The Planet of Cities: North American cities from 1980 to 2080

Greg Clark, Urbanist
Borane Gille, Head of Cities Innovation, The Business of Cities

With just 6% of the world’s population, North America (Canada, Mexico and United States) commands outsized global attention due to its economic clout. Over the past 40 years, cities in North America have charted a dual trajectory: the global success of ‘superstar cities’ alongside the stark decline of once-thriving industrial cities. Shaped by financial crises, globalisation, industrial offshoring, suburbanisation, the COVID-19 pandemic and shifting geopolitics, North America’s urban landscape tells a story of resilience, reinvention and disruption.

North American cities at the start of the urban century

Since 1980, North American cities have followed two contrasting paths. Deindustrialisation led to the decline of many former industrial hubs, while coastal cities thrived (see Figure 1), fuelled by the rise of the service and knowledge economies. This economic shift reshaped the urban landscape, creating stark contrasts between prosperity and decline.

In the United States, most cities were marked by suburbanisation, with middle income people migrating from urban cores to suburbs. Highways, car culture and sprawling residential neighbourhoods defined much of the urban development, leading to urban decay in many cities’ downtown areas.

Deindustrialisation in Rust Belt cities such as Detroit, Cleveland and Pittsburgh led to population decline and economic contraction, as manufacturing jobs were relocated, outsourced or replaced by automation. Enabled by the then new technology of air conditioning as well as the growth of car ownership and expressways, population shifted towards the Sun Belt cities.

Cities on the West Coast, such as Los Angeles and San Francisco, benefitted from the rise of information technology and entertainment industries. Los Angeles emerged as a cultural hub and the 1980s saw the start of what would later become Silicon Valley. By 1980, globally traded finance and professional services started to take off in New York City.

In Canada, Montreal was losing its dominance to fast-growing Toronto. This was following the construction of the St. Lawrence Seaway, improving connectivity between Toronto and US markets, but also the independence movement in Quebec, after which many English-speaking businesses and people moved from Montreal to Toronto. A similar suburbanisation unfolded in Canadian cities with long-established downtowns losing population.

Mexico experienced rapid urbanisation driven by migration from rural areas (see Figure 2), industrialisation and demographic growth. The economy of Mexican cities became dependant on manufacturing, particularly in industries such as textiles, food processing and automotive production. Tourism also grew, with the first hotel opening in Cancún in 1974. The introduction of the maquiladora programme, which allowed foreign companies to set up manufacturing plans in Mexico, led to the dramatic growth of border cities such as Tijuana and Ciudad Juárez.

North American cities now

North American cities have diversified their economies and shifted focus to knowledge-based industries, technology, finance and healthcare.

What we begin to see now is a the emergence of new set of cities and regions through reindustrialisation while the high-growth model of tech cities is being challenged by land constraints, unaffordability, and inequality.

While New York remains a financial powerhouse, the city has also successfully grown its innovation economy. It is a leading destination for AI talent and companies, with AI companies expanding their footprint in the city tenfold in ten years. Following strategic public and private investment, it also boasts new edges in life sciences and the green economy.

San Francisco and the broader Bay area have become synonymous with the tech industry, while Los Angeles has continued to dominate entertainment, arts and fashion. However, congestion, housing unaffordability and higher taxes are casting a shadow on the long-term success of these cities, leading to a major outflow of people since the COVID-19 pandemic. San Francisco has also been impacted by the post-pandemic shift to more hybrid work patterns. Recent data suggests it could take up to two decades for the city’s office market to recover to pre-pandemic levels.

With the US’ renewed emphasis on domestic manufacturing, we observe the emergence of new cities across the country attracting talent and companies. Out of the 15 fastest-growing cities and towns in the US in 2023, 12 are in the Sun Belt. Cities like Austin and Phoenix have seen explosive growth, boosted by recent national economic and innovation policies. Post-pandemic, Austin has become a major tech hub, attracting Tesla, Apple and Google due to its lower cost of living and favourable business environment. Similarly Charlotte, frequently rated as one of the most liveable cities in the US and the second-largest banking centre in the US, has been attracting major international companies as well as diversifying into tech-driven sectors and clean energy.

A stable political climate and immigration-friendly policies have accelerated flows of talent, capital and knowledge to Canada’s cities. Toronto has emerged as a globally competitive tech hub, which now boasts the third largest tech workforce in North America. Canadian cities have been more active in adopting green practices and technologies and Vancouver has been recognised among the leading cities globally when it comes to sustainable living. Innovation has also been core to Calgary’s shift towards a less oil-reliant economy and Montreal’s rise as a global hub for artificial intelligence. However, Canadian cities now face a growing housing unaffordability challenge, with four of its six major housing markets rated severely unaffordable.

While Mexico City remains the largest and best-connected city, cities like Monterrey and Guadalajara have emerged as significant regional hubs. Border cities such as Tijuana, Juarez and Reynosa continue to thrive on cross-border trade but have now expanded to other industries such as logistics, aerospace and electronics. Tourism remains a major industry for many of Mexico’s fastest-growing cities such as Cancún, and Puerto Vallarta. The recent completion of the Tren Maya, a 1,500km train connecting tourism hotspots in South-eastern Mexico is expected to drive more investment to one of the country’s poorest regions.

North American cities towards 2080

The success of North American cities remains to be defined as global trends continue to unfold.

Regional integration: as second and third tier cities emerge as new living destinations for highly skilled talent, better, faster connectivity is required between cities to develop economic linkages and facilitate commutes in and between North America’s megaregions. Those regions will have their own economic strengths and greater co-ordination at the metropolitan and regional levels is required to ensure progress on the net zero and equity agendas. This is also a growing imperative for Mexican cities, where major investment and governance reforms are needed to build more integrated regional economies.

Climate resilience: wildfires in California and British Columbia are becoming more frequent and coastal cities like Miami and parts of Los Angeles may face significant spatial changes as they adapt to environmental challenges. The US’ fastest growing cities are also the ones at most risk of extreme temperature rises. As some of the biggest producers, more efforts are required of North American cities and regions to decrease their carbon emissions, shift towards more sustainable production and consumption models, and mitigate the impact of climate change.

Cost of housing: in both Canadian and US cities, the cost of housing has been pushing people out from major cities to secondary urban centres. However, those cities are now experiencing pressure on affordability too. Planning reforms to encourage densification and boost housing supply can help alleviate the affordability challenge and create more opportunities for people to locate closer to employment centres.