Monday, January 23, 2006

Houston holds its own in domestic migration

I came across this interesting analysis of estimated domestic migration trends across U.S. cities from 2000 to 2004. Domestic migration means what it sounds like: people moving within the U.S., but excluding any population changes from births over deaths or international immigration. The good news is that Houston is doing substantially better than most other large cities, but we are definitely swimming against the tide: the largest metros (5+ million) are losing domestic population hand over fist. The "sweet spot" seems to be metro sizes of 1 to 2.5 million that are growing like crazy (like Austin and San Antonio). I'm guessing these metros offer most of the amenities people want, without a lot of the biggest city hassles like crazy traffic congestion (Austin excepted!), subpar urban schools, and outrageous housing prices.

Getting specific, the Houston metro gained 1% in domestic migration, behind only Phoenix (6.3%), Atlanta (3.1%), and DFW (1.7%) in the top 20 metros. The not-as-good news is that Harris County lost 98,330 domestic migrants, but the other counties picked up 147,173, giving us a net gain of 48,843. Most of the top 11 core counties (inc. Houston/Harris at #11) lost around 100,000 domestic migrants, with the dramatic exceptions of the Big 3 - NY, LA, and Chicago. NY lost around 640K, and LA and Chicago each lost around 400K. Among the top 20 cores, only Phoenix gained (can you say "California exodus"?).

Some quoted stats:
  • The largest core percentage losses were in Boston (-11.6%), San Francisco (-10%), St. Louis (-9.8%) and Denver (-9.7%) (that last one surprised me).
  • For metros, San Francisco suffered the largest domestic migration loss, at 6.4%, followed by New York at 4.2%. Chicago and Boston also lost more than 2.5%.
  • Some metros with strong infill programs and efforts to gain core population suffered significant core losses, such as Atlanta, Portland, Chicago, Denver and Washington-Baltimore (the Washington loss was somewhat greater than that of Baltimore).
  • The largest metro numerical gains were in Phoenix, Las Vegas, Tampa-St. Petersburg, Orlando and Sacramento (in order), all of which experienced a gain greater than 100,000.
  • The largest metro numerical losses were in New York, San Francisco, Chicago, Los Angeles, Boston and Detroit, all of which experienced a net loss greater than 100,000.
Based on some slightly older Brookings data I have on immigration, I think at this point Houston is the largest immigrant gateway in the U.S. that is still also attracting domestic migration. This is an incredibly powerful asset if you think about it: we're attracting the international talent pool necessary to become a true global city (just as London, NY, LA, SF, and Chicago did), while still being attractive to job-creating companies and their domestic employees. It's definitely an exciting time to be in Houston.


At 10:04 PM, January 23, 2006, Anonymous Anonymous said...

What's probably happening in Houston's case is that the inner loop population going up, but the population between 610 and about highway 6 is decreasing (and will continue to do so, with this year's Katrina influx as an exception), with population increasing again outside highway 6. That spells trouble, especially if the City is ever prevented from future annexations to claim suburban tax base.

Your conclusion has a chamber-of-commerce optimism, which on the one hand is refreshing, but on the other can indicate blind spots.

At 10:31 PM, January 23, 2006, Anonymous Anonymous said...

I think we're missing a larger question here. Let me explain:

Anyone from the San Francisco Bay Area can tell you that demand for housing within the "core county" (San Francisco) is high. Just looking at the ridiculous price appreciation of housing stock in San Francisco (which is only now slowing down due to interest-rate hikes).

So where does net "out-migration" occur?

There seem to be a couple of answers to that question, and that seems to be a more interesting answer to pinpoint.

1) Smaller domestic families are moving into "core counties," replacing larger domestic families.

2) More pied-a-tierres (could explain NYC outmigration).

3) Affluent immigrants (or poor, which I imagine Wendell Cox is implicitly saying as a critique of inner-city subsidy programs) buying houses from domestic families, who move out of the city.

What seems most likely is (1) -- small-family households move into highly appreciating inner-cities, buying out large-family households. Those large-families move to the suburbs, for larger (and cheaper per sf) housing stock.

I've been in Houston for three years, and I haven't seen any huge drop in demand for inner-city housing for the past couple of years. What I do see is large demand for housing within the loop from young, urban couples (eg, higher-income families with one child, vs. lower-income families with more children). The same goes for SF -- childless couples seem to be more and more the norm, rather than the traditional first-generation family of six (who, if settled in SF before 2000 and leaving during 2000-2004, would be considered "outmigrants").

What would confirm or disprove this is to see the HOUSEHOLD outmigration rate.

I do see immigration being a factor -- with Hispanics coming into formerly Afro-American neighborhoods, and Asians coming into Alief, Bellaire, etc. But hey, as people have said before, immigrants are the lifeblood of cities; it's not necessarily bad if more immigrants are choosing to live in the inner-city.

As long as abandonment isn't occurring in the inner city -- and I don't think it is in LA, SF, or Houston--I don't think that these numbers are cause for alarm. There are great stories to be told from these numbers, but I think we need more statistics in order to avoid falling into a simple, facile reading.

At 10:55 PM, January 23, 2006, Blogger Tory Gattis said...

Annexations are important, as is neighborhood redevelopment, but the most critical tax base to hold on to is the job base and commercial tax base, which we're doing pretty well at so far.

It is a general trend of cities that, as they age, the older, smaller housing stock in the core tends to hold fewer middle-class or higher families as they move to the suburbs for newer, bigger homes and are replaced with either higher-income childless couples (who don't mind having less space) or low-income immigrants (who can't afford more space). If it's more of the former, the city loses overall population; more of the latter, they lose domestic migrants but may gain total population with immigration (as Houston is doing).

Demand for inner city housing is strong in Houston in certain neighborhoods, but weaker in others esp. outside the loop and on the north, east, or south sides. Many of these neighborhoods are in pretty bad shape - thus Mayor White's initiatives to improve them.

Some cities with high domestic out-migration - like NY, SF, or LA - may still be very popular with the affluent - as noted by their high housing prices - but I think they tend to fall off the radar for most growing companies because they know their employees will have trouble affording to live there. They are semi-coasting off their previously established industry clusters (mostly NY finance, SF tech, and LA entertainment). Houston is still in a strong position to attract new companies, industries, and economic development - and the domestic migration numbers are an indication of that.

At 11:05 PM, January 23, 2006, Anonymous Anonymous said...

I wonder how the New Orleans evacuees affected/will affect these stats for Houston.

Also simply increasing population is not a goal in and of itself, attracting young productive workers in cutting edge fields who will settle here is the most important thing.

At 7:50 AM, January 24, 2006, Anonymous Anonymous said...

No doubt, the New Orleans influx likely made Harris County a net positive domestic migration core, while adding substantially to the metro positive migration figures, even if it is a somewhat temporary or isolated event.

Other than natural competititive urges, increasing population generally, in and of itself, does not increase vitality in a city. However, since we have not mastered the art, nor even understand the concept of prosperity without growth, population growth is desired. In reality, since prosperity usually creates more jobs, increaing population is an indicator of a vibrant economy, since that economy will draw migrants from underperforming areas. So, while population growth is not the goal, it is often a sympton of what is desired, improved economic conditions and employment.


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