The Tech Generation Rush Isn’t to Major Cities. It’s Away From Them

Remember when Amazon led America on a mad rat race, promising to bring tens of thousands of high-paying jobs to one lucky city if it offered business-friendly bids with massive tax incentives and a promise to not disclose its plans to the public? When New York City and the Washington, D.C., suburbs were finally chosen, they seemed to have been the foregone conclusion, with Jeff Bezos’ behemoth company saying it had selected the locations for their attractive talent base, among other things.

Amazon eventually decided to pull out of the Big Apple, after stiff opposition from local politicians and activists. Perhaps the online retailer should have looked beyond the big lights, though. After all, the much-touted innovation hubs of America are being outpunched by their scrappier, lesser-known counterparts across the country, according to a Brookings Institution study analyzing millennial migration data from the most recent American Community Survey (ACS) results, released in February.

From 2012 to 2017, New York City saw the largest net exodus of millennials of any American city — 75 percent more than during the previous year period.

As Brookings demographer Bill Frey notes, those losses weren’t limited to New York. Millennials are also leaving Los Angeles (18,722), Chicago (13,757) and Miami (7,000). Meanwhile, seven metropolitan areas — Denver, Dallas, Austin and Houston, Texas; Seattle; Charlotte, North Carolina; and Portland, Oregon — each saw gains of more than 7,000 young adults (25–34) from 2012-2017.

For Joel Kotkin, an urban studies professor at Chapman University and author of The Human City: Urbanism for the Rest of Us, the data suggests that the reputation of New York and San Francisco as hotbeds of talent is overblown, a symptom of quantity rather than quality. The old assumption, Kotkin argues, is that the millennial generation has spurred a movement toward superstar cities. But the ACS data has “contradicted that,” he says. Midsize, less heralded cities with active tech and financial service industries are leading in migratory growth, and are benefiting from a “combination of the highest salaries with the lowest living costs,” Kotkin says. What’s more, the emphasis on being connected to Wall Street (in New York) or Silicon Valley (in the San Francisco Bay area) is less crucial these days. “The more that high tech becomes distributed by technology, it becomes less imperative that you all be in the same place,” he says.

Those advances (plus average house prices that are half those in California and a third of what can be found in New York City) have allowed for growth in places such as Minneapolis-St. Paul; Columbus, Ohio; and Kansas City as miniature tech hubs. Each of those three cities made the top 20 magnets for attracting new residents as well. Part of their attraction is not just budding technology. It’s the way culture has evolved too, where many cities have thriving downtowns, multiple independent coffee shops and lots of locally sourced food.

Another way to look at the data is by comparing millennial migration before and after the Great Recession beginning in 2008. During that time, many millennials (most in their 20s or younger) moved to cities for “a coolness factor,” Frey says. “They didn’t have the housing market or the job market, so they wanted to be somewhere good.” Once the recovery began, those cities benefited from their young (and highly educated) workforce suddenly poised to capitalize on what last August became the longest bull market in U.S. stock market history.

Of course, the rise of these cities is a bit of a “chicken or egg” question, Frey admits. “Some of these places already had young people ready that helped create the music, the coffee shops, that people like; some of that was already there in the lean years. But it’s also somewhat unique to millennials,” he says. “You didn’t see these places popping up as magnets for young people pre-recession.” And just because cities are attractive to young workers doesn’t mean that local residents are attracted to the newcomers: In virtually all the cities seeing the most growth, real estate prices have also risen and, in some instances, forced the old guard out.

Frey isn’t as eager as others to suggest that this data signifies the decline of the so-called superstar cities. The tens of thousands in population loss aren’t huge when compared with the total 8.6 million population of New York City, for example. And Frey says he is “still a little bit on the fence” about declaring a long-term trend for young adults, considering so much of their migratory patterns have been dictated by the 2008 collapse of the housing market and the burden of student loan debt.

However, the data clearly shows that smaller cities receive an outsize number of young new residents. The future could hold more surprises too. “Atlanta is a huge magnet for young Black people, but not as much for Whites,” Frey notes. “If you look at the diversity of the millennial generation, and even greater diversity for the post-millennial generation, you may see other areas become much more active.” The conclusion: Major tech cities of the future could be dictated by the rise of a majority-minority nation.