December 31, 2019
Happy New Year's Eve! I'd like to thank you all for joining this growing community over the past six months. I'm grateful for the feedback and ideas you've passed along to me, and I look forward to the conversations in 2020.
- During this holiday week — a time when many people travel to their hometowns — it seemed timely to examine where and why people move.
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- Today's edition is 1,450 words, a 5.5-minute read.
1 big thing: Americans are moving far less
Fewer than 10% of Americans moved to new places in the 2018–2019 year, the lowest rate since the Census Bureau began tracking domestic relocations in 1947.
Why it matters: Despite a strong economy, more people are feeling locked in place. Young adults, who have historically been the most mobile, are staying put thanks to housing and job limitations. So are aging adults who are reluctant to (or can't afford to) make a move.
By the numbers: The share of Americans who moved in the past year is about half of the amount in the 1950s, when about one-fifth of the population moved each year. That number is now 9.8%, the first time it's dipped below 10%.
- Only 20% of people aged 20–24 moved this past year, down from 29% in the 2005–06 year.
- Of those in their late 60s, only 4% moved in the past year.
- 19.7% of renter households (who tend to be more mobile than homeowners) moved, down from 30.2% in 2005–06.
What they're saying: "There's been this long-term decline in mobility going back to the 1950s, as the population got older and as more people owned houses in the '60s and '70s and didn't move," said demographer William Frey of the Brookings Institution. "But the continued decline since the Great Recession and the housing crunch is driven by the millennial population."
The big picture: Decades ago, job markets were more interchangeable and diverse, so it was easier for people with most occupations, from factory workers to bankers, to find jobs in a variety of places that were relatively affordable. Now, though, industries are clustered in specific regions, middle-class jobs have declined, and housing prices are rising in many prosperous areas.
- As a result, low-wage and high-wage workers have less flexibility to relocate.
- Long-distance migration — across the country, for instance — tends to happen more among the highly educated population drawn to new cities by jobs.
- Short-distance migration, often within the same county, is usually due to housing-related reasons.
Between the lines: The fact that far fewer people are moving to new counties or states could be a bad sign for economic mobility, per research by the McKinsey Global Institute.
- When people do move, they go to places that are very similar to where they came from, McKinsey partner Susan Lund told Axios earlier this year.
- That means people from distressed areas aren't finding their way into more prosperous ones, leading to sustained economic gaps between places.
What to watch: It's also a bad sign for smaller cities and rural areas that are already having trouble attracting new residents. Stagnating areas are likely to stay stagnant if people feel stuck in place.
2. The new relocation test: Jobs for spouses
The rise of dual-career couples has contributed to lower mobility rates between cities and has made it harder to recruit workers to smaller job markets.
Why it matters: Moving to a different town for a job opportunity was more common when most households had one primary earner. Now that the majority of households rely on two incomes, relocating requires finding two good jobs instead of one.
More than 60% of all U.S. households have two working parents, according to Pew Research Center. White-collar workers are more likely to be part of households where both partners work full time.
Where it stands: 50 years ago, the main requirement for relocating was a stable job for the family breadwinner.
- "Now, when you have two-professional couples, you don’t want to go to a place where one has a great opportunity and one doesn’t," said Rob Atkinson, president and CEO of the Information Technology and Innovation Foundation.
- "You want to go to a labor market where it’s rich with opportunities, and with plenty of backup plans for both in case the job you went there for doesn't work out," Atkinson said.
Between the lines: Smaller markets with fewer options are finding it hard to lure candidates. "When you try to recruit people from outside the area, you have to have employment for spouses," said Barry Tippin, city manager for Redding, California.
- "You’re almost always recruiting both," he said. "If a spouse is a teacher or a nurse, there are almost always opportunities. But if a spouse is in corporate finance, we don't have a lot of that up here."
3. Affordability is driving decisions on where to live
Most American workers place affordability above jobs on the priority list when determining where to live, according to Prudential's Pulse of the American Worker survey conducted in November by Morning Consult.
Why it matters: The high cost of living in job-rich centers holds people back from looking for new opportunities there.
Nearly half of those surveyed said affordability and proximity to family and friends were the most important factors, while only 15% listed job opportunities as a primary reason. (Note: The survey has a 3% margin of error.)
- Although 6 in 10 people are willing to relocate for a new job, 88% wouldn’t commute more than an hour, even for their dream job.
- The majority of Americans surveyed said they've lived in their community for more than 15 years.
- Only 23% said they'd relocated for their current job.
Blue-collar and hourly wage workers tend to have deep networks of friends and families that tie them to a particular community and keep them from leaving, even if higher-paying opportunities are elsewhere.
- "It struck me how locally anchored people were," said Molly Kinder, a fellow at Brookings Institution's Metropolitan Policy Center, whose recent research interviewed 40 workers including those employed in grocery stores, fast food and clerical jobs.
- "We have this notion that all people need is a platform online that tells them where a job is available," she said. "But for the lower-income population we talked to, the way people knew about or had access to jobs is through a friend or family."
Occupational licensing requirements can also discourage crossing state borders, Kinder noted.
What to watch: The cities projected to have the fastest-growing populations over the next five years include Austin, Dallas-Ft. Worth, Orlando and Charlotte, per an analysis by the Urban Land Institute.
4. Household income stagnates as home prices soar
Despite a robust economy and low unemployment, household income hasn't changed much in the past 20 years.
- Median household income was $63,179 in 2018, statistically unchanged from 2017, according to Census data released in September.
- On an inflation-adjusted basis, households are making only 2.7% more than in 1999.
- “Most families have just barely made up the ground lost over the past decade,” Economic Policy Institute senior economist Elise Gould said at the time.
Meanwhile, large numbers of Americans are paying significant portions of their income on rent as housing costs have outpaced growth in wages.
- Home prices grew at a slower rate in 2019 than they did in 2018, but a shortage of housing inventory is driving price increases even in U.S. markets touting affordability like Phoenix and Tampa.
What to watch: Annual median home prices are expected to increase by 3.6% in 2020 and by 3.5% in 2021, according to a National Association of Realtors forecast.
The bottom line: “Real estate is on firm ground with little chance of price declines,” said Lawrence Yun, the group's chief economist, in a release.
- “However, in order for the market to be healthier, more supply is needed to assure home prices as well as rents do not consistently outgrow income gains," Yun said.
Pic du jour: China's rapid urbanization
China now has 130 cities of at least 1 million people — more than the U.S. (45), European Union (36) and South America (46) combined.
Go deeper: Global cities are booming
5. Urban files
The decade of the very poor and the super rich☝️(Axios)
'Advertising breaks your spirit': The French cities trying to ban public adverts (The Guardian)
Miami leads in keeping kids out of jail, but much of Florida fails (Miami Herald)
High schoolers step up to help run the Twin Cities (Minneapolis Star-Tribune)
How the on-demand economy reshaped cities (CityLab)
6. 1 drone thing: FAA proposes new tracking regs
The Federal Aviation Administration wants to require the vast majority of drones to broadcast identifying and location information so authorities can spot rogue drones and generally keep tabs on the rest.
Why it matters: Drone makers have been waiting on the FAA to propose the Remote ID regulation to ease security concerns about potentially hostile drone operators that could, for example, wreak havoc at an airport — similar to the incident that shut down the U.K.'s Gatwick Airport last year.
Between the lines: The drone industry hopes a workable Remote ID standard will make the FAA comfortable with allowing operators to fly drones beyond their line of sight and over people — allowances necessary to enable package delivery and other commercial uses.
Details: The draft rule, which is expected to be published in the Federal Register today, will apply to all recreational and commercial drones weighing more than 0.55 pounds. The public can comment on the proposed rule for 60 days.
Go deeper: The drone nightmare is here
Hope you have a great start to 2020! I'll be off next week, so Axios Cities will be back in your inbox Jan. 15.