Coastal metropolitan areas with diverse populations, such as Los Angeles, San Francisco, and New York, are often the cities mentioned when college seniors are asked where the finest jobs are located.
However, according to economic development data, today’s true hotbeds of economic activity are actually in smaller cities located away from the coasts. This is most likely the result of the financial needs of the American people. Many of these hotbeds are offering a lower cost of living, recreational opportunities, attractive community amenities, and an abundance of job opportunities.
18 Hour Cities
Historically, this has been quite the opposite. Today’s smaller cities drawing in the right mix of talent, civic cooperation, and market focus are reaping economic benefits, and a few are outperforming some major urban competitors, as well. For example, cities referred to as “18 hour cities”, such as Nashville, Denver, and Charlotte, are experiencing robust economic growth resulting in an increase in the development of thriving residential neighborhoods.
Though the term is normally used in real estate, “18 hour city” is a second-tier city that is experiencing higher than average urban population growth with lower costs of doing business and a lower cost of living than that of first-tier cities. For example, New York, Chicago, Boston, Los Angeles, San Francisco, and Washington D.C. are first-tier cities and often referred to as 24-hour cities.
What Draws People to 18 Hour Cities?
Lower costs of doing business in these “18 hour cities” are drawing both entrepreneurs and employers. In addition, highly-educated and technologically-skilled millennials, who are either launching or advancing their careers, are targeting these smaller cities in disproportionate numbers. The millennial population in Orlando, Colorado Springs, and San Antonio grew at more than 60 times the rate of Chicago’s from 2010 to 2015.
Consider downtown Denver, despite its bustling job market; there are 10,000 residential units under construction. This number reflects nearly 50 percent of the total housing stock. Another example is Dallas, which attracted approximately 150,000 new residents last year.
The growth that secondary cities are experiencing is really nothing new. Five years ago, the Urban Land Institute described such growth, and these cities could see even more growth next year. It should be no surprise that eight of the top 10 real estate markets to watch in 2019 are “18 hour cities”, with Dallas topping the list, according to an annual industry forecast, Emerging Trends in Real Estate, which is published by the Urban Land Institute and PWC.
What's Fueling the Economic Growth in 18 Hour Cities?
The fact that residents can actually afford to live in these second-tier cities is one contributing factor to the economic growth. This affordability is a big draw to those who want to put down roots or raise a family. When compared to Dallas, a one-bedroom apartment in Los Angeles, smaller in square feet, is almost double the expense.
In addition to the appealing affordability of second-tier cities, economic opportunities are just as good or better when compared to those in the coastal metropolitan areas. According to ZipRecruiter, an employment website, hotbeds such as Phoenix, Kansas City, and Huntsville are among the fastest growing markets for tech jobs. The tech titan company, Amazon, has recognized the lure of smaller cities by investing in an operations center in Nashville. The $230 million investment will create 5,000 jobs.
Where are Millennials Choosing to Live?
Millennials who are tech-savvy and at the beginning of their careers are choosing second-tier cities for this reason and more. According to a survey conducted by an online apartment rental market, Apartment List, millennials are looking to live within their means. They report down payment requirements are the biggest obstacle to homeownership. For example, millennials living in San Francisco or Kansas City would have to save nearly three decades to have enough for a down payment on a home.
The true allure is that many “18 hour cities” are full of entertainment opportunities, such as bustling arts, music and food scenes that keep the city alive past the normal workday. With active downtown shops, restaurants and clubs, it is most likely populations will continue to increase in these hotbeds that allow you to live, work and play. The second-tier cities that continue to see steady economic growth and remain both affordable and enjoyable will be where many people choose to live.
As the job market continues to evolve throughout the entire United States, it is expected that more "18 hour cities" will make their way to the forefront of where Millennials and even older generations choose to plant their roots. When you combine affordability with strong job markets and entertaining atmospheres, big things are sure to happen even in the smallest of cities.
If you're looking for job in a smaller city like Denver or Dallas, contact ICS. We'll connect you with the right people and get you that perfect job that you've been looking for in all the wrong places. Click below to see our open roles.