The Rust Belt Stabilizes as the Sun Belt Tops Out

(Bloomberg Opinion) -- Americans tend to move from large, urban areas, particularly in the Northeast and the Midwest, toward suburban areas, particularly in the South and the West. After many decades of that kind of migration, a few big shifts are appearing: Some hard-hit Rust Belt metros are starting to show signs of stabilization, and the biggest Sun Belt metros are showing signs of strain as congestion gets worse and their affordability worsens.

For instance, even in the fastest-growing large metro areas in the country, all based in the South, their core urban counties are now seeing native-born Americans head for the exits in large numbers. In 2011, Harris County in the Houston metro area, Dallas County in Dallas, Fulton County in Atlanta, and Miami-Dade County in Miami took in a net 35,000 people in domestic migration. In 2018, they lost a combined 115,000 people on the same measure, with a steady deterioration in the years between. This is occurring even at a time when these metro areas have seen less exurban development than in the past cycle, and where their urban cores have been transformed by new apartments and moderate increases in density.

The Rust Belt Stabilizes as the Sun Belt Tops Out

Someone might think that if large Sun Belt metros are now losing residents like older metros were, then those Rust Belt metros must really be having a rough time. But they’d be mistaken.

While they’re still seeing net domestic outflows, Wayne County in the Detroit metro area, Cuyahoga County in Cleveland and Hamilton County in Cincinnati are all seeing less domestic net outmigration now than they were at the start of the decade. Brookings has previously noted that some Midwestern metro areas are now seeing modest net inflows of residents age 25 to 34. Blogger and urbanist Pete Saunders has noted that Detroit’s white population has grown substantially this decade, reversing decades of decline.

There are a few trends to note here and to watch in the future. The first is that to the extent Rust Belt metros are stabilizing, it not only means good news for those communities that can focus on revitalizing their economies rather than continuing to lose people to other metros; it also means that those Rust Belt communities will no longer be sources of talent and jobs for the South and the West to the extent that they’ve been in the past. This will require new recruitment and development strategies for those metros.

The second is that core counties in large Sun Belt metros, now having similar migration patterns to places like New York, Chicago and Los Angeles, may have to adapt their governance models to their new realities faster than they might be comfortable with. As older, mature metro areas have shown, the problems of congestion, inequality and affordability don’t fix themselves, and generally require a larger tax base than Sun Belt metros are accustomed to. Low taxes are a great selling point when your community is new, with lots of room for growth, but nobody has seemed to figure out how to manage a larger, more mature community with low taxes.

The third is that even while these Sun Belt metros are continuing to grow quickly because of natural population growth, immigration and suburban/exurban population growth, that won’t necessarily last forever either. Birthrates continue to fall. The future of immigration policy in the U.S. is highly uncertain. And there’s likely a limit to how far out a metro area can develop. Here in Atlanta, while exurban Forsyth and Cherokee counties continue to show positive domestic in-migration and strong population growth, closer-in Gwinnett County, which for decades has been one of the fastest-growing counties in the country, had domestic out-migration for the first time in 2018.

To the extent growth begins to slow in larger Sun Belt metros as size catches up to them and natives decide to leave for greener pastures, where are they going to go? That may turn out to be the key migration question for the next decade. Metros of 1 million to 3 million residents, places like Raleigh and Nashville and Austin, continue to show strong growth, but it remains unclear whether they’re willing or able to build out the infrastructure necessary to become as large as Atlanta or Dallas — or whether they even aspire to get that large. They may hit congestion constraints earlier than their larger peers.

Metros are going to fill up, and the costs of that growth will compel people to move elsewhere. It’s just not clear which places are willing and able to handle that growth.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Conor Sen is a Bloomberg Opinion columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.

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