America’s new geography of opportunity Citizens prefer the business-friendly fringes

Houston’s Energy Corridor neighborhood, named after the oil and gas companies that have planted their US headquarters along this far-Western stretch of Interstate 10, is a charmless dystopia if you listen to urban planners, academics and most media: it’s car-centric, light on public transportation, prone to traffic and flooding, and has no major museums and cultural institutions — the horror! Such places lack the aesthetics and glamor of cities like New York, Chicago and Los Angeles — which will perhaps someday be referred to as “legacy” cities — however, they meet the needs of both industries and people and reflect an emerging geography of opportunity in America.  

The numbers speak for themselves: the Energy Corridor covers some nearly 2,000 acres, 20 miles west of Houston’s central core. It is home to eight Fortune 500 companies, has 67,000 jobs, 27 million square feet of office space, and nearly 4 million square feet of retail and restaurant space. The residential population is 20,000 strong and growing, and should continue to thrive so long as fossil fuels continue to supply four-fifths of the world’s energy supplies. It and a host of new communities further west — many developing their own retail and residential centers — have accounted for nearly 86% of the region’s growth since the year 2000. 

Houston’s light touch regulation and openness to urban expansion accounts for much of the new development, according to Tim Cisneros, a local developer and architect. Over excellent steak at a local Uruguayan restaurant in the Energy Corridor’s City Centre dining-and-retail hub, Cisneros tells me his big opportunities are increasingly in the peripheries, in places like Sugar Land, Pearland, the Woodlands, and Cinco Ranch, all metropolitan Houston or adjacent communities created in the past few decades. “In places like this,” Cisneros says. “You get the urban experience even when you are not in the city.”

The conventional wisdom is that being big and dense is the key to success. As Neil Irwin wrote in The New York Times in 2018, the future would be one “where a small number of superstar companies choose to locate in a handful of superstar cities.” However America’s essential story has always been one of migration — first from New England to the Midwest in the early 19th century, then from the countryside to big cities, followed by mass migration to California after World War II. Today’s big shift is the movement of companies and people to business-friendly regions in the suburbs and exurbs.

Corporations are leaving the great urban cores of New York, Chicago, San Francisco, or Los Angeles due to high energy prices, regulatory constraints and sky-high taxes. They are locating instead in less glamorous places like Dallas, Houston, Atlanta, Nashville, Phoenix, Salt Lake City, and Raleigh. A ranking of American business climates by Site Selection gave top ratings to Texas, Georgia, Virginia, Arizona, Florida, and Midwestern states like Ohio and Indiana. 

Houston has emerged as first in job creation among the nation’s largest metro areas, growing 50% faster than New York, twice as fast as Los Angeles, and over seven times faster than greater Chicago in the past year. Overall, mid-sized metropolitan areas, with populations of between 1 million and 10 million, are adding jobs the fastest. 

It used to be that dense cities were considered to be inherently more productive. However, technology such as remote work, video conferencing, and instantaneous communication is enabling  worker dispersion, bearing out Frank Lloyd Wright’s prediction that in the future “the city should be everywhere and nowhere.” And a recent report from Brown University suggests that neither city size nor density strongly correlates with higher productivity. This merely reflects reality: today, the 50 fastest-growing counties, almost all in metropolitan peripheries, are gaining jobs at well more than two times the general rate.

In the once glittering downtowns, there has been a 90% decline in the prices of commercial real estate in some cases. This is not just a post-pandemic phenomenon. Office occupancy started to decline by the turn of the new millennium, and construction of new space also began to fall around that time. In 2019, before the pandemic, construction was one-third the rate of 1985 and half that of the year 2000.

This reflects an economy already dispersing at a rapid rate. Between 2010 and 2017, 91% of employment growth among major metropolitan areas was outside of central business districts. Remote work has proven a gift to some outlying areas, sparking growth even in parts of southern Appalachia. The 50 highest-growth counties, almost all of them in exurbia, experienced an employment increase of more than 2.5 times that of other counties in 2019. These aren’t “bedroom communities”; they are spread out cities.   

Some urban cores, notably Manhattan, remain powerful in terms of media and culture, but no longer dominate the country’s economic life. The rise of AI may accelerate this process by downsizing many of the activities key to urban centers. 

Growth in the business-services industry has also trended toward smaller metro areas of 1 million to 5 million people, particularly over the most recent five year period. Booming business service-industry hubs include smaller metros such as Austin, Nashville, Salt Lake City, Raleigh, Indianapolis, Charlotte, Omaha, Orlando, and Portland, Maine. In contrast, San Francisco and San Jose are suffering the nation’s biggest employment declines, as well as stubbornly high vacancies for commercial real estate. 

Moving out of big urban areas used to mean a downgrade in earnings, but now, salaries across the 19-state American Heartland region, essentially the territory between the Appalachians and the Rockies, are above the national average.  The hinterland’s improving conditions are further buffeted by growth in jobs making material goods. Cities like Miami, Charlotte, and Knoxville — none of them historically associated with industry — have seen the most robust industrial growth, while the last generation’s industrial leaders — cities like Los Angeles, San Jose, and Seattle — suffered a marked decline. Traditional manufacturing-oriented communities such as  Indiana, Wisconsin, Michigan, Iowa, and Ohio, are also benefiting from re-shoring businesses and foreign investment.  

Increasingly, great urban centers play an essentially symbolic role, known for glamor and high-income residents. In New York, while the overall population has declined, the number of ultra-wealthy residents has also increased. The result is a bifurcated urbanity, more like that of a stratified Medieval city rather than an engine of upward mobility; for example the Bronx, just across the Harlem River from increasingly bourgeois Manhattan, remains the country’s poorest urban county. Even as poverty in suburbs has increased, the suburban poverty rate is only half of that found in big cities. 

These stark class divisions have helped progressives to gain elected office in blue cities like Seattle, Chicago, Washington, LA, and Portland, Oregon. These groups, notably the ascendant Democratic Socialists of America, embrace policies that weaken law enforcement, allow for public camping, and seek an expansion of the welfare state by imposing higher taxes on businesses and wealthy individuals. Ultimately, such policies backfire as technology allows key executives to become more mobile.

The second shift lies with migration of people, particularly young families. America’s urban core counties lost 3,259,000 net domestic migrants from 2020 to 2024, which was three times the rate of loss in the previous decade, according to demographer Wendell Cox. Growth has shifted to peripheral areas, largely to areas 20 miles or more from the central core.

This is a longtime trend. In 1950, nearly 24% of the US population lived in the core cities. Today, according to one MIT study, roughly 80% of the nation’s metropolitan population lives in suburbs or exurbs, while barely 8% live in the urban core and another 13% live in traditional transit-oriented suburbs. Since 2010, suburbs have accounted for about 90% of all US metropolitan growth.

In many ways, this represents a return to deep-seated patterns. Americans have long tended to favor single-family houses in lower-density neighborhoods. In the 2020 Census, 92% of the population lived in counties with typical suburban population densities. In contrast, the urban cores, with population densities of at least 7,500 per square mile, accounted for barely 4% of the population, mostly located in and around New York City.  

These trends seem likely to increase as the two key demographic groups, Millennials and immigrants, continue to move to suburbs, and increasingly the exurbs. In the past, many younger people headed for big cities like New York, as well as places like Seattle and Denver, but high  housing prices make settling in these places more difficult, particularly for families. Instead they are moving to affordable regions, such as Atlanta, Las Vegas, and Houston, where Millennial homeownership has surged. 

The key is that Millennials, born between 1981 and 1994, and now the largest portion of the population, are entering middle age. Lured by lower crime rates, single family homes, and better schools, educated Millennials now are migrating to suburbs or smaller cities. In contrast, New York, Los Angeles, Chicago, and even Seattle have lost some of their once magnetic appeal. The top 10 cities for Millennials include Austin, Dallas, Jacksonville, Tampa; Salt Lake City, and Henderson, Nevada.

Attitudinal swings associated with entering middle age are responsible for this shift, according to Robert Schottenstein, CEO of Columbus-based builder M/I Homes, Inc. “This is a flight to safety and security,” Schottenstein told me. “The Millennials are getting older and they are transitioning as they start families.” Even before the pandemic, two-thirds of Millennials preferred suburban living. One clear sign: high-growth exurban counties have added residents ages 25 to 34 by almost four times the national rate.  

Minorities and immigrants, who make up a large share of new buyers, favor not dense metros but sprawling areas such as South Florida, Houston, and Dallas-Ft. Worth, all of which now attract more immigrants than gateway cities like New York and Los Angeles. This reflects a preference for affordable single-family houses; something particularly marked among Latinos.  Roughly half of all Asians and Latinos live in single-family homes.  

Meanwhile it seems likely that migration patterns out of the dense, blue states will continue for the foreseeable future. In a poll taken in early 2026, roughly half of Massachusetts residents said they have considered leaving the state. Similarly, one-third of New York residents already plan to leave within the next five years, as do 4 in 10 Californians. Recently, more are moving not just to Texas and Florida, but even to “hillbilly states” like Alabama, Arkansas, and Oklahoma. By 2050, according to the most recent projections, Texas is on track to surpass California as the nation’s most populous state. 

Over time, birthrates will further propel these trends. Dense urban areas such as Los Angeles, Portland, San Diego, Boston, and Chicago, have experienced the most rapid decline in birthrates. The next generation of high school graduates will be concentrated in places like Texas, Florida and the Carolinas, while huge drops are expected in California, New York, and Illinois.  

These trends suggest an America that will look more like the Energy Corridor than like a historic urban core. This prospect may not thrill urban sophisticates, but developers like architect Tim Cisneros are not about to miss an opportunity to meet the aspirations of America’s perpetually restive population. “You go there,” he says, “because that’s where the action is.”

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