Smart growth proponents have long predicted that the ever-greater expansion of suburbia would one day reach its limit, prompting a renewed interest in central city living. “Residential Construction Trends in America’s Metropolitan Regions," a new report from the EPA, suggests that this trend is well underway, with residential permits in downtown areas and close-in suburbs more than doubling since 2000 in 26 of the nation's largest metro regions.

The shift has been especially pronounced in some big cities, such as New York, which saw its share of regional permits increase from 15% in the early 1990s to 48% by 2008. In Chicago, housing permits inside city limits rose from 7% to 27% over the same time period.

Rapid revitalization is sweeping many smaller cities as well. In Portland’s downtown neighborhoods and close-in 'burbs, permit activity jumped from 9% to 26% over the last two decades. Home building in Atlanta’s core neighborhoods grew similarly, from 4% to 14%, according to the analysis, which examined Census residential permit data for the nation’s 50 largest metro regions over 19 years. In this examination, researchers compared the number of permits issued by central cities and core suburban communities with the number issued in suburban and exurban communities.

They found that a geographic shift in residential permits was indeed occurring, with the most notable spurts in urban redevelopment over the past five years. Data indicates that this trend is continuing in spite of the real estate slump, and the study's findings suggest that urban revitalization may be intensifying as local and regional jurisdictions implement smart growth measures. National policies also are likely to support this trend as the Obama administration’s Sustainable Communities Initiative begins to gain traction. 

“When you look at the regions that are really embracing walkability, investing in transit, and thinking about natural resources protection, these are the regions that are weathering the downturn best,” Shelley Poticha, director of HUD’s newly-created Office of Sustainable Housing and Communities, told BUILDER in a recent interview. “I think we’re going to see more and more regions reinvesting in their downtown areas, in suburban town centers, and in neighborhood centers,” she said.

In medium-sized cities, some of the most dramatic shifts have occurred in regions that have aggressively promoted growth boundaries and urban redevelopment, such as Portland, Denver, Sacramento, and Atlanta. In larger metro regions such as New York, Chicago, Boston, Miami, and Los Angeles, “market fundamentals are shifting toward redevelopment even in the absence of formal policies and programs,” the study's authors noted.

Some experts say economic and demographic factors such as constrained consumer finances, smaller households, and changing lifestyle preferences are driving increased demand for urban-style neighborhoods. “Consumers want ‘value retention’ and this portends a shift to closer-in communities and infill sites closer to transit,” says Ed McMahon, a senior resident fellow at the Urban Land Institute.

Still, the infill frenzy has yet to significantly alter America’s housing landscape. New residential construction projects continue to move forward on greenfields at the urban fringe in many markets, the study found.  And even in cities with significant urban revitalization, this market segment continues to represent only a small slice of the housing pie; urban core neighborhoods still account for fewer than half of all new residential units in most regions.

Where exactly the pendulum is, and how far it could swing remains a point of debate. “If you believe the economist Richard Florida, every phase or epoch of capitalism has its own distinct geography, or what geographers call the ‘spatial fix’ for the era,” says McMahon. “Suburbanization was the spatial fix for the consumer/industrial age. The economy is different now. It no longer involves simply making and moving things. Instead, it depends on generating and transporting ideas. This occurs in cities and other places of density. Low-density sprawl is ill-fitted to a creative, post, industrial economy. We are seeing the beginning of the reshaping of the landscape to fit the post industrial economy.”

Jenny Sullivan is a senior editor covering architecture, design, and land use for BUILDER.

Learn more about markets featured in this article: Chicago, IL, Miami, FL, Atlanta, GA, Denver, CO, Portland, OR, New York, NY.