Once bypassed in the stream of investments funneled into downtown cores and outlying suburbs, first-tier neighborhoods are emerging in the post-recession era as major magnets for urban growth, according to ULI CEO Patrick L. Phillips.

Phillips spoke on the potential of inner-ring suburbs in a keynote presentation at “Sustainable Suburbs: Re-Imagining the Inner Ring,” an event held February 12 by the North Carolina State University College of Design and the Raleigh Department of City Planning. The appeal of close-in neighborhoods, Phillips said, is rising due to their proximity to major employment centers and to transit options—unlike far-flung exurbs, many of which are experiencing a high volume of foreclosures resulting from the recession. The convenience and time-saving features of first-tier suburbs have become more important to consumers as urban areas have become increasingly congested, he noted.

“It’s clear that the disconnect between housing and jobs, long daily commutes, and time wasted in traffic is causing more and more people to rethink how and where they are living,” Phillips said. “This bodes well for first-tier suburbs—not so well for the exurbs.”

Phillips pointed to several forces of change related to population and demographic shifts that likely will redefine living and working environments in the United States for decades ahead, including increased urbanization; substantial population growth; baby boomers becoming senior citizens; echo boomers entering adulthood; a growing number of smaller households; a likely housing shortage, particularly affordable housing that is close to job centers; and continuing growth outside urban cores.

“Suburban development in the 21st century cannot mean sprawling development; that simply is not a sustainable growth model. In the suburbs, less land will have to be used to accommodate more people,” Phillips said.