New book predicts rapid suburbanization of cities has ended

by Reed Liming, Santa Fe, NM

Arthur C. (Chris) Nelson’s latest contribution to understanding America’s evolving cities is Reshaping Metropolitan America (Island Press, 2013). Nelson’s book is a self-described decade-long project that traces America’s changing demographics and its impacts on the housing market and, by association, our evolving cities.

His premise is this: The rapid suburbanization of American cities has ended – for good. Nelson’s thesis that America’s housing market of the future will be more urban and less suburban is reflected in compelling numbers he provides throughout the book, including:

  • Only 13 percent (3.5 million) of new households formed by 2030 will contain children
  • 53 percent (14 million) of new households will be single-person; mainly aging baby-boomers with some “millenials” (born 1996-2010)

A changing America

According to Nelson, market trends set the stage for a vastly different housing market through 2030. These include rising energy costs, falling incomes, lagging employment, shifting wealth and loss of interest in and increased difficulty obtaining home ownership, as well as key population trends (aging, minority population growth and increasing senior/youth dependency).

Nelson also cites numerous national preference surveys pointing to the fact that both baby-boomers (born 1946-1964) and Generation Y-ers (born 1981-1995…largely kids of boomers) will increasingly tend to reject America’s suburban model in favor of more urban lifestyles. This is important as both Boomers and Y-ers represent large populations that will continue to drive the housing market over the next two decades.

Housing in a different way

Average household size will remain fairly constant through 2030, according to Nelson. Increases in single-person Boomer households may be off-set by more multi-generational housing among the growing ethnic minorities less able to obtain home ownership in the traditional suburban single-family detached, large lot mode.

While even more new households will be added between 2010-2030 than were formed between 1990-2010, according to Nelson, the demand will be for a very different housing type due to Boomers downsizing and continued lower home ownership rates among the ethnic minorities that are driving much of America’s population growth. Nelson cites the fact that 85 percent of all new housing units built between 1989-2009 were single-family detached and that 33 percent of all this new housing was built on lot sizes of at least one half-acre in size. It is this large-lot, suburban-style housing on the edge of America’s cities that stands to suffer the most from weakened demand through 2030, according to Nelson.

A changing housing market

Nelson’s assumptions about the future of the U.S. economy help gird his considerable statistical analysis of demographics and the changing housing market. According to Nelson, the U.S. economy and demography will reflect the following:

  • Fewer kids in new households
  • Rapidly growing ethnic minority population when compared to whites
  • Overall lower home ownership rates (ethnic minorities have considerably lower rates) 
  • Lower educational achievement among growing ethnic populations
  • Lower median household income among those groups (and the nation as a whole)
  • Diminishing high-paying employment/industries in America’s future

The author points out that more non-residential space will be needed. Nelson believes that home-based offices and Internet retail shopping will have minimal effects on the need for added floor area in the future, in part due to relatively short “shelf lives” of commercial buildings and the need for replacement. He calculates a national demand for increased non-residential development of 28 percent above the 24 billion square feet of existing non-residential development the U.S. currently contains.

Implications for planners

Nelson lays out his vision (and math) for how America’s cities can, or should, most efficiently absorb the housing and non-residential growth to 2030. He brings together the changing household make-up of America and a changing national economy, combining them with the national preference surveys.  

“Mixed-use, amenity-rich, transit-accessible options” along low-density, parking-lot dominated commercial corridors and large under-performing retail/employment centers represent the convergence of “preference survey” demand and potential supply, for Nelson. His math demonstrates that if all new housing needed between 2010-2030 were built in these more urban or ripe-for-redevelopment suburban locations it would still be short of the demand for this type of housing and lifestyle.

He urges local officials and planners to start preparing local plans and codes to at least allow for, if not incentivize, this new wave of development. Too often, local development codes and zoning ordinances represent roadblocks rather than facilitation for this type of redevelopment and mix of uses.


Regardless of whether or not you accept Nelson’s numbers and calculus for the future, one thing seems certain – the “new normal” will not look like the “old normal.” Still, this is a nation where the built landscape, while aided and abetted by public sector codes, is dominated by the primacy of private land ownership and the market…i.e. cheap raw land on the outskirts, especially in larger tracts, is tough to beat…and we Americans, especially Westerners, seem to like it that way, or at least we have for the last 60-70 years.

Yet, Nelson’s own substantial statistical analyses and merging of the trajectories of the U.S. economy, demographics and public preferences make his thesis seem less wild-eyed prediction and more foregone conclusion. Stay tuned…

Reshaping in Santa Fe

So, Chris Nelson has laid out the arguments for a new era dawning for America’s metros. How’s it playing out, so far? Well, there’s some evidence of this new era in Santa Fe, New Mexico.

Prior to 2008, housing growth in the county areas around Santa Fe’s urban area (defined by two local highways) was strong and for two decades rivaled the growth inside the urban area. These unincorporated county lands were dominated by large lots (1-2 acres and larger) and generally more expansive and expensive homes. Figures (see table) show that from 2004-2007, the urban area absorbed 2,518 of the region’s 4,040 new units, or 62 percent. And, like the rest of the U.S., new construction was booming.

Now, let’s consider the most recent four years (2009-2012). While new housing construction took a dive in Santa Fe, as it did across the U.S., the geographic mix has certainly changed. Although new housing construction dropped by 67 percent from 4,040 units to just 1,343 units, the urban area’s share of new units increased from 62 percent during 2004-2007 to 76 percent during 2009-2012.

Part of Nelson’s theory that new housing construction (and the housing market, overall) would be most decimated in the outer suburbs and edge areas, post-bubble, seems to be playing out in Santa Fe…so far.

Reed Liming is the director of the Long-Range Planning Division for the City of Santa Fe, NM.

Published in the July/August 2013 Issue

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