ESI President and Principal, Richard Voith collaborated with Arthur Acolin, a Ph.D. candidate at the University of Southern California Price School of Public Policy and Susan Wachter, Co-Director of Penn IUR and Professor of Real Estate and Finance at the Wharton School to publish a white paper for the Penn Institute for Urban Research (Penn IUR).
The report, entitled “City and Suburb—Has There Been a Regime Change?” highlights the shifts that have been taking place in the pattern of urban population and employment trends in U.S. cities. After decades of urban decline, city populations are growing again thanks in large part to their transition from an industrial-based economy to a knowledge-based economy. The paper states that, “While suburbs are still growing, the ‘inevitable’ decline of American cities appears not to be inevitable at all but rather to be a particular historical moment … Suburban growth is returning to a more sustainable rate of growth that is not predicated on continued city decline. Trends over the last twenty years show continued growth in suburbs but at a slower rate, while the population decline of central cities has slowed or even reversed.”
While external forces such as increased travel costs and development costs in suburb areas play role in these trends, the authors find that the strongest drivers of this trend are internal to cities. The development of new communication technologies, increased importance of physical proximity in enabling faster exchange of information and consumption amenities among other factors, have remade urban locations a prime attraction for firms and residents alike.
The paper also highlights the dynamic of population diversity in cities and how it creates a feedback loop by attracting more people to urban areas.
Click here to read the full Penn IUR white paper.