Forbes/Joel Kotkin: Millennial Boomtowns: Where The Generation Is Clustering (metro, suburban)

[darkeconomist]

Much has been written about the supposed preference of millennials to live in hip urban settings where cars are not necessary. Surveys of best cities for millennials invariably features places like New York, San Francisco, Chicago and Boston, cities that often are also favorites of the authors.

Complete story on Forbes.com

[Malloric]

Originally Posted by darkeconomist

Complete story on Forbes.com

I can't imagine too many of them can afford to live in SF, Chicago, NYC, etc. At least not the type of neighborhoods that privileged white kids (which is really who we're talking about) would want to live in. I mean, technically I'm still in that bracket (barely, 29). San Francisco would be a stretch on my income. To live in a popular neighborhood would certainly require roommates.

[Katarina Witt]

That's a crappy picture of Denver.

[Eddyline]

Originally Posted by Malloric

I can't imagine too many of them can afford to live in SF, Chicago, NYC, etc. At least not the type of neighborhoods that privileged white kids (which is really who we're talking about) would want to live in. I mean, technically I'm still in that bracket (barely, 29). San Francisco would be a stretch on my income. To live in a popular neighborhood would certainly require roommates.

I'm curious how a whole generation of approximately 80 million people are all "white" and "privileged"?

[memph]

Originally Posted by Eddyline

I'm curious how a whole generation of approximately 80 million people are all "white" and "privileged"?

I think he's saying that the ones moving into SF, NYC, Boston, and DC are privileged white kids. The less priviledged ones are moving into lower cost core cities, suburban apartments or staying with their parents (probably in the suburbs).
But from the looks of it, this article doesn't show that Millennials aren't interested in living in vibrant urban neighbourhoods, probably it's just that many can't afford to. An increase of 3.2% in core counties Millennial population might be more than the total increase in core counties (for all generations)? What might be more interesting is to look at where Millennial that are moving are moving to, and how the increase in Millennial population in core counties compares with the change in other age groups for core counties. BTW is the core county for NYC just Manhattan?

For example, in Toronto, if you're a Millennial making $50,000/year (pretty good for someone just starting their career) a financially prudent amount to pay for rent would be $1000-1300/month.

At the price, you can get:

-A bachelor studio (ie 300-400sf) in Downtown
-A 1 bed basement apartment just outside downtown
-A 1 bed non-basement apartment further from downtown in a less vibrant neighbourhood (but still ok to live in without a car)

But basically, you're looking at the low end of the market. Loads of Millenials are going to be making $20-40k/year and would essentially have to be living with room-mates in a basement apartment semi-urban neighbourhood... For Millenials that have low wage, low skill jobs where you might as well just live in the suburbs with your parents and take the bus.

Also the typical demographic you'd expect to be living in core cities are college educated Millenials, and the 20-29 age group would include some still in their studies. I don't know about the USA, but in Ontario, most students fall into one of these two categories:

-Attending university in their home town (metro area) --> most likely living with parents to save costs, even if they live in the suburbs, there's usually decent transit access to universities
-Attending university in another city --> most likely a small city. Maybe this is unique to Ontario, but students at Toronto universities are mostly locals (or maybe int'l students) with few from other cities in Ontario. If you're studying in another city, that mostly means Waterloo, London, Kingston, Guelph and less often Ottawa, Peterborough or St Catharines. Well over half my high school friends in suburban Toronto went to universities in these smaller Ontario cities. The universities in these smaller cities are also usually outside the core.

[Malloric]

Originally Posted by Eddyline

I'm curious how a whole generation of approximately 80 million people are all "white" and "privileged"?

Because most of the whole generation can't afford to live in a hip neighborhood in San Francisco. Nobody is talking about the whole generation except you.

[jade408]

Originally Posted by Malloric

I can't imagine too many of them can afford to live in SF, Chicago, NYC, etc. At least not the type of neighborhoods that privileged white kids (which is really who we're talking about) would want to live in. I mean, technically I'm still in that bracket (barely, 29). San Francisco would be a stretch on my income. To live in a popular neighborhood would certainly require roommates.

Actually, I think Chicago is pretty doable. It is just so much cheaper than other metros. When my sister lived there, she lived in a tiny studio, right in the middle of the Gold Coast with a doorman. It was like $800. Now it is $1200. That is a prime location right there. Sure her apartment wasn't amazing, but she had a doorman, free internet, and had 3 El stations within a 2 block walk. That is pretty awesome. If you live a little further, you can still get good stuff. Unlike NYC/DC/SF. Here co-workers daughter got a great apartment in Rogers Park for cheap!

Originally Posted by memph

I think he's saying that the ones moving into SF, NYC, Boston, and DC are privileged white kids. The less priviledged ones are moving into lower cost core cities, suburban apartments or staying with their parents (probably in the suburbs).
But from the looks of it, this article doesn't show that Millennials aren't interested in living in vibrant urban neighbourhoods, probably it's just that many can't afford to. An increase of 3.2% in core counties Millennial population might be more than the total increase in core counties (for all generations)? What might be more interesting is to look at where Millennial that are moving are moving to, and how the increase in Millennial population in core counties compares with the change in other age groups for core counties. BTW is the core county for NYC just Manhattan?

For example, in Toronto, if you're a Millennial making $50,000/year (pretty good for someone just starting their career) a financially prudent amount to pay for rent would be $1000-1300/month.

At the price, you can get:

-A bachelor studio (ie 300-400sf) in Downtown
-A 1 bed basement apartment just outside downtown
-A 1 bed non-basement apartment further from downtown in a less vibrant neighbourhood (but still ok to live in without a car)

And that's the difference in prices for let's say the Bay Area and T.O.

For $1000-$1300 in the Bay you can:
1. Get a room in a house in an outer neighborhood of SF
2. Get a room in a converted living room in a closer neighborhood in SF
3. Share a one bedroom in downtown Oakland or most Silicon Valley
4. Live in a non-central, Oakland or San Jose neighborhood with mediocre transit
5. Live in a suburb 40+ miles from SF (and most job centers) that has commuter rail. It won't be walkable so you need a car to get around, even if you could take transit to work

[hurricaneMan1992]

The article is a bit of a wake-up call in the sense that so many millennials are living in suburban homes with families for financial reasons. I wonder if there are some hard numbers on what percentage of millennials this represents? As the economy improves and they get further in their careers, and push back parenthood (also for financial reasons... ), these folks will get back on their feet and move into the city, and many will opt to live a lifestyle that's less car dependent than previous generations. They won't have their parent's cars to use! I am close to the upper age range of "millennials" (low 30's) and am just now able to afford my own place in the city instead of the traditional suburb+car (this is without owning a car--a sacrifice I am willing to make in the short term at this stage of my life, as it makes it possible for me to live in a vibrant neighbourhood with most things in easy walking distance).

And in the end it doesn't really take *all* of us moving to the city. Given that in previous generations city centers were shunned, and walkable city centers with decent public transportation are very limited, it doesn't take much of an increase in demand for it to seem like people are "flocking" to the cities. It might seem like way too many condos are being built downtown, but remember, with a small downtown and large suburban population to begin with, it doesn't take a large percentage of people moving in from the suburbs to fill those condos. Meanwhile, of course, many (most?) millennials will still need to live in those suburban locations. But even these might well cluster around neighbourhoods that are walking distance to at least a few things, and that have bus or rail lines. Many of these bus and train systems were built around serving the poor, hence the gentrification trend. Remember, car ownership costs have gone way up as has traffic congestion, and this trend doesn't show any sign of changing, so it makes good economic sense to live where mass transit and walking/biking are viable options. No, self-driving cars and electric cars won't solve these issues--if anything, they will make cars even more expensive! City planners and political leaders need to take this into account and invest more in public transportation infrastructure if they want to be competitive in the next 20-30 years.

It should also be pointed out that many millennials are perfectly fine living with roommates for a few years at they start their careers--this is what generally happens in the "hot" markets around South Florida, and we're not even considered one of the "millennial capitals." Cohabitation is also more readily accepted and can cut costs substantially--a couple can share a 1br or even a decent sized studio, but with roommates you would generally want a more expensive 2+br place.

[Opin_Yunated]

Originally Posted by memph

I think he's saying that the ones moving into SF, NYC, Boston, and DC are privileged white kids. The less priviledged ones are moving into lower cost core cities, suburban apartments or staying with their parents (probably in the suburbs).
But from the looks of it, this article doesn't show that Millennials aren't interested in living in vibrant urban neighbourhoods, probably it's just that many can't afford to. An increase of 3.2% in core counties Millennial population might be more than the total increase in core counties (for all generations)? What might be more interesting is to look at where Millennial that are moving are moving to, and how the increase in Millennial population in core counties compares with the change in other age groups for core counties. BTW is the core county for NYC just Manhattan?

For example, in Toronto, if you're a Millennial making $50,000/year (pretty good for someone just starting their career) a financially prudent amount to pay for rent would be $1000-1300/month.

At the price, you can get:

-A bachelor studio (ie 300-400sf) in Downtown
-A 1 bed basement apartment just outside downtown
-A 1 bed non-basement apartment further from downtown in a less vibrant neighbourhood (but still ok to live in without a car)

But basically, you're looking at the low end of the market. Loads of Millenials are going to be making $20-40k/year and would essentially have to be living with room-mates in a basement apartment semi-urban neighbourhood... For Millenials that have low wage, low skill jobs where you might as well just live in the suburbs with your parents and take the bus.

Also the typical demographic you'd expect to be living in core cities are college educated Millenials, and the 20-29 age group would include some still in their studies. I don't know about the USA, but in Ontario, most students fall into one of these two categories:

-Attending university in their home town (metro area) --> most likely living with parents to save costs, even if they live in the suburbs, there's usually decent transit access to universities
-Attending university in another city --> most likely a small city. Maybe this is unique to Ontario, but students at Toronto universities are mostly locals (or maybe int'l students) with few from other cities in Ontario. If you're studying in another city, that mostly means Waterloo, London, Kingston, Guelph and less often Ottawa, Peterborough or St Catharines. Well over half my high school friends in suburban Toronto went to universities in these smaller Ontario cities. The universities in these smaller cities are also usually outside the core.

Toronto is nice but thank goodness I live across the border. No way in hell I'd pay $1,000+ for rent. You are renting. Rent is supposed to be as cheap as humanely possible to bank cash since there is no equity.

If possible, try to keep rent + utilities under 20% of income. For $50,000 / year, that is $800-$850 / month. Get a few roommates and stack money to the ceiling. That is why most millenials are staying home; we have too much in student loans to pay rent that high.

[Hemlock140]

We definitely see this in the Seattle area, where millennials are flocking in (30% of new residents) and are making $80k and up so can afford to live here.

Seattle - Best cities for Millennial homebuyers - CNNMoney