Americans on the Move

Joel Kotkin, a respected contributor to on urban issues, recently wrote an article about the migration patterns of Americans and where they are moving.  He predicts the population growth over the next few decades will be largely concentrated “to lower-cost, less regulated and generally less dense regions,” and because of this he places Texas as one of the biggest gainers.  What does this mean for Texas and other booming “Sun-Belt States?” Here are the highlights from the article.  (Here is the article in full).

The red states may have lost the presidential election, but they are winning new residents, largely at the expense of their politically successful blue counterparts. For all the talk of how the Great Recession has driven people — particularly the “footloose young” — toward dense urban centers, Census data reveal that Americans are still drawn to the same sprawling Sun Belt regions as before.

An analysis of domestic migration for the nation’s 51 largest metropolitan statistical areas by demographer Wendell Cox shows that the 10 metropolises with the largest net gains from 2000 through 2009 are in the Sun Belt, led by Phoenix, and followed by Riverside-San Bernardino, Calif.; Atlanta; Dallas-Ft. Worth; and Las Vegas.

Migration has slowed from a high of nearly 2 million annually in 2006 to less than 800,000 last year, but the most recent numbers show that the Sun Belt states, though chastened by the recession, are far from dead, as often alleged. This part of America somehow manages to continue to draw Americans seeking opportunities, in particular from the large coastal metropolitan regions.

The biggest winner has been Texas. The Lone Star state boasts four of the 10 metro areas with the largest net migration gains for the past two years.  Dallas ranks first, followed by Austin in third place, Houston in fifth and San Antonio in eighth. In contrast, some of the growth leaders over the 2000-09 period, notably Las Vegas, and to a lesser extent Phoenix, have tumbled considerably in the rankings. The lesson here: a strong economy has to be based on something more than gaming, tourism and home construction. Energy, technology, manufacturing and trade are far preferable as an economic base.

How about the biggest losers? From 2000-09, the metropolitan areas that suffered the biggest net domestic migration losses resemble something of an urbanist dream team: New York, which saw a net outflow of a whopping 1.9 million citizens, followed by the Los Angeles metro area (-1,337,522), Chicago, Detroit, and, despite recent improvements, San Francisco-Oakland. The raw numbers make it clear that California has lost its appeal for migrants from other parts of the U.S., and has become an exporter of people and talent (and income).

What can we expect now? It seems clear that the urban-centric policies of the Obama administration have not changed Americans’ migration patterns. The weak recovery has slowed migration, but expensive, overregulated and dense metropolitan areas continue to lose population to lower-cost, less regulated and generally less dense regions.

If the economy somehow gains strength, it may only serve to further accelerate these trends. The incipient recovery in housing prices seems likely, at least in places like California and the Northeast, to create yet another bubble. This will give people more incentive to move to less expensive areas, particularly those who can cash in by selling a house in a pricier city and moving to a less expensive one. This may be bad news to many urban pundits and big city speculators, but it also should create new opportunities for more perceptive, and less jaded, investors.