Prosperity for whomst? Why it is really the “Oregon Regressivity Council”

Synopsis

Shifting the Tax Burden: The business-dominated Prosperity Council predictably recommends cutting taxes for the wealthy and big businesses. Their recommendations systematically shift the state and local tax burden away from high-income households and onto ordinary Oregonians.
Flawed Evidence: The Council lower income households higher taxes in Oregon than in Washington. Objective data from the authoritative Institute for Taxation and Economic Policy shows Oregon’s lowest-income households actually face a lower overall tax rate than those in Washington when including all significant taxes.
Skewed Immediate Cuts: Despite feigning concern for low and moderate-income families, the Council proposes zero tax relief for them. Instead, all immediate actions exclusively cut taxes for the top 5 percent of estates, the largest 5 percent of businesses, and millionaires.
Regressive Models as Best Practices: The entire report frames competitiveness around states with vastly more regressive tax systems that shift government costs to those least able to pay, specifically targeting Washington, Pennsylvania, and Arizona as models.
Inherently Regressive Long-Term Strategy: The long-term plan uses code words like a balanced three-legged stool to slash progressive income taxes and tax consumption instead. Shifting toward consumption and property taxes automatically harms average citizens because lower-income families spend a much larger fraction of their income on basic consumption and rent.

The business-dominated Prosperity Council appointed by Governor Tina Kotek has produced a report, that predictably and unfortunately offers a series of discredited and largely self-serving recommendations. Whose prosperity are they concerned about? Despite claims to care about low and middle income households, the Council’s real concern, as demonstrated by its recommendations, is cutting taxes for the wealthy and big businesses.

What the council really recommends is: Let’s shift the burden of paying state and local taxes from high income households and big businesses to ordinary Oregonians.

A better name for the “Prosperity Council” would be the “Regressivity Council,” because the likely effect of their recommendations is to make the Oregon tax system decidedly more punitive for average Oregonians,

Despite carefully crafted concern expressed for ordinary Oregonians, low and moderate income families and small businesses, there’s nothing in the Council’s recommendation that directly benefits any of average Oregonians. Read between the lines, and focus on specific, immediate actions the Council is endorsing, and you’ll see that their primary aim is to make the Oregon tax system more regressive. The report has a number of “tells”

First, all of its short term recommendations are cuts to taxes that benefit only the 5% wealthiest Oregonians, and the 10% largest businesses, or millionaires.
Second, they use a set of code words that call for cutting income taxes–which are essentially the only progressive part of the Oregon tax system. When you read calls for a “three legged stool” or a “balanced” tax system, or “reducing income taxes” they’re not talking about cutting taxes for the single person earning $40,000 per year.
Third, every state the council cites as a model has a more regressive tax system than Oregon; One of their favorites (Washington) ranks second (behind Florida) for the most regressive tax system in the nation.

The chief evidence that Oregon has a structural problem is a claim that a single person with an income of $40,000 somehow pays about 2 percent more taxes that residents of Washington or California. The Oregonian Editorial Board uses this anecdote to claim that :

. . . Oregon’s tax policies are broadly punitive, including for lower- and middle income Oregonians. Those making just $40,000 a year pay a higher effective income tax rate than their counterparts in Washington and California,

There are six major problems with this claim:

First, it isn’t true. The claim is based on a set of calculations made by ECONW, a consultant to the Port of Portland, which also has a long-standing relationship with the Portland Metro Chamber–and which has been paid to document the chamber’s view of tax problems. ECONW’s calculations, which are presented in conclusory form, and aren’t documented. The ECONW example is also for a single person, living alone, with an income of $40,000. Families with $40,000 don’t pay higher rates than Washington (and the Oregonian editors conveniently obscure this point by omitting this key fact). In addition, the comparison is based only on income and sales taxes and omits property taxes. Property taxes are shifted to renters in rent, and obviously matter a lot for this kind of comparison).

Fortunately, there are more objective measures of state tax system fairness. The Institute for Taxation and Economic Policy (ITEP) has produced a series of seven reports over the past 20 years documenting the incidence of state and local taxes by income for all 50 states. It is widely regarded as the most authoritative and objective source of data about who pays state and local taxes. It clearly shows which state has a fair system of taxation, and which penalizes the poor. The contrast between Oregon and Washington shows what Paul Krugman has called the “picket fence and the staircase.” Oregon’s tax burden by income looks like a picket fence, with every income group paying about 10.5 percent (plus or minus 1.5 percent) of their income in state and local taxes. Washington is a staircase, with tax rates steadily declining as income rises. The top 1 percent pay less than a third as much of their income in state and local taxes as the bottom 20 percent (4.1 percent vs. 13.8 percent).

Oregon’s tax system is roughly proportional; everyone pays about the same share of income. Washington’s is the nation’s second most regressive.

Importantly, the ITEP methodology includes estimates for all significant state and local taxes, including property taxes. ITEP’s analysis shows that Oregon households in the bottom 20 percent of the income distribution pay less of their income in state and local taxes in Oregon than similar households in Washington. Those in the bottom fifth of the Oregon population pay about 12.0 percent of their income in state and local taxes; the bottom fifth of Washington households pay about 13.8 percent. More broadly, the bottom sixty percent of households in Oregon pay lower tax rates than the bottom sixty percent of households in Washington.

Second, small differences in tax rates among states don’t matter economically. There’s no evidence that very small differences–about two percentage points of income, (if you believe the Prosperity Council). in state and local taxes make much difference to the health of a state economy or where households live, especially households with low and moderate incomes. For example, no one has cited evidence to show that households in the $40,000 income bracket are moving away from Oregon because of taxes.

Third, it masks who the Prosperity Council really cares about. The cherry-picked claim that Oregon’s tax system hits a $40,000 income single taxpayer harder than other states is really just a P.R- adjusted version of the the Council’s real concern: that Oregon charges higher taxes to higher income households than do other states. In Oregon, the top twenty percent of households pay about 12.2 percent of their income in state and local taxes, in Washington it is only 6.2 percent, according to ITEP. Materials submitted to the Council and its own staff presentations emphasized the tax burden of high income households. One of the Council’s slides presented at its January 22,, 2026 kickoff meeting emphasized Oregon’s high income tax rates for joint filers of $100,000, $250,000 and $500,000 and single filers with $100,000 and $200,000.

Mike Wilkerson, ECONW, January 22, 2026 Prosperity Council slide deck (obtained via public records request)

This slide was not included in the Council’s final report. Recognizing this wouldn’t get a sympathetic hearing from the broader public, the Council chose to use only a slide indicating the tax burden paid by a $40,000 single person as their example.

Fourth, nothing in the Council’s recommendations do anything to address the tax burden of the $40,000 income household. The Council has proposed four immediate tax cuts, all for businesses and wealthy households, and nothing for moderate or middle income households, and in fact, essentially nothing for anyone with incomes below $250,000 or so. The Council’s immediate recommendations are:

Estate Tax Cut: $400 million (benefiting the top five percent of Oregon estates)
Corporate Activity Tax: $100 million cut (benefiting the largest 6 percent of all Oregon businesses)
Extending Trump’s “QSBS” break to Oregon taxes: $56.6 million; 94 percent of this tax break goes to households with incomes over $1 million.
Reinstating an R&D tax credit: At a likely cost of $90 million, revive a sunsetted 15 percent tax credit for research and development, that chiefly benefits large corporations

While it purports to care about the plight of low income households, the Council proposes to do nothing to help them. It would be easy, if the Council were actually concerned about lower income households to increase the personal exemption credit, or Oregon Earned Income Credit or Oregon’s Kid’s Credit. All of these would provide focused relief to lower and middle income households facing rising costs. The fact that neither the Council, nor its cheerleaders on the Oregonian editorial board, mention such options shows they really don’t care about the plight of average families.

Fifth, the Council’s long term plan is to increase the burden of taxation of low and middle income Oregonians. While the Oregonian may consider the current tax burden “punitive” for persons making $40,000, the recommendations of the Prosperity Council’s report is make long term changes to Oregon’s tax system to systematically shift the burden of taxation away from the wealthy and to lower and middle income Oregonians.The report is replete with “tells.” They’re calling for a commission to make sweeping but vaguely described changes to Oregon’s tax system. But if you look closely, its clear what they have in mind: They want to slash income taxes (which are the most progressive part of Oregon’s tax system, and are paid mostly by high income households), and raise other taxes, by taxing consumption (through either a sales tax, a value-added tax, or a big increase in the commercial activity tax). Any shift away from taxing income and toward taxing consumption automatically shifts the burden of taxation to lower income households because lower and middle income households spend a much larger share of their income on consumption than higher income households. Of course the Council doesn’t come right out and say this. But reading between the lines, though, there are code words: they want a more “balanced” tax system. They want Oregon to have a “three-legged stool.” “Balanced” to them means lower income taxes and higher property and sales taxes. The missing “third-leg” of the proverbial stool is a sales tax. And at one point, on page 18, the Council actually concedes that they want to make the tax system more regressive.

Achieving a more balanced and competitive tax system may require broader-based revenue tools that can be more regressive in isolation.

(They go on to claim that because the more regressive tax system would fund public services like education, it wouldn’t really be that regressive, but that begs the questions that tehe tax system itself would be more regressive than the current system which relies heavily on progressive income taxes to fund these same services).

Sixth, the real plan is to compete by being more regressive. The entire framing of the report is about “competing” with other states based on tax levels, especially for higher income households. Every one of the states that they compare Oregon with has a much more regressive tax system. Washington has the second most regressive tax system in the nation, Oregon has the 42nd most regressive. The other states they say are “best practices” all shift a higher share of the cost of government to those least able to pay: Pennsylvania (4th), Arizona (13th), Indiana (14th), and Virginia (37th). The reason the Council thinks Oregon can’t compete is that our tax system isn’t as regressive as these other states–which, by the way, all have weaker economic fundamentals than odes Oregon.

Why it is really the Regressivity Council, not the Prosperity Council.

The way we measure the fairness of a tax system, and how much the burden of paying for public services is distributed across the population is whether the tax system is regressive or progressive. Regressive has a very specific meaning in public finance. It means that low and middle income households pay a larger fraction of their income in taxes than upper income households. Currently, Oregon has one of the least regressive tax systems of any state, ranking 42nd in regressivity. What that means–and what really irks the members of the Prosperity Council–is that higher income households pay a larger fraction of their income in taxes than lower and moderate income residents. They’re plainly jealous of the high income households in other states, where the well-off arepay much less in state and local taxes. Washington, with the second most regressive tax system in the nation, seems to be their preferred model. And keep in mind, in Washington, high income families pay less than half as much of their income (6.2 percent) in state and local taxes as those in the bottom 20 percent of the population (13.8 percent).

When they say Oregon’s tax system isn’t “competitive” with other states, they don’t mean for low and moderate income households. What they really mean is the wealthy have to pay higher taxes in Oregon. That’s the real “problem” that the Prosperity Council is aiming to solve. There only way to achieve that objective is to shift the burden of taxes from higher income households and big businesses to everyone else.

They shed great crocodile tears for a taxpayer with $40,000. That’s funny because all the deliberations before the Council seemed to be concerned chiefly with the loss of high income households, moving in response to a regional tax to pay for housing programs and a Multnomah County tax to support universal pre-K education. There’s no evidence that a 2 percentage point difference in tax rates is motivating people to move, or that migration of those in the under $50,000 bracket is a an imminent threat, But obviously the teams PR handler s said it was bad optics to talk about the plight of those who have vastly higher incomes than the average Oregonian.

They disappeared examples from earlier drafts that showed the impact for families with higher incomes.

The most important step the Governor and Legislators can take to address Oregon’s uneven tax structure is to support moving Oregon beyond its current “one-and-a-half-legged stool” model, which relies heavily on personal income tax and constrained property tax revenues. Reform should aim to strengthen long-term revenue stability, diversify the tax base, reduce volatility, and increase contributions from nonresidents. Achieving a more balanced and competitive tax system may require broader-based revenue tools that can be more regressive in isolation. (Page 18.)

The Council recommends yet another advisory group be empaneled to figure out how to improve Oregon’s tax system. Lowering rates for everyone, providing stable revenue and somehow maintaining progressivity of the personal income tax. They don’t explain how this will be done, leaving the difficult work to others.

The group should consider how to restructure the Corporate Activity Tax, enable local governments to evaluate options to increase stability with common sense property tax funding, and rebalance the personal income tax structure to maintain progressivity and reduce effective rates for all income brackets.

The centerpiece of the report is a series of recommended tax cuts for immediate action. They benefit the wealthiest households and the biggest businesses. Despite the urgency of the economic situation, there’s nothing here that directly benefits the state’s low and moderate income households. This large scale tax reform is left to some vague future action by yet another group to be appointed to deliver recommendations in 2029 or so.

Feigning concern for low and middle income households, giving tax breaks to the wealthy and big businesses

It’s clear from the Prosperity Council’s carefully scripted media blitz that they want everyone to believe that they are deeply concerned about low and moderate income families. C0-Chairs Curtis Robinhold and Renee James both took pains to mention inflation and the burden it causes for low and moderate income households. They

Here’s what to Co-Chairs told KGW-TV’s “Straight Talk” in June:

Robinhold: “. . . how do we get more prosperity, and really focusing on low and middle income Oregonians. How do we help them lift up their situation in a, in an era where inflation is really high.”

James: “. . . medium to lower income wage earners. How are they doing in our state? Are you know, is it working for them? And I think the answer is no.”

The key point here is that despite mouthing concern for low and middle income families, and complaining that a $40,000 single wage earner paid slightly more than someone in a neighboring state, none of the Council’s recommendations do anything to lower taxes for these households.

Robinhold told KGW that the four tax breaks they recommended were for family-owned businesses and entrepreneurs.

The recommendations that we made, and you can find these on the governor’s website, but the, the even the near-in ones are all about entrepreneurial, family-owned businesses, small, medium businesses

The reality is the Council’s short term recommendations benefit only the ten percent of largest businesses in the state that pay the Commercial Activity Tax, the 5 percent of wealthiest households that pay any Estate Tax, and millionaires who can claim the “Qualified Small Business Stock” tax break. The Council leaves to the long term (2029, or after) for a larger tax reform, but then they call for increasing taxes that bear more heavily on low and moderate income households, especially by shifting away from income taxes to sales and property taxes. The clear implication here is that the Prosperity Council is offering the same discredited “trickle-down” view of prosperity: that cutting taxes for businesses and the wealthy will ultimately benefit lower income people. This is what economist John Kenneth Galbraith famously called “horse and sparrow” economics: if you feed enough oats to the horses, eventually some will trickle down to the sparrows.

Their models are regressive states

A central claim of the Council’s report is that Oregon is in “compeitition” with other states, and needs to change its tax system to better compete against them. The Council lists several states as best practices: Pennsylvania, Arizona, Indiana, and Virginia, and repeatedly compares Oregon to Washington State. Each of of these comparison states has a tax system that is vastly more regressive that Oregon’s.

If these are our competitors, and they are perceived to be “more competitive” based on their tax systems, the only way to improve Oregon’s position–according to the Council’s logic, is to make Oregon’s system more regressive.

Shifting taxation away from wealth and income is inherently regressive

The proposal to shift to a consumption tax, and to cut income taxes and inheritance taxes, is inherently regressive. The published economic research confirms that both consumption taxes and property taxes are regressive. Consumption expenditures make up a much larger share of income for lower income households than they do for upper income households. Consumption taxes, including both sales taxes and a value added tax, bear far more heavily on lower income households than upper income households. Similarly, because property taxes are largely passed on to renters in rent, and because renters tend to have lower incomes, property taxes are also regressive.

Economists Kimberly Clausing and Mary Lovely present BLS data on consumption spending by income decile in the US. The lowest income households spend about 80 percent or more of their income on consumption, the highest income households spend less than half of their income on consumption, and the highest decile spends only about one-third. Consumption taxes bear about twice as heavily on the bottom three deciles as they do on the top two deciles. This is vastly more regressive that Oregon’s existing tax system.

Another study, by Federal Reserve Bank economists, finds the same result: that consumption taxes are inherently regressive because lower income families spend a much larger fraction of their income on consumption. The study also finds that a larger proportion of lower income consumption tends to be taxable, which further amplifies the regressivity. Here’s their conclusion:

These [consumption] taxes are clearly regressive: low income households face much higher effective rates than richer ones. There are two reasons why sales and excise taxes are regressive. First, consumer spending rises less than proportionately with income. Second, households with lower incomes consume consumption bundles that are different from, and more heavily taxed than, the ones richer households consume. (Fleck, et al, p. 13)

The same study also looks at the incidence of property taxes. It finds that much of the burden of property taxes is shifted to renters, and because housing costs tend to be higher for lower income households, that property taxes are also regressive.

It is clear that property taxes are regressive. Effective tax rates decline strongly with income; while property taxes claim at least two percent of income for the poorest 80 percent of households, they account for only one percent of income for the richest one percent. (Fleck, et al, p. 17)

Changing Oregon’s tax system to reduce the share of revenues from the most progressive form of taxation (income), to the most regressive forms of taxation (consumption, property), are calculated to make Oregon’s tax system more regressive–shifting the burden of paying public services to low and moderate income Oregonians. That’s what masquerades as “balance” for the Prosperity Council.

References:

Clausing, Kimberly A. and Lovely, Mary E., Why Trump’s Tariff Proposals Would Harm Working Americans (May 20, 2024). Peterson Institute for International Economics Policy Brief 24-1, Available at SSRN: https://ssrn.com/abstract=4834397 or http://dx.doi.org/10.2139/ssrn.4834397

Davis, Carl, et al, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States 7th edition, (Institute for Taxation and Economic Research, January 2024, https://itep.org/whopays-7th-edition/

Fleck, Johannes, Jonathan Heathcote, Kjetil Storesletten, and Giovanni L. Violante, Fiscal Progressivity of the U.S. Federal and State Governments, Federal Reserve Bank of Minneapolis, January 14, 2025, https://www.minneapolisfed.org/research/staff-reports/fiscal-progressivity-of-the-us-federal-and-state-governments

“Buy a big house and live in the suburbs” — Tracy Chapman

“Outside suburbia’s sprawling everywhere/ I don’t want to go, baby” — Kim Wilde

I grew up in the suburbs, and when I got the chance, I moved to a big city and never looked back.1 I love living in dense, built-up urban areas, with great train systems and tons of restaurants and shops. Japanese cities are the best in the world, and I’ve written plenty of posts about what makes them so great. But you don’t have to be Japan in order to create amazing metropolises — New York City, Paris, Istanbul, Seoul, London, etc. are all excellent places to live.

I’m far from the only person who feels this way. Rents in New York City are absolutely insane — $5300 a month to live in Manhattan, $4350 to live in Brooklyn. That’s partly because there are a lot of good jobs in NYC — it’s a cluster for industries like finance and media. But more and more, Americans move to cities because they like living there.

As early as 2000, economists were starting to find that “amenities” were driving America’s urban revival even more than job opportunities were. Couture and Handbury (2020) find that wanting to be close to restaurants and nightlife explains about 40% of the trend of young, high-earning, college-educated people2 moving to cities in recent decades. Furthermore, the stereotype of dense cities as crime-ridden and unsafe is just wrong — NYC has one of the lowest violent crime rates among big cities in America.

I’ve been a relentless advocate of building more dense, walkable cities in America. Not only would this raise GDP (because of improved clustering effects), but it would let Americans live where they want. The demand for life in cities like NYC exceeds America’s willingness to supply these environments; this raises rents in places like NYC, which pushes a lot of people into the suburbs who don’t want to be there. Forcing those city types into the ‘burbs raises rents for people who like suburbia. Basically, everyone would be happy if America had a few more Manhattans and a lot more Brooklyns.

Yet among my fellow urbanists and YIMBYs, I often encounter disdain or outright hostility toward the suburbs that define most of America’s present urban landscape. This isn’t just an urbanist thing, of course — my own parents had a lot of negative things to say about suburbia, and ranting against its sterility and boredom is a staple of pop culture. But the criticisms are just way overdone; the suburbs are not the isolating, lonely hell that they’re often made out to be.

And I think that the constant ranting against the suburbs complicates the quest for denser cities. It creates the suspicion that urbanists and YIMBYs want to make the whole nation into Manhattan. Nothing like that could ever happen, of course; even Japan is mostly suburbanized. But painting the quest for denser metropolises as an attack on suburbia makes everything needlessly confrontational, polarized, and zero-sum.

So I think it’s helpful to go through some reasons why the suburbs aren’t actually as bad as they say.

The suburbs don’t force you to have a long commute

One of the most persistent myths about suburbia is that it forces you to commute a long way to work:

It’s possible, of course, for something like this to be true. If cities refuse to build housing (which they do), and if jobs are concentrated in the city center (thanks to clustering effects or agglomeration or whatever), then people will be forced to live far out on the periphery and endure punishing commutes to get to work.

The thing is, it’s not true. Despite greater sprawl, Americans have some of the shortest commutes in the developed world. This is from the OECD:

Source: OECD; giant red arrow by Noah Smith

Why do Americans take less time to commute to work? One reason is that it’s not just our homes that are scattered and dispersed; our workplaces are too. America’s urban agglomerations are polycentric; they’re not just one central business district surrounded by concentric rings of houses. Suburbanites tend to live near where they work.

Another reason Americans have shorter commutes is that cars are almost always faster than public transit at getting you from point A to point B. This isn’t just true in places like America and Canada that are built with cars in mind. It’s true in places like Stockholm and Amsterdam that were built to be transit-friendly — even when you take parking time into account. In fact, it’s not even close. This is from “Disparities in travel times between car and transit: Spatiotemporal patterns in cities”, by Liao et al. (2020):

We use real-world data to make realistic estimates of travel time by car and by PT [Public Transit] and compare their performance by time of day and by travel distance across cities. Our results suggest that using PT takes on average 1.4–2.6 times longer than driving a car. The share of area where travel time favours PT over car use is very small: 0.62% (0.65%), 0.44% (0.48%), 1.10% (1.22%) and 1.16% (1.19%) for the daily average (and during peak hours) for São Paulo, Sydney, Stockholm, and Amsterdam, respectively…A systematic comparison between these two modes shows that the average travel time disparity is surprisingly similar across cities…for travel distances less than 3 km, then increases rapidly but quickly stabilises at around 2. [emphasis mine]

And here’s a chart, showing that public transit takes more time whether you’re measuring in terms of the length of the trip or the percent of the population reached:

That doesn’t mean cars are better than public transit. Cars cost more, and they require a lot more land to move the same number of people. But because they take you directly from point to point, instead of making a circuit and stopping periodically, they get you there faster.

Of course, commuting by car and commuting by train or bus aren’t the same experience. Driving gives you more privacy, but it forces you to pay attention to the road instead of reading or playing games. Traffic can be frustrating, but so can jostling and bumping strangers for a space on the train. You’re a lot less likely to be sexually harassed in your car, but you’re more likely to die in an accident than to be murdered on the bus. And so on.3

But the point is, cars are not a cost forced upon suburbanites in exchange for their large houses, as some urbanists believe. They are a thing people want in and of themselves, and are willing to pay a lot of money for, all over the world. The convenience, sense of freedom, and privacy cars offer is a benefit of suburbia to many people, in addition to the large house and cheap land. Car ownership is a form of wealth.

The suburbs are not lonely and isolating

Again and again, I hear urbanists declare that the suburbs are lonely and isolating. It certainly sounds logical. In a city, you’re walking past other people constantly — on the street, on the train, in cafes and restaurants. In suburbia, you’re shut at home inside your giant house or alone in the metal shell of your car. How could suburbia not be more lonely than the big city?

But in survey after survey, we don’t find this to be the case. Here’s Abshire et al. (2022):

Data were obtained from 616 adults (278 from small rural, 100 from large rural, 98 from suburban, and 140 from urban areas) from June 2018 through October 2019…Mean unadjusted loneliness scores were lower in suburban compared to urban areas…The prevalence of loneliness was 50.7%, 59.0%, 40.8%, and 54.3% in small rural, large rural, suburban, and urban areas, respectively. Suburban living was associated with lower odds for being lonely compared to urban living…but this association was not statistically significant in the adjusted model[.] [emphasis mine]

And here’s Hammond et al. (2021):

Data from 756 participants who completed 16,602 assessments between April 2018 and March 2020 were used in order to investigate associations between momentary feeling of loneliness, the social environment (i.e. overcrowding, social inclusivity, population density) and the built environment (i.e. contact with nature)…Increased overcrowding and population density were associated with higher levels of loneliness; in contrast, social inclusivity and contact with nature were associated with lower levels of loneliness. These associations remained significant after adjusting for age, gender, ethnicity, education and occupation. [emphasis mine]

And here’s Morris and Pfeiffer (2016):

Based on data from the 2003 to 2013 American Time Use Surveys, this research…assess[es] whether suburban living is associated with less socializing than city living in mid-to-large American metropolitan areas. After controlling for personal characteristics, we find no meaningful difference in suburbanites’ and city dwellers’ time spent socializing across a wide range of social activities. [emphasis mine]

Bower et al. (2022) review 57 different studies and find no systematic association between loneliness and any measurable feature of the built environment.

Why doesn’t the simple intuition work here? Probably because people aren’t just like particles bouncing around in a chemistry experiment — they don’t simply form human connections and bonds just because they happen to walk past each other. A few relationships form from random urban conversations, but most form through work, or friends-of-friends, or shared hobbies, etc.

And while meeting a ton of new people is fun, what really gets rid of loneliness is repeated interaction with people you know and care about. Imagine going to ten parties filled with strangers versus having two close friends over for dinner. Which of those is more likely to leave you feeling lonely? What about 100 Hinge dates versus having a relationship? Remember that Japan has the world’s best cities, but struggles with widespread loneliness.

In fact, suburbs have some features that make it easier to interact with the people you really care about. Those big houses aren’t just for walking around all alone and going “Wow my house is so huge”. They’re for entertaining guests. It’s harder to have a dinner party or a TV night or a game night at a tiny little Manhattan apartment than at a big suburban McMansion. Cars help too; those short travel times make it easier to just pop over and hang.

This doesn’t mean cities are socially inferior to suburbs. Constantly meeting new people is exciting. There’s more fun stuff to go out and do with your friends in a city — restaurants, parties, and so on. It’s just a different lifestyle.

There’s a reason people are moving to the ‘burbs

The urban revival of the 1990s through the 2010s was a modest thing. It was largely driven by young people, high earners, and educated people. Here are some charts from Jed Kolko a decade ago:

During most of that urban boom, it was actually the suburbs that were growing much faster. And in recent years, the trend toward suburbanization has only accelerated. Here’s a much more recent chart:

Kolko shows that although the densest city centers are rebounding from the pandemic, more than 100% of this is driven by immigration — domestic migration is still strongly away from city centers.

In fact, the new suburbanization trend is being led by Millennials. This is from the Joint Center for Housing Studies:

[W]e found that throughout the past decade millennials were moving to suburbs that were farther out from the city center. There are many ways to define suburbs, and in this paper we rely on a framework that considers rates of homeownership, single-family housing, and car commuting, in addition to proximity to a metro’s urban core. While there is extensive research and discussion about millennial preferences for walkable urban areas, we found that the places with the largest increases of early millennials were both suburban and on the periphery of metropolitan areas. [emphasis mine]

Why are Millennials moving out? Part of it — the part that urbanists and YIMBYs will emphasize — is that they’re being pushed out by higher rents, which are a result of cities failing to build more housing. But that’s not the whole story. Millennials are also being pulled to the suburbs, because suburbs are generally better for raising kids.

Albouy and Faberman (2025) find that the kind of high-skilled workers who drove the urban boomlet of the 1990s through the 2010s tend to move out — and value urban amenities less — once they get a little older:

We show that high-skill workers disproportionately sort into high-amenity areas, but do so relatively early in life. Workers of all skill levels tend to move towards lower-amenity areas during their thirties and forties. Consequently, individuals’ time use and expenditures on activities related to local amenities are U-shaped over the life cycle…We present evidence that the move towards lower-amenity (and lower-cost) metropolitan areas is driven by changes in the number of household children over the life cycle: individuals, particularly the college educated, tend to move towards lower-amenity areas after having their first child. [emphasis mine]

Kolko shows something similar — people with a kid over 6 tended to move out of cities during the urban boomlet, even as childless people and people with young children were moving in:

Anyone with kids can easily rattle off the reasons why suburbs make it easier to raise kids. A big house means more room for kids to have their own bedrooms, space to play, and a back yard to run around in safety. A car makes it a lot easier to ferry kids around to school, or soccer practice, or wherever. Cars also make it much easier to do large grocery shopping trips — try taking a week’s worth of food for a family of four home from the store on foot or on a bike and you’ll quickly understand.

It’s almost a cliche that people move to the city when they’re young — to jump-start their career, to party, to meet friends, to explore the world, to date around, and to find their spouse — and then move out to the ‘burbs once they settle down and have kids. The cliche is rooted in reality.

Instead of attacking suburbia, just make room for everybody

Instead of treating the suburbs as some sort of hellish place that Americans’ car culture has exiled them to, urbanists should recognize that suburbs have real advantages that dense urban cores can’t easily replicate. Yes, too many Americans are pushed out to the ‘burbs by unaffordable housing. But a lot move there of their own free will, because they want a nice place to raise kids, enjoy a short quiet drive to work, and hang out with their friends in a big comfy house. It’s not the lifestyle for everyone, but it’s the lifestyle that a lot of people love and aspire to.

Which doesn’t mean we should ignore the real disadvantages of suburbia, either. Low-density sprawl is very expensive to maintain. It tends to make people less healthy, because they walk less. It reduces variety among restaurants and brick-and-mortar retail outlets, because it’s harder to cater to niche tastes when you don’t have a critical mass of people nearby. Those tradeoffs shouldn’t be ignored.

Nor should we accept that the current suburban form is the optimal one. A lot of American urbanism has focused not on Manhattanizing urban cores, but on giving suburbs a few more of the benefits of cities — creating “gentle density” with rowhouses and duplexes and small apartment buildings, allowing retail in residential areas, adding bike lanes and commuter rail, and so on. This should all continue.

But it’s simply a mistake to frame the question of urban form as “Which is better, cities or suburbs?”. The answer is that they’re good for different things, and they appeal to different sets of people. Instead of fighting flame wars over whether the whole country should look like Manhattan or the Inland Empire, we should aim for a country that has room for everyone. We should build great city centers for the same reason we should build great suburbs — because Americans deserve to have great places to live, no matter what kind of place they want to live in.

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Well ok, not quite. My PhD years and my first year at Stony Brook involved more stints of suburban living.

“Yuppies”, in the parlance of our times.

Whether your car or the bus smells better probably depends on a lot of things.