Houston Strategies

Census on domestic migration

You may have seen the articles about the Census report on domestic net migration (i.e. ignoring foreign immigrants) that came out last week. The overall theme: Americans are fleeing the big cities, although most of those cities are making it up with foreign immigration.

Americans are leaving the nation's big cities in search of cheaper homes and open spaces farther out.

Nearly every large metropolitan area had more people move out than move in from 2000 to 2004, with a few exceptions in the South and Southwest, according to a report being released Thursday by the Census Bureau.

Northeasterners are moving South and West. West Coast residents are moving inland. Midwesterners are chasing better job markets. And just about everywhere, people are escaping to the outer suburbs, also known as exurbs.

"It's a case of middle class flight, a flight for housing affordability," said William Frey, a demographer at the Brookings Institution, a Washington think tank. "But it's not just white middle class flight, it's Hispanics and blacks, too."

Here's a trivia question you won't believe the answer to: Guess which city is losing domestic migration at the slowest rate (i.e. doing the best) among these six: NY, LA, Chicago, Detroit, Boston, or SF? The answer: Detroit! It would fall into the sixth position in the table graphic at the bottom of this post. Don't believe me? Just check out Table 3 on page 8 of the report. Looks like housing costs trump healthy industry economics when it comes to domestic migration for a city.

Houston has some good news and some bad news.

First, the good news: the Houston metro is only one of three out of the twelve largest that is gaining domestic migration, along with Atlanta and DFW. Only 7 out of the 25 largest are gaining domestically, adding Riverside-SB, Phoenix, Tampa, and Portland. Texas is also healthy with the sixth-highest annual inmigration, behind super-hot Florida ("where the Yankee Boomers all retire"), then Arizona, Nevada, Georgia, and North Carolina.

The bad news: Harris County is losing the tenth-most annually among counties, with an annual domestic outmigration of 23K. Dallas County is in even worse shape, in sixth-place losing over 40K/year (more loss from a smaller county). On the plus side, if you look at the maps in the report, you can see the counties around Dallas and Houston - heck around almost all of the Texas Triangle - are gaining and gaining strongly.

The Wall Street Journal has an article focusing on tech and housing-rich SF and Boston:

An exodus of U.S. workers from the technology-rich San Francisco Bay and Boston areas accelerated early this decade, according to Census Bureau data to be released today.

Meanwhile, high housing costs on both coasts drove more Americans to cheaper cities nearby. One big winner is the inland Riverside, Calif., area. It continued to attract residents from the Southern California coast from 2000 to 2004, experts say. States in the Southwest and Pacific-Northwest continued to attract many disaffected Californians, economists say. But their rate of U.S. migration gains slowed compared with the 1990s, the Census data indicates. Florida continued to attract new residents at a fast clip.

The bursting technology bubble sent people packing from the San Francisco Bay area. The rate of domestic migration out of the area nearly tripled to an average annual net loss of 14.7 people per 1,000 population, compared with a loss of 5.5 people in the 1990s. At the same time, the Boston area, another high-tech hub, lost workers at an average annual rate of 9.5 domestic residents per 1,000 population, nearly double the '90s rate.

Some economists say the losses of skilled workers, coupled with high housing costs, could hamper the ability of the tech industry to attract new labor, at least in those areas. "Today, housing in both Boston and the Bay area is unaffordable" relative to other parts of the country, says Mark Zandi, chief economist at Moody's Economy.com. "If the tech sector takes off, it's going to be much harder to bring in skilled labor for these positions."

During the latter half of the 1990s, when housing prices were lower and the tech sector was booming, San Francisco's job market expanded at an average rate of 3% to 4% a year, compared with 1.3% today, Mr. Zandi estimates. Boston's job market was growing an average of 2% to 3% a year in the late 1990s, compared with roughly 1% today.

More than half of the roughly 973,000 tech workers employed in California in early 2000 had left the industry or the state by 2003 (ouch!), according to the Sphere Institute, a Burlingame, Calif., think tank.

...

In some large cities, such as San Francisco and Boston, gains from immigrants failed to completely offset the loss of residents to other cities, says William Frey, a demographer at the Brookings Institution. Census officials say domestic migration tends to be one of the best measures of the impact of economic factors such as job growth and housing prices.

Areas near regions with fast-rising housing costs were among the biggest beneficiaries of domestic migration. In 2004, for example, the inland California region of Riverside-San Bernardino-Ontario attracted 46,000 net residents from the Los Angeles metro area, according to Economy.com. In the Boston area, roughly 3,700 net residents relocated to the Providence, R.I., metro area.

Meanwhile, Florida continued to lure domestic immigrants. A combined 41,500 net residents from the greater New York region moved to the Miami, Orlando and Tampa regions in 2004, according to Economy.com. "The New York to Florida highway is still intact," says Brookings' Mr. Frey. Orlando and other Central Florida cities "are new destinations where people are finding jobs. Employers are saying, 'It's more affordable to move to these areas.' The local economy is much more diversified. Central Florida is not just Disney [World] anymore."

posted by Tory Gattis @ 8:00 PM