The three major factors affecting the future of the nation's cities are: (1) lack of housing demand due to population migration; (2) the conflict between suburban growth and city restoration; and (3) the combination of racially segregated housing markets, obsolescence of existing buildings, and the high cost structure of both public sector and private sector operations in older cities. Many large older cities in the Northeast and Midwest are experiencing population loss and physical decay leading to extreme fiscal problems. This will continue unless Federally financed intervention is made to alter this process. Ultimately, the nation must choose between two basic methods of accommodating future urban growth and improving the quality of life. One would require further suburban expansion including regional shifts to Sunbelt suburbs. The other would require slowing suburban expansion in order to create in-city housing demands on which the restoration of older cities can be built. The long-run shift of households and resources from the high-cost Northeast to the lower-cost Southwest will continue until cost structures are adjusted downward in the former and upward in the latter. (Author/WI)