NJ Suburbs Bounce Back as Older Millennials Go for House and Garden

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A new report suggests suburban living in the metropolitan region may not be passé after all, although New Jersey’s urban counties are continuing to grow even faster than the suburbs.

The new Rutgers Regional Report released yesterday indicates a possible resurgence of interest in suburban living in the New York-New Jersey metro area, as population growth between 2016 and 2017 in the 27 suburban-ring counties around New York City and northeastern Jersey outpaced growth in the city and urban Essex, Hudson and Union counties in terms of the number of residents. As a percent of total population, the urban and suburban areas grew at the same rate — 0.2 percent.

However, data in the report titled “The ‘Burbs’ Bounce Back: ‘Trendlet’ or ‘Dead Cat Bounce’?” also show that New Jersey’s three urban counties had the highest population growth rate in the four-state region. That indicates the continued popularity of Jersey City and the rest of Hudson County, as well as Essex and Union counties, which are dominated by communities with the public transit, walkable downtowns and nightlife that the millennial generation craves. Population in those three urban counties grew by 0.6 percent from 2016 to 2017, compared with a rate of 0.3 percent for New Jersey’s surrounding suburban counties, and 0.2 percent for the entire region.

Trend or blip?

In terms of numbers of new residents, New Jersey’s 11 suburban-ring counties — Bergen, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex and Warren — added more people from 2016 to 2017 than the previously mentioned three urban counties. The suburbs grew by about 17,000, compared with an increase of more than 12,000 in the urban core. Taken together, New Jersey’s counties were responsible for 57 percent of the population growth in the region.

James Hughes, a Rutgers University professor and dean emeritus of Rutgers’ Edward J. Bloustein School of Planning and Public Policy and a co-author of the report, said it’s too soon to tell whether there is a trend toward a return to the suburbs or whether this was a blip and the widely reported resurgence of the cities will continue.

Where aging millennials want to live

“The de-suburbanization trend lasted at least six years in the aftershock of the Great Recession,” Hughes said. “We are in the midst of the second longest economic expansion in history … when that ends, does it change the trend? The demographics of aging millennials do point to at least some re-suburbanization.”

Driving the population trend, and of most interest to researchers, businesses and local officials, is the large millennial generation. There is no government-sanctioned definition of what constitutes a millennial, as there was with the baby boomers — who are largely the parents of millennials and were born during the clearly defined population explosion of 1946 to 1964. But The Pew Research Center, which does a significant amount of demographic research, considers them to be everyone born between 1981 and 1996, which would make them age 22 through 37 today.

The living preferences of millennials is significant because they are the youngest workers, or soon-to-be entrants into the workforce, to whom businesses are looking to fill new job openings and replace the aging boomers, who have begun retiring in significant numbers. Millennials are also the ones to whom suburban retirees are hoping to sell their homes as they move to smaller spaces.

“They are our future workforce,” said Michele N. Siekerka, president of the New Jersey Business and Industry Association. “Our businesses need an active, ready workforce.”

New Jersey’s millennial population, by all definitions, has been growing at a healthy pace. Using the Pew classification, the state’s millennials numbered almost 1.9 million last year, a number that should be higher this year with nearly all millennials out of college now and many of those who attended out-of-state schools having returned home — at least temporarily. New Jersey’s millennial population grew by nearly 1 percent between 2016 and 2017 and by 3.1 percent from 2010 to 2017, according to an NJ Spotlight analysis of U.S, Census Bureau data.

Having a lawn ‘not such a bad thing’

Depending on their age, millennials are finding New Jersey attractive for one of two reasons, according to Hughes. Younger millennials want to live in urban areas with lots of activity and often choose the Hudson County waterfront, Newark, or towns like Harrison along the PATH line that provides quick access into New York City, where housing is more expensive — although downtown Jersey City and Hoboken are becoming unaffordable to many. Older millennials may finally be starting to settle down, get married and raise a family in the suburbs along NJ Transit lines that have vibrant downtowns and are not too far from Manhattan.

“It’s really hard to get at the underlying dynamics,” Hughes said. “New York and the Hudson River Waterfront are becoming prisoners of their own success: Not only are older people moving out, but younger millennials can’t afford to move in. We do have a lot of millennials in their 30s who have started thinking that maybe having a lawn is not such a bad thing.”

In addition to preferring more urban living, many millennials could not afford to buy their own homes until recently due to a confluence of economic factors. Many graduated with large amounts of student loans due to college cost increases that outpaced inflation into a recessionary or slowly recovering economy where well-paying jobs were sparse and more stringent lending rules made it harder to qualify for a mortgage, Hughes said. Many millennials wound up living with their parents; in 2015, almost half of New Jersey’s 18-to-34-year-olds were living with their parents, the highest percentage of any state in the nation.

Millennials also have been marrying later and having fewer children than the baby boomers, and many chose not to get a driver’s license nor to own a car, making life in a large house on several acres in the suburbs unattractive. But as they age and more do start families, they may be seeking their own homes with space for children to play in some of New Jersey’s less remote and less expensive suburbs that have good school systems.

Hughes said he sees demand for homes rising in communities with public transportation, vibrant shopping districts and good schools. “Lower-density areas with a McMansion on three acres are going to be soft markets in the future,” he said. “Places with 1970s subdivisions that are a two-mile car trip to get anything are not going to be favorites.”

Uncertainty about future development

Tim Evans, who does demographic analysis for New Jersey Future and has written about the return of the population to urban New Jersey, said he agrees with Hughes’ conclusions on where people want to live, just not all his definitions. For instance, he said the report characterizes Bergen and Passaic counties as being in the “suburban ring,” while Evans considers them as part of the urban core. Both include some cities, as well as many densely populated near-urban communities. Bergen County posted the highest population increase from 2016 to 2017 — 6,019 people — of all 35 counties the report studied.

“The trend of compact, walkable places growing faster than the rest of the state is still true,” Evans said. “They’re just not outstripping the statewide growth rate by quite as big a margin from 2016 to 2017 as they were in the several prior years.”

The trend toward urban living that began in 2010 was a reversal of decades of flight from the cities to the suburbs as highly educated young adults sought to escape inner-city turmoil, poverty, crime, high taxes, deteriorating public transit, and more. But beginning in earnest at the start of this decade, and earlier in some especially popular places like the Hudson River waterfront, suburban-bored young adults, empty-nester baby boomers and international arrivals flocked to urban areas and with that trend, the demand for rental housing increased.

According to the report, suburban ring counties in Connecticut, New Jersey, New York and Pennsylvania nearly doubled their total population, gaining more than 5.3 million people, between 1950 and 1980. By comparison, the eight regional core counties in New York and New Jersey lost close to 1 million people. The suburban ring continued to grow from 2010 through 2017, but at a much smaller rate, while at the same time the regional core grew at an annual pace of more than double that of the suburban ring, accounting for almost 72 percent of the region’s total population growth. That growth shifted again between 2016 and 2017, when 62 percent of the region’s total population gain occurred within the suburban ring.

“Certainly, the overall 2010–2017 period of this report suggests that, for the first time in the post–World War II era, the tidal wave of metropolitan expansion has begun to ebb, with the regional core outperforming the suburban ring,” the report states. “However, the last year of this period (2017) also suggests that a pause, or something more fundamental again, is taking place in this transformation.”

Hughes said that whether that trend will continue is anyone’s guess.

As the report states, “The newly released census data … as well as the break in trend evident by the last year of data for this period, adds uncertainty to the next stage of the region’s development.”