A New Map of America’s Largest Cities…as Experienced by Millennials

 
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As millennials come into their own as a primary engine in the American economy, many cities are vying to attract the best and brightest from this key demographic. The frenzied reaction to Amazon’s search for its HQ2 last year highlighted just how seriously many leaders take the issue of attracting skilled workers and managers, many of whom are in the millennial age group.

These are the people who fuel local economies by purchasing and improving homes, eating out regularly, and buying everything from baby clothes to school supplies for their growing families.

Whether the stereotypes are fair or not, many have come to see millennials as a group with specific desires and a willingness to move, buy, and bargain until their demands are met. This point of view has many city leaders focused on developing communities that will satisfy and serve millennial residents who have the financial and professional means to live in any city they choose.

With all the attention on how and why millennials choose where to live, there is surprisingly little concrete information about which cities are successfully meeting this generation’s demands.

The Langston Co. specializes in understanding specific groups of consumers and employees; so this past winter, we designed a study of the exact calculus that millennials are applying to their migration decisions and partnered with Centiment to collect statistically robust data. We wanted to know what millennials think about, how much it matters, and how each of America’s largest and fastest-growing cities were doing.

In this article, I’ll share one of the most interesting outcomes of that study — a plot of every city in the study that just might predict the future of millennial migration in America.

The Millennial Value Equation

To illuminate how millennials choose where to live, we applied a classic lens for understanding human behavior — the determination of value.

The word, “value,” gets used with many meanings, so I should specify that we’re using it to describe the idea of worth. We wanted to understand what makes a city worth living in, as assessed by millennial residents.

The value of a city is the balance between all the benefits and amenities it offers weighed against the costs and hassles one must incur to live there. At the heart of this calculation are two opposing factors: what I get from living in this city and what I pay to be here.

Stacking Up Cities

Using data from our study, we’re able to compare American cities — as seen by their millennial residents — in many ways. One of the most interesting visuals is the value map, which focuses specifically on the what I pay vs. what I get trade-off. A blank value map looks like this:

 
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This value map could describe almost any market, from automobiles to grocery stores to investment advisors; but today we will use it to describe the market of cities that millennials have to choose from in the United States.

So here it is — the map of America’s largest and fastest-growing cities as seen by the millennial aged residents who experience them.

 
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Looking at a map in this way allows us to make intuitive sense about many of the attributes we have come to understand about America’s cities.

Take San Francisco, for example, with median rents between $3,000 and $4,000 for a modest apartment and some of the highest living costs in the country, it seems impossible for many to afford living in the city. However, the benefits San Francisco offers residents are truly outstanding.

The city is a booming commercial center that offers tremendous opportunity for workers in a wide variety of sectors, led of course by its booming tech epicenter in Silicon Valley. It also offers families with children access to top-notch amenities. It is home to a world-class culinary scene, hosts a wide diversity of residents and cultures, and sits just a short drive away from wide-open natural open space and parks.

Clearly, San Francisco is right at home in the “Premium” neighborhood on our value map, although its many benefits are comparatively less special than they were in years past. We believe this is because other cities are starting to pile up benefits of their own, including vibrant startup ecosystems, iconic cultural districts, and top-tier museums and amenities for families. The rise of such trendy cities is putting pressure on the value proposition San Francisco offers to residents, which is a likely reason the city has slipped from the comfortable “premium zone” on the map into a much less pleasant position — the “worse value zone.”

Not all cities are as extreme as San Francisco, though. What about a place like Minneapolis, where the cost of living is more reasonable and, while the city has a lot to offer families and professionals, there is nowhere near the density of diversity, amenities, and successful startups as the Bay Area? The value map allows us to compare a place like Minneapolis to a place like San Francisco or Philadelphia. We can actually stack a city with a lot of unique character, like Austin, against a city with a completely different and equally unique character like Seattle.

Unsurprisingly, many cities are clustered together in the mid-range neighborhood of the Fair Value Zone. However, many cities have actually escaped the fair value zone altogether. Cities like Austin, Miami, Minneapolis, Atlanta, and Houston have significantly above-average scores for both “what I pay” and “what I get.” This means that they punch above their weight at offering millennial residents a lot of benefits in return for the costs and hassles of living there.

Other cities have the opposite scenario. Detroit, Sacramento, Chicago, Seattle, and Washington DC have lower-than-average scores for both sides of the value equation. This makes it far less likely that millennials with the freedom to move will stay in these cities.

Of course, many residents of a city don’t have the freedom to pick up and move just because it doesn’t offer them the best possible value. Many people find themselves in a particular city because they want to stay close to family members, or because they have a great job, or because they happen to be personally loyal to the area. On the whole, however, more and more millennial residents have the freedom and the desire to change cities at least once or twice in their lifetime; and we believe that the value a city offers to its residents will determine which metropolitan areas attract talent, employers, and investment dollars over time.

The cities which provide superior value to their residents will thrive in an economy where technology and wealth are allowing more and more individuals to choose where they will live and, along with that, establish their family, invest in a home, and spend their household income. This value map might just give us a glimpse into the future of America’s cities.

Details and Such

Many people will have a lot of questions about this mapping system given how briefly I described it. The city value map is just so interesting that I had to dive in right away; but for the curious and skeptical, here are a few more points about the details of this approach.

The Complexity of It All

The calculations we used to aggregate scores are fundamentally simple, but the equation of value gets complicated really fast.

The “what I get” side of the equation breaks down into a myriad of smaller components. It includes employers and jobs, parks and amenities, restaurants and attractions, people and networks, weather and nature, and on and on.

On the “what I pay” side of the equation, residents face a lot more than just financial costs. Although this does include common expenses such as rent and home prices, taxes, and the cost of living, there are also non-financial costs, such as the time people spend sitting in traffic or — if they don’t have a car — the hassle of navigating their city’s public transit system.

Our study broke down the elements of what I pay and what I get into several constituent parts. While the results of the full breakdown are fascinating, they are also very complex and take time to digest. In this article, I focused on the two big attributes only. If you want to go deeper, you can check out the entire study at https://thelangstonco.com/cities-scorecard.

Score Calculation

These scores are based on self-reported satisfaction ratings for more than 40 attributes. We collected the ratings from nearly 3,000 millennial-aged participants in our study, which gave us a statistically representative sample of this population in the United States.

The value map we’ve constructed shows the average relative score of every city for the “what I get” and the “what I pay” side of the value equation. Relative score is another way of saying its difference from the average. We put all scores on an index where 100 is exactly the average score for all participants in the study.

For example, if a city has a score of 110 on “what I get,” that means its score was 10% higher than the overall average. If its score is 90, on the other hand, that means its score was 10% lower than the average.

Placing zones on the map

There are three main zones on the map — the “worse value” zone, the “better value” zone, and the “fair value” zone. The fair value zone breaks into three smaller areas, which are “economy,” “mid-range,” and “premium.”

These zones are purely conceptual. Drawing them on the map helps us mentally organize and interpret the data, but their boundaries are not calculated. The actual location of the lines are placed by hand and serve simply as a guide to understand the relative position of each city within the broader “market.” If you feel the fair value zone should encompass a wider or narrower band, feel free to redraw the boundaries however they best suit you in understanding and organizing the information.


Spencer ImelBy Spencer Imel