Why America’s Millennials Are Moving to the Sun Belt

Lower-density, more affordable cities draw young Americans

Today’s young Americans are restless, and they’re on the move in search of better pay and more affordable housing. While many reside in expensive coastal urban areas, such as Los Angeles, New York and Boston, there is no doubt that young Americans are also moving to metropolitan areas in the Sun Belt, particularly Texas and North Carolina, and the Intermountain West, according to Census figures. These Millennials are taking their skills with them in hopes of buying their first home and starting their families in a demonstration of suburbanization.

“Following the Great Recession, Texas captured an enormous share of young people, including my two sons,” explained Dowell Myers, a University of Southern California professor who specializes in urban growth and societal change.

Myers recently authored a study that looked at how some urban cities have reached their “peak” Millennial rate. His research shows that despite the tendency for Generation Y to live in urban areas, often out of necessity, this generation may soon move to outlying central city and inner suburban neighborhoods that fulfill their urban preferences.

Myers spoke with Opportunity Lives about how many ignore the impact that the Great Recession has had on this cohort of Americans, and how the Great Recession may become recognized as a kind of natural experiment in urban flows.

OPPORTUNITY LIVES: Can you describe the impact of the Great Recession on Millennials, based on your research?

MYERS: The Great Recession had an enormous effect on everybody, but especially on young people. They were the last in line. They had no seniority and they were looking for entry level positions. These were people who didn’t have housing and were still living with their parents or living in dorms and graduating. Following the Great Recession, they were looking for places to live. Young people are going to bear the brunt of housing shortages that we’re still enduring here in the aftermath of the Great Recession. That’s a big issue that must be addressed.

Despite the tendency for Millennials to live in urban areas, they may soon move to outlying central city and inner suburban neighborhoods that fulfill their urban preferences

OL: In what areas are the lingering effects from the Great Recession felt strongest for Millennials?

MYERS: There are two parts to the Great Recession’s effect on Millennials. One part is the entry level jobs which were so terrible. The other part is the housing side, which is the last part of the recession which we’re going to recover from. It had a lasting damage to our housing production system.

OL: Speaking of housing production, what about homebuilders? Are they producing enough?

MYERS: Too many homebuilders went out of business or had to scale down their staff. These builders lost their workers, which means there’s a real shortage of manpower that’s holding back building companies. On top of that, the financial system has been restructured and it’s much harder for people to get loans for homes. There’s less leverage allowed and there’s stricter qualifying criteria, which has also contributed to holding back production. These are the lingering effects of the recession that have prevented the suppliers from stepping up and building the apartments that we would like to see built to house young people. Lastly, there are political instances in the neighborhoods where local voters don’t want to see construction.

OL: What trends may shape how housing looks in the future ?

MYERS: Three different big trends are coinciding. One is the birth trend. Another is the employment trend. Then, there’s the housing supply trend. It’s confusing the heck out of everybody as to what’s going on, because you can look at it and see changes happen in all different trends. However, we don’t really know what’s behind it.

OL: Are quality of jobs partially behind employment trends, perhaps? Of Millennials and the wages they take home?

MYERS: It’s been a true recovery. However, it is a sluggish recovery. We should have had a sharper recovery, and then another correction. We can see the employment numbers rising. We can see the unemployment rate is down to 4.6 percent. It’s down, but it’s not that low for young people. However, around the recession, unemployment for young people unemployment was over 10 percent. It’s just an indication that people who are looking for jobs are getting them. Job creation has increased and the unemployment rate has fallen.

“It’s been a true recovery. However, it is a sluggish recovery”

OL: Does this mean that Millennials are going to start families or are in the process of starting families?

MYERS: More young people can begin to form households independently. The rate of household formation, which had been stifled, will start to increase and it may lead to more mobility while young Americans are taking new jobs.

OL: Many of these jobs are in the Sun Belt and the Intermountain West. What can you tell us about those regions that are capturing young Americans?

MYERS: During the recession a lot of people moved to Texas, because it was one of the few places creating jobs. Recently, the Austin American-Statesman had a report out about new residents and how the bulk are coming from Southern California. There are people moving in both directions. The way of looking at it is to understand the net growth.

OL: What does the net growth show? Can you give an example?

MYERS: California has been “net out” for a long time, but it’s in part because we have a lot of young people. A lot of people come out to California to try it and don’t stick, and then they go back out. There’s always been a lot of rotation through California.

OL: Why do they leave California?

MYERS: The housing costs are a principle push factor for them to leave because they just can’t buy a house here. Opportunities will seduce some elsewhere. For instance, their friends may show them pictures of the house they got that has twice the space as something in that price range here, so there is an allure of cheaper housing that draws a lot of people.

OL: In your research, you use the metaphor of a bathtub to describe urban flow. “The level of population in a city is like the level of water in a bathtub, held steady by an inflow from the faucet and an equal outflow from the drain,” you write. Can you describe how the net inflow and outflow may present challenges?

MYERS: In most places, it’s not a problem, but for some places it is. In California, for instance, it’s always been an attractive place to live and will keep pulling people in even after the peak. Some don’t leave because they get so rooted in a place, like San Francisco. The ones that stay usually do not have kids, which means they don’t have the same school problems or housing pressures. San Francisco’s population is shifting to people who are like that. That won’t be a factor for them. There are other places that are more marginal, but the chances of residents are a little less clear cut.

Reut R. Cohen (@ReutRCohen) is a journalist, adjunct professor and a communications specialist for the largest housing trade group in California. She can be reached at reut@reutrcohen.com.