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Cities Grow at Suburbs' Expense During Recession

 

By CONOR DOUGHERTY

 

U.S. cities that for years lost residents to the suburbs are holding onto their populations with a mix of people trapped in homes they can't sell and those who prefer urban digs over more distant McMansions, according to Census data released Wednesday.

 

Growing cities are growing faster and shrinking cities are losing fewer people, reflecting a blend of choice and circumstance.

 

In Chicago, Matthew Sessa and his wife sold their townhouse and decided against buying a four-bedroom house in the suburbs. They bought a three-bedroom in Chicago's Lakeview neighborhood instead, with a yard not much bigger than their garage.

 

"What we ended up getting in the city was just as nice, and the neighborhood that we moved into also has a very good elementary and junior high," said Mr. Sessa, a commercial banker who is 37 years old and has a baby due any day.

 

But Chicago is also becoming home to people who can't sell their houses or find jobs elsewhere.

 

Jhonathan Gomez, an organizer with the Latino Union of Chicago, a nonprofit that works with day laborers, said many immigrant workers have been moving back to the city from suburbs including Berwyn and Cicero. Mr. Gomez, who organizes on the north side of Chicago, said at one intersection in the city's Avondale neighborhood, the number of day laborers has roughly doubled in the past year, to as many as 150 or more on a typical day.

 

"There's a lot of people moving to the city and looking for work because there's higher density and more jobs," he said.

 

Chicago's population grew at a 0.73% annual rate in the year ended in July 2008 from 0.23% a year earlier and declines in the previous five years, according to an analysis of Census data by William H. Frey, a demographer at the Brookings Institution. Population growth also accelerated in smaller cities such as Minneapolis and Columbus, Ohio.

 

Growing cities are growing faster and shrinking cities are losing fewer people, reflecting a blend of choice and circumstance.

 

The Census data underscored how the recession and the real-estate slump have curbed migration, especially to suburbs and outer areas known as exurbs.

 

The central-city population in U.S. metropolitan areas with more than one million people (excluding New Orleans, where recent growth rates reflect residents returning to the city following Hurricane Katrina) grew at an annual rate of 0.97% between July 2007 and July 2008, according to Mr. Frey's analysis. That compared with a growth rate of 0.90% in 2006-2007, and growth rates around 0.5% in the years between 2002 and 2005, when the robust real-estate market led to new jobs and new housing developments outside the cities, where open land is more plentiful.

 

"This shows cities were reviving at the end of this decade, and they are also surviving a recession that has been a lot harsher for other parts of our landscape," Mr. Frey said. "Cities are big enough and diverse enough that they are able to survive these ups and downs in the economy a lot better."

 

Population growth in the cities has translated to slower growth in the suburbs. U.S. suburbs in metro areas greater than 1 million people grew at a 1.11% annual rate in 2007-2008, the same as a year earlier and down from growth rates between 1.29% and 1.48% between 2002 and 2005, according to Mr. Frey's analysis.

 

Brad Andersen, a managing broker at Griffith, Grant & Lackie Realtors said sales in suburban Chicago have fallen off considerably as real-estate prices have declined. In the Lake Forest suburb, there were 157 homes sold in 2008, compared with 227 a year earlier.

 

"The money people planned to use as a down payment for the next home is no longer available," Mr. Andersen said.

 

In Buffalo, Mayor Byron Brown said his administration has put much of its effort into programs that aim to stanch the outflow of residents, from redeveloping the city's waterfront to residential projects such as a former office building that has been converted into condominiums. He hopes that when the recession ends, the city will continue to hold on to more residents.

 

"What we have been trying to do is position ourselves as a community that people will want to live in," he said.

 

Population growth is starting to strain services in some cities. Public School 290 in Manhattan has about 650 students, about 250 more than capacity and above the posted fire-code occupancy. New York City's population grew at a 0.64% annual rate in 2007-2008, compared with growth rates between 0.37% and 0.55% from 2002 to 2005.

 

The school has so little space that students who need occupational therapy have to meet with a therapist in a copy room, says Andy Lachman, an officer of the school's parent-teacher association whose daughter will be in fifth grade next year. "It adds stress to a situation that shouldn't have to be there," said Mr. Lachman.

 

With the slowdown in construction and service jobs on the urban edges where development was greatest, a bigger share of immigrants are moving to central cities, instead of directly to the suburbs as they had during the real estate boom.

 

The upshot is that the spread of racial diversity, which had been moving beyond gateway cities such as Los Angeles to suburbs and interior states, has slowed with the economy.

 

Meanwhile, growth in urban Hispanic and Asian populations, much of it fueled by immigration, has accelerated in many city centers. That has already showed up in county demographic data released by the Census last month.

 

In California, which saw Hispanic population growth slow during the housing boom as many immigrants bypassed the state and native-born Hispanics moved for opportunities elsewhere, the Hispanic growth rate increased to 2.4% in 2007-2008 from 2% a year earlier.

 

Many Sunbelt cities saw population-growth slow from the torrid rates during the housing boom.

 

In Tucson, the population grew at an annual rate just under 1% in 2007-2008, down from 1.35% in 2006-2007. Las Vegas's population slowdown was even more dramatic. It grew at a 0.38% annual rate in 2007-2008, down from 1.04% in 2006-2007 and rates as high as 3.30% during the height of the housing boom.

 

http://online.wsj.com/article/SB124641839713978195.html

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