Copyright Appraisal Institute Fall 2005| [Headnote] |
| Abstract |
| Micropolitan areas (Micros) are newly defined census geography, falling between metropolitan and rural in terms of their urban qualities. Micros significantly redefine the American landscape, placing much more of the U.S. land area into "centered," as opposed to "non-centered," areas. This article examines the characteristics of Micros and their housing characteristics, affordability, and prices. |
| Key Points |
| * Micropolitan areas contain more than 28 million people (or one in ten Americans) and they account for over a fifth of all U.S. counties. Eastern micropolitan areas mostly lie between metropolitan areas, while Western ones may be isolated places far from big metropolitan areas. |
| * Micropolitan areas have slightly more affordable housing than the U.S. average. Remote micropolitan areas, especially in the Great Plains states, have the most affordable housing as a group, while booming ones in the West are the least affordable. |
| * Micropolitan areas are not identical small towns-they can be as different from one another as Los Angeles is from Detroit. Likewise, micropolitan housing varies considerably ranging from some of the least to some of the most affordable places in the United States to own a home. |
This article is a first look at housing values in the nation's micropolitan areas. "Micropolitan areas" (Micros) are a newly defined census geography introduced in June 2003(1) and updated in December 2003.2 Micros fall between metropolitan and rural areas in terms of their urban qualities.3 They lack the large central city (over 50,000 residents) that the Office of Management and Budget (OMB) requires as a criterion for being a standard metropolitan area. By contrast, Micros have central cities that compare with modest-sized towns.4 Like metropolitan areas, Micros are quite diverse. As the term "Micro" implies, these places are generally, but not always, less populous than metropolitan areas. Yet, big Micros can exceed small metropolitan areas in total population. In fact, the biggest Micro (Torrington, CT) outranks 103 of the smallest metropolitan areas (out of 276). Therefore, Micros and metropolitan areas substantially overlap.
Prior to this definition, all U.S. counties were either metropolitan or non-metropolitan; Micros offer a gradation between metropolitan and rural areas in terms of urban qualities.5 The U.S. Census Bureau currently identifies 573 Micros, accounting for 690 out of 3,141 U.S. counties. In total, over 28.3 million people live in Micros. Thus, Micros comprise over a fifth of U.S. counties and a tenth of the nation's total population, which makes these places a significant new area of study.
Micros significantly redefine the American landscape-with this new definition, more than half the land in the continental United States is now officially designated as either Micro or metropolitan by the census. With the addition of Micros, much more of U.S. land area falls into urban areas or so called "centered," as opposed to "non-centered," areas. In 1890, America's census-designated frontier closed as settlement swept into remote corners of the nation. By the 1920s, the United States was for the first time majority urban. At mid-twentieth century (1950), more than half of the country lived in metropolitan areas. As of the 1970 census, America had become a suburban-dominated nation-with more than half of all metropolitan residents living outside central cities.6 Now a new milestone has been reached: as of 2000, rural areas cover less than half the continental United States.
Given that they have only recently been defined, there is extremely limited literature on Micros.7 However, Micros have begun to be adopted and used by the media, local governments, and policymakers. Businesses, government agencies, and planners have new geography to work with. Publications took notice-Site Selection Magazine, for example, started a list of "Top Micropolitans" in which to locate businesses.8 Other Micro-based lists will follow.
Because Micros are so new and poorly understood, this article begins with a look at micropolitan geography. Micropolitan geography is also a key determinate of housing conditions, including affordability. The article then turns to the methods used to examine micropolitan housing. The next section gives a brief overview of micropolitan housing characteristics, and then turns to defining the affordability and value of housing in micropolitan areas. The article concludes with a look at the policy implications that are raised by the micropolitan data.
Micropolitan Geography
Like metropolitan areas, micropolitan areas are constructed from counties containing the population center and any surrounding counties that have commuting relationships with the central county or counties. The only difference is in the size of the city-Micro principle cities9 range in population from 10,000 to 49,999 residents whereas metropolitan areas require principle cities greater than 50,000. A statistical area may be anchored by more than one principle city.
Micros can be populous regions but without big centers, while metropolitan areas may have big centers that are surrounded by little additional population. A place is defined as metropolitan or micropolitan based on the size of its center rather than total population. This raises an interesting question regarding what is urban. The traditional view holds than an original large core city anchors subsequent suburbanization and creates a metropolitan area. But the big Micros reverse this standard pattern for they grew to a metropolitan scale without a large central city.
Some of the largest Micros are more than just overgrown small towns-they appear to be exemplars of a new decentralized or even countrified city. Most research on decentralized cities (e.g., edge cities and edgeless cities) looks at the places that have grown next to traditional cores, such as Tysons Corner outside of Washington.10 Yet, the "suburban" growth in big Micros is not "outside" anything because there is no real center to be outside of-and no "urban" to be a "sub" of. In this way, the Micro growth represents a new metropolitan form with an expansive periphery and a relatively small core.
We can measure the suburb to city center relationship in both metropolitan and micropolitan areas. The ratio of center city population to their suburbs has been tracked back to 1910.11 In the first decade of the 20th century, central cities dominated the metropolis, accounting for three-quarters of all people in the region. By 2000, the roles had been reversed with just 37.7% of metropolitan residents living in central cities. But an analysis of micropolitan areas reveals that their central cities are even more modest relative to their suburbs: only 31.6% of Micro residents live in their core.12
Micros reflect U.S. regional differences. Metropolitan and micropolitan areas substantially fill in the eastern half of the nation. The only big spaces left in the East without Micros are the upper Great Lakes, northern Maine, and the central Appalachian Mountains. A state such as Vermont, which has few metropolitan counties, is full of micropolitan ones. Southeastern states from Mississippi to North Carolina now have their metropolitan areas complimented with substantial micropolitan zones. So extensive is the urban coverage of the East that if one drove the entire length of Interstate 95 from Maine to Florida they would only pass through five non-metropolitan counties.
By contrast, big stretches of the West are without urban places. The Great Plains and the northern Rockies have big rural gaps between their Micro and metropolitan areas. However, the interstate highways that pass through the Rockies and Great Plains often anchor multiple micropolitan areas along their length.
The differences between East and West also hint at the role that Micros play in regional development. In the East, Micros seem to be small-scale urban fillers between bigger metropolitan areas, while Western micropolitan areas may be central places that anchor economic development across a broad area. This difference could impact conditions in Micros such as their housing affordability. For example, Micros in the East that are essentially exurbs to large metropolitan areas may face future housing-cost pressures as their metropolitan neighbors continue to sprawl. There are currently 49 Micros in the Northeast, 235 in the South, 206 in the Midwest, and 64 in the West. Figure 1 shows the distribution of micropolitan areas across these regions.
Methods
The Census Bureau identifies 573 Micros. This analysis focuses on the 567 Micros in the coterminous United States. The Micros in Alaska, Hawaii, and Puerto Rico are excluded because preliminary analyses show these places to be outliers. For example, there are very remote Alaskan Micros that are actually closer in proximity to Seattle, WA, than Anchorage, AR. In Hawaii, three entire islands are Micros. In order to compare Micros and their housing conditions, this analysis concentrates on the continental United States.
The first part of the analysis focuses on three demographic dimensions of Micros-size, growth, and location. After establishing a baseline of Micro geography, the second part of this analysis examines the housing conditions in the Micros in terms of housing demographics, general characteristics, and affordability.
Data Sources
The definitions of the micropolitan areas come directly from the Census Bureau,13 as do the population data.14 The housing information and variables come from the 2000 census's "long-form" compilation. The data is obtained at the county level because counties are the building blocks for Micros and the census is currently not reporting data at the micropolitan level. As some Micros are composites of multiple counties, a weighted average was used to obtain Micro-level data.
| Figure 1 Micropolitan Areas-Continental United States |
Population size and growth are the first Micro characteristics explored to establish a basic micropolitan-area typology. Location is operationalized here as a remoteness indicator that measures the distance between the center of a micropolitan area and the center of a "big" metropolitan area.15 "Big" refers to metropolitan areas with more than one million residents, which describe the top-50 U.S. regions ranging in size from Richmond, VA, with just a million to New York with over 21 million people.16
The top-50 metropolitan areas alone account for almost three-quarters of the U.S. population and are home to key transportation infrastructure such as hub airports. Distance from these places, which are also the nation's economic engines, puts remote micropolitan areas at a locational disadvantage. The 25 most remote Micros are at least 275 miles from a big metropolitan area, which means that their residents must drive four or more hours to reach big city services and amenities. Micros located near large metropolitan areas tend to be faster growing and bigger, while the more remote places are often smaller and slower growing. This finding is consistent with geographer Calvin Beale's work that established remoteness as a key indicator of metropolitan development.17 Remoteness (and what it implies with regard to access) is a key concept in rural geography and should apply to this new smallscale urban form.
Micropolitan Affordability Rating
The micropolitan affordability rating (MAR) uses similar assumptions to the National Association of Home Builders-Wells Fargo Housing Opportunity Index (HOI). The HOI computes the portion of homes in each metropolitan area and region that are affordable to a family with a median household income.18 The MAR computes a similar index, with the focus being solely on Micros and on homeownership. The MAR is the percentage of households that can purchase a median priced home; the HOI and MAR provide different but complimentary statistics about the affordability of housing. The first shows the share of homes sold that could be purchased with a median income. The MAR indicates the percentage of households that can afford a median-priced home for each micropolitan area.
The micropolitan areas are a brand new geography. Therefore, data for these places is not nearly as developed as it is for metropolitan areas, which have existed as a census category for well over half a century. There are currently no trade-group data sources on micropolitan housing, like those produced for metropolitan areas by national organization such as the National Association of Realtors or the National Association of Home Builders. The data for the micropolitan housing came from the Census Bureau's long-form compilations. This data was collected on April 1, 2000. While the housing data is not current, it nonetheless shows the relative condition of micropolitan housing. This data is important for framing the basic housing costs and characteristics in these places.
Whenever possible, the data types and underlying assumptions for the MAR closely match the HOI. This formula assumes a 30-year fixed-rate loan for 90% of the sale price with a 10% down payment. The interest rate used to calculate payments was 7.25%-the current interest rate in 1999.19 This rate was obtained from the Federal Housing Finance Board Monthly Interest Rate Survey and is an average of the effective interest rates offered for conventional single-family mortgages during that period. Median real estate taxes were obtained from the census, as were the categorized gross incomes of Micro households and median house value used to approximate the cost of purchasing a new home. The monthly payment amount incorporates principle, interest, and real estate taxes. Property and mortgage insurance are not included in the total.
The MAR formula takes both total loan amount and household income into account. A median monthly payment based on the costs of homeownership-loan interest, principle, and taxes-was computed for each Micro for a 30-year loan schedule.
This payment amount was used to determine a required yearly salary necessary to pay less than 28% of gross income for housing. Like the HOI, the MAR considers housing affordable when no more than 28% of gross income is spent on housing. The total number of households earning above that required yearly threshold were tallied. This number was compared to the total number of households to arrive at the percentage of households in each Micro capable of buying a median priced home. Thus, the MAR is the percentage of households in each Micro that can afford the median cost of housing given the incomes actually available. The HOI is slightly different in that it determines the percentage of housing available to a family with the median income.
Micropolitan Housing Characteristics
Given the unwieldy number of micropolitan areas, this analysis presents only an overview of micropolitan housing.20 In total, Micros contain 12,944,559 housing units, or 11.2% of the nation's housing stock. On average, Micros have more singlefamily detached units than the United States as a whole (68.8% in the Micros, compared to 60.3% in the United States). Micros also have more than double the percentage of mobile homes than the nation as a whole (the average for the Micros is 15%, in contrast to 7.6% for the United States). Micro housing stock is roughly comparable in age to the national housing stock; the median age for both hovers around 1970. Micro housing has a similar distribution to U.S. averages in terms of number of bedrooms and total number of rooms (14.5% of Micros and 16.9% of national homes have 4 or more bedrooms; 6.8% of Micros and 7.7% of national homes have 9 or more total rooms). The Micros slightly lag the nation in the percentage of owner-occupied units. This information is summarized in Table 1.
Reflecting the fact that micropolitan areas are a transition category between city and country, Micros have only two-thirds as many housing units in census-defined "urban areas" compared to the nation as a whole (51.6%, compared to 77.6%). Micros also have roughly double the percentage of rural housing units as the entire United States.
Micropolitan Housing Affordability
Affordability reflects an extremely complicated situation, and is indicative of the differing housing characteristics and situations in the Micros. There are large differences on both ends of the affordability spectrum, with some Micros coming in significantly below U.S. and Micro averages, and others soaring well above. Micros on average have slightly more affordable housing than the nation. Sixty-three percent of micropolitan residents can afford their area's median-priced home compared to just 58% for all of the United States.
Affordability is a component of house price, household income, and a monthly payment consisting of principle, interest, taxes, and insurance. The Micro median house value (as of 2000) is about 70% that of the United States as a whole: $78,461 compared to $111,800 as of 2000. Butin 2000, the $34,234 median income in the Micros was about 80% of the U.S. median income of $41,994, which translated into a more affordable housing in the Micros. Affordability in Micros ranges from a low of 16% in Jackson, WY-ID, to a high of 81.6% in Borger, TX. That means that less than one in six residents in Jackson could afford the median-priced home compared with over four in five households in Borger.
| Table 1 United States and Micropolitan Housing Comparison |
| Table 2 Most-Expensive Housing Micros |
Micropolitan House Values
In 2000, housing values in Micros ranged from a low of $25,400 in Pecos, TX to a high of $301,099 in Jackson, WY-ID (Table 2). Nine out often Micros with the highest median housing values are in the West. Six of the Micros with the most-expensive housing also are among those with the least affordable housing: Jackson, WY-ID; Silverthorne, CO; Edwards, CO; Key West-Marathon, FL; Truckee-Grass Valley, CA; Heber, UT. Much of the demand for housing in these Micros comes from outsiders who seek vacation property.
All ten Micros with the lowest-value homes are in the South, with nine in Texas alone (Table 3).
The lowest-value Micros are smaller places that lost population in the 1990s, and lie very remote from a major metropolitan area. With only average homeownership rates, this suggests a mismatch between housing costs and income. The median income in all of these Micros is below the Micro median and only three-quarters of the U.S. median income. Mortgage payment and taxes in these places are approximately half of the Micro average and onethird of the U.S. average. Median house values are one-third to one-half of the Micro average, and onefifth to one-third of the U.S. median.
Policy Implications
There are many possible implications from this research in part because Micros are a new category. Micros differ in housing conditions somewhat from the nation as a whole. In some ways, Micros represent a housing success story. Micros have generally more affordable housing. Given their relative affordability, policymakers should consider ways to strengthen these communities.
Certainly, there are major differences between Micros. Much of this difference derives from a Micro's regional location and their degree of remoteness. The remote Micros may be affordable, but often need economic development. Micros in the path of big-metropolitan sprawl may be rapidly developing, but may need housing preservation programs.
| Table 3 Least-Expensive Housing Micros |
The designation of Micros addresses a longstanding concern among rural advocates that many smaller-although important-cities fall below the census's metropolitan area category. These advocates lobbied the Census Bureau to find a means to capture such places, which resulted in the micropolitan label. The micropolitan label also allows a more sophisticated differentiation between what was rural and is now deep rural. The Census Bureau's past "non-metropolitan" designation was too broad to be synonymous with rural areas. The remaining non-metropolitan counties that fall below the Micro level can now be seen as truly rural.
The Census Bureau now officially recognizes a new category of urban place, which could entitle what were formally non-metropolitan places to apply for metropolitan-based federal and state housing aid. It may also mean that Micros have to forgo rural housing assistance. At this point the jury is still out on the way that Micros may go. The Census Bureau only creates new categories based on a read of human geography. The Census Bureau, however, makes no recommendations for how a new category such as micropolitan areas should relate to public policy issues such as federal aid. The leadership in micropolitan areas must determine the nature of their needs and lobby state and federal agencies accordingly. For now, most Micros remain non-metropolitan in self identity, but that condition should change in the next several years as more and more of these places come to understand the implications of their new designation.21
The Booming Western and Stagnating Southern Micropolitans
The housing policy implications of the findings range widely depending on location. There appear to be big regional differences in housing opportunity, with the two extremes being resort communities of the West versus remote rural parts of the South. One has an affordability problem, while the other faces potential abandonment issues. In both cases, housing opportunity is bound up with regional development trends. In some instances, housing could play a role in addressing larger issues such as maintaining sustainable environments and reinvigorating economic development.
The resort towns of the West have an acute housing affordability problem born of a mostly low-wage economy and high home costs. Many of the houses in these Micros are for affluent second-home buyers, whose salaries are derived from professional and managerial jobs in big metropolitan areas. Most locals, who rely on a tourist economy, simply cannot compete in this market and sometimes need to commute from great distances to their jobs.
While affordability may be most directly a housing problem, there are additional implications. Much of the micropolitan West is picturesque and ecologically fragile. Most urban residents, including many from outside the region, want to see this land preserved and developed only as tourist destinations. Yet, most locals prefer that these places be used for more than tourism, which could include extractive industries such as mining. A booming mining or energy economy would have two effects: higher wages and diminished interest in vacation home development by big city home buyers. Both of these impacts could produce more affordable housing, but may result in a less sustainable use of the land. Not addressing the housing affordability problem in Western Micros could produce a conflict between locals and outsiders over the fate of these places and change the direction of their economic development.
The problem in parts of the rural South, especially the Great Plains sections of Texas, is too little demand for housing. The housing there is affordable, but that is in part because the regional economy is stagnating. Significant population loss occurred during the 1990s in places such as Pecos, Borger, and Andrews, Texas. These Micros have had an especially difficult time retaining recent high school and college graduates who seek opportunity elsewhere. Part of their efforts at economic revitalization could be to profile their housing opportunity.
| [Footnote] |
| 1. Office of Management and Budget, OMB Bulletin No. 03-04 (June 6, 2003). |
| 2. This new designation uses 2000 data as a reference point. In 2000, the new core-based statistical area (CBSA) replaced metropolitan statistical areas (MSAs), consolidated metropolitan statistical areas (CMSAs), and primary metropolitan statistical areas (PMSAs). CBSAs define both micropolitan and metropolitan areas. Because of the unusual timing in this definitional release, many researchers remain unaware that the metropolitan definitions have shifted away from the traditional PMSAs and CMSAs. |
| 3. Robert E. Lang and Dawn Dhavale, "Micropolitan America: A Brand New Geography," Metropolitan Institute at Virginia Tech Census Note 04:01 (Alexandria, VA: Metropolitan Institute at Virginia Tech, May 2004). |
| 4. The OMB definition for a Micro is "at least one urban cluster of at least 10,000 but less than 50,000 in population," although more than 50,000 residents can live in the entire micropolitan statistical area. Like metropolitan areas, micropolitan areas are constructed from counties containing the population center, and those that have commuting relationships with the central county; http://www.census.gov/population/www/estimates/ aboutmetro.html. |
| 5. Depending on the location of principle cities and commuting relationships between counties, all counties are designated as metropolitan, micropolitan, or non-metropolitan. The Census Bureau defines rural places using population density, so a non-metropolitan designation is not synonymous with rural. However, non-metropolitan counties can be assumed to be sparsely populated and not connected with any surrounding urbanization. |
| 6. For a fuller discussion of these key transitions, see Bruce Katz and Robert E. Lang, eds., Redefining Cities and Suburbs: Evidence from Census 2000. vol. I (Washington, DC: Brookings Institution Press, 2003). |
| 7. Lang and Dhavale 2004; W. Frey et al. Tracking Metropolitan America into the 21st Century: A Field Guide to the New Metropolitan and Micropolitan Definitions, Brookings Institution Metropolitan Policy Program, Living Cities Census Series (Washington, DC: Brookings Institution Press, 2004). |
| 8. Ron Starner, "Top Micropolitans," Site Selection Magazine (March 2005). |
| 9. Changes to how the Census Bureau classifies places have eliminated the category "central cities." Office of Management and Budget, 2003; Frey et al. The new definitions relabel all of what were previously classified as central cities, plus some other places, as "principal cities," demonstrating the Bureau's awareness that important cities need not be central to their metropolitan regions. In fact, a principal city need not even be an incorporated place. For example, Paradise, NV (a principal city in the Las Vegas/Paradise Metropolitan Statistical Area), is only a "Census Designated Place" carved out of unincorporated Clark County, NV. Lang and Dhavale. |
| 10. Joel Garreau, Edge City: Life on the New Frontier (New York: Anchor,1991); Robert E. Lang, Edgeless Cities: Exploring the Elusive Metropolis (Washington, DC: Brookings Institution Press, 2003). |
| 11. U.S. Census Bureau, Demographic Trends in the 20th Century (Washington, DC: U.S. Census Bureau, 2002). |
| 12. Lang and Dhavale. |
| 13. Office of Management and Budget. |
| 14. U.S. Census Bureau, Census 2000 Summary File 1 (SF 1) 100-Percent Data, 2004, accessible at http://factfinder.census.gov/. |
| 15. This was done by calculating the distance from the centroids of Micro to metros in ArcView 3.3. |
| 16. San Juan, PR, was replaced with Richmond, VA. |
| 17. Calvin L. Beale, "A Characterization of Types of Metropolitan Areas," in A Taste of the Country: A Collection of Calvin Beale's Writings, ed. Peter A. Morrison (University Park, PA, and London: The Pennsylvania State University Press, 1990), 59-75. |
| 18. For a more complete background on the HOI and a description of its methodology, see http://www.nahb.org/page.aspx/category/sectionlD=135. |
| 19. Although the census was taken in April 2000, the collected median income and housing data are from 1999. |
| 20. A full list of micros is available on the Metropolitan Institute at Virginia Tech's web site, http://www.mi.vt.edu, or from the U.S. Census Bureau, http:// www.census.gov. For a more complete discussion of Micro characteristics (population, growth rate, remoteness from major Metro), see Lang and Dhavale. |
| [Reference] |
| Additional Reading |
| Lang, Robert E. "Micropolitan Areas: A Brand New Geography." Plenary address to National Association of Counties Annual Legislative Meeting, Washington, DC. March 1, 2004. Available at http ://www.mi.vt.edu. |
| Lang, Robert E. "Open Spaces, Bounded Places: Does the American West's Arid Landscape Yield Dense Metropolitan Growth?" Housing Policy Debate 13, no. 4 (2002): 755-778. |
| Lang, Robert E., Deborah Epstein Popper, and Frank J. Popper. "Is There Still a Frontier? The 1890 Census and the Modern West." Journal of Rural Studies 13, no. 4 (1997): 377-386. |
| Lang, Robert E., Deborah Epstein Popper, and Frank J. Popper. "Progress of the Nation: The Settlement History of the Enduring American Frontier." The Western Historical Quarterly 23, no. 3 (1995): 289-307. |
| Lang, Robert E. and Kristopher M. Rengert. "The Hot and Cold Sunbelts: Comparing State Growth Rates, 1950-2000." Census Note Series 01:02. Washington, DC: Fannie Mae Foundation, 2001. |
| McGranahan, David and Calvin Beale. "Understanding Rural Population Loss." Rural America 17, no. 4 (Winter 2002): 2-11. |
| Rengert, Kristopher M. and Robert E. Lang. "Cowboys and Cappuccino: The Emerging Diversity of the Rural West." Census Note Series 01:04. Washington, DC: Fannie Mae Foundation, 2001. |
| Rowley, Thomas D. "The Rural Identity Crisis." Rural Policy Research Institute, August 25, 2005. |
| [Author Affiliation] |
| by Robert E. Lang, PhD, and Dawn M. Dhavale |
| [Author Affiliation] |
| Robert E. Lang, PhD, is the founding director of the Metropolitan Institute at Virginia Tech in Alexandria, Virginia, and an associate professor in Virginia Tech's School of Planning and International Affairs. He holds a PhD in Urban Sociology from Rutgers University. Lang is coeditor of the new scholarly publication Opolis: An International Journal of Suburban and Metropolitan Studies. He also serves as associate editor for the journal Housing Policy Debate, and book review editor for the Journal of the American Planning Association. He is currently working on a book for Brookings Institution Press entitled Boomburbs: The Rise of America's Accidental Cities. Contact: rlang@vt.edu |
| Dawn M. Dhavale is a doctoral student in urban affairs and planning at Virginia Tech in Alexandria and a researcher at the Metropolitan Institute at Virginia Tech. She has conducted research on topics such as micropolitan areas, census-designated places, and suburban growth trends. Her dissertation research focuses on metropolitan development. She has a masters in urban and regional planning from Virginia Tech. |