Rahm Emanuel: Given a choice, Americans want cities over burbs

March 25, 2014, 1:00 PM UTC
Fortune
Chicago Mayor Rahm Emanuel

FORTUNE — The suburbs are losing out to cities when it comes to where people want to live, according to Chicago Mayor Rahm Emanuel.

The former Chief of Staff to President Obama is famous for his bold statements and blunt talk. And as the Mayor of Chicago, it might not be so surprising that he’d be promoting his own city center.

But Emanuel had fighting words for the lifestyle so historically and inextricably linked to the American Dream.

In a wide-ranging discussion about Chicago’s growth in the nearly three years since he was sworn in, Emanuel described a number of ways in which the city has outperformed: Its downtown is one of the fastest growing in the country; a number of Fortune 500 companies have relocated their headquarters there; when the current plan to expand O’Hare is finished, the airport’s flight capacity will surpass that of Atlanta’s Hartsfield-Jackson.

But one theme kept coming up: Whether in Chicago or elsewhere, Emanuel said, Americans are increasingly turning away from conventional bedroom communities. “When given the choice,” he said, “people want to live in a vibrant city. No one wants to live in the suburbs anymore.”

MORE: The end of the suburbs

The Mayor set Chicago’s growth in the context of the overall urban “renaissance” happening across the country. But Chicago stands apart for a few reasons. One is the degree to which it’s drawn Fortune 500 companies to relocate there. Across the country, companies are ditching big suburban office parks in favor of new downtown headquarters, but Chicago is Exhibit A: In just the past few years, United Continental Holdings (UAL), Motorola Mobility, Hillshire Brands (HSH) have all moved their headquarters from the nearby burbs to downtown Chicago; Archer Daniels Midland (ADM) is in the process of doing so; and last year GE Transportation (GE) relocated to Chicago from Erie, Pa.

This is happening elsewhere in the country too — see Panasonic’s recent move from Secaucus, N.J. to downtown Newark, First Round Capital leaving West Conshohocken, Pa. for Philadelphia, and the hottest Bay Area startup activity shifting from Silicon Valley to San Francisco itself. But nowhere are the examples as big or abundant as in Chicago.

As grateful as he is for the Fortune 500 love, Emanuel said it’s the city’s universities and research facilities that matter more — because they guarantee a talent pipeline and “labor certainty” for the corporate giants. He cites Chicago’s 13 higher education institutions — he meets with their presidents once a quarter — as well as research facilities like the Knapp Center for Biomedical Discovery at the University of Chicago and a new $320 million digital manufacturing research hub announced last month by President Obama and financed by a broad government and private sector partnership.

MORE: Toll Brothers moves from the ‘burbs to the big city

Without these facilities, Emanuel said, the blue chips wouldn’t come. “I couldn’t be happier about GE Transportation,” he said. “But the biomedical center is far more important” in terms of guaranteeing GE the ability to draw talent. “The research drives it,” he says.

The city is modernizing its entire public transit system (including the Blue Line, which goes to O’Hare and from which a train derailed Monday injuring some 30 people) and adding 4G broadband — a move that’s all the more critical given last week’s news that public transit ridership nationwide hit record levels last year. (Employers like it when their employees take public transit to work, Emanuel pointed out, because it means they can keep working.)

Schools are a critical part of the city-vs.-suburb equation, of course, and overhauling Chicago’s public school system — along with an ongoing fiscal crisis and a crackdown on crime — is one of the Mayor’s biggest priorities and greatest challenges. He cited proof of a schools turnaround: The city’s “on-track” graduation rate, an estimate of where the graduation rate will be in five years that was 55% a decade ago, is 80% today. The city has the biggest International Baccalaureate program in the country, he noted, and four of the five best-ranked public high schools in the state are in Chicago (though all are selective magnet schools). It’s home to new models for education including the Sarah E. Goode STEM Academy recently featured on the cover of
Time
.

MORE: Whole Foods sees opportunity in Chicago’s South Side

Emanuel vowed that if the schools deliver, parents will stay in the city instead of decamping for the burbs. He cited long, expensive commutes for families who can’t afford the gas, and Chicago’s abundant single-family home housing stock as reasons more families will shun suburbia. “Give a parent a good public school, and they won’t leave,” he says. “People want to be in the city.”

The Chicago Mayor is the latest boldfaced name to make the claim that the suburbs are falling out of favor with Americans. Former New York City mayor Michael Bloomberg, who presided over a historic revitalization of New York during his 12 years as mayor, told an audience at the New York Economic Club in December that “it’s clear that the golden age of the suburb is over.” And speaking recently on CNBC, Chicago real estate mogul Sam Zell talked about the “end of suburbia” (or what he referred to as “ticky-tackyville”). “All you need to do is make the school systems in the cities triple A,” Zell said. “And then why would anyone live in the suburbs?”

The Mayor is on the case.