Migrant millennials are redrawing the map of America

A 23-year-old works at his desk at Rally Software Development in Boulder, Colorado. 
Cyrus McCrimmon | Getty Images
A 23-year-old works at his desk at Rally Software Development in Boulder, Colorado. 

Nina Sharma’s mother was from Iowa, her father from India, but they moved to New York “because it was the center of the universe and that’s where they wanted to be”, she recalls. For years, as she worked in Manhattan for Carnegie Hall and the New York Public Library, Ms. Sharma felt the same way, until a work trip took her to the Rocky Mountains.

“In my New York-centric mind I hadn’t realized you could have a real career in a beautiful place and have a life and access to incredible nature,” she says. So in 2012, aged 33, she left New York for Colorado, where she now runs an innovation program on the University of Denver’s leafy campus.

For generations, ambitious young people like Ms. Sharma’s parents flocked to a handful of America’s biggest cities, looking for opportunity in commercial hubs like New York, Los Angeles, Chicago and San Francisco.

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That pattern has been broken by millennials, the coveted talent pool who began to come of age around 2000. As they make their way through the workforce, buy properties and have children of their own they are not only elbowing out Generation X as the driving force in the US economy; millennial migrants are redrawing the map of America.

Driving forces behind millennial migration

As a recent analysis by Brookings Institution demographer William Frey found, the strongest growth in America’s millennial population between 2010 and 2015 was not in coastal cities such as New York and LA, but in smaller ones in the south and west. The double-digit increase in 10 large metro areas, from Colorado Springs and Denver to San Antonio and Austin, contrasts with Midwestern cities such as Chicago and St Louis, whose millennial populations rose less than 1 per cent.

As one economist’s attempt to measure the exodus from San Francisco’s Bay Area showed recently, it costs 10 times as much to rent a U-Haul truck to move from San Jose, California, to Phoenix, Arizona, as to make the same journey in reverse, because the traffic is mostly one way. In Silicon Valley, the geographical byword for the country’s tech future, population growth has stalled.

This millennial migration is largely being driven by affordability, says Karen Harris of the macro trends group at Bain & Company, the consultancy. “Tier one cities have become incredibly expensive; as a result they have become the province of rich people, single people and empty nesters.”

But as technology makes it easier to pursue most careers from almost anywhere, and ecommerce and sharing economy companies provide easy access to goods and services across America, this generation is looking at location in a new way, Ms Harris says. Proximity to centres of finance, technology or industry is less important but quality of life and a community of like-minded people has become more so.

Few places tell this story better than Denver, Colorado. Its middle-of-the-country location, affordable universities, plentiful jobs and easy access to a snowboarder’s paradise in the Rocky Mountains have drawn tens of thousands of millennials in recent years, transforming its population and economy.

How the movement transformed a city

Denver’s population has jumped by 100,000 to 704,000 since 2010: Brookings estimates that only Houston saw a bigger influx of millennials between 2010 and 2015. Almost half of the city’s 25 to 34-year-olds are college graduates (helped by the fact that two-thirds of University of Denver alumni stay in Colorado after they graduate).

BP and Slack, the messaging group, are among the companies to announce plans to open offices in Denver. The former “cow town”, known for its oil, gas and cable companies, has been attracting technology and professional services groups. Denver has also made the 20-city shortlist for Amazon’s second headquarters, alongside other millennial magnets such as Columbus, Dallas, Nashville and Raleigh.

“Ten years ago, if you were talented you had to go to the Bay Area or Chicago,” says Dan Peterson, 31, who was born and raised in Denver. Now, as he sees friends and clients getting priced out of such places, he is finding plenty of talent moving in the other direction; the only problem is the intense competition for good people, and the newcomers’ high salary expectations.

Mr Peterson built his digital marketing company, Attis Media, in a WeWork office, one of many co-working spaces across the city. The repurposed warehouse looks like a photographer’s staging of a millennial workspace, with entrepreneurs and freelancers communing over nitro cold brew coffee, fussing over their colleagues’ dogs and bonding over the occasional game of shuffleboard as peppy slogans exhort them to “do what you love”.

Down a corridor of tightly packed offices, Jason Ayachi, 34, and Morgan O’Malley, 33, are among the migrants looking to capitalise on Denver’s millennial moment. The two college friends moved from LA and Arizona to launch a recruitment agency in a city where the unemployment rate has fallen from nearly 10 per cent in 2010 to 2.8 per cent: 90 per cent of their applicants come from other states.

“We came here to do research and fell in love with it. It’s an adult playground,” Mr O’Malley says. Denver also provided a concentration of like-minded millennials who shared their business ambitions as much as the desire to get to the mountains at weekends. He adds: “The start-up community here was a lot more open to collaborating.”

Aliaksandra and Francesco Spitaleri are among the converts. Originally from Belarus and Italy, the couple met in New York before where they ended up in an apartment in the hipster haven of Williamsburg, which they could only afford by renting out two of the rooms.

“I couldn’t imagine having kids there,” says Ms Spitaleri, 28, who now makes perfumes for a Denver boutique. Colorado offered “a better quality of life in a place with a decent economy, a slower pace of life and more nature”, says Mr Spitaleri, 38, who works as a waiter, DJ and driver for Uber and Lyft when he is not trading stocks and cryptocurrencies.

Cities such as Denver that are gateways to the great outdoors have obvious appeal to employees looking to bike to work and go to the slopes in their free time, observes Luis Benitez, who runs Colorado’s Outdoor Recreation Industry Office. “With the millennial generation it’s much more about experiences than things — and if the outdoors does anything, it provides a whole lot of experiences,” he says. “Whenever they touch nature, there’s always this brooding sense of reflection that I only see in millennials.”

The cyclists and skateboarders in neighborhoods with Manhattan-worthy nicknames such as LoHi and RiNo are just one sign of how the millennial influx has changed the fabric of Denver. The century-old Union Station has converted its atrium into a bustling hangout filled with couches, carpets and reading tables, surrounded by boutiques advertising “hand-dipped ice cream” and “doodads, gewgaws and whatnots”.

“You can’t move without running into a shared office space, a food market or a brewery,” observes Chuck Sullivan, co-founder of Something Independent, an events and content company. But he notes that change has not come without a cost, ticking off a list that sounds like what recent arrivals were trying to escape when they moved: shortage of affordable housing, gentrification that is excluding some minority populations, the connected problems of addiction and homelessness, and lengthening traffic jams — even to the mountains.

“As a city, how do you maintain soul through growth?” Mr Sullivan asks. “Who’s it including and who’s it leaving behind? These are the same conversations that are happening in Silicon Valley and New York and Boston.”

How soaring house prices fuel divides

Denver’s residential property prices are 50 percent above their pre-crisis peak, dividing the city into those who bought and have watched their assets appreciate and those wondering if they will ever get on the housing ladder. Since Colorado legalized recreational marijuana in 2014, Denver has been rife with stories of dispensary owners driving the market up by putting their unbankable cash into property.

Bobby Mitchell moved from Santa Cruz eight years ago, and works at both a high school and a craft beer bar. With rents rising fast, the 29-year-old is looking for a place to buy with his girlfriend but has been alarmed by the competition for properties that come on the market. “I went on a group tour to see a house and 12 other cars pulled up. It’s so cut-throat I was scared off,” he recalls. As newcomers from out of state send house prices “through the roof”, he sees a rift growing between locals and recent arrivals.

Another divide has opened up, along racial lines, as Denver’s property riches have not been evenly shared between ethnicities. Millennials are used to being America’s most diverse group: 43 percent are non-white, and several of the other boomtowns they have flocked to — including San Antonio, Houston, Dallas and Austin — now have majority non-white millennial populations. Denver is not on that list — almost 61 percent of its millennials are white, while 26 percent are Hispanic and under 6 percent are African-American.

Maps produced by the city show how unevenly black and Hispanic Denverites are distributed: around Union Station and its luxury apartment buildings, for example, 9 percent of the residents are Hispanic and 1 percent are African-American. Many young minorities do not believe Denver’s growth has included them. “It’s a very, very white town,” says Vince, an Asian-American transplant from New York, who asked not to give his last name.

The city’s investments in affordable housing have struggled to keep up with demand. Property taxes have risen with prices, making traditional African-American neighbourhoods unaffordable to people who grew up there.

“The tension is very real between those who have lived here for generations and feel left behind by the growth, and the people who’ve come here to live,” warns Leslie Herod, an African-American Democrat elected to Colorado’s state legislature in 2016.

Brandé Micheau, 38, a legal investigator and Denver native, has seen rough majority-minority neighborhoods flip to being desirable addresses for mostly white young families. “The folks coming in [are] in their mid-30s and are walking in areas that were blighted or downright dangerous. Now it’s Jim and Kim walking their dogs and pushing their strollers at 8 o’clock at night,” she observes. This influx is both a gift and a curse: “The new bike lane comes in, the coffee shop comes in, property taxes go up and people get pushed out.”

Gabrielle Bryant, a local television producer, is among those who have left, choosing nearby Aurora, where the African-American share of the population is above the national average at 16 per cent, compared with 10 per cent in Denver.

“Of course people coming from New York or San Francisco are ‘Oh, Denver’s amazing, it’s so affordable’. If you come from here, it’s not so much,” she says, because local incomes have not kept pace with house prices. She sees gentrification in stark them-and-us terms: “We lost our neighborhood and they’re getting the benefit.”

The hunt for the ‘next Colorado’

Complaints about congestion may seem trivial by comparison, but traffic is Denver’s second-biggest topic of contention. According to an analysis from Inrix, Denver’s drivers spent an average of 36 hours last year in traffic, placing it 21st out of 240 US cities. That is still nothing compared with LA (102 hours) or New York (91), but is a noticeable increase.

For a few, it is the final straw. Cathy Kiriakos, a budget analyst, moved to a small community north of Denver in 2012 from the Midwest. One of the draws was getting to ski regularly, but the 45-minute drive to the Winter Park resort took her almost four hours last year. “We didn’t get ski passes this year. It’s not fun any more,” she says. Ms Kiriakos has also become jaded by the “bad attitude about transplants” in her more conservative rural community, where opposition to higher taxes shot down a recent effort to increase schools funding. When she spoke to the Financial Times, Kiriakos was packing up to move back to near Chicago.

For now, disillusioned leavers are outnumbered by new arrivals to Denver, but there are signs that its millennial-fuelled population boom is slowing. Its growth rate peaked in 2015 and it has dropped down the Census Bureau’s list of fastest-growing cities, which is now topped by San Antonio and Phoenix.

Mike Newlands moved to Denver after college in 2006 to work in the sporting goods industry, and is living with a friend while saving for a downpayment on a property. He worries that anyone who did not buy by 2010 is effectively priced out of Denver. “People are asking now where the next Colorado is,” he says, listing more affordable alternatives like Jackson, Wyoming, and Boise, Idaho. “People like me who make $75,000 a year are going to be gone.”

The millennials who are reshaping cities such as Denver may not stay in one place for long. “We’ll try Chicago — maybe in five years we’ll be considering Toronto. I don’t need to be in one place to find success,” says Ms Kiriakos. “Our generation’s more willing to uproot and try things.”