The Future is Urban, Even in Suburbia

There’s a new trend in housing development that says you can have it all and afford it, too.

“Surban” represents all the benefits of dense urban development ­– walkability and bikeability, vibrant restaurants, retail, arts and culture, and some public transportation options – plus the perks of a suburban area – better schools, less crime, lower housing prices. It’s a model many call “mixed-use” or “town centers,” and it appeals to several generations of homebuyers and renters.

The only problem is the trend hasn’t caught on with San Antonio developers yet. But they are listening.

At a meeting of the San Antonio chapter of the Urban Land Institute Tuesday, architects, real estate brokers, bankers, and developers convened to hear demographer and author John Burns explain why surban – a term he coined and trademarked – will be part of the future fabric of housing and neighborhood development.

Burns and Chris Porter coauthored Big Shifts Ahead: Demographic Clarity For Business, in which they forecast seven of the biggest opportunities ahead based on changing demographics.

In the book, they point to the Reston Town Center in Washington, D.C., and the Legacy Town Center in Plano as examples of mature suburban areas that have embraced these demographic shifts, offering the best of urban revitalization and surban living. Burns also named other neighborhoods in California, Illinois, Pennsylvania, Colorado, and Georgia.

Yet as San Antonio’s urban core continues to grow and increase in density during this “Decade of Downtown,” traditional suburbs keep developing as well.

Like most of the nation’s biggest cities, San Antonio continues to experience population growth, according to Census Bureau data. But city growth isn’t the same as urban growth, and San Antonio is one of three among the 10 largest cities that are considered more suburban than urban, based on an analysis by FiveThirtyEight in which people described the neighborhoods they live in.

Though the vast majority (64%) of all U.S. households exists within suburban areas, urban areas are growing at a rate not seen since the Roaring ‘20s, Burns said. According to his research, 15% of households today are located in an urban downtown or urban neighborhood, and population growth has also skewed toward urban living in the last decade.

Four factors, he said, have led to the urban and surban trend – local government investment in the city center, post-recession job growth in the urban core, technology use making everything easier, and societal shifts. And he’s not just talking about Millennials.

Burns examines shifts in where and how people will live by redefining generations by decade born, and how their experiences during that time affected consumer behavior.

Those born in the 1930s led a shift to saving; 1940s to achieving; 1950s to innovating; 1960s to more equal opportunities for women; 1970s to more work-family balance; 1980s to the sharing economy; 1990s to connectedness; and 2000s to more global awareness and interaction.

As the 1980s “sharers” and 1990s “connectors” start families and look to buy their first homes, suburban living will continue to dominate the market. (The youngest Millennials tend to fear debt, and thus, are buying homes later in life than previous generations.) Housing costs and school quality will be the drivers. Surban areas tend to provide lower prices and better schools than urban neighborhoods, along with the walkability and other desirable aspects of urban living the ’80s and ’90s kids have come to expect.

Empty-nesters, too, will be drawn to surban living, Burns predicts, and as the bulk of household growth continues to occur in the suburbs, growth in “urban areas” – the combination of urban downtown and urban neighborhoods – will slow due to lack of developable land and higher prices.

Burns said he is starting to see more surban development in big “booming” suburban cities where 64% of the population resides – think of cities like New Braunfels – than smaller suburbs, but that will be the next big wave.

His recommendation to ULI members attending the luncheon was to focus on the young adult market, both as surban renters and owners. This is a group that has fewer people driving cars, more women graduating from college, and more men staying home to care for children.

He pointed to a neighborhood called Vickery Grove on San Antonio’s Northwest side. While not exactly fitting Burns’ surban definition, the development is offering 82 single-family detached homes for rent at rates comparable to apartments.

The neighborhood has a pool, fitness center, and grounds maintenance, like most multifamily housing projects, but also has on-site management, friendly cul-de-sacs, and household diversity that includes students, retirees, families new to the area, and people overcoming credit issues. It’s also gated, for security, as are many San Antonio suburban housing developments.

Neighborhoods like Vickery Grove are responding to an increasing demand for detached rental housing, Burns said, up from 9% in 2005 to 12% today.

But Burns suggested that the 65-and-up crowd is a good target market for future housing development, as these affluent empty-nesters and retirees is looking for surban apartment living as well. They are renting more and seeking multi-generational communities where they can lead active lives and reside near children and grandchildren.

AREA Real Estate Principal David Adelman said Burns’ analysis validates his focus on forthcoming projects. “I’ve been wanting to do a residential project that sort of identifies a 55-and-up, active community that’s not necessarily looking for traditional ownership, but looking for walkability,” he said. “I’m working on it.”

“San Antonio is a clear national draw because of affordable housing,” Burns said. “Everybody who comes here says, ‘I can’t believe [the low prices].’ Everybody who has been here for 10 years or longer, though, disagrees. So I think we’re somewhere in between.”

But going forward, Burns sees San Antonio becoming a permanently more expensive place to live. That could make surban development happen here faster, but it has a ways to go.

“Those [surban] homes and apartments tend to be more expensive, so if you have to charge $2,500 a month, it’s a lot easier to do [so] in an area where everybody’s paying $2,500 a month as opposed to here where people are paying $1,500 a month,” Burns said. “So the competition here is intense.”