Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate.
A new Trulia report looks at which cities have the highest housing burdens.
As the knowledge economy becomes increasingly spiky, concentrated, and urban, some of America’s most expensive cities like New York, Los Angeles, San Francisco, Washington, D.C., and Boston have become even more unaffordable. But the burden of escalating housing costs is not spread evenly, hitting some groups harder than others. As the affluent and the talented crowd into these urban centers, less advantaged families, those who don’t yet own a home, and younger people have trouble staying in or moving to cities, and many are pushed out.
But which cities have the highest housing burdens? What groups are being hit hardest? And who is able to stay in America’s “superstar cities” and tech hubs?
A new report from real-estate website Trulia takes detailed look, using data from the American Community Survey to track the types of people (by age, income, and occupation) that are staying and leaving these cities. The report calculates the “move-away rates relative to expectation”—or the percentage of how many people moved away compared to what we might expect based on the demographic representation of a group in a metro—for Millennials and several income groups in the ten most expensive metros in the U.S. Positive figures indicate higher outmigration than one might expect, and negative figures indicate higher stay rates than one might expect.
Of all the age groups, Millennials were most likely to move away from these metros, and had the highest move-away rates relative to expectation. Americans ages 18-34 had a move-away rate relative to expectation of more than one hundred percent (105.6 percent) compared to negative rates for Americans ages 35 to 54 (-28.5 percent) and 55 and up (-48 percent). Of course, Millennials have far higher rates of mobility and include people moving both for and after college.
The table below breaks down the data for Millennials in the ten most expensive metros. All ten metros have high shares of Millennials, but also surprisingly high shares of Millennials leaving (roughly 50 percent).
Move-Away Rates for Millennials
|Metro||Current Share of Millennial Households||Share of Millennial Households Leaving||Move-Away Rate Relative to Expectation For Millennials|
|Silver Spring, MD||20.1%||49.2%||144.2%|
|Orange County, CA||20.6%||46.0%||122.7%|
|New York, NY||24.8%||51.2%||106.4%|
|Los Angeles, CA||24.4%||48.8%||100.2%|
|San Jose, CA||23.8%||47.3%||98.3%|
|San Diego, CA||28.1%||55.1%||96.4%|
|San Francisco, CA||27.4%||52.3%||91.1%|
Silver Spring, Maryland, (which represents one of two divisions of the D.C. metropolitan area), tops the list with the highest move-away rate relative to expectation, followed by Orange County (part of the greater Los Angeles metropolitan area) and Oakland, California. New York is fourth, Chicago fifth, and D.C. sixth. Interestingly, San Francisco and San Jose, along with San Diego, had the lowest move-away rates relative to expectation for Millennials.
The pattern by socioeconomic class or income is also striking, with low-income households moving away at the highest rates by far, and having the highest move-away rates relative to expectation.
Move-Away Rates by Income
|Income Group||Share of Households Currently Residing in Top 10 Metro||Share of Households That Moved Away From Top 10 Metro||Move-Away Rate Relative to Expectation|
|$30k or less||16.9%||25.5%||50.8%|
|More than $150k||19.6%||14.1%||-28.0%|
The two lowest income groups had the highest move-away rates relative to expectation, with those making $30,000 or less at 50.8 percent and those making $31,000 to $60,000 at 7.2 percent. The remaining higher income groups had negative rates: -4.3 percent for those making between $61,000 and $90,000, -13.6 percent for those making $90,000 to $120,000, -22.4 percent for those making $121,000 to $150,000, and -28 percent for those making more than $150,000. This shows a pattern of sorting by class, with the affluent and advantaged staying put or perhaps moving to expensive cities, and the less advantaged being pushed out. As Stanford economist Rebecca Diamond has shown, this compounds inequality, as the affluent gain access to more advantaged locations with better schools, better services, better amenities, and better employment networks.
The table below shows the migration statistics for low-income households by metro. Silver Spring, Maryland, had the highest move-away rate relative to expectation, with over twice as many low-income residents moving away than expected, followed by Oakland, California, (91.5 percent) and Washington, D.C. (86.4 percent). In contrast, New York saw by far the smallest move-away rate relative to expectation (35.1 percent), trailed significantly by Chicago (47.8 percent) and Los Angeles (49.7 percent). But, if we consider the San Francisco Bay Area as a whole—made up of Oakland (91.5 percent), San Francisco (59.2 percent), and San Jose (62.3 percent)—then this region yields the highest move-away rate relative to expectation for those earning $30,000 or less.
Move-Away Rates for Low-Income Households
|Metro||Share of Households Currently Residing in Top 10 Metro That Earn $30k or Less||Share of Households Leaving Top 10 Metro That Earn $30k or Less||Move-Away Rate Relative to Expectation for Those Earning $30k or Less|
|San Jose, CA||11.0%||17.9%||62.3%|
|Silver Spring, MD||8.7%||17.7%||103.5%|
|Orange County, CA||13.1%||24.3%||85.9%|
|San Francisco, CA||12.4%||19.7%||59.2%|
|San Diego, CA||15.8%||23.8%||50.9%|
|Los Angeles, CA||21.5%||32.2%||49.7%|
|New York, NY||19.2%||25.9%||35.1%|
The next table shows the migration statistics for the highest income households—those earning more than $150,000 a year. New York saw the highest move-away rate relative to expectation (-6.5 percent), followed by Chicago (-14.5 percent). In contrast, San Jose saw the lowest move-away rate relative to expectation (-52.7 percent), trailed slightly by Washington, D.C. (-46.9 percent). The remaining metros saw rates of around -30 to -40 percent.
Move-Away Rates for High-Income Households
|Metro||Share of Households Currently Residing in Top 10 Metro That Earn More than $150k||Share of Households Leaving Top 10 Metro That Earn More Than $150k||Move-Away Rate Relative to Expectation for Those Earning More Than $150k|
|New York, NY||18.4%||17.2%||-6.5%|
|Los Angeles, CA||14.2%||10.0%||-29.7%|
|Silver Spring, MD||29.8%||20.2%||-32.3%|
|San Diego, CA||16.5%||10.0%||-39.2%|
|San Francisco, CA||29.7%||18.0%||-39.4%|
|Orange County, CA||22.1%||13.1%||-40.5%|
|San Jose, CA||31.3%||14.8%||-52.7%|
The report also looks at the move-away rates relative to expectation for various types of workers. Surprisingly, given protestations from artists and musicians like David Byrne and Moby that creative residents are being pushed out of expensive cities, the report finds that the arts, entertainment, and food services group saw only 9.4 percent more residents move away than expected among the ten most expensive metros, including New York, L.A., and San Francisco. Those working in schools, hospitals, and social services are being pushed out at much higher rates than artistic creatives.
All in all, the report helps us better understand the sorting of Americans by class within and across our metros. The affluent and the talented are flooding into superstar cities and tech hubs, creating a vicious competition for space that is pushing out the young, the less advantaged, and those who do not own homes, reinforcing the deepening class divides in our cities.