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Fast-Growing Companies Prefer Vibrant Parts of Cities—and Suburbs

A new study finds that high-growth companies flock to neighborhoods that are more mixed-use and transit-accessible, whether in urban centers or suburbia.
Growing companies are concentrated in the more vibrant parts of both urban and suburban areas, some clustering near major highways like Atlanta's Interstate 75.
Growing companies are concentrated in the more vibrant parts of both urban and suburban areas, some clustering near major highways like Atlanta's Interstate 75.David Goldman/AP

For all the talk about tech firms heading back downtown, Amazon chose two HQ2 locations more on the fringes of urban centers—Long Island City, Queens, New York (roughly three miles from Midtown Manhattan) and Crystal City, Virginia (about four miles from downtown D.C.) But these are not traditional suburbs by any stretch of the imagination. They are dense, have mixed uses, and are accessible by transit. The tendency for high-growth firms to locate in such places in both urban and suburban areas is the subject of a new study published in The Professional Geographer.

In the study, authors Emil Malizia, of the University of North Carolina at Chapel Hill, and Yasuyuki Motoyama, of the University of Kansas, argue that the debate over whether growing companies prefer cities or suburbs is oversimplified. Despite the recent shift of companies back to urban centers, more Americans continue to live and work in suburbs. And, for decades, suburban hubs like Silicon Valley and Route 128 outside of Boston were the preferred destination for the tech industry. The study examines the degree to which high-growth firms gravitate to more vibrant areas—defined as neighborhoods that are denser, more mixed-use, more transit-accessible, and more walkable—in both cities and suburbs.