Back to the City—The Struggle

The popularity of urban life comes with regional challenges
Source: U.S. Census Bureau, 2014 American Community Survey

Last month, I provided an overview of some conspicuous and important demographic changes in New Orleans and other cities in the United States. The “back to the city” movement, in which younger, well-educated, and generally more affluent residents are choosing to live in urban neighborhoods in far greater proportions than in the past, represents a significant shift in local and regional dynamics.

The statistics confirm what many of us in the metropolitan area have observed anecdotally over the course of the last several years: Our downtown population has grown by 80 percent in the past five years, and some transitional neighborhoods have seen a surge of reinvestment.

This trend presents both opportunities and challenges to the New Orleans metropolitan area. On the one hand, the city’s popularity brings with it some obvious benefits. Many aging or blighted homes are being restored, and several historic commercial corridors are experiencing rejuvenation. Rising property values and new businesses are adding more revenue to a cash-strapped city. The perspectives and talents of new residents are also bringing diverse, creative, and important perspectives to our region’s economic and civic life.

However, like many areas throughout the country, the New Orleans metropolitan region must confront some uncomfortable realities to ensure that it remains competitive, equitable, and well-positioned in the coming years.

First, as the city continues to attract residents with relative affluence, it must ensure that it remains a broadly affordable place to live. According to the most recent census data, Orleans Parish is among the top 4 percent of all counties nationwide whose renters spend more than 35 percent of their income on rent alone (not including utilities, insurance, and other housing costs). As a point of reference, over 53 percent of the city’s renters fall into this category, the highest among a list of Southern cities including Baton Rouge, Memphis, Birmingham, Dallas, Houston, Mobile and Jackson. Considering that Orleans Parish is also in the top 3 percent of counties whose housing units are occupied by renters, this constitutes a widespread and important public policy concern.

Secondly, we have to acknowledge that while the increased enthusiasm for urban life, especially among more established families with children, is exciting, it also has tradeoffs. Some real estate experts forecast that a significant portion of housing supply over the next several years — namely, relatively large suburban homes whose owners want to downsize — will not have an adequate level of demand to absorb it. According to one study, roughly 25 percent of homebuyer demand has shifted from single-family homes to alternatives like condos and townhouses, even as the overwhelming number of new homes built over the past 25 years have been single-family.

Dubbed the “Baby Boomer Selloff Crisis” in some circles, this potential mismatch of supply and demand could have serious consequences for individuals whose financial stability is heavily tied to the equity in their homes and for the communities where they live.

Third, we also must ensure that the urban communities experiencing more popularity now than in previous generations remain viable and healthy for all residents. This includes ensuring adequate public safety, a range of high-quality educational opportunities for families of all income levels, and sustained economic opportunity for workers in a variety of industries throughout the course of their careers. The city has made progress in these areas over the course of the last decade, but still has a long way to go to capitalize long-term on this recent momentum.

There is much to celebrate in this “back to the city” period. Long-neglected historic neighborhoods throughout the country have been reinvigorated, and more efficient and compelling visions for our cities have emerged and gained traction. But we cannot be blind to — and must be proactive about — the corresponding challenges.
 


Robert Edgecombe is an urban planner and consultant at GCR Inc. He advises a wide range of clients on market conditions, recovery strategies, and demographic and economic trends.

 


Categories: Real Estate, The Magazine

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