Downtown Chicago’s boomer bust

by Joe Zekas on 10/21/13

Joel Kotkin, writing at newgeography, argues that the oft-reported back-to-the-city trend among empty nesters is a myth:

Perhaps no urban legend has played as long and loudly as the notion that “empty nesters” are abandoning their dull lives in the suburbs for the excitement of inner city living.

Only one city, Miami, recorded a net gain in the boomer population within five miles of the center, roughly 1%. Much ballyhooed back to city markets including Chicago, New York, Washington, D.C., and San Francisco suffered double-digit percentage losses within the five-mile zone.

What are the implications of these findings? For cities, time to forget the long-anticipated “back to the city” trend among seniors as something that can save their downtowns. To be sure, there may be some ultra-affluent urban districts that may attract wealthy older investors and buyers, many of them part-time residents, such as Chicago’s Gold Coast and parts of Manhattan. In some elite Manhattan buildings, full-time residents constitute as little as 10% of the total.

A little further out from these hot spots, boomers are fleeing. The five-mile zone around the City Hall of New York lost about 20% of its boomer population in the past decade, while in Chicago the corresponding area lost 26%.

We know you love to hate on Joel Kotkin, but how about disputing his numbers instead? The choice of a 5-mile radius, a zone that differs radically between New York and Chicago, is a good starting point.

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{ 23 comments… read them below or add one }

IrishPirate October 21, 2013 at 6:36 AM

Joe,

I won’t dispute his numbers, but there is one factor he doesn’t seemingly account for. Death.

The standard definition of the baby boom is 1946-1964. The oldest boomers are now 67 years old which means their mortality rate is increasing. Less boomers to go around so to speak.

It’s difficult to have a “net gain” when the pool you’re drawing from is dwindling on a daily basis.

That being said the urbanist wannabees who constantly project a move back to central cities are sadly wrong. If only it were so.

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boomtown October 21, 2013 at 9:09 AM

The sheer number of boomers negates that entire argument. There are more boomers than X and Y combined. And lifespan is 80-100 now, not 67.

Could it be that they just don’t want to live in the expensive city? They come from a time when Chicago was easy to navigate and today it’s just a hassle they don’t have to deal with. Or can’t afford after retirement.

It appears boomers are going south to lower costs of living and easier living VS expensive Chicago.

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IrishPirate October 21, 2013 at 11:14 AM

Boomie,

I can guarantee Joe Z is very happy to hear about the lifespan now being 80-100.

Which reminds me of a joke. If you’re lucky you live to be 90. If you’re really lucky you live to be 80.

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louisvanderwright October 21, 2013 at 12:55 PM

“There are more boomers than X and Y combined.”

Uhhhhh, nope. By some accounts (i.e. depending on how you define gen Y), there are more people in Gen Y ALONE. The Baby Boomers and Millenials are almost exactly the same size, Generation X is smaller, but not by much. The above statement you made is laughably wrong.

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PosterBoy October 21, 2013 at 2:00 PM

“It appears boomers are going south to lower costs of living and easier living VS expensive Chicago.”

That would be wrong. Rates have been unchanged over the last 6 years and what the Sunbelt experienced in the early 2000′s will not be happening again….anytime soon.

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Joe Zekas October 21, 2013 at 9:38 AM

IP,

Kotkin does note that “there was an overall loss of about 1.3 million boomers, principally due to deaths.”

I’m with boomtown, though – mortality doesn’t explain much here since areas outside the urban core gained boomers.

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IrishPirate October 21, 2013 at 11:13 AM

Joe,

I’m considering a political career and I don’t believe I should allow facts or being prepared get in the way of me making any statements.

That being said I don’t believe there is a substantial movement of any age demographic into the core of urban areas. I wish I was wrong about that.

There is one possible exception and that might be the post college crowd, but I suspect that will be a temporary phenomena with that crowd moving on as they age.

I hope I’m wrong on that.

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Ben L October 21, 2013 at 11:22 AM

As I write every time a Kotkin article gets posted on here, Kotkin’s analysis is hamstrung by his refusal to acknowledge price as a signal by which to determine interest in a particular type of neighborhood. “[T]here were roughly a million fewer boomers in 2010 within a five-mile radius of the centers of the nation’s 51 largest metro areas compared to a decade earlier.” So what? Population numbers alone aren’t very useful for understanding consumer preference. More people own a Ford Focus than a Bentley Flying Spur. That doesn’t mean that the Ford Focus is more desirable, it means that it’s more affordable and more widely available.

Kotkin comes *so close* to doing something useful with his numbers. He correctly identifies that people are leaving high priced areas and moving to low priced areas. But those high priced areas cost a lot of money precisely because they are very desirable! To say otherwise is foolish. It would be very reasonable to conclude that urban living is actually very desirable, but that housing in dense walkable areas is woefully undersupplied, hence the high prices.

Last time Kotkin wrote an article on this same thing, Matt Yglesias somewhat exasperatedly declared “Since he’s written this article so many times and so many people have written the rebuttal to it, I’m sure he already knows what the rebuttal is and for some reasons doesn’t care.” See link here.

I know the YoChicago staff has a lot of experience with real estate and development, so I’m sure that they (unlike Kotkin) understand that any attempt at understanding consumer preference is useless without including price metrics.

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Brett October 21, 2013 at 11:22 AM

Generation Y alone is as big or bigger the baby boomer generation. That is counting the number of people of born, and it depends on the definition of Gen Y. Some definitions produce a significantly larger Gen Y population than the boomers.

Life expectancy for males in the U.S. is about 76, and 81 for females.Combing the groups produces an average life expectancy of around 78. So, it is inaccurate to say life expectancy is 80-100.

All that said, I never saw any real evidence that the baby boomers were waiting en masse to move into cities when they got older. They didn’t when they were younger, so why would they suddenly change their ways?

It is Generations X, Y and Z (and whatever comes after Z) that will continue the long, slow revival of U.S. cities. It will take generations to repair the damage inflicted in the 20th century by a variety of government policies and social and economic forces.

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Joe Zekas October 21, 2013 at 12:00 PM

Ben L,

Kotkin is not unaware of the issue of price, and mentions it several times in his article.

The so-called rebuttals to Kotkin don’t rebut any part of his central point, which is simply contending that the numbers don’t support what he refers to as the “urban legend” that empty-nesters are abandoning the suburbs for the cities.

Why should Kotkin focus on price – which no one would dispute is an issue – when the thesis he’s countering also largely ignores price?

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Ben L October 21, 2013 at 12:12 PM

Because a price-ignorant thesis is an unintelligent one.

Here’s how Kotkin wraps up his article:
“For real estate developers and investors, the ones often most entranced by the “back to the city” story, the lessons are very clear. It makes more sense to follow the numbers, and understand the logic of senior migration, than swallow the snake oil so many have been carelessly imbibing. There are great opportunities in the expanding senior market, including in some uniquely attractive urban districts— but the bigger plays are in outlying areas, and, increasingly, smaller towns.”

If Kotkin wants to hand out advice to developers, wouldn’t it be worthwhile to pay attention to price? Isn’t that something that a developer might be interested in?

Kotkin looks at people leaving walkable urban places and says “Wrap it up, urbanailures! Nobody wants to live there!” I look at people leaving walkable urban places *and* the steadily rising prices in such places and I say “Wow, there’s a market here that is incredibly underserved! Maybe we should reform our land use policies to allow that market demand to be met.” It’s two completely different understandings of the population trend.

What is Kotkin’s purpose if it’s not identifying consumer preference? If his purpose is rote repetition of population migration numbers, then he’s just a glorified bean counter. If he wants to do something interesting with his data, he won’t exclude one of the most important consumer preference signals from his analysis.

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Joe Zekas October 21, 2013 at 1:11 PM

You’re creating a straw-man version of Kotkin and responding to that rather than to what he actually says.

There’s real value in counting where actual beans are moving as opposed to mythical beans.

I don’t think Kotkin would disagree with the notion that land-use reform and other reforms that led to lower price points would attract more boomers to urban cores. But he’s dealing with the historical realities of the choices people actually made not wishful thinking about the choices they might have made given different alternatives.

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Ben L October 21, 2013 at 11:33 PM

It’s a strawman argument to cite what he says and then respond to it? Ooooookay.

And lots of laughs at the idea that Kotkin would understand how land use reform in the core would impact development activity. Look at the stink he raised when Los Angeles upzoned major nodes and corridors a little while back. Kotkin simultaneously fretted that more permissive zoning would ruin LA’s character while simultaneously crowing that nobody would want to move there to densify the newly upzoned neighborhoods. These two positions are of course completely at odds with one another, but that doesn’t matter to him as long as he can push his narrative.

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Joe Zekas October 21, 2013 at 11:52 PM

Ben L,

The response was unresponsive.

PosterBoy October 21, 2013 at 12:25 PM

From the Wall Street Journal correction:

“However, since the cited U.S. census data reflect overall population changes rather than migration patterns, it cannot be definitively stated that migration to city centers was responsible for the greater loss of baby boomers in the areas farther from the city centers.”

See that phrase “cannot be definitively stated”…and yet Kotkin uses it as the absolute truth.

Let’s look at this from a different angle.

“Real estate agents say they have been noticing the switch from suburban to urban living for baby boomers, The Washington Post reported.

So who are you going to believe? Boots on the ground or Joel Kotkin’s questionable analytics. Also, remember that they only news outlets that picked it up were Forbes and Pajama Media which should tell you a lot about his audience.

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PosterBoy October 21, 2013 at 12:32 PM

BTW, here is Diana Olick with more info:

http://www.cnbc.com/id/100637694

Once again. People who actually work with their eyes open or Joel Kotkin?

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Joe Zekas October 21, 2013 at 1:13 PM

PosterBoy

Nothing about the WSJ correction runs counter to Kotkin’s argument.

Your links are exactly what Kotkin is debunking.

Are you seriously saying we should believe anecdotes from real estate agents and developers rather than actual numbers? Seriously? Seriously?

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PosterBoy October 21, 2013 at 1:52 PM

“Nothing about the WSJ correction runs counter to Kotkin’s argument.”

Apparently you nor Kotkin understand the phrase “cannot be definitively stated”

“Are you seriously saying we should believe anecdotes from real estate agents and developers rather than actual numbers? Seriously? Seriously?”

Since the actual numbers do not tell a definitive story…yes. You didn’t have any problem linking to Diana Olick’s website in the past, so now your are going to throw her under the bus because she is reporting on something that is counter to Kotkin?

Nice one Joe.

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Joe Zekas October 21, 2013 at 3:05 PM

Kotkin and I both understand the phrase perfectly.

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PosterBoy October 21, 2013 at 3:23 PM

How do you know what Kotkin thinks?

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Joe Zekas October 21, 2013 at 11:53 PM

Because I can accurately read what he says.

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PosterBoy October 22, 2013 at 7:21 AM

“Because I can accurately read what he says.”

Well then you are easily manipulated.

Chew on this 2005 article for awhile…tell me again that Kotkin doesn’t have an agenda.

“It is the path of least resistance, but one that offers only poor returns.”

Poor returns?

All these people must have listened to Kotkin’s “investment” advice.

LOL!

CaptainVideo October 22, 2013 at 9:44 AM

From Kotkin: “New Yorkers and Londoners still possess the essentials for a more vital future. But first their political leaders must realise that great cities need schools for families, transport that works, jobs for the middle and the aspiring working classes. And they must acknowledge the continuing need to invest heavily in public safety, particularly in an age of terror.” This is right on for Chicago too.

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