According to a new publication from the Urban Land Institute (ULI), suburban housing markets across the United States are evolving rapidly and overall remain well-positioned to maintain their relevance in the years ahead as the places where most Americans live and work, even as many urban cores and downtown neighborhoods continue to attract new residents and businesses.
The report, Housing in the Evolving American Suburb, was developed by RCLCO for ULI Terwilliger Center for Housing and provides a new analytic framework that describes different kinds of suburbs based on the key factors that define and determine their housing markets.
The report classifies and compares suburbs in the 50 largest metro areas in the U.S. and “provides a more nuanced view of the demographic and economic trends that affect each type of suburb and to understand how they vary among different types of metro areas.”
“What’s happening in America’s urban places is very exciting and important, but this report pulls back the lens and presents a much broader view and a better framework for understanding where people actually live in this country,” says Adam Ducker, managing director at RCLCO. “The suburbs have evolved far beyond the monolithic bedroom community of our imagination, and this report is the first to deal with them fully, and on their own terms, in a long time.”
Photos courtesy Urban Land Institute
The report identified development trends in five distinct types of suburbs within the 50 largest metro areas: Established High-End, Stable Middle-Income, Economically Challenged, Greenfield Lifestyle and Greenfield Value. The types range when it comes to home value, location, population and levels of development.
Certain aspects of these different types of suburbs came to light through key observations. For example, because millennials are known for needing affordability, they are more attracted to economically challenged and greenfield value suburbs, which the lowest housing costs of the five types. Both greenfield lifestyle and greenfield value suburbs have the highest homeownership rates are more skewed toward detached housing. It was also found that stable middle-income established high-end and economically challenged suburbs account for 72 percent of suburban housing built between 2000 and 2015.
Key observations about the findings overall concluded that America remains a largely suburban nation as they account for 79 percent of the population, 78 percent of the households, 32 percent of the land area and 75 percent of young adults aged 25 to 35. This majority is largely due to the 91 percent growth in population that occurred in suburban areas from 2000-2015.
This along with job growth, diversity, higher incomes and larger populations of youth are just a few reasons how suburban communities have evolved to become so stable and valuable in real estate today.
While the ascendancy of American suburbs starting after World War II came largely at the expense of cities, the recent revitalization of urban centers is in many cases complementary to the continued strength of their suburbs, according to Stockton Williams, executive director of Terwilliger Center.
“Suburban housing dynamics increasingly reflect some of the most profound issues shaping our society, including aging, immigration, economic mobility and evolving consumer preferences,” says Williams. “As a result, suburbs will generate substantial residential development and redevelopment opportunities and challenges in the years ahead.”
The report points out that even as urban revitalization continues, with some suburbs becoming more closely integrated with their city cores, a large number of suburban areas remain distinct enough to warrant analysis in their own right. ULI engaged RCLCO to conduct the analysis and generate actionable information for business leaders and local officials that could help shape the future of American suburbs.
“The capacity of American suburbs to evolve with the economic and demographic transformations the country is experiencing will be one of the central real estate and land use issues of the 21st century,” says Williams.