The changing landscape of urbanization

U.S. cities such as New York, Chicago, and Los Angeles have long been acclaimed as the cities that support the most opportunity and excitement for young professionals. Today 2.6% of the U.S. population lives in NYC, 1.2% in LA, 0.8% in Chicago. Although these numbers demonstrate how large the cities are, surprisingly each city has seen its population shrink over this past year (see chart below).

Since 2017, NYC’s population has dropped by half a point per year. According to the US Census Bureau, LA’s population dropped -.13% from 2017 to 2018. The US Census Bureau also states that Chicago’s population declined for the fourth year in a row for 2018 (see chart below).

Economists, reporters, and other experts list hundreds of potential reasons to explain this shrinkage, but the four biggest recurring themes are: quality of life, housing options, jobs, and taxes. Residents of these cities are heading elsewhere because the factors that once drove them to these large cities can now be accessed more easily in other locations, and usually at a lower price. 

 

The New York Times’ April article “Is New York City’s ‘Remarkable Growth Story’ Ending?” speculates that the migration from NYC is caused by the appeal of less expensive and warmer cities in the Southeast. The Financial Times and CNBC reports that part of the moves from NYC and LA can be contributed attributed to significant rent increases.  

 

Although the net migration may cause concern in NYC, LA, and Chicago, the population influx in southeastern and southwestern cities highlights the idea that benefits such as quality of life, housing options, jobs, and taxes are increasing in emerging cities in Florida, Texas, Arizona and others.

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