The U.S. and Canada’s emerging cities are not experiencing the kind of super-charged growth one sees in urban areas of the developing world, notably China and India. But unlike Europe, this huge land mass’ population is slated to expand by well over 100 million people by 2050, driven in large part by continued immigration.
In the course of the next 40 years, the biggest gainers won’t be behemoths like New York, Chicago, Toronto and Los Angeles, but less populous, easier-to-manage cities that are both affordable and economically vibrant.
Americans may not be headed to small towns or back to the farms, but they are migrating to smaller cities. Over the past decade, the biggest migration of Americans has been to cities with between 100,000 and 1 million residents. In contrast, notes demographer Wendell Cox, regions with more than 10 million residents suffered a 10% rate of net outmigration, and those between 5 million and 10 million lost a net 2.4%.
In North America it’s all about expanding options. A half-century ago, the bright and ambitious had relatively few choices: Toronto and Montreal for Canadians or New York, Chicago or Los Angeles for Americans. In the 1990s a series of other, fast-growing cities–San Jose, Calif.; Miami; San Diego; Houston; Dallas-Fort Worth, Texas; and Phoenix–emerged with the capacity to accommodate national and even global businesses.
Now several relatively small-scale urban regions are reaching the big leagues. These include at least two cities in Texas: Austin and San Antonio. Economic vibrancy and growing populations drive these cities, which ranked first and second, respectively, among large cities on Our “Best Places For Jobs” list.
Austin and San Antonio are increasingly attractive to both companies and skilled workers seeking opportunity in a lower-cost, high-growth environment. Much the same can be said about the Raleigh-Durham area of North Carolina, and Salt Lake City, two other U.S. cities that have been growing rapidly and enjoy excellent prospects.
One key advantage for these areas is housing prices. Even after the real estate bust, according to the National Association of Homebuilders, barely one-third of median-income households in Los Angeles can afford to own a median-priced home; in New York only one-fourth can. In the four American cities on our list, between two-thirds and four-fifths of the median-income households can afford the American Dream.
Advocates of dense megacities often point out that many poorer places, including old Rust Belt cities, enjoy high levels of affordability, while more prosperous regions, such as New York, do not. But lack of affordability itself is a problem; areas with the lowest affordability, including New York, also have suffered from high rates of domestic outmigration. The true success formula for a dynamic region mixes affordability with a growing economy.
Our future cities also are often easier for workers and entrepreneurs alike. Despite the presence of the nation’s best-developed mass transit systems, the longest commutes can be found in the New York area; the worst are for people living in the boroughs of Queens and Staten Island. As a general rule, commuting times tend to be longer than average in some other biggest cities, including Chicago and Washington.
In contrast, the average commutes in places like Raleigh or San Antonio are as little as 22 minutes on average–roughly one-third of the biggest-city commutes. Figure over a year, and moving to these smaller cities can add 120 hours or more a year for the average commuter to do productive work or spend time with the family.
Similar dynamics–convenience, less congestion, rapid job growth and affordability–also are at work in Canada, where two cities, Ottawa (which stretches from Ontario into Quebec) and Calgary, stand out with the best prospects. Many Canadians, particularly from Vancouver, would dispute this assertion. But Vancouver, the beloved poster child of urban planners, also suffers extraordinarily high housing prices–by some measurements the highest in the English-speaking world. This can be traced in part to the presence of buyers from other parts of Canada and abroad, particularly from East Asia, but also to land-use controls that keep suburban properties off the market.
Calgary, located on the Canadian plains, not much more than an hour from the Rockies, retains plenty of room to grow, and its housing price-to-income ratio is roughly half that of Vancouver’s. Calgary is also the center of the country’s powerful energy industry, which seems likely to expand during the next few decades, and its future is largely assured by soaring demand from China and other developing countries.
The other Canadian candidate, the capital city of Ottawa and its surrounding region, has developed a strong high-tech sector to go along with steady government employment. Remy Tremblay, a professor at the University of Quebec at Montreal, notes that Ottawa “is changing very rapidly” from a mere administrative center to a high-tech hotshot. Yet for all its growth, it remains remarkably affordable in comparison with rival Toronto, not to mention Vancouver.
In developing this list we have focused on many criteria–affordability, ease of transport and doing business–that are often ignored on present and future “best places” lists. Yet ultimately it is these often mundane things, not grandiose projects or hyped revivals of small downtown districts, that drive talented people and companies to emerging places.
Raleigh Durham, N.C.
Even in hard times this low-density, wide-ranging urban area has repeatedly performed well on Forbes’ list of the best cities for jobs. The area is a magnet for technology firms fleeing the more expensive, congested and highly regulated northeast corridor. One big problem obstructing the region’s ascendancy has been air connections. But Delta recently announced a large-scale expansion of flights there from around the country. Population growth will likely be lead by educated millennials seeking affordable housing and employment opportunities. Today the region has 1.7 million residents; the State of North Carolina projects it will grow to 2.4 million by 2025.
Austonites tend to be smug, but they have good reason. The central Texas city ranked as the No. 1 large urban area for jobs in our last Forbes survey. Along with Raleigh-Durham, Austin is an emerging challenger for high-tech supremacy with Silicon Valley. The current area’s population is 1.7 million and is expected to grow rapidly in the coming decades. Austin owes much both to its public sector institutions (the state government and the main Campus of the University of Texas) and its expanding ranks of private companies–including foreign ones–swarming into the city’s surrounding suburban belt.
Salt Lake City, Utah
Once seen as a Mormon enclave, the greater Salt Lake urban area–with roughly 1 million people–has every sign of emerging as a major world player with a wider appeal. The church still plays a critical role, in part by financing a massive redevelopment of the city’s now rather dowdy city core. The area’s population has doubled since the early 1970s and will grow another 100,000 by 2025 to well over 1.1 million. New companies are flocking to this business-friendly region, particularly from self-imploding California. Increasing national and global connections through Delta’s hub will tie this once isolated city closer with the wider world economy.
Calgary, Alberta, Canada
You don’t have to buy the notion of a climate-change-driven northern ascendancy to see a bright future for Alberta’s premier city. Calgary is positioned well on the fringe of Canada’s largest energy belt and enjoys lower taxes and less stringent regulations than its Canadian rivals. Calgary has been hit by a slowdown in energy business, but over time demand from China, India and a slowly recovering world economy should boost this critical sector. The region is expected to be back to its familiar place on top among Canadian urban economies by next year.
San Antonio, Texas
Last year this historic Texas metropolis–home to the Alamo–ranked second on our list “best cities for jobs” among larger cities. The region has been growing rapidly to well over 2.1 million. As the economy, particularly in Texas, recovers, an already strong health care sector will be joined by an expanding industrial base. One key factor in San Antonio’s favor: stable house prices–even by Texas standards. PMI Mortgage Insurance Co.’s most recent risk index, which is a two-year measure, lists San Antonio as having the lowest risk from falling prices among large Texas cities.
Canada’s capital region, which extends across the border to Gatineau, in Quebec, has grown to over 1.2 million. This growth has come in large part from government–which may slow after the end of Canada’s stimulus–but also a vibrant private sector. Ottawa boasts a pleasant quality of life and is one of Canada’s most affordable big cities. The population, notes the University of Quebec’s Remy Tremblay, is the “most educated, with the highest disposable income, of all Canadian cities.” Ottawa airport, Tremblay adds, is experiencing the fastest traffic growth of virtually any in Canada.