As common as it is to consider urban and suburban environments opposites in terms of density, development, and culture, it's neither helpful nor accurate to define all urban locations by their high-population downtowns or all suburbs as strictly single-family residential.
So concludes The New Geography of Urban Neighborhoods, an examination of population density, employment density, housing type, home values, rent, vacancy, and new development activity by RCLCO (formerly Robert Charles Lesser & Co.) and the Urban Land Institute's Terwilliger Center for Housing. In the report, the authors identify six distinct urban paradigms that coexist within almost all city environments.
These paradigms consist of three traditional “downtown” centers and three residential neighborhood types, each with its own unique development patterns, supply-and-demand trends, demographic characteristics, and economic conditions, described below.
Six Urban Paradigms
1. Economic Center: The historic urban core or central business district of most cities. Office buildings generally outnumber residential buildings in economic centers, but new residential development has changed the landscape in many of these neighborhoods.
On average, economic centers contain 5.5% of the urban population and 37.3% of urban employment. The average household income is $96,900, the average apartment rent is $2,405, and rental apartments there grew by 69.0% between 2010 and 2017.
2. Emerging Economic Center: These areas are shifting from single-family residential or low-density commercial use to dense residential or office development and generally have a large supply of vacant land or redevelopment opportunities.
On average, emerging economic centers contain 2.1% of the urban population and 7.7% of urban employment. The average household income is $85,600, the average apartment rent is $1,845, and rental apartments there grew by a whopping 114.9% between 2010 and 2017.
3. Mixed-Use District: Live/work/play neighborhoods, with a combination of high-density housing and upscale retail, often on the ground floors of residential buildings. These areas are often located near major employment cores.
On average, mixed-use districts contain 14.8% of the urban population and 10.5% of urban employment. The average household income is $86,000, the average apartment rent is $1,975, and rental apartments there grew by 40.7% between 2010 and 2017.
4. High-End Neighborhood: Residential areas often characterized by historic single-family housing and walkable shops and restaurants.
On average, high-end neighborhoods contain 16.7% of the urban population and 17.9% of urban employment. The average household income is $86,800, the average rent is $1,570, and rental apartments there grew by 35.5% between 2010 and 2017.
5. Stable Neighborhood: Often historically working-class neighborhoods with diverse, attainable housing. ULI notes that many of these locations are beginning to gentrify into more upscale communities as young professionals move in.
On average, stable neighborhoods contain 44.1% of the urban population and 20.1% of urban employment. The average household income is $52,700, the average apartment rent is $1,235, and rental apartments there grew by 8.2% between 2010 and 2017.
6. Challenged Neighborhood: Predominantly residential locations with low home values, low rents, and high vacancy and unemployment rates. Very few major development projects occur here.
On average, challenged neighborhoods contain 16.9% of the urban population and 6.5% of urban employment. The average household income is $37,900, the average apartment rent is $970, and rental apartments there did not grow between 2010 and 2017.
ULI and RCLCO have also pinpointed eight key social, economic, and demographic trends in urban neighborhoods, as well as differences between urban and suburban locations as a whole.
Eight Key Trends
1. Population growth rates in urban places are approaching suburban growth rates for the first time in decades. Urban and suburban populations grew at roughly the same rate between 2010 and 2015—3.4% and 3.7%, respectively—with denser urban locations growing faster than residential neighborhoods. Emerging economic centers experienced the fastest population growth, at 9.9%, followed by economic centers, at 7.4%. Urban growth outpaced suburban growth around New York City and other coastal centers, while Sun Belt suburbs grew faster than cities.
2. Today, more than 29 million Americans live in urban neighborhoods. Within urban locations, three-quarters of the population live in dense but predominantly residential neighborhoods. Seventeen percent of the total population lives on just 1% of the land area in the top 50 metro statistical areas.
3. Urban places are now capturing more than their fair share of new job growth. Urban places accounted for 30% of existing jobs and 36% of new job growth between 2005 and 2015. The number of new jobs rose by 20% in urban places during this period. In comparison, suburban places accounted for 58% of employment growth during this period and experienced a 15% increase in the total number of jobs.
4. Upscale urban places are among the most racially and ethnically diverse types of neighborhoods. There is close to a 50–50 split between white (non-Hispanic) and nonwhite populations in economic centers and mixed-use districts, which command the highest and second-highest rents, respectively, in a given urban center. In comparison, only 35% of the residents of high-end suburbs are nonwhite.
5. Almost a third of urban households are headed by millennials. More than 29% of urban households are under 35, compared with 18% of households in the suburbs. Young people make up 39% of the population of economic centers and 35% of the population of emerging economic centers and mixed-use districts.
6. Rental apartment development is now concentrated in urban locations. Urban rental apartment inventory grew twice as quickly as suburban apartment inventory, 32% versus 16%, between 2010 and 2017. One-fifth of new apartment units were built in emerging economic centers during this time.
7. Urban locations tend to face greater affordability issues than suburban locations. Urban residents have an average household income of $66,000 and an average monthly rent of $1,650, compared with an average household income of $89,000 and average apartment rent of $1,275 in the suburbs. Urban households tend to spend about 30% of their income on housing versus 17% of those living in suburban areas.
8. Roughly half of urbanites take transit, walk, bike, or carpool to work. Just over 50% of workers living in the top 50 metros drive alone to work, compared with 78% of workers living in the suburbs. Urban residents who live in economic centers or mixed-use districts are among the most likely to walk, bike, carpool, or take public transit to work, as only 32% and 35%, respectively, drive alone to work.
Click here to read the full report.
