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May 26, 2016

The real reason why Millennials, Gen Xers are flocking to cities

Wharton School study sees why young, college-educated people are moving downtown

Gentrification Cities
Philly Beer Week M. Edlow/ for Visit Philadelphia™

Research from the Wharton School found that the presence of bars, restaurants and theaters plays a strong role in drawing college-educated adults to America's cities.

Whether you see it as "urban revival" or decry it as "gentrification," anyone who has spent some time in America's cities can see a clear trend: young, college-educated people are flocking to urban centers and transforming neighborhoods. 

But are younger generations really wedded to city living, or is this just a passing fad? Commentators have speculated that this trend is just a result of people having kids later in life. Once those Millennials settle down with a family, the popular wisdom goes, they'll pack up their minivans and go back to the suburbs.

A researcher at the University of Pennsylvania's Wharton School, however, says that she has the data to show that the young people moving into the city today really are different. And they really are going to stay.

“I don’t think it’s a fad," said Jessie Handbury, who presented her preliminary findings at a symposium on gentrification research held Wednesday at the Federal Reserve Bank of Philadelphia.

Handbury and her co-author, Victor Couture of the University of California, wanted to find out why college-educated adults under the age of 45 are moving in a totally different direction than the rest of the country, literally. 

Related story: Gentrification doesn't force poor out, but it's harder to move in

Twenty-three out of 25 of the country's largest cities are seeing growth in this group, and the number of young college-educated adults is growing three times faster in the downtown areas of cities than in the suburbs. The trend for every other demographic group is just the opposite: people are moving at higher rates to the suburbs. 

“This isn't a Baby Boomer story, this is a Millennial story," Handbury said. 

Handbury and Couture created a statistical model that would test a variety of different explanations for this trend. The goal was to see which factors correlated most strongly with growth in the yuppie population.

They put in a huge amount of data on where people lived across the country and the factors that might draw them to live there, like housing prices, job locations and the presence of amenities like stores and restaurants. They looked at these amenities in 2000, to avoid the problem of counting businesses that popped up after young professionals had already moved in.

As it turns out, Millennials and Gen Xers really do have different tastes than Baby Boomers. The presence of amenities like theaters, bars and restaurants made the largest contribution in explaining why people with a college degree moved to cities.

“That surprised me, because I just thought it was all anecdotal. ... You don’t necessarily think someone’s moving where they’re moving because they want to be near a Whole Foods or SoulCycle location,” Handbury said.

The role of kids and crime

The fact that cities are much safer now also helps draw people in. There was a huge drop in crime across the entire country in the 1990s, with homicide rates plummeting 43 percent in a single decade.

The drop in crime in cities relative to the suburbs, the authors found, helped draw in more young professionals. However, even cities with low crime rates to begin with saw an increase in this population, so crime can't be the only explanation.

Related story: Pew: Gentrification just one facet of neighborhood change in Philadelphia

To see if Millennials and Gen Xers move back to the suburbs once they get older and have kids, the study looked specifically at college-educated people age 35 to 44. The number of people in this group with children actually grew at a faster rate in cities than in suburbs.

It's still true that city people are much more likely to be childless than suburban people, but a growing number of people are choosing to stay in the city with their kids.

The quality of local schools also makes a big difference to parents, so that's something the authors plan to investigate next.