The new magnetism of mid-size cities

If, 10 years ago, you had asked 28-year-old Sarah Luckett Bhatia if she’d eventually return to her hometown of Louisville, Kentucky, she “would have laughed in your face.”

Even just a few years ago, the prospects of coming home to Derby City would have seemed slim. Bhatia moved to Chicago for school, studied at Columbia College, and immediately got a job in corporate planning and strategy. Like many 20-somethings, she steered her life and career trajectory toward big cities and the opportunities they promised.

But Bhatia’s plans started changing after meeting Ravi, a video editor at Leo Burnett, and marrying him in 2016. After years of living in Chicago, the couple was getting tired of the urban grind and began prioritizing kids, a home, and a connection to family.

At the same time, it struck Bhatia that “Louisville got cool.” The city’s restaurant and bar scene, propelled in part by the surrounding region’s bourbon boom, has blossomed—“I think it’s on par with Chicago, which I realize is a controversial thing to say,” Bhatia says—and the city has a new pro sports team, the Louisville City FC soccer club, which plans to build a new stadium in the Butchertown neighborhood, part of a 40-acre, $200 million development.

In 2017, Bhatia decided to move home, joining a growing number of younger Americans returning to the small- and medium-sized cities they left after college. There are no studies yet measuring the movement by what some call “boomerangs,” those millennials moving back to their hometowns from larger cities, and much of the evidence is anecdotal at best.

But conversations with Bhatia and others, as well as some demographic data, suggests those moving home are part of a boom in the country’s second-tier cities.

Mid- or second-tier cities, loosely defined as those under a million people that aren’t regional powerhouses like Austin or Seattle, are increasingly seen as not just places to find a lower cost of living, easier commute, and closer connections with family, but also a more approachable, neighborhood-oriented version of the urban lifestyle that sent many to the larger cities in the first place. Between 2010 and 2015, cities such as Colorado Springs saw their millennial populations grow by more than 10 percent.

And many, like the Bhatias, see the move back as not a trade-off, but a trade-up. Young adults coming home isn’t anything new. But compared to just a decade earlier, many who have made the move say smaller cities now offer more viable career and entrepreneurial opportunities that may be increasingly difficult to realize in larger, more expensive metros.

On many levels, the Bhatias’ move back to Sarah’s hometown made sense. Ravi found a job doing video work for a local advertising firm, Scoppechio, with more of a leadership role and room for career advancement than he had in Chicago. Sarah, who currently isn’t working, is studying for her GMATs and plans to go to graduate school.

They made a big upgrade on the housing front, trading a $900-a-month apartment in Chicago’s Uptown neighborhood for a century-old Dutch Colonial in Louisville’s Audubon Park neighborhood. They’re paying more—the mortgage is $1,200—but now own a home with a yard on a single salary, something that Bhatia says would have been unimaginable in Chicago.

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The new magnetism of mid-size cities

After a decade of investment in parks and greenspace, homegrown tech hubs, and downtown redevelopment, many small and mid-size metros are seeing more signs of life and increased migration, according to a recent Brookings Institution analysis of U.S. Census data. This comes at a time when larger superstar cities are seeing slower population growth and an uptick in domestic out-migration.

Cities such as Madison, Wisconsin, and Indianapolis, Indiana, have thrived due to the growing tech scenes, including headquarters for large companies such as Epic and Salesforce, respectively, as well as investments in public infrastructure, such as the Indianapolis Cultural Trail and Madison-area bike trails. Silicon Valley investors see possibility in the Midwest. AOL founder Steve Case’s Revolution’s Rise of the Rest seed fund plans to invest $150 million in new companies in the region, especially in sectors such as health care, agriculture, transportation, finance, and manufacturing.

Louisville has made similar strides in recent years, investing millions of dollars in an expansion of its Frederick Law Olmsted-designed park system, adding a new convention center and a pair of hotels to the recently coined NuLu neighborhood, and building new apartments downtown. Mayor Greg Fischer brags about $12.5 billion in economic development in the region.

Part of the attraction is what sociologist Jill Harrison has called “place character.” Surveying nearly two dozen young adults who have returned to Youngstown, Ohio, Harrison found those coming back to their hometown highlighted heritage, recovery, and the new opportunities in these revitalizing communities.

Growth isn’t evenly spread across the country, with hard-hit areas of the Rust Belt still struggling with population loss, and new arrivals and developments can lead to rising housing costs. But the economies of many smaller metros continue to grow and diversify. Louisville added 2,500 new businesses and 70,000 over the last six years, including a 53 percent jump in what the Brookings Institution called “advanced industries jobs,” all while home prices remained relatively affordable (compare the city’s median home value of $153,802 to Chicago’s $226,073). It’s helped make Louisville one of the leading larger cities when it comes to millennial homeownership.

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“Taking the risk of reimagining their city”

Moving to smaller cities offers a hands-on opportunity to take part in the renewal and regrowth of smaller downtowns and Main Streets, a new sense of dynamism The Atlantic’s James Fallows has called a “reinventing of America.”

The challenge—creating a city that provides a diversity of jobs and an interesting place to live—requires working on many fronts, and there is no formula, according to Tom Murphy, a former mayor of Pittsburgh and a senior resident at the Urban Land Institute. He sees the question of why some cities are succeeding in this moment as “the biggest story that isn’t really being covered.”

Civic leaders need to reimagine land use, especially at former industrial sites and buildings; build strong public and private partnerships; focus on arts and culture; and act locally, instead of waiting for state and federal help.

“Cities need the right leadership, from both the public and private sector, who are willing to take the risk of reimagining their cities,” he says. “It’s painful, because change is painful.”

Take Pittsburgh, where Murphy was mayor from 1994 to 2006. Economic jolts unmoored the city, which then turned to new industries for revitalization. Downsizing and steel industry struggles meant this proud manufacturing center lost nearly 60 percent of its population between 1970 and 1990.

It was a devastating loss, says Murphy, but in the past few decades, the city has turned the corner. The educational and medical industries fuel new economic growth. The tech sector, bolstered by the brainpower at Carnegie Mellon University, has turned the city into a hub for innovation, robotics, and autonomous vehicle research, while redevelopment of the industrial riverfront added acres of public space downtown.

“Pittsburgh changed from one of the most economically depressed and environmentally damaged cities to one of the most livable,” says Murphy.

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Finding a larger community in a smaller city

Bhatia says money and family are far from the only upsides that led her to put down roots in Louisville. In the four years she lived in her Chicago apartment, she barely learned her neighbor’s name. In Louisville, she’s found a place in the community, taking part in planning neighborhood events such as the Festival of the Dogwood. She even petitioned City Hall about the placement of stop signs. She admits it’s “very Leslie Knope from Parks & Rec,” but she loves it.

“It’s all about approachability,” she says. “It’s intimidating in larger cities. You feel like you need to dedicate a lot of time to get involved. Here, we feel like we can make an impact.”

The ability to afford a home has helped many who moved from superstar metros to so-called second-tier cities connect with their new communities. Elissa Washuta, a 32-year-old author and academic, moved to Columbus, Ohio, last July. After a decade of living in Seattle, and staring down increasingly higher rents and cost of living that had “gotten out of hand,” she decided to scour academic job boards and found a position at Ohio State University.

Washtua now lives in a restored historic home near the popular Short North neighborhood, paying less for a mortgage than her Seattle apartment (a studio was $1,750 a month plus parking when she left). She says homeownership has given her a sense of permanence.

“It was a dream of mine since I was a kid,” she says. “I like the idea of a house with history and character. I’ve rented since I left my dorm in college, and never painted a wall.”

It’s not perfect. Washuta is still making connections to the college town’s local literary scene, and she misses her home and the Pacific Northwest landscape. But the change in her quality of life has been dramatic. Not having to worry about money as much, and feeling secure in her home, makes a big difference.

“It’s been a good move for me,” she says.

Finding a new home, and home base, for remote work

The changing nature of work, especially toward service and consulting and tech, and the growth of startups in second-tier cities, has altered the equation for younger workers. While business formation and venture capital funding is still concentrated in coastal cities, Revolution founder Case believes the next generation of tech companies can be more geographically diverse.

Max Wastler, a 37-year-old travel writer and brand strategist who has previously worked for companies such as Conde Nast Traveler and Basil Hayden, recently returned to his hometown of St. Louis after working in New York City, LA, and Chicago. After a job and relationship in LA didn’t work out, he came home during Thanksgiving, and his brother convinced him to give St. Louis a shot.

After being away for more than 15 years, Wastler found more happening, and more opportunities, than he expected. In the nearly six months he’s been home, he’s found numerous startup hubs and tech events in the city, courtesy of CORTEX, House of Genius, and programs like Arch Grants.

While the city hasn’t seen the same young adult population boom as others, with just a 0.9 percent jump in the millennial population between 2010 and 2015, the city has still changed. Today, St. Louis, and neighborhoods such as Tower Grove and Cherokee Street, are filled with locals who came back, or what he jokingly calls “carpetbaggers,” finding their own niche in town. Like other Midwestern cities with a rich industrial heritage, St. Louis has a central business district filled with impressive architecture ideal for a vibrant downtown.

“St. Louis is a city built on history,” he says. “Today, you can go out on a Friday and Saturday night, and there are wonderful, amazing cultural events in these amazing old buildings. The cultural community is growing by leaps and bounds, and it wasn’t that way in past decades.”

Wastler, who founded Rivver Co. since returning home, is working on partnerships with Lands’ End, based in Wisconsin, and Airstream, which often takes him to Ohio. He has found that he can operate from anywhere, and as a colleague told him, it’s always nice to make a “New York salary with a St. Louis cost of living.”

But there’s also a draw to being in his hometown, especially places he was unfamiliar with, or really didn’t visit, when he was younger.

“The realization that I can work from anywhere made me want to go to a place I feel welcome,” he says. “I feel welcome here. I don’t know if it’s part of a larger trend, but it’s part of a larger thing for me. I’m home.”