Millennials, drawn by the vibrant city life and lucrative job opportunities, flocked to urban centers in the early 2000s and 2010s. Urban planners and leaders embraced the 'creative class' theory, believing that attracting young, educated professionals would drive economic growth. Real estate developers followed suit, constructing apartment buildings catering to singles and childless couples. However, a critical mistake was made - the needs of families were overlooked.
The focus on smaller apartments and studios ignored the reality that millennials were aging and starting families. As they entered their 30s and 40s, these millennials began to leave cities, seeking housing that could accommodate their growing families. The data speaks volumes - large urban counties across the nation experienced an 8% decline in their under-5 population between 2020 and 2024. This exodus of families has profound implications for cities.
When families leave, cities lose more than just tax revenue. They lose their highest earners, biggest spenders, and the future workforce. The gap left by millennial families cannot be filled by the smaller Gen Z generation, especially with the rise of remote work reducing the need to live in expensive cities. The 'creative class' theory, while not entirely wrong, missed a crucial point - cities must retain these individuals through their peak earning years, which often coincide with parenthood.
The consequences of this oversight are far-reaching. Cities are left with a demographic decline, economic pressures, and a real estate industry that signals a need for change. Older, affluent homeowners, often past their child-rearing years, oppose zoning law changes that could bring more housing options to their neighborhoods. As a result, American cities are predominantly zoned for single-family housing, leaving little room for the duplexes, townhouses, and smaller apartment buildings that young families need.
There's also a resistance to certain families moving in, with racial and class-based biases influencing zoning decisions. To address these historic patterns, policy changes beyond zoning codes are required. Ending parking minimums, allowing single-stair buildings up to four stories, and making it easier to approve smaller buildings are steps in the right direction. The Institute of Family Studies proposes a shift in how affordable housing programs are measured, prioritizing the number of bedrooms and people housed over the number of units built.
Professional culture also plays a role. Many planners don't consider designing urban communities for families as part of their job, influenced by development patterns from the 1960s and 1970s that prioritized suburbs over cities for families. This structural problem goes beyond zoning and building codes, reflecting a lack of investment in the future workforce.
The economic reality is stark. Public support for seniors is up to three times higher than for children, with the federal government providing the majority of senior aid while covering a fraction of child subsidies. State and local governments bear the brunt of K-12 education costs, creating a negative incentive for cities to welcome families with school-age children. This short-sighted approach ignores the long-term benefits of investing in human capital.
As more elected leaders recognize the housing crisis in their cities, the urgency to address these issues grows. If cities continue to lose families, they risk losing their most productive and experienced residents, resulting in a demographic imbalance. Once families leave, cities are left with fewer advocates pushing for better schools, parks, and transit, making the areas less attractive to future generations of parents.
Declining birth rates further compound the problem. Research has established clear links between housing costs, housing size, and birth patterns. The lack of suitable housing not only steers families out of cities but also contributes to some people choosing not to have children at all. Housing costs are a significant barrier to childbearing, impacting fertility rates and leading to longer periods of living with parents.
The real estate industry is beginning to shift, with some institutional buyers rejecting studio and one-bedroom-heavy buildings. Construction financing challenges have also opened developers to rethinking their conservative approaches. The 'built-to-rent' boom has demonstrated that families with kids will rent homes, challenging the industry's inertia.
Bobby Fijan, a vocal critic of the industry, advocates for a range of solutions, including building family-sized row homes and apartments. Fijan and his colleagues surveyed over 6,000 Americans, finding that many preferred layouts with more rooms, even if they didn't currently have children. The one-bedroom plus den model emerged as a promising option, offering flexibility for families as they grow.
While the 'abundance' movement argues for removing regulatory barriers to housing and energy, making cities family-friendly often requires direct government spending on schools, childcare, parks, and transit. Leah Libresco Sargeant, from the Niskanen Center, proposes that baby bonuses and reducing barriers to family-friendly housing could address both obstacles, bringing the movement on board with new family investments.
The challenges cities face in retaining families are multifaceted. Addressing public safety concerns, improving schools, and fixing basic infrastructure are essential. It will require substantial investments in education, transit, and childcare, challenging the status quo and making long-term spending choices. The cities that succeed in keeping their families will thrive, and these are battles worth fighting for local leaders.
