The End of the Suburbs: Where the American Dream Is Moving (19 page)

When I first started talking with Duckworth for this book, I thought he would end up serving as an example of just how great suburban life can be. Then one day in passing, he mentioned he was moving his family into Philadelphia’s Center City. When I pressed him, Duckworth shrugged. He and Angela realized they are happier in urban places, he told me, but they were really moving for their daughters, now ages nine and eleven. In the city, he thinks they’ll have a more diverse group of friends and acquaintances. “I want them to have more exposure to the world,” he said, “and not be so sequestered as I fear they will be.” He said he got some flack from a few of his suburban neighbors, one of whom said she thought they were making the move solely for themselves and not for their children. “It’s okay if that’s your reason,” she told him, “but just admit it.”

Toll Brothers, for its part, is looking to market its new city developments to families just like the Duckworths and the Dailys, but the company is also targeting empty nesters returning to an urban environment, international buyers, wealthy Wall Streeters, retirees, and incoming millennials. “The reason New York is so hot and is our best market is because it’s ‘all of the above,’” says Toll’s Yearley.

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F
or the clearest picture of where American wealth is moving, it’s always a safe bet to watch what retailers do. In increasing numbers, they’re charging into cities, too. Walmart, the retailer known for its enormous footprint above all else, has been fine-tuning new formats designed for more urban areas: Neighborhood Markets, which are less than a quarter the size of its supercenters, and an even smaller Walmart Express format, which measures about the size of a standard-issue CVS.
Walmart has said it is planning “hundreds
” of these smaller stores across the country in the coming years.
By 2016 Best Buy plans
to double the number of its smaller-format Best Buy Mobile stores.
Even Target
, which more than other big-box stores tied its strategy to the growth of the suburbs, is going in the other direction, opening a new urban format store—called, simply, City—that’s two-thirds the size of its typical store. The first opened in downtown Chicago, and stores are planned for Los Angeles, Seattle, and San Francisco. “
You have a massive rush throughout retail
to get small,” Leon Nicholas of market research firm Kantar Retail told the
Wall Street Journal
. “Honestly, I am not sure what’s going to happen with a lot of these giant boxes.”
As of this writing, JCPenney
, the quintessential old-school mall anchor, had just announced plans to lease a high-profile building in Manhattan’s Soho.

Company headquarters, too, are starting to relocate back to cities from their massive suburban office parks. This has been particularly true in Chicago, whose suburbs have long housed some of the bluest of blue-chip corporate campuses—McDonald’s in Oak Brook, Kraft in Northfield. But
in 2007, United Airlines left
suburban Elk Grove for downtown Chicago.
This year, Hillshire Brands
(formerly known as Sara Lee Corporation) will move from its headquarters in Downers Grove to a new space in downtown Chicago.
Motorola Mobility is shuttering
its Libertyville campus and moving all three thousand workers to Chicago’s Merchandise Mart. “
The whole corporate campus seems
a little dated,” Joe Mansueto, CEO of Morningstar, which has always been in Chicago, told
Crain’s Chicago Business
in an article about the city’s many corporate campus reverse migrations (“Like the disco ball, the regional shopping mall and the McMansion, the suburban corporate headquarters campus is losing its charm,” the story began). It’s not just Chicago.
In New York City, UBS
is said to be mulling plans to return to Manhattan from Stamford, Connecticut, where it moved in the mid-1990s. In 2011, Quicken Loans relocated from suburban Livonia, Michigan, to downtown Detroit. In Philadelphia, venture capital firm First Round Capital moved from suburban Conshohocken to University City. The list goes on and on as companies competing for younger workers realize they need to move to where the talent wants to live.

Nowhere is this more obvious than in San Francisco, where some of the hottest tech start-ups are forgoing Silicon Valley for the city itself.
Twitter, Zynga, Airbnb, Dropbox
, Uber, Pinterest, and Yelp are among those that have opted to build new headquarters in San Franciscos proper instead of the stretch of suburbs that make up the Bay Area peninsula. Several venture capital firms, too, longtime fixtures of Menlo Park’s Sand Hill Road, have recently announced plans to either relocate or open satellite offices in San Francisco. In the mornings, the traffic on the 101, the main commuting freeway out of San Francisco toward the Valley, is now heavier heading out of the city than the reverse.

One of the more interesting company relocations these days is happening in Las Vegas, where
Zappos, the online shoe giant
, is getting ready to move from a cookie-cutter suburban office park off a highway interchange in Henderson, Nevada, to a brand-new headquarters in Las Vegas’s old city hall. The company’s CEO, Tony Hsieh, is something of a guru when it comes to building workplaces, and the zany, quirky Zappos offices are legendary both for the employees’ cubicles, which are decorated with streamers, foil, kitschy figurines, faux-jungle greenery, and more, and for its stated mission to “create fun and a little weirdness.”

But even with all the office whimsy, Hsieh, a big believer in the benefits of the spontaneous “collisions” that occur among employees when they are encouraged to socialize and have places to do so, felt his company’s culture was stifled by its suburban location. The closest place workers could “collide” after work or outside the office was at a bar a half mile away across a few parking lots. So when the opportunity arose to move to the city, Hsieh jumped, leased the building, and set about planning to move his company there in 2013.

He didn’t stop there. Hsieh decided to invest in reenergizing the entire neighborhood, the neglected Fremont East area a few miles north of the Strip. He committed $350 million—the soft-spoken thirty-nine-year-old is worth hundreds of millions thanks to the sale of Zappos to Amazon.com in 2009—to develop the neighborhood surrounding the company’s new headquarters and fill it with all the necessary ingredients for a thriving urban culture. That means things like loft apartments, hipster cocktail lounges, great Thai food, a thriving arts scene, yoga, doggie day care, coffee shops, and plenty of places for residents to interact with one another.
In keeping with the findings of
economists like Harvard’s Edward Glaeser, who has found that innovation happens faster in cities because proximity to others breeds creativity, a big part of Hsieh’s plan is to draw entrepreneurs from all over the country with a network of co-working spaces where dozens of start-ups can set up shop and work in close proximity to one another.

Hsieh wants as many of his employees—and those of the other start-ups—to live in the area as possible, and he knows that having good schools is critical, so his team is working on building an early-childhood school set to open later this year. He’s investing in bringing displays of artwork from the Burning Man festival to the area, and his team is developing bike-sharing and car-sharing programs. “The idea went from, ‘Let’s build a campus’ to ‘Let’s build a city,’” Hsieh says over shots of Fernet, the bitter digestif that has become the team’s signature drink, at his new neighborhood’s Cheers equivalent, the Downtown Cocktail Room.

Hsieh has a vision to create his own version of the sidewalk “ballet” Jane Jacobs described, a place where people can live, work, and play without leaving their neighborhood. (It’s actually Jane Jacobs meets Ed Glaeser; the economist and author has become a hero of the Downtown Project team.) Hsieh himself has moved, too, vacating his suburban Vegas house for one of the loft-style apartments. “I haven’t been back there in months,” he told me.

In addition to home builders, retailers, and corporate office parks, the urban migration can be seen in that most iconic emblem of America: our sports stadiums.
For most of the 1970s, the trend in stadium construction
and financing was to build “concrete doughnuts,” massive, multipurpose cement structures usually placed at or close to highway interchanges accessible only by car. Built in the ’60s and ’70s, like everything else, they followed the move of Americans to suburbia. But starting in the mid-1990s with the opening of the Camden Yards Sports Complex, the new home for the Baltimore Orioles based right in the city’s central business district and near its popular Inner Harbor, ballpark construction has been moving downtown. Coors Field in Denver, Petco Park in San Diego, and others soon followed, channeling the storied historical design of old urban ballparks like Boston’s Fenway Park and Chicago’s Wrigley Field. In an informal survey of twenty-three ballparks built since 1990, all but two can generally be described as “urban,” with most being built in a city’s downtown area.

Suburban expansion sports teams are following this path, too. Late last year, the National Hockey League’s New York Islanders announced they were moving from their home in the Nassau Veterans Memorial Coliseum in Uniondale to Brooklyn, where, beginning in 2015, they will play in the shiny-new Barclays Center.
It was a seminal moment in sports
, one TheAtlanticCities.com called a “harbinger of suburban decline.” Forty years ago, as one blogger pointed out, Nassau County was “given a gift” in the form of the first professional sports team for suburbanites. The team was a sign that the suburbs had grown large enough to compete economically with the urban center of New York. Now, the story argued, that trend is happening in reverse. “It may seem like a simple, 30-mile move from one arena to another,” the Web site wrote. “But really, it’s just one more reminder that the mid-century suburb has peaked.”

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O
ne could argue that the resurgence of our cities does not necessarily portend the fall of the suburbs. But while many cities have been benefitting from an influx of wealth, the suburbs have been suffering a rise in poverty. From 2000 to 2010, the number of poor in the suburbs or the nation’s largest metro areas grew by 53 percent to a record 15.3 million. And while poverty has increased in cities as well, the growth rate in the number of poor living in the suburbs was more than twice that in cities during the decade—and the suburbs are now home to the largest and fastest-growing poor population in the country. This isn’t just the Great Recession at work;
as early as 2005, the suburban poor
outnumbered their city counterparts by almost a million. “
We think of poverty as a really urban phenomenon
or an ultra-rural phenomenon. It’s increasingly a suburban issue,” says Elizabeth Kneebone, Brookings fellow and coauthor of a recent Brookings book on the topic,
Confronting Suburban Poverty in America
.

The reasons for this shift are many. During the growth years of the 1990s and 2000s, low-skill construction and service jobs boomed in the suburbs. Soon immigrants began bypassing cities and immigrating directly to the suburbs and exurbs. But these low-skill jobs were the first to vaporize in the housing bust and ensuing recession. At the same time, the longer-term collapse of the manufacturing industry outside midwestern cities pushed many people into poverty. Some of this is also due to the squeeze on the middle class in general. Indeed, the rapid rise in the poor population in the suburbs in the 2000s can’t be explained simply by more low-income residents moving there; a wide swath of the new suburban poor are longtime suburban residents who weren’t poor in the beginning of the decade but fell below the poverty line as incomes stagnated and home prices increased.

According to one study,
nearly three-quarters of suburban nonprofits
are seeing new visitors with no previous connection to safety net programs of any kind.
In Grand Rapids, Michigan
, Steve Gibson, executive director of Byron Community Ministries, says many people he sees seeking help were until very recently members of the middle class. “I hear it over and over again,” he told a reporter for
Next City
magazine. “‘We used to donate to you.’”
In Long Island’s Suffolk County
, the number of food stamp cases jumped 55 percent from 2010 to 2012, and the emergency-housing caseload hit a ten-year peak with nearly five hundred families and three hundred individuals living in shelters and motels.

Suburban poverty
poses different kinds of challenges than urban poverty. There are fewer social services in the suburbs, so the safety net is “patchier and spread thinner” than in large cities, says Brookings’ Kneebone. And even when services do exist, it’s difficult for the poor to get to them if they lack access to a car. Suburban poverty also tends to be hidden behind closed doors as its residents fear the stigma of having their neighbors learn they’re getting government assistance. Falling below the poverty line, after all, is not exactly keeping up with the Joneses. “Soaring poverty rates threaten the very foundations of suburban identities, suburban politics and the suburb’s place in the nation’s self-image,” wrote Lisa McGirr, professor of history at Harvard and the author of
Suburban Warriors: The Origins of the New American Right.

Along with poverty, crime rates have gone up in suburban counties at the same time as they have declined in cities, and suburbs are increasingly seeing gang, gun, and drug activity, and worse.
In 2012 federal prosecutors in northern Virginia
charged alleged members of the Crips gang with luring high school girls in its wealthy suburban areas into teen prostitution rings. “Slavery in the suburbs,” read the special logo on the local news the night the story broke.
After a tragic gang rape
in a park in a planned community in Moreno Valley, California, the accused teens were said to have ties to a local gang. There has always been crime in the suburbs, of course, but increasingly it seems to be more of the sort once reserved for cities.
While overall homicides
have been falling nationwide—they fell sharply from 2001 to 2010, including a 16.7 percent decline in big cities, as places like New York City saw rates hit forty-year lows—they rose 17 percent in the suburbs. “People used to leave the city because they were afraid,” says the historian Kenneth Jackson. “Now, if you throw car crash danger in, you’re really in more danger in the suburbs than the city most of the time.”