The American dream: a white picket fence and a patch of grass to call your own. In 2002 President Bush declared “owning a home lies at the heart of the American dream,” and wanted, "everybody in America to own their own home.” Twelve years and a housing crisis later, it seems as though that’s no longer the case: Americans are packing up and booking it to the city.
“The American dream is fundamentally about opportunity,” says Vishaan Chakrabarti, director of the Center for Urban Real Estate at Columbia University. “It’s not so much where you live but whether you can do better than your parents and grandparents and a lot of young people today are finding those opportunities in cities. The data are very clear, we’ve seen an enormous migration to every urban area in the country.”
The nation's urban population increased by 12.1% between 2000 and 2010. According to the Census, urban areas accounted for 83% of the U.S. population in 2012. And The Brookings Institute notes 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."
Single-family homebuilding is at its lowest rate in decades, as only 600,000 single-family homes were built in 2013, down from 1.7 million in 2005. The purchasing of single-family homes is also down 13.3% year-over-year. High-rise apartment buildings now make up 40% of all new construction and metro areas are growing more quickly than the U.S. as a whole. According to The Nielsen Group 62% of millennials would prefer to live in urban centers.
And it’s not just millennials; baby boomers are also leaving their suburban homes for apartments with much less square footage. So why this exodus from the suburbs?
People want to closer access to health care facilities and culture, says Chakrabarti. Gas prices are a factor too.
“Most people have been hit really hard by this last recession and are worried about mortgage debt and auto debt, so this is a pocketbook issue at a significant level,” says Chakrabarti.
The tightening of purse strings is a prevailing issue but there’s more to reurbanization.
“If you look at the millennials they grew up with Hurricane Katrina, Deep-water Horizon, a lot of things that were around the environment—it’s a socially conscientious generation and they are interested in driving less and walking more,” Chakrabarti explains.
There’s also a social aspect to living in a city that people in the suburbs tend to lack. “People like the amount of diversity they find in cities," Chakrabarti notes.
According to Chakrabarti, it’s the perfect storm of economic, social and environmental issues that are driving the suburbs into extinction.
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