As boomers settle into their next phase and gen y flies the coop, Revitalization is ripening in metros across the U.S. Could a second wave of urban renewal be in chattanooga’s imminent future? We think so.
By Laura Childers
The story of the American City can be told in a series of snapshots. An image dating from the 1800s shows a bustling center of commerce and industrial activity – workers clearing roads, businesses erecting storefronts, clouds of steam rising from the silos of downtown factories. Fast-forward to the 1950s. Americans are buying cars and taking to the new interstate highway system, foregoing the smoke and noise for quiet streets far beyond the city limits. This trend continued well into the 1990s, leaving *many urban centers across the U.S. to fall, neglected, into states of decay.
But today a new chapter is beginning. As we enter into the 21st century, demographic trends are shifting once again, ushering in a tide of new growth for *American cities. Current photos show downtown storefronts popping up again, couples moving into revitalized historic neighborhoods, and tourists flocking to new downtown attractions – scenes from a new pattern of migration and development that economists have coined “urban renaissance.”
The Shape of Things to Come: Two Generations in Transition
There’s no question that in recent years, generation wars have come to the forefront of public discussion. Countless articles have been written about the contrasting and often conflicting ideals of Generation Y (the 89 million millennials born between 1981 and 1996) and their baby boomer parents (the 77 million born between 1945 and 1964 now reaching retirement).
Yet the warring factions narrative immediately breaks down when it comes to how and where each generation wants to live. A survey of recent demographic data shows that as it regards place and lifestyle, their ideals are strikingly aligned. They both want to be located in or just outside of city centers.
Baby Boomers
A profile of the 77 million born between 1945 and 1964
After raising their families in the suburbs where they could be close to good schools and big box shopping, baby boomers are finding themselves with houses far too large for their needs – and longing to be closer to their children (and grandchildren), many of whom have moved to urban areas.
Looking for ways to downsize and be closer to family, these empty nesters are increasingly turning to attractive metro areas where they can enjoy shorter drives to work, active lifestyles, and the amenities of downtown living.
An important factor driving the trend is that, unlike their parents, baby boomers are an extremely mobile generation. A recent AARP survey found that an estimated 18 million baby boomers are expected to relocate when retiring before 2029. While that is still less than half of the generation’s total population, it is a figure that still carries significance for cities looking to attract the demographic, as baby boomers claim 70% of the country’s disposable income.
“They are looking for a great second act,” says Darlene Brown, Owner and Managing Broker of Real Estate Partners Chattanooga LLC. “With their children grown they no longer want the burden of home and lawn care. It’s a time for reinvention. So many people my age – once they make the move closer to downtown – talk about what a ‘freeing’ experience it is.”
Generation Y A closer look at the 89 million born between 1981 and 1996
The most ethnically and racially diverse generation in American history, Generation Y shows a marked preference for urban settings over the suburbs they were raised in. They also follow a trend of delaying marriage and starting a family, life events that have historically served as catalysts for moving away from city centers.
Generation Y finds themselves up against a daunting economic landscape characterized by low job prospects, large student loans, and high health insurance costs. So rather than putting a down payment on their first home, they’re busy developing cost-efficient lifestyles in or near cities where they can find jobs and access to lower-cost transportation.
Brown points out that millennials are also known for placing a high value on community, as evidenced by thriving neighborhoods on the fringe of urban areas. “Here in our city, we are really seeing that age group create a new sense of neighborhood and community in the Southside right now,” she says.
Learning from Other Cities
To understand the implications of this data for a city like Chattanooga, it is important to look to other U.S. cities where these trends have played out. Two cities that rise to the forefront of the discussion are Raleigh, North Carolina, and Austin, Texas.
From 2000 to 2010, these two cities claimed the fastest-growing baby boomer populations of all U.S. cities. Both are also college towns, boast thriving revitalized city centers, have beautiful outdoor amenities (e.g., Smoky Mountains outside of Raleigh, Lady Bird Lake running through Austin), and are located in the warm climate of the Sun Belt. Both cities have lured large populations of millennials (especially Austin), and benefit from public-private partnerships working to form new strategies for downtown development. They also have highly educated work forces and strong industry clusters in science, research, and technology.
The success of these two cities – both in regard to population growth and downtown development – cannot be attributed to one or two factors. Rather, both have benefitted from a high quality of life, a diverse economy with strength in a variety of sectors, and significant effort on the part of their communities to continue positive economic momentum.
Raleigh, North Carolina Population 423,179
The numbers are in, and Raleigh is clearly the new it-place for the over-45 crowd. An analysis of Census data from 2000-2010 shows the North Carolina city had the highest growth rate in the 45-and-over population among all U.S. metro areas, increasing 10.9% from 2000 to 2010.
The home of North Carolina State with Duke and the University of North Carolina close by, the city boasts an elite education cluster that draws students from all over the nation and abroad. As part of the Research Triangle, it claims two world-class teaching hospitals at Duke and UNC and a growing science and tech-based cluster – all of which contribute to high-quality, higher paying jobs.
Raleigh’s revitalization efforts:
Raleigh wasn’t always the hub of activity it is now. Its vibrant, revitalized downtown has been driven in large part by over $2 billion in public and private investments since 2003.
A regional planning process initiated that year led to the building of a downtown Convention Center, the cleaning up of downtown streetscapes, the development of Fayetteville Street (the north-south thoroughfare at the heart of the city), and the improvement of the downtown pedestrian environment. In total, over 50 development projects have been completed in downtown Raleigh since 2003, radically changing the face of the city’s downtown landscape.
Austin, Texas Population 842,592
The Lone Star State capital is doing more than “Keeping it Weird.” It’s drawing an abundance of new millennials and baby boomers to settle down in or near the vicinity of its perimeter. The baby boomer population in this happening Texas city grew 6.4% from 2000 to 2010 and it’s projected to gain another 42,000 in that age range in the next five years. A recent Nielson study also found Austin to be the No. 1 market for millennials in the nation in terms of concentration. An average of 110 people are moving to Austin per day, and many of them are in the under-35 crowd.
Like Raleigh, Austin is a college town with the University of Texas located right downtown. Millennials love its funky culture, popular music festivals, low unemployment rate, and reasonable cost of living. Boasting 4,000 tech companies (representing 35% of the area’s payroll), the city’s innovative business climate is further boosted by the growing presence of superstars like Apple, Google, Facebook, and Intel.
Austin’s revitalization efforts:
In the early ‘90s, real estate and retail in Austin’s urban core were virtually non-existent. So in 1997, under the leadership of then-Mayor Kirk Watson, Austin’s public and private sectors came together to form a plan to revitalize the city’s downtown, a plan that led to a “short list” of priority projects including the development of under-utilized downtown properties. Since 2000, new policies and strategies in Austin have spurred more than $2.2 billion in private investment downtown. And for the fourth year in a row, Austin has taken the top spot on Forbes annual list of “America’s Fastest-Growing Cities.”
Building on the 21st Century Waterfront
Though smaller than Austin and Raleigh, Chattanooga finds itself in a very similar situation. It has a high quality of life combined with a high level of civic activity. It’s in the Sun Belt. It’s home to a host of universities, including the University of Tennessee at Chattanooga in the heart of downtown. It has a vibrant start-up community, an extremely strong health care industry, a low cost of living, a beautiful landscape, and public and private leadership committed to investing in its future.
You could say Chattanooga has the recipe for continued revitalization in its back pocket. Now we’re left with the questions: “What’s next?” and “How can we prepare?”
Jamestown’s Michael Phillips, the visionary behind Chattanooga’s highly successful Warehouse Row development, says one key to our city’s success moving forward lies in continuing to promote our “sense of place.” “Chattanooga has the rare distinction of having a very cool historic fabric as far as buildings that make up the downtown, not to mention a river running through it,” he says. “From a development perspective, those are incredible amenities for a city.”
He continues: “When we’re talking about luring outside investment, I think another thing to understand is that people are looking for something unique and original. In the Southern regional market, we’ve seen a lot of cities like Chattanooga and Asheville and Charleston develop themselves in really creative ways because they’ve had less resources, financially speaking. For them, using a non-commodity specialist approach – promoting the virtues of the town, emphasizing things like history, unique public art, local food, etc. – has really given them an advantage, because investors see that as really fertile ground.”
Kim White, President and CEO of River City Company, a local economic development non-profit, says another key to moving forward is to capitalize on UTC. “Part of the success of cities like Austin and Raleigh as well as a city like Greenville is that they all have a busy college scene. Or if you think about Savannah, what the College of Art and Design has done for their downtown is unbelievable. So we are working with both UTC and Unum to provide more of a link to downtown. All of the elements are there and now it’s just about finding ways to close that gap with more housing and mixed-use developments.”
She adds that working on our downtown infrastructure is crucial too, explaining that many of the cities that are succeeding right now have done a great job developing affordable housing, downtown real estate, ample parking, and attractive outdoor spaces.
“The fact is, we already have terrific amenities and attractions downtown, so one of the next steps is simply to connect them by making the city more walkable and more bikeable,” White says. “Something else that is important for people who live in cities are open spaces, and the city now has $2.8 million in the budget for revitalizing Miller Park and we’re developing plans together for how to make that work.”
“Overall, it’s really about making sure we continue to have a high quality of life here and keeping it authentic. We’re also working really hard on closing the gap for affordable housing downtown, something that can really help us retain and attract the millennial demographic. Already, progress is being made on that with a tax-freeze program for developers who we’re working with in partnership with the city.”
The Campaign Begins
Of course, revitalization in our city is certainly not a new story – for years national and international media outlets have touted the success of Chattanooga’s renaissance that began with the downtown waterfront. But today, as baby boomers and millennials increasingly transition to new life stages, cities across America will find themselves competing for these very important, highly mobile demographic groups – giving Chattanooga a chance to capitalize on a trend that has incited significant growth in cities like Austin and Raleigh.
“You are talking about ‘signs of life’ in downtown metros and I would argue that there are signs of exceptional life here in Chattanooga,” says Darlene Brown. “More than 20 years of carefully planned revitalization and growth and renewal have come together and we are really experiencing a second renaissance, particularly in the City Center and Southside districts.”
“We have had great success, but I think we all need to understand that we are competing with other cities for two very large, educated, highly mobile groups,” White adds. “There is certainly still work to be done so that we can continue to be a city of choice.”
Game on.
