Businessweek Explores the Phenomenon of People Moving To "Second Tier" Cities Like Austin and San Antonio
Wed April 9, 2014 1:28 pm

It's not really news that Texas' biggest cities are among the fastest-growing in the country. In fact, it seems like about once a month, a new study that finds a new way of measuring growth finds that the four largest metro areas in the state are also among the ten fastest-growing metro areas in the U.S. 

The latest outlet to discover that is Bloomberg Businessweek, which manages to couch their findings in breathtakingly condescending terms, running its report under the headline, "Austin or Bust: America's Biggest Cities Lose People to the Urban B-List." 

We'll stifle our defensive impulses enough to explore the substance of Businessweek's report, rather than just type things like "Your mom's an urban B-list." The focus of the piece is the author's anecdotal observation that her friends have left the "A-list" cities like New York, Los Angeles, San Francisco, and Boston, for cheaper, smaller, less hectic places around the country, which prompted her to seek out data that confirms that this is an actual trend. 

I know people who have moved in recent years from Los Angeles to Charlotte, from Boston to Durham, from New York to Seattle, from the Bay Area to Denver. Thanks to new U.S. Census data, I now know I am not going crazy. The flight to second-tier cities is thriving.

The report cites the growth of those "second tier" cities, among which Texas takes four of the top spots—Austin in first place, San Antonio in third, and Houston and Dallas at numbers nine and ten, respectively. The report goes on to detail the fifteen metro areas that are sending the most of its people to Austin—six of which are in California, which anyone who's tried to buy a house in Austin, only to find a competing cash offer coming in ten percent over the list price from someone on the coast sight-unseen, is already aware of. Others include New York, Chicago, Washington DC, and Philadelphia—what we can assume are the "A-list" cities that are shrinking while Austin, San Antonio, Dallas, and Houston all boom. (Chicago and New York, for example, have each lost almost two percent of their population since 2010.) 

The fact that Austin is the fastest-growing city in the country makes it the marquee example here, and its growth—even compared to the others on the same list—really is staggering: Austin's population has boomed by 5.4% in the same time that Chicago and New York saw their populations fall. Talking percentages can be misleading, but even looking at actual figures, those numbers are impressive. Austin's 5.4 percent growth can be estimated at roughly 97,000 people in the four years the study looks at, while San Antonio—which comes in at number three—grew by a much more moderate rate of 3.2 percent, good for about 73,000. (In between the two is Raleigh, North Carolina, which grew by 3.7 percent, or roughly 44,000 people.) 

In other words, in both actual numbers and rate of growth, Austin's growth is massive. (The Dallas and Houston metro areas, which grew by 2.1 percent in the same time frame, added actual numbers in the range of 140,000 people.) 

All of this is interesting for statistics nerds and demographics afficionados, but the real takeaway might be that the so-called "B-List" cities may have to figure out how to find a place to put all of those newcomers from Los Angeles and New York. That's especially true in Austin, where housing demand so far outstrips supply that properties often spend mere hours on the market before bidding wars erupt. 

That's something that satirist Neal Pollack, upon moving back to the city, has been pointing out on Twitter recently. 

That sort of frustration is common, and it speaks to the next challenge for Texans in our "second tier" cities—if we accept that this growth is a good thing, how then how do we ensure that it's sustainable, and that all of the people who would be heading to Austin don't give up on finding a place to live and move to Nashville or Charlotte, instead? 

 
It's a question that's inherent in the growth happening in Texas, and elsewhere. CNN Money reported on the same phenomenon of homebuyers finding themselves priced out of the market that Pollack poked fun at last week:

As housing becomes more expensive some worrisome trends that occurred during the bubble years are re-emerging, said Humphries. These include a greater reliance on non-traditional financing, like low-downpayment loans and adjustable-rate mortgages, and a greater pressure to move further away from urban job centers in order to find affordable housing.

Jeff Cuthbertson and his wife have bid on more than a dozen homes in Austin, Texas over the past several years and have been outbid on every one.

“We have been priced out of the market — literally,” he said. “Now we are planning a move, probably to North Carolina or Tennessee.”

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