Where Are The Boomers Headed? Not Back To The CityPosted: October 21, 2013
Joel Kotkin reports: Perhaps no urban legend has played as long and loudly as the notion that “empty nesters” are abandoning their dull lives in the suburbs for the excitement of inner city living. This meme has been most recently celebrated in the Washington Post and the Wall Street Journal.
Both stories, citing research by the real estate brokerage Redfin, maintained that over the last decade a net 1 million boomers (born born between 1945 and 1964) have moved into the city core from the surrounding area. “Aging boomers,” the Post gushed, now “opt for the city life.” It’s enough to warm the cockles of a downtown real-estate speculator’s heart, and perhaps nudge some subsidies from city officials anxious to secure their downtown dreams.
But there’s a problem here: a look at Census data shows the story is based on flawed analysis, something that the Journal subsequently acknowledged. Indeed, our number-crunching shows that rather than flocking into cities, there were roughly a million fewer boomers in 2010 within a five-mile radius of the centers of the nation’s 51 largest metro areas compared to a decade earlier.
If boomers change residences, they tend to move further from the core, and particularly to less dense places outside metropolitan areas. Looking at the 51 metropolitan areas with more than a million residents, areas within five miles of the center lost 17% of their boomers over the past decade, while the balance of the metropolitan areas, predominately suburbs, only lost 2%. In contrast places outside the 51 metro areas actually gained boomers.
Only one city, Miami, recorded a net gain in the boomer population within five miles of the center, roughly 1%. Much ballyhooed back to city markets including Chicago, New York, Washington, D.C., and San Francisco suffered double-digit percentage losses within the five-mile zone.
Where the boomers move is critical to the real estate industry, as well as other businesses. This is a large and relatively wealthy generation. Boomers account for some 70% of the country’s disposable income, and their spending decisions will shake markets around the country.
Given the importance of this market, why has the analysis of it proved so wrong? One factor may well be that most boomers generally do not really want to move if they can help it. Three out of four boomers want to “age in place,” according to a recent AARP study.
Part of the problem is one found commonly in press reporting on demographic trends; reporters only tend to know what they see, and mostly they work almost exclusively in urban cores. They encounter empty nester who moves to Manhattan or even downtown St. Louis, but not the ones who moves to the desert, lake, the mountains, the woods or into an adult-oriented community on the urban fringe. Out of the core, these people often fade into media oblivion.
However, as people age, they turn out to be not, as one developer suggests, “more hip hop and happening” than more likely to seek remaining not only close to home, but attached to the workforce and the neighborhood. A recent series in the Dallas Morning News tracked where local empty nesters were moving — largely to low-crime, well-maintained suburbs and exurbs. What were they looking for? The paper found the biggest concern by far to be safety, followed by affordability and quiet.
So if boomers aren’t flocking to inner cities, which of the 51 biggest metro areas are gaining the largest share of them? The top gainers are all relatively low-cost, low-density Sun Belt metropolises, led by Las Vegas. Its boomer population expanded 20.2% from 2000 to 2010, with a 12.2% decline in the five-mile inner ring and 36.3% growth outside it. In second place, Tampa-St. Petersburg, Fla., up 11.5% (-8.3% in the five-mile zone, +13.5% outside); followed by Phoenix, whose boomer population rose 11.3% (-22.8%, +15.0%). In contrast, more expensive, denser cities like New York, San Francisco, Los Angeles and San Jose, Calif., saw the worst boomer flight, suffering double-digit percentage losses.
What are the implications of these findings? For cities, time to forget the long-anticipated “back to the city” trend among seniors as something that can save their downtowns. To be sure, there may be some ultra-affluent urban districts that may attract wealthy older investors and buyers, many of them part-time residents, such as Chicago’s Gold Coast and parts of Manhattan. In some elite Manhattan buildings, full-time residents constitute as little as 10% of the total.
A little further out from these hot spots, boomers are fleeing. The five-mile zone around the City Hall of New York lost about 20% of its boomer population in the past decade, while in Chicago the corresponding area lost 26%.
Ultimately, some downtown places might be a “wonderland,” as The New York Times puts it, for a small group of highly affluent residents. But for most they are outrageously expensive. At an age when capital preservation if often paramount, in New York, the senior best positioned is one living a long time in a rent-controlled apartment.
Cities need to understand that, for the most part, their appeal remains primarily to young, largely single people, students and couples before they have children; cities’ real challenge, and opportunity, lies in trying to keep more of this youthful cohort in the city as they age and expand their households. Boomers and seniors may be able to support luxury apartment developers in parts of Manhattan, but not in most cities.
The boomer population in the five-mile radius of the 51 largest U.S. metropolitan areas fell by roughly a million from 2000 to 2010, out of a 2000 population of nearly 6 million, or 17%. The boomer population outside the five-mile zone in these metro areas also fell, but at a much lower rate: 2%, or 800,000 people out of a population of 39.5 million in 2000. Away from the major metros, smaller metropolitan areas and rural areas gained nearly 450,000 boomers. However, there was an overall loss of about 1.3 million boomers, principally due to deaths.
Given the trends, suburbs will likely persist as a primary arena for aging populations. This suggests these communities will have to ramp up services to accommodate them, such as shuttle buses and hospitals. They should cultivate downshifting boomers as new consumers for local stores, and particularly on Main Streets, and as sources for capital and expertise.
Perhaps the biggest impact, however, may be on smaller metropolitan areas and the less expensive Sun Belt communities. As more boomers achieve “empty nester” status they could bring investment capital, and broader connections to smaller cities that could much use them.
One early sign of this trend may be the recent rise in migration to Florida. After a brief recession-driven hiatus a net 200,000 people have moved to Florida in the last two years. New Census numbers also suggest a large number of people continue to leave the Northeast, the Midwest and California. Also likely to benefit will be some emerging boomer magnet communities in Idaho, Arizona, Utah, the Carolinas and Colorado.
For real estate developers and investors, the ones often most entranced by the “back to the city” story, the lessons are very clear. It makes more sense to follow the numbers, and understand the logic of senior migration, than swallow the snake oil so many have been carelessly imbibing. There are great opportunities in the expanding senior market, including in some uniquely attractive urban districts, but the bigger plays are in outlying areas, and, increasingly, smaller towns.
- Where Are The Boomers Headed? Not Back To The City (nalert.blogspot.com)
- Financial Concerns Could Drive Retiring Baby Boomers Out Of The City (newyork.cbslocal.com)
- Baby boomer bloggers offer tips on how to live better (boomersurvive-thriveguide.typepad.com)
- Retirement Living: Top metro areas for retirees (usatoday.com)
- Best of Boomer Blogs #328 (sobabyboomer.com)
- How the Baby Boomers invented wine (steveheimoff.com)
- Why boomers need Generation Y (pbstites.wordpress.com)
- Daily Baby Boomer News Update: October 19, 2013 (babyboomers.com)