If you are in a position of leadership in a small community, might not follow the trends affecting larger cities. There are some current developments in city population data, however, that you will want to follow. You might be able to increase your tax base and capture new business investments as a result.
The first two decades of the twenty-first century have generally been characterized by a strong trend toward urbanization, not just in the United States but across the globe. North America continues to lead as the most urbanized of all continents at 82% of its population. What is perhaps less known is that, while urbanization continues, there has been a discernable shift in the trends that now actually favor small cities over larger ones.
Recent information from the Brookings Institute shows the annual change in population in the United States across three types of communities: (1) the 53 “major metro” areas, defined as 1+ million in population, (2) 331 “other metro” areas of less than 1 million, and (3) non-metropolitan areas, which comprise only about 14% of the total U.S. population. Major metro growth has slowed considerably in the last few years, cut almost in half. Yet growth in “other metro” areas has declined much more gradually, with slightly more absolute growth in the last two years. It appears a new trend is forming.
Is this the death of large cities? Absolutely not, but it shows a shift in consumer preference away from larger cities. Analyzing this data may provide some new, compelling information to support your community planning efforts.
Even more interesting is that this reversal in trends does not yet include the presumed impacts of the COVID-19 pandemic on consumer behavior. There has been much speculation about the impacts of the pandemic, supported by early responses to polls. The data suggests that residents of major metros are considering moving to less dense areas either temporarily or permanently.
Even before the pandemic, the SmarterLocalGov team at MRB Group noted this trend in our work with communities across Upstate New York and elsewhere. Smaller communities that had suffered through years of population decline started seeing a resurgence in development interest followed by an influx of new residents and businesses. Nowhere has this been more obvious than in the downtowns of small cities that dot the landscape across Upstate.
The pattern is usually the same: an investor buys an old mill building (or factory, or vacant office building, etc.); converts it into quality for-rent apartments in a downtown with good “bones”; others take note; suddenly a brewery appears and coffee shops, and more buildings get converted and reactivated, and, the next thing you know, a community group has raised money to create a live performance space in an old theater on Main Street. The order of events might change, but the elements are usually the same: (a) quality of place, (b) downtown amenities, (c) a receptive community with a vision, (d) partnerships between public, non-profit and for-profit sectors, and (e) with a little bit of luck, “B”, “C”, and “D” strengthen “A”, so the cycle repeats.
We believe that the population migration trend towards small cities is going to continue and that COVID-19 will likely accelerate this trend for a whole host of reasons.
Even though the fear of contagion may someday wane, the benefits of a remote work environment might continue for some time. The “natural experiment” created by COVID-19 has largely proven that many white-collar jobs can be conducted anywhere that a reliable internet connection exists. Suddenly, the appeal of the large city as a go-to employment hub has lost some of its luster, both for the individual, who must bear the cost-of-living, and for the employer, who must bear the overhead cost of very expensive office space in large cities. Furthermore, the cost of housing in major metros has forced mid-skill workers, a vital part of the economy, into much longer commutes, a double hit to both quality of life and pocketbook. These problems all get solved through migration to low-cost, low-density communities that can still offer city-like amenities.
Which small cities are most likely to attract in-migration? We believe the key metrics are: the overall economic health of the community pre-COVID-19, internet quality, density, cost of living, commuting time and available amenities, such as quality schools, and a walkable downtown. One often overlooked item is the overall diversity and attitude of a community. Are you welcoming to outsiders? How do you show that?
Some of our clients are already adapting their marketing messages to sharpen their appeal to big-city residents in anticipation of this migration. What are you doing? We would love to hear from you.
