Cities Growing Faster than Suburbs (But Not by Much)

Eliot Brown, commercial real estate reporter for The Wall Street Journal, writes on urban trends largely influenced by firms seeking to attract the brightest young workers with decidedly urban preferences. Mid-size and large cities are prospering.

2 minute read

January 5, 2015, 6:00 AM PST

By Irvin Dawid

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"In the latest period tracked, between mid-2012 and mid-2013, the overall population of cities rose 1.02% compared with 0.96% in the suburbs, according to an analysis of Census data by the Brookings Institution," writes Brown.

Where urban growth is clearing outpacing growth in the suburbs is demand for commercial rent space, measured by the increase in rent prices.

Office rents sought by landlords in urban areas rose 18.7% in the past four years, based on end-of-2014 estimates, compared with just 3.3% in the suburbs, according to real-estate research firm CoStar Group Inc.

One of the major reasons driving this demand are "location decisions being driven largely by job recruiting, say experts," writes Brown. "Companies seeking to lure the best and smartest young college graduates say the right location gives them an advantage over other employers."

Whatever its cause, the trend is spreading to midsize cities, such as Nashville and Cleveland, where a long-struggling downtown [in Cleveland] is beginning to draw residents seeking city life without the high cost they would face in New York or Boston.

In a related earlier article, Brown writes about the "clustering" of many tech companies, particularly Googe in Manhattan since purchasing "one of the largest office buildings in Manhattan for more than $1.8 billion," according to a December 2010 New York Times article. 

Unlike many existing large companies in Manhattan, tech companies highly value proximity for their workers. Google has accumulated proximate properties on the west side to hold a total of 4,000 workers, second only to their Mountain View, Calif. headquarters, writes Brown.

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