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Suburbanization: One Year Later

Josh Young profile picture
Josh Young


  • The Suburbanization trend we identified a year ago has continued.
  • The scale is larger than expected.
  • The impact on oil demand and other knock-on effects are greater.

Plain White Moving Truck
Photo by jhorrocks/iStock via Getty Images

The COVID-19 pandemic has accelerated the trend of migration from urban neighborhoods to suburban ones. In our first Suburbanization white paper, we analyzed evidence of this trend, calculated the size of the trend, and estimated the

This article was written by

Josh Young profile picture
Josh Young is the Chief Investment Officer of Bison Interests, an investment firm focused on publicly traded oil and gas companies. And he is the former Chairman of the Board of Iron Bridge Resources, which sold to Warburg Pincus and CPPIB backed Velvet Energy in 2018 for $142 million. He is a value investor primarily focused on energy stocks, natural resources stocks, and companies trading at low multiples to earnings, cash flow, or book value. He has presented at numerous investment conferences, including Platts, LD Micro, Oil & Gas Money, Louisiana Energy Conference, and the Global Resources Investment Conference and has been featured in media including Barrons, Bloomberg, Business Insider, Fox Business News, RT and Oil & Gas Investor Magazine. He is a graduate with honors from the University of Chicago in economics.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Important Disclaimer: Opinions expressed herein by the author are not an investment recommendation and are not meant to be relied upon in investment decisions. The author is not acting in an investment adviser capacity. This is not an investment research report. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that potential and existing investors conduct thorough investment research of their own, including detailed review of the companies' SEC or CSA filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author's best judgment as of the date of publication and are subject to change without notice. The author and funds the author advises may buy or sell shares without any further notice.

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Comments (24)

T-time profile picture
I do not believe that 'suburbanization' is a real thing, and your data is a bit flawed because urban areas also become bigger via annexation as the population increases. I live in an urban area and housing costs are through the roof and most importantly, housing inventories here in the city are the lowest they have been in over 20 years. It's tight in the suburbs as well, but it is MUCH tighter in the cities.
Suburbs are boring and require a 20 min drive to do anything. Urban areas will always have more appeal to the younger generations and more so with millennials and gen Y than with gen X (which is my generation). Covid may have facilitated some movement to those already thinking about moving to the burbs and with job losses and covid-caused disruptions there will be some movement but it will not be a generational shift imo. Once the pandemic starts to wane and folks are ready to start spending the largest reserves of savings since 20 years we will see the urban areas come back alive. LIke I said, and I have three 20-something aged children, that NONE of them want to live in the burbs. They have fewer children, wait later to have them, and prefer to live centrally. They are also more environmentally conscious, not wanting to spend a lot of money on gas and time on a lawnmower. I think you got this backwards - and you even quoted an article that describes my point - we are actually seeing urbanization.
Josh Young profile picture
thanks for the comment. sounds like you have a strong opinion on this. the data shows otherwise, very substantially. the question is what happens as cities reopen, and the data so far is showing that people continue moving out to the suburbs and exurbs. your three children are not a statistically meaningful sample set, and it sounds like their preferences are different from broader population level behavior.
@T-time Last time I checked crime has become rampant in cities. Sure, 20-somethings might risk it as they perceive they have little to lose. But that changes as they experience crime and their increasing wealth gets confiscated to pander to criminals and politically favored "victim" classes get superior rights to taxpayers along with pallet-loads of cash.
T-time profile picture
@Josh Young let's revisit in one year from now. You claim data supporting otherwise yet your writing actually cites a paper that provides data contrary to your thesis.
No hard feelings, we will just agree to disagree. Yes my kids are a small sample size but they all have friends, etc., and I am very involved in their lives. The white picket fence in the suburbs is not appealing to these younger people. Also, why is it that you cannot find any housing in the city? The demand is at 20 year high - not sure your narrative aligns well for an exodus!
Everybody is moving to Florida, everyone drives a lot here. Bought USO today.
Ok second article of yours I've read.
Gotta tell you I'm living that article. If you're in a world class recreation area, it's just been insane. Propane, SPH, is my second largest position in MLP land.
Gotta say I wish I had run into you sooner. Your credentials are impeccable! Warburg Pincus?
I dont think I made too many mistakes rooting around the oil patch, but i think you might have a couple ideas to round out my little oil black swan!
I think other factors, like people moving away from public transport to driving will also be a big factor. Anecdotally where I live in Canada, public transportation is virtually empty. Josh are you bullish any Canadian E&Ps?
Josh Young profile picture
@Mark.c there is data that people are shifting away from public transit, similar to your observations. Yes I am.
@Josh Young anything other than Baytex?
New house in the 'burbs => bigger car or SUV in due course. I think you are onto something that will give the urban exodus theme another oil demand leg.
tbone1ct profile picture
Just don't see it gaining much more traction. Now that the shot is in 30% of adult american's any thought of moving is in the rear view mirror. How many American's are out of work? You must have economic mobility.
Josh Young profile picture
@tbone1ct thanks for the comment. That was directionally the response and narrative last year to our first of these. It has already been a bigger and more sustained effect than we expected.
@Josh Young A household move is a very big deal that requires multiple motivational drivers. Safety? Where to begin -- hospitals were closed to non-pandemic non-ER cases, police departments are being defunded, burglary and looting are rights, in some cities roads are regularly closed/blocked by "demonstrators" who burn down police stations, burn out many businesses, etc. Taxes? Going up sharply as the moneyed few who paid the bulk of them depart daily. Schools? Rampant PC-ism and extended closure has delayed if not stunted educational development of students.

De-urbanization is snowballing mostly for reasons that have nothing to do with vaccination. The consequential effects of meat-headed decisions of the past year will ripple for generations, just like the Great Depression.
@tbone1ct does it matter how many people aren’t working if everyone has money to spend? People aren’t working largely because they don’t need to anymore. Businesses are shutting down operations and reducing hours due to labor shortages. The economy is overheated due to all the helicopter money and that’s bullish for oil.
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