University of Virginia Study of Cities' Revival From 2000 to 2005; Incomes of Whites in Cities Pass Suburbs

December 04, 2006

Dec. 4, 2006 — Cities are making a comeback. According to a new study that reviewed data from 40 U.S. cities, per capita income of non-Hispanic whites was substantially higher in cities than in suburbs. The study's authors, William H. Lucy and David L. Phillips of the University of Virginia School of Architecture's Department of Urban and Environmental Planning, based their research on data for the years 2000-2005 from the U.S. Census Bureau that surveyed cities in 35 of the largest metropolitan areas.

Lucy's and Phillips' research expands on and supports conclusions presented in their book, "Tomorrow's Cities, Tomorrow's Suburbs," published in January 2006, which was based on data through 2000.

The study, "Whites Lead Cities' Income Revival 2000-2005", shows that per capita income of non-Hispanic whites relative to the entire metropolitan area (city plus suburbs) gained an average of 4 percent from 2000 to 2005. Per capita incomes of non-Hispanic whites were higher than metropolitan per capita incomes in 25 cities and lower in only 11. They were highest in cities in the South (Atlanta was 91 percent higher than its metropolitan average; Washington, D.C., 51 percent; Tampa, 33 percent; and Charlotte 30 percent higher than its metropolitan average); followed by the Southwest (Dallas was 35 percent higher and Houston was 27 percent higher than metropolitan averages). Some cities in the West had considerably higher per capita incomes than metropolitan averages (Seattle, 20 percent; San Francisco, 19 percent; and Denver, 16 percent). Of the 15 northern cities, 10 experienced increases in per capita incomes of non-Hispanic whites compared with metropolitan and suburban averages between 2000 and 2005. Boston led with a 22 percent increase, Chicago was up 20 percent and Kansas City was 10 percent higher. New York City (7 percent) and Minneapolis (4 percent) also had higher non-Hispanic white per capita incomes when compared to their metropolitan areas.

Other northern cities, where the per capita incomes of non-Hispanic whites were below metropolitan averages, still made gains from 2000 to 2005 - Baltimore (9 percent), Buffalo (7 percent), St. Louis (6 percent), Philadelphia (1 percent) and St. Paul (1 percent).

Some cities did have per capita incomes considerably lower than metropolitan averages, including Detroit (38 percent), Cleveland (30 percent), Philadelphia (20 percent) and Milwaukee (18 percent).

The findings contradict the commonly held belief that most middle- and upper-income whites had left the cities for the suburbs before 2000.

"The impression that whites have abandoned cities comes from two income dimensions - relative per capita income in some northern cities and relative median family income in many cities nationwide," wrote Lucy and Phillips in the report.

"What's most surprising is that median family income of non-Hispanic whites was almost as high in cities as in the suburbs (96 percent of metropolitan income)," Lucy said.

For the most part, cities had lower median family incomes than per capita incomes relative to metropolitan incomes, reflecting the view that cities have less appeal to families with children than to singles, young marrieds, empty-nesters and retired persons.

Race plays a role when average per capita incomes for cities are studied, the researchers found. Average per capita incomes were dependent on the proportions of non-Hispanic whites, blacks, Hispanics and Asians in the central cities. In the 40 cities covered by the study, the unweighted average per capita income in 2005 for non-Hispanic whites was $37,479; for Asians, $24,187; blacks $15,670; and Hispanics $14,511.

Between 2000 and 2005 the average share of the city populations for Hispanics increased from 16.1 to 18.3 percent, decreased for non-Hispanic whites from 54.7 to 54.3 percent, increased for blacks from 29.2 to 29.5 percent and for Asians from 5.4 to 6 percent. Small sample sizes, particularly for Asians, led to uncertain data reliability.

Thus, cities' per capita incomes relative to metropolitan areas were influenced by changes in these groups' proportion of city populations.

Hispanics, who are not a racial category, account for a large portion of population growth in many cities. "The overall income effects seem now to depend on population components," Lucy added.

Also, given the large gap in incomes between non-Hispanic whites and Asians compared with blacks and Hispanics, decisions by these family groups about location preferences will shape city and suburban income differences in coming years, concluded Lucy and Phillips.

The relative per capita income of blacks in cities compared to their metropolitan areas in 2005 increased in six cities: by 6 percent in Atlanta, Los Angeles, Minneapolis and Virginia Beach, by 5 percent in Portland, and by 1 percent in Oakland. Chicago and Phoenix were unchanged. However, in 80 percent of the cities, relative per capita income for blacks decreased. The largest relative decrease, 19 percent, was in Miami. Virginia Beach decreased by 13 percent and Orlando by 12 percent.

Blacks continued the trend of gravitating to the suburbs that occurred in the 1990s, the research team stated.

"As more blacks enter the middle-class they are behaving as whites did earlier. They are moving to the suburbs," Lucy said.

While only 14 cities had higher median family incomes than their suburbs, median family incomes of non-Hispanic whites relative to suburbs increased in 23 cities. For this statistical group, seven cities showed no change and in 10 there was a decline in median family income relative to suburbs. Cities in the Northeast, Mid-Atlantic and Midwest made gains in 10 of the 17 cities in the study. Two did not change. Many of the cities that had much lower median family incomes than their suburbs still increased in relative terms during the period 2000 to 2005.

Housing value and condominium construction were other indicators of the revival trend of cities. Following the same path as the relative per capita income trend, the value of owner-occupied housing in the 40 cities was 87 percent of metropolitan value in 2000 compared to 90 percent in 2005. Since 2000 there has been substantial construction of condominiums in or near the downtown areas of cities, which attract young professionals and middle-aged and elderly empty-nesters, a factor the researchers believe has contributed to the relative income increases in cities.

Lucy and Phillips conclude that the data suggests that there is a strong trend indicating the comeback of cities and not just an aberration that will pass.

 "Looking back to the 1950 census the subsequent boom of the suburbs and the decline of cities, was not foreshadowed in 1950 data," Lucy said. "Because the 2005 data indicate significant improvements have occurred in numerous cities, a huge realignment of fortunes is potentially underway. If the income trends that reflect empty nesters increased attraction to cities are strong enough to improve tax bases and public services in cities, movement of middle-income families with children to cities could occur in the future."

Cities covered in the study: Atlanta, Baltimore, Boston, Buffalo, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Denver, Detroit, Houston, Indianapolis, Kansas City, Las Vegas, Los Angeles, Miami, Milwaukee, Minneapolis, New York, Newport News, Norfolk, Oakland, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Sacramento, San Antonio, San Diego, San Francisco, Seattle, St. Louis, St. Paul, St. Petersburg, Tampa, Virginia Beach and Washington, D.C.