoenix and Atlanta -- it's not sustainable economically. It's not sustainable environmentally. It doesn't mean that they can't have growth, it just has to be growth that's generally in line with their access to those resources.
Buntin: What about recent evidence from the U.S. Census that cities are increasing their share of metro populations?
Berube: You're seeing cities grow again not because people are flocking there, but because they're not moving out to the suburbs at the same rate they were during the earlier part of the decade. I think we'll get back to ... suburbs growing faster than cities. It's just the nature of America. But I think there is at least, given this kind of pause in what's been the long-run trend, I would be surprised if there weren't some reevaluation and a bit of a reset in those trends.
Frey: This idea of city versus suburbs is somewhat artificial. In America today, I don't know when it was that Joel Garreau wrote his "Edge Cities" book [Ed. Note: 1991]. That was the beginning of thinking about suburbs as if they were cities. Some of them have downtowns, some of them have retail centers and business centers, and people can even walk to work. You have Bethesda, Md. as one of these kinds of places.
This idea that Alan's been talking about is that when we're talking about a suburban environment, it might be a different kind of suburban environment. Our good colleague and friend, Joel Kotkin likes to talk about this city-versus-suburb stuff all the time. But my feeling is that there's a lot of common ground between his new view of the suburbs [set forth in his new book, "The Next Hundred Million"] and the kind of 21st century suburbs that are very different from the tract housing back in the 1950s and the 1960s. Having said all of that, I think perhaps even more so than Alan, I'm not very optimistic that anything other than market forces are going to affect people's movement to suburbs and exurbs. What's really going to stop this from happening is just constraints, the idea that gas may cost, I don't know, $4 or $5 a gallon and it will be very expensive to make these commutes. That's what's going to force people to not keep moving out. Because it's America's past and it's America's present. People for some reason -- I'm not one of them -- people for some reason like to move out and have some control over their yard and their space and so forth.
Buntin: Doesn't the growth of the exurbs threaten your vision of a more urban suburbia?
Frey: Alan, you might want to talk about what percent of the population lives in the exurbs according to our research, five percent?
Berube: Six percent.
Buntin: That's all?
Berube: We did a paper on this five years ago when David Brooks wrote on Paradise Drive, when people were starting to use his term "exurb" more and more in the popular media. We said based on all that, what do we think characterizes exurbia, and it was fast growth, low-density development, but with some sort of commuting connection back to metropolitan areas and it was, you know, I thought a fairly liberal definition. And it's still only six percent.
Buntin: So we really are a suburban nation?
Frey: Yes, I think that's right. I always like to say back in the 1950s when you said you lived in a city, you were living in a microcosm of America. When you told people you were living in the suburbs you were saying something very distinct, probably you lived in a neighborhood that was largely white, with single family homes and families that had children and dogs and so forth. Now, when you say to someone you're living in the city you're saying something more distinct about yourself. If you say you're living in the suburbs, you're living in a microcosm of America.
