Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a University Professor and Director of Cities at the University of Toronto’s Martin Prosperity Institute, and a Distinguished Fellow at New York University’s Schack Institute of Real Estate.
Socioeconomic sorting at the metropolitan level is making America more polarized, an economist finds.
The Sunbelt is growing, the Rust Belt is dying, and the only thing keeping expensive coastal cities afloat is international immigration, as American-born residents flee their escalating housing prices.
That pretty much sums up the conventional wisdom about the recent growth and decline of U.S. cities. And that conventional wisdom was only reinforced last month when the Census Bureau released its latest figures on population growth for America’s metropolitan areas. Nine of the top 10 counties with the largest numeric increase in population last year were in the Sunbelt, with the one exception being King County, where Seattle is located.
But the conventional wisdom masks a deeper trend: America’s geography continues to be reshaped by a polarized pattern of socioeconomic sorting. This process is driven by a selective population shift of the most affluent, the best-educated, and the young to expensive coastal metros like the San Francisco Bay Area, Los Angeles, Seattle, and the New York–Boston–Washington corridor, with the less affluent and less educated flowing into cheaper Sunbelt metros, and the even less advantaged trapped in Rust Belt areas.
That is the basic pattern documented in a new analysis by urban economist Issi Romem, who charts the socioeconomic status of the domestic migrants to and from America’s largest metro areas between 2005 and 2016. Romem finds a selective class-based sorting of Americans. Those moving to expensive coastal metros, according to his analysis, have significantly higher incomes and higher levels of education than those moving out, and are considerably younger.
Magnets for the affluent
The graph above tells the basic story, charting the difference in median household incomes for in-migrants and out-migrants of metro areas arrayed by their average home values. Expensive metros like San Francisco, L.A., New York, San Diego, D.C., Seattle, and Boston are at the top right, which means the people moving into these places are considerably more affluent than those moving out. People moving into San Francisco, for example, out-earn those moving out by an average of $12,640. In New York, L.A., and Miami, the difference is roughly $10,000. Phoenix, Denver, and Washington, D.C., are in the next rung, with a difference of around $5,000.
When it comes to income sorting, fast-growing, less expensive Sunbelt metros such as Dallas, Orlando, and Las Vegas are a wash—those moving in and out have roughly similar incomes. But the Rust Belt metros of Cleveland, Pittsburgh, and Detroit fall victim to what Romem calls “negative income sorting”; that is, the median household that moves in earns less than the median household moving out. Overall, the chart shows the polarized economic sorting going on across America’s metro areas (note the slope of the fitted line headed upward as it moves to the right): The more expensive the housing, the higher the income of those moving in, compared to those moving out.
Expensive places attract the highly educated
This sorting is also dramatic when it comes to educational attainment. The people who are moving into expensive coastal metros are considerably more educated than those who are leaving. And since pricey metros like the Bay Area, Boston, and D.C. already have among the most highly educated populations in the nation, their initial human-capital advantage is compounded by their ability to attract highly educated people from the rest of the country.
Again, fast-growing Sunbelt metros occupy the middle of the graph, while Rust Belt metros occupy the lower left, because they continue to “trade” (in effect) more highly educated people for those with lower levels of education. Romem points squarely at the dilemma faced by metros such as Pittsburgh—the extent to which graduates from their leading research universities, like Carnegie Mellon, relocate to more expensive and more vibrant metros. This pattern is “particularly concerning” for such metros, he notes, “because it does not bode well for their ability to cultivate a knowledge-based economy.”
Expensive coastal metros are also magnets for the young. New arrivals to San Francisco, L.A., Boston, Seattle, New York, and D.C. are considerably younger than those moving out. Of course, warm Sunbelt metros like Miami, Phoenix, Orlando, and Tampa are retirement hubs, attracting in-migrants who are considerably older than those moving out. But Pittsburgh, which for a time had one of the oldest populations in the country, now attracts more young people than older ones.
Young people migrate to expensive coastal metros for the opportunities they provide. They take advantage of their thick labor markets, not to mention the wide array of accomplished potential partners in these places, or thick mating markets. They are able to pursue this locational strategy because they are young and single, rent rather than own housing, don’t need much space, and can live with roommates.
Romem’s data show that in-migrants to expensive coastal metros are much less likely to be homeowners than those moving out, and are more likely to live in a household with multiple earners (that is, with roommates). As these young people get older, start families, and need more space, they are more likely to leave for cheaper places either in the suburbs or in less expensive metro areas.
But the bulk of the people who leave these places are members of the working and service classes, whose incomes are wholly insufficient to bear the burden of exorbitant housing prices.
More Americans may be moving to less expensive Sunbelt areas, but costly coastal metros continue to attract the most affluent and the most educated. The “big sort” that Bill Bishop identified a decade or so ago has become an even bigger sort, as the most talented and most ambitious continue to crowd into a small number of places like the Bay Area, L.A., Seattle, and the Boston–New York–Washington corridor. America’s leading coastal metros are expensive not just because of housing restrictions or natural geography, Romem argues, but their high housing prices come from this constant influx of educated and affluent talent, which also means that their housing prices are likely to keep rising.
America’s geography continues to be reshaped by this giant sorting machine. With their vibrant labor markets, large numbers of talented young people, high rates of productivity, and high levels of amenities, expensive coastal metros continue to lure the talented and the privileged. It is this basic fact of our modern knowledge economy—the self-reinforcing clustering of talent in a handful of winner-take-all metros—which spells the deepening spatial polarization of American society.