Aerotropolis revisited

In my last post I tried to answer the question: why do people (and firms) locate near airports? While using our models of urban economics was useful in providing theoretical answers I though this time I would look for the answers the real world has to offer. What I found was: it’s all about the money. Oddly enough I found Dubai tangled up with these answers. Honestly, Karl Rove is not coercing me in any way (that I know of at least).

The first answer I found was that airports aren’t cost effective, by themselves at least. According to an article in the International Herald Tribune by Kevin Brass, “beyond the basics of terminals and runways, many of the largest airports now derive as much as 50 percent of their revenue from sources not directly related to aviation, like shopping areas and restaurants.” As we see from the basics of our monocentric city model, other businesses will locate near by along with residential neighborhoods for the workers of the airport firms.

The second is a little more tantalizing. Form the same article, “outside Seoul, the expansion of the Incheon airport is a crucial part of New Songdo City, a free trade zone of 607 hectares, or 1,500 acres, that includes 4.6 million square meters, or 50 million square feet, of offices and a large residential complex.” To turn a phrase, one could say: if you tax it, they will flee. Airports are attracting firms because of the tax incentives associated with doing business within the confines of these free trade zones.

Could it be that airports will spell the demise of trade barriers, or will airports be swallowed up from sight by neighboring businesses?

Affordable Housing, Thanks to Sprawl

In an article from Leonard C. Gilroy for Reason Public Policy Institute, Urban Sprawl:Good for Minorities?, the decreasing cost of owning a home is cited as a reason for opposing anti-sprawl policies. To quote, "...a recent study by Matthew Kahn at the Tufts University Fletcher School of Law and Diplomacy identifies one important benefit of sprawl: it reduces the housing consumption gap between white and black Americans." Controlling for such things as income, family size, and the two-parent household, the finding was that a black family in a sprawling city consumed more rooms, more square footage, was more likely to live in the suburbs, and was more likely to own the home. The conclusion was that "[housing] affordability is likely to decrease in the presence of more antisprawl legislation."

I found this to be interesting empirical evidence of the class discussions that we have had pertaining to the policy effects of containing sprawl via boundaries; creating such zones would necessarily drive up the costs of land and thus homeownership. Also, this study flies in the face of those that claim sprawl creates economic gaps between the wealthy and the poor. In Some Realities About Sprawl and Urban Decline, Anthony Downs of the Brookings Institute concludes that even in the absence of sprawl, the economic gaps between minorities and whites exist in any city that is experiencing growth. In that light, implementing policies that contain sprawl actually act to decrease any economic gains that minorities could hope to gain.

Governments failure to sprawl

From the economic efficiency framework the conceptualization it would seem that it is more often governments inability to deal with the effects of sprawl rather than sprawl being the inherent problem itself. It would seem that sufficient planning and implementation of infrastructure related concepts would be all that was needed for successful sprawl. Rather than suggesting that we keep widening roads, continue to put up growth boundaries and invest in poorly planned metro rail systems, we should find a model of successful growth implementaion and follow it.

However, this does suggest that such a model has been initiated and implemented successfully. Even if it doesn't exist, the understanding from an economic efficiency framework would suggest that the market would most likely take care of everything save its failures, which more often than not these days look more and more like government failures, rather than the latter. The governments one way view seem to be more harmful than helpful in some circumstances. As citizens should we just hold up the white flag and let the government failures continue?

Smart Growth and Elections

Any current discusion about urban growth is packed with loaded terms and other rethorical gimmicks. Sprawling cities are seen as a threat to the environment, to public finances and even the social fabric of cities. However, EPA smog ratings show that metropolitan areas with the lowest population densities have the fewest air pollution problems. The alleged depletion of open space is negated by the fact that less than 5% of the nation's land is developed and only about one-quarter of the farmland loss since 1945 is attributable to urbanization. According to the National Center for Policy Analysis (NCPA), when assesing the costs of suburbanization on local governments "the evidence is mixed on infrastructure costs and wether low-density development causes them to increase." Although Smart Growth advocates claim that urban sprawl increases the cost of public services, the NCPA does not support their conclusion and the Center's studies explain, "while some infrastructure costs fall as density increases, as a rule increases in density are accompanied by increases in population and in the level of general spending."
The Smart Growth movement suggests that the individual decisions of city dwellers will not result in a desirable urban outline and that local governments must take a stronger, more "constructive" role in the planning of urban development. Yet, aside from creative names that imply an intellectual superiority (Smart Growth) and elicit combined feelings of modernity and traditional values at the same time (New Urbanism), these proposed plans of urban planning do not present any clearly innovative solutions to the challenges of customary urban planning.
What has become an unruly debate of Smart Growth vs. Free Sprawl, however convoluted and unsolved, will probably continue to gain importance and to become more contemptous with the increasing number and size of urban regions and their ever growing political importance.
In his article Suburban Sprawl gains momentum, Stephen Ohlemacher explains how according to the latest U.S. Census Bureau data, the "nation's population is shifting south and west, to the distant suburbs of metropolitan areas," Ohlemacher adds, "the fastest-growing counties in the United States are suburban, rural or a mixture of both as more people seek big yards and open spaces, even if that means a long commute."
Growing urban centers, especially those "fastest-growing counties," may be increasing in political significance as well. It could be the reason why the debate over urban growth is so loaded and heated. The latest gubernatorial race in Virginia is drawing attention to the increasing importance of issues regarding urban growth when it comes to national elections.
Reporter Keith Shneider, in an article for the Michigan Land Use Institute, describes how newly elected governor of Virginia Timothy Kaine,
"staked his election on a strategy of directly confronting
the causes and consequences of rampant development,
and his victory has prompted strategists in both parties
to conclude that the politics of growth could be a crucial
factor in a presidential election, perhaps as early as 2008."
The evidence that Schneider bases his claim on is what he calls "basic electoral math" :
"The last two presidential elections were decided in the
fastest growing counties of a select group of states,
including Virginia, Florida, Colorado, North Carolina, and
Ohio. In 2004, half of President Bush's 3.5 million vote
electoral margin came from the 100 fastest-growing counties,
97 of which voted heavily Republican."
In adittion to the statistical significance of these counties characterized by fast urban growth, the author explains, "growth is one of the top three voter priorities in all of these fast-developing counties." Schneider's article suggests the existence of a trend that would inevitably raise the profile of the debate for Smart Growth vs. Free Sprawl.

The question that should follow Schneider's conclusion is, once the debate over the issue of how to deal with urban growth reaches a level of political prominence such as described by the author, can solutions be constructed, assesed and implemented outside the realm of political manipulation? If the direction of urban development becomes a protagonist in the rethoric of campaings and a vehicle for the mobilization of votes, any treatment of the subject will center around political and not economic efficiency. Can the politization of urban sprawl eliminate any chance of constructing sound and effective solutions to the problem of growth management?

Social Equity and Sprawl

Smart growth seems to be touted as a tool to help contain and even possibly stop sprawl, which is an evil because of the costs to transportation, natural resources, etc. This article doesn't look at sprawl from a standpoint of being a nuisance to the environment or even as a problem in terms of convenience. Rather, this article argues that sprawl creates a social injustice because the wealthy, impartially the white or non minorities, are able to move out of the inner cities or other undesirable areas and neighborhoods, leaving behind vacant and run down communities. The minorities are stuck in a community that doesn't offer decent jobs because they too have left with the 'whites'. Smart growth is seen as the tool that will fix these injustices. The article blames the sprawl primarily on public policy, rather than free market responses. I would have to disagree.

The article claims that it is public policies, such as the federal government authorizing funds for interstate, that cause, or at least at a minimum enable sprawl. As the argument goes, the highways make it easy for people to leave the densely populated cities and move outward. The article contends this is not due to free market principles. I disagree. The federal government allocates money to be spent on interstates when demand is such that the interstate is warranted. The way that a demand is established is through people choosing (through free market) to move to the suburbs or other outlying areas. The government doesn't simply choose to put interstates in random locations and then people emerge around them. Rather, an identifiable pattern emerges where people are beginning to locate in an area, without an interstate, and the government decides that the funds for an interstate are best spent in that particular location due to the concentration of residents. Without a doubt the emergence of the interstate makes it easier for people to move to outer areas, but the interstates are only placed there after people choose to be there.

The article also posits the claim that sprawl is unfair to those in the inner cities or neighborhoods that are left vacant because they can not afford to get out like the others. This argument, while possibly true, doesn't seem to be reason enough on its own to warrant drastic measures to implement smart growth to curb sprawl. This is simply a moral argument. The authors of the article obviously feel bad for the people who are left behind and 'trapped' in the ran down neighborhoods, but they fail to make a convincing argument as to how this is such a bad thing. It can't possibly be that because sprawl caused the migration to the outer limits, and abandoned buildings in its wake that this somehow makes those stuck behind significantly worse off. If they were significantly worse off, then that means that they would have had to have been fairly good off before everyone began leaving, and for this to have been true then they too should have been able to afford to flee to the suburbs with everyone else. Because they didn't we have to assume that they were in poverty to begin with or at least not 'well' off, in which case them being left behind doesn't seem to hinder their economic situation much more.

While smart growth may ultimately be a positive economic tool, this article doesn't seem to make a convincing argument that the use of smart growth to control 'white flight' in order to protect the poor left behind is practical or even necessary. Sprawl seems to be a result at least in part to free market activity and not specifically driven by government policy like the article claims.

Political Economy

I have been intrigued by the notion that there are some that blame National City Lines owned by GM, Standard Oil, and Firestone for destroying light rail trantsit in the early 20th century. I read an opinion article in the Courant newspaper dated, March 5, 2006 by a Tom Sevigny

http://www.courant.com/news/opinion/commentary/hc-plcsevigny10305.artmar05,0,7131096.story?coll=hc-headlines-commentary .

In the article he contends that Urban Sprawl happened because of a conspiracy by National City Lines (NCL) to systematically destroy light rail transit by buying them up, trashing them and ultimately being able to solidify monopolistic power by getting Americans to buy automobiles.

After further research into this subject, I have come to realize that sprawl was probably going to happen anyway. In the interest of profits this company could probably see the "writing on the wall" so to speak and got in on the action a bit early.

Light rail transit had actually been declining in the previous ten years to NCL buying up all the light rail lines and since it was in a position to do so it did. It then converted what wasn't already converted into bus lines, since bus lines aren't constrained to a certain track like light rail is. Making it more efficient to have bus lines. This also consequently cause a fundamental shift in the preferences of consumers for cars.

I think on a basic level we might all have an innate desire to be more spread out instead of packed into densely populated areas. Since the advent of the automobile this has allowed us to travel further out in our quest to be more "spread out". Obviously, Mr. Sevigny has a slanted view of what caused sprawl but his own conspiracy argument works against him. If it hadn't been GM it could very well have been, Ford or Dodge. The fact remains, "sprawl" was already starting to take hold when the light rail lines of the early twentieth century were in decline.

I wonder, What caused what?

Lowry Redevelopment

This article in the Rocky Mountain News talks about the redevelopement of Lowry Air Force Base in Denver and the positive economic impact it's had on the city. It says that while Denver invested $1.37 million into the redevelopement of Lowry, the area has provided $5.7 billion in economic benefits, $3.3 billion of which has benefited the Denver area. I can't quite tell if it's talking about tax benefits (which would be a transfer) or if it's talking about economic activity within the area such as jobs and the like, though the article does use "economic activity," so it seems the latter is more applicable.

Regardless of how they got their definitions, readers should be a bit skepticle of the study when they see that there is a "240,776% return to Denver on its initial investment." Since you can't do a whole lot with$1.37 million in terms of development, I assume that Denver spent that money planning the development of Lowry. Another clue regarding government intervention is when it mentions price controls on housing.

"The Lowry Community Land Trust has sold 100 affordable homes priced from $115,000 to $167,000, with another 86 homes planned or under way priced from $138,000 to $167,000. And another 100 homes are being sold with no price controls, starting at $150,000, according to the report."

Given these price controls, price controls probably set by planners, it's possible if not probable that Denver's investment actually COST them money in economic activity (by whatever standards they used, which themselves could also be suspect). The $1.37 million Denver spent could have hindered the redevelopment of the area, especially given its location close to Cherry Creek and Downtown Denver. With such a high demand for land in the area, it would be easy to imagine the "benefits" being much greater. Unfortunately, Denverites can't compare these current results with identical results if Denver had just left it alone.

Governmental flaw cuts both ways

I've suggested in class that I believe the fundamental problem regarding sprawl relates not to transportation times or excessive land use, as these are all natural outcomes of consumption, but rather inefficient local government. I believe this to be so, largely because local government must provide infrastructure to the vast tracts of low density space, but its unimaginable that government could keep up with the pace of the free market driven real estate market.
However, in researching for the paper, I came upon the above article. Basically, a group of new urbanism developers bought an isolated piece of property, intending to develop it into a successful and self contained New Urbanist community. They sited many potential advantages, many of which we've discussed in class, however, much more interesting are the reasons for its failure. The first major disadvantage was that they choose a tract of land that was simply too far away to justify the convenience of high density containment. I found this amusing, as a fundamental argument against the evils of sprawl involves long commuter times. Naturally, they tried to establish an employment center within the community, but then a series of large scale corruption scandals related to the construction and development were revealed, and the community has totally stagnated. I believe that this highlights the main reason why New Urbanism is destined for (at best) mediocrity. Though we talk about the 'all knowing planer' in the context of a perfect city, perhaps we must also call this person, the incorruptible planner. An additional irony is found in a fact I read related to the topic. According to the Congress for New Urbanism, about half of the NU projects are geared towards 'suburban fill', while the other half is called 'green land-fill', meaning the establishment of a community on previously undeveloped space. As I consider these two topics, it seems that the command economy element of this movement are already rearing its inefficient head. Instead of more densely packed, efficient cities, we may soon see America's heart land (the breeding ground for sprawl) dotted with failed NU communities, established too far way to be of any use and sunk by corruption, actively and wastefully consuming land, which the movement supposedly desires to protect.

Planning, New Urbanism, and Sprawl

Community planners in Chesterton, Indiana have seen hopes sunk about a planned new urbanist community at a development called Coffee Creek Center. The vision for the center was conceived in 1996, but the planners have had trouble making the transition from planning over to actual construction of the homes intended for the center. The chief marketing intent was to lure commuters to this area just south of Chicago with the hope of offering country living in an urbanist setting while still providing easy access to the major market in Chicago.

http://www.nwitimes.com/articles/2006/03/26/business/business/214a7026f04a42c78625713b00812fe2.txt

The problem, according to Samuel Staley, director of Urban and Land Use Policy at the Reason Public Policy Institute is that the planners didn't estimate their market properly. Segedy said "the new urbanism concept remains a tough sell in much of the Midwest, where potential homebuyers are still more interested in having a big house on a big lot than in recreating an urban experience". He goes on to state that if someone wanted to live in a city-like setting, then why live one hour away from it? Segedy also claims that most new urbanist projects should be targeting suburban markets or areas near "older, crumbling inner cities", but miss the mark when they go after these other residents.

Robert Steuteville, whose New Urban News (http://www.newurbannews.com/) provides information to planners and those curious about the movement claims that most new urbanist centers have been primarily successful. He points out that many communities developed on new urbanist principles are not only successful, but also motiviating other communities to consider just such developments.

At times the philosophy and ideals of new urbanism seem at odds with what they call the problem of sprawl as well. The Center for New Urbanism's own philosophy is as such: " In all cases, New Urbanist neighborhoods are walkable, and contain a diverse range of housing and jobs. New Urbanists support regional planning for open space, appropriate architecture and planning, and the balanced development of jobs and housing. They believe these strategies are the best way to reduce how long people spend in traffic, to increase the supply of affordable housing, and to rein in urban sprawl. Many other issues, such as historic restoration, safe streets, and green building are also covered in the Charter of the New Urbanism, the movement's seminal document.

Although these new urbanist philosophies tout the lack of dependency on automobiles and the availability of affordable housing, the fact remains that most who would live in such a development would more than likely still have to drive to their place of employment and will still pay a premium for the structure. And although many of these developments have shops and other amenities in the community itself, they still have to drive to get to other, more specialized and cost-controlled centers (even though they probably would never admit it). Also, in the very words of the developer responsible for the Prospect Park neighborhood in northern Colorado, "Current prices range from $285,000 to over $500,000, which at the "lower end" is about the average price of housing in Boulder County". Those kind of prices still do not resonate as the kind of housing a family living at or just below the poverty line would be able to afford.

The communities themselves seem on the surface to be a good idea (and in a sense, a very good idea--who doesn't like the notion of not having to rely on automobiles and would like to be more in touch with their community?), but the problem still remains. Sprawl is sprawl, and even though many new urbanists contend that the new urban community combats sprawl, they still seek out old farmland and build on it, and construct roads on it, and put shops on it. And in essence, isn't that the very sprawl they claim to be fighting? It seems like nothing more than slapping a label on something just to be able to market it a little differently and then sell it to those that consider themselves to be alternative thinkers. Their neighborhoods may be a bit different, but those that are building on farmland are just as "guilty" as those they slam for promoting sprawl.

Included is one of the links to the local Prospect Park community that has stated just such an ideal here in Colorado. It's a fascinating place to visit, and actually does look like a nice place to live. It just seems odd not to consider it as also being part of our evil "sprawl problem" (http://www.terrain.org/unsprawl/8/.

Academic paper

here is the link to the academic paper I will be summerizing in class

Benefits of Sprawl

Matthew Kahn has posted a research paper on his blog titled The Benefits of Sprawl. Here are the first 2 paragraphs of the paper:

"Today, most Americans who live in metropolitan areas live in single detached homes and commute to work by automobile. New York City is America’s sole urban center where a significant fraction of the population lives in apartment buildings, works downtown and commutes by public transit. As transportation costs continue to decline and household incomes rise, we are choosing sprawl as we live and work in the suburbs.

The conventional wisdom is that this trend imposes major social costs relative to its benefits. An advanced Google search reveals that there are 39,500 entries for the exact phrase “costs of sprawl” while there are only 455 entries for the exact phrase “benefits of sprawl”. The beneficiaries of sprawl may be a “silent majority” who are not as politically active as center city boosters, environmentalists and the urban poor’s advocates in voicing their views on the merits of the ongoing decentralization of jobs and people taking place across cities in the United States.
This paper seeks to address this intellectual imbalance by presenting original empirical work documenting some of the benefits of living in a sprawled metropolitan area. This paper uses a number of U.S data sets to explore how sprawl improves quality of life. I focus on how sprawl affects firms, workers and consumers."

Perhaps someone would like to read the paper and gives us a summary in class?

sprawl

There is an article on the Sierra Club website titled, “If We Don’t Like Sprawl, Why do We Go On Sprawling?” I think it is one of the most important questions we can ask as economists dealing with sprawl. Is sprawl the result of government giving into the rent seeking behavior of a few very rich, well connected people, or are our own preferences more involved than we want to admit? The article paints a pretty bleak picture of government subsidies and developers. It states that growth isn’t all good, that sprawl raises taxes, and that a few profit at the disadvantage of the masses. But I still wonder what would really happen if the invisible hand of the market were left on its own and people made their own decisions without government building stadiums or giving out tax breaks. Would the allocation of resources people would choose put cities in a place where they are all neat, low cost, close together, with low-cost transportation? I’m not sure. Besides the government interference, which is admittedly huge, why do people move outside of the city? Is it because people just don’t like living in cities, is it due to people wanting lower cost homes?

Taxes are a big issue. The governments give large tax breaks to companies that move into town. This is not efficient, and I’m against it. Let them build where they build. The article I read states that, In Redmond, Washington, single-family houses pay 21 percent of property tax but account for 29 percent of the city budget.” This is obviously an issue.

Sprawl is definitely an issue worth considering. However, I’d hate being the economist who has to analyze the benefits and costs with different sprawl reducing policies. The topic is so loaded, so vague, so made up of a bunch of individual issues that should be considered on their own, that it seems impossible to get a clear picture of what sprawl is, let alone how to fix it. The fact that sprawl happens in the midst of all the heat around the issue, is a pretty interesting fact. We won’t get to the bottom of it until we separate the individual issues under sprawl and find out where the market failures are. It seems like it’s another of those issues that the government created, not one that the government is going to fix.

Rebuilding New Orleans

Richard Florida writes an interesting commentary on rebuilding New Orleans. He doesn't seem to offer specific proposals, but he does seem to offer warnings. Here is his concluding paragraph:

"The people of New Orleans know what they want. More than just reconstructed levees, a refurbished downtown, or even rebuilt homes, they want the soul of the city back. Their insights - both angry and enthusiastic - remind us of the underlying source of resilience that really rebuilds fallen cities: the people. Let's hope that their leaders will understand this, and provide us all with a compelling model of a creative, prosperous and sustainable city."

Please read the entire piece. Then consider whether or not you think New Orleans can be successfully rebuilt, in view of Florida's warnings, if government planners and government officials are going to be involved?

Fix It First - Sprawl - Sierra Club

Fix It First - Sprawl - Sierra Club

The sierra club has an interesting view of sprawl and development. Their concern is increasing the quality of already developed areas, rather than expanding outwards. The Sierra Club makes a good point to the need to fix current roads and bridges before expanding into "nowhere". What's important is to realize is the government is providing club goods that act as public goods. In essence there creating a market inefficiency yet meeting demands. People have taken on the belief that government should provide our roads, highways, parks, etc. Because of this it is provided best fit as seen by government rather than market demand. This could be a cause of sprawl.

http://www.sierraclub.org/sprawl/community/transformations/index.asp

The sierra club also provides an interesting set of photos on what the development of certain locations should look like. I think these show a good picture of new urbanism development. I find it interesting to see how they add light rail and make the area look more congested. It is like a return to the past where buildings are close together. Although these look nice, the area will become more congested and could defeat their own purpose of reducing sprawl. If people don't respond and start taking rail, biking or walking then cars will be even more crammed causing more pollution and could create another inefficiency in the market. I think its best to let developers produce what is demanded, if that's a new urban area than great, and if a suburb than that's good to.

Just who is locating near Airports?

In a past issue of the Economist (26 Nov 2005) there was an article that is quite relevant to the topic of Urban economics; in particular, the location decisions made by businesses. We all know about the pollution (noise, air, and otherwise) that come form airports, but this article notice a funny thing going on:
Working in the shadow of an airport has its problems. There are height restrictions on buildings, and residents and office workers have to put up with the noise and traffic that airports generate. But, despite those drawbacks, more and more businesses feel the need to be near a runway.

It is not surprising that airports draw market-oriented firms; in fact the article mentions that consulting firms locate near airports (thus reducing their costs to changing clients). But this isn’t the only reduction in transportation costs that airports can provide. Amazon.com is planning a plant in Irving, Texas just a short drive from DFW international airport. This is a good example of median location oriented firms. What is unusual is that whole communities are being built airports. According to the article:
When Washington Dulles International Airport opened in 1962 in rural Virginia, it was considered a white elephant; but it has spawned a high-tech corridor and now sits in the fastest-growing county in the United States. Denver's ten-year-old international airport, about 40 miles out of town, is expected to be the centre of a community of 500,000 people by 2025—almost as many people as live in Denver itself.

Could it be that living near airports isn’t all it’s cracked up to be?

Urban Sprawl: Good for Minorities?

Urban Sprawl: Good for Minorities?

Through the course of the semester we have tried to establish a definition for sprawl. It seems that we have come to the conclusion that sprawl is indefinable. We have been unable to find a definition that we like or that is not corrupted by the policies that are placed on sprawl. I have included the website that has many definitions of sprawl from many different aspects. We as a group have seemed to say that it is growth that moves in an outward fashion.
Who is affected by this idea of sprawl? In looking at an article titled “ Urban Sprawl: Good for Minorities” written by Leonard C. Gilroy. He says that sprawl seems to be very important for minorities especially those of African American decent. Areas that are high sprawl metropolitan areas seem to see minorities being able to buy homes in the suburban areas just like their white counter parts. In areas that are low sprawl minorities are left to live closer to the business center. They are unable to afford what lays out side the metropolitan area. This is an interesting idea that sprawl allows the minorities to achieve a better freedom. Gilroy argues that if policies are put in place to stop sprawl or overly plan sprawl those that are greatly affected is the minority. They are the silent victims that are not taken into account for.
In reading this article it is hard to believe that it is the minority that suffers. Gilroy in the article states that more African Americans today have college degrees than in the past and that their incomes seem to steadily rise. They are able to live the American dream. It makes you question wither sprawl has anything to do with the minorities. Is this even an issue of race? It seems that it is the market at work. As we said in class several times if the factors are efficient to move outward into the suburbs families will do so. As we have evolved as a society we see more equality given to all mankind. This would say that the opportunity is fair.
I think that Gilroy is missing the idea. I think people whether African American or White will stay close to the metropolitan area if it is not efficient to move outward. If market allows for the sprawl then most people will move outward. It is the American dream to spread out and have land and live the happy life. This idea is not restricted to color. The opportunity is provided to all those effected by the outward movement of a metropolitan areas quick growth. The race of a person will should not affect how sprawl affects them.

What Is Going On In New Orleans?

Almost half a year has passed since Katrina, so there is no reason to be impatient. Yet it is impossible to escape the distinct impression that the city is adrift. It is normal in emergencies for the state to suspend or curtail municipal powers. That has not happened in New Orleans, leading to wrangling between the mayor and local neighborhoods about where and especially where not to locate FEMA trailer housing. A city that is unable to decide where to temporarily house its own refugees is unlikely to struggle successfully with the more complex question of exactly how to rebuild. Should low lying areas be turned into parkland, and housing concentrated on higher ground? Should building codes be changed to require all structures to be raised on platforms or stilts? The social and economic implications of both strategies are major. Private property would have to be expropriated, and new lands would have to be made available. Upgraded building codes would raise the cost of construction.

It would obviously be simpler if everything could stay as it is, and if the flooding problem could be solved by simply constructing higher levees and more and bigger pumps. The recent White House commitment to increase spending on reinforcing levees to $3.1 billion does not even begin to resolve this issue, however; it has been estimated that fully protecting the city against a Category 5 hurricane (recent reports suggest that Katrina was actually a Category 3 storm when it made landfall) could cost more than $30 billion. But absent adequate protection, many people who were evacuated from the city have been reluctant to return. The population of New Orleans is currently about 100,000 not even a quarter of its pre-Katrina size.

What strategy to adopt? “Build levees and they will come back,” or plan for a better but smaller city?

New Orleans is different, and not only because effective leadership and governmental action have been clearly absent, but also because it is an American city. The shape of our cities is not the result of bureaucratic planning, but of demand. If people want to live in houses with their own gardens, you get suburbs; if yuppies want to live in lofts, you get rehabbed industrial districts; if wealthy investors want to put their money into sun drenched real estate, you get the Miami condo boom. If businesses want their offices in high rise buildings, you get central business districts, but if those office buildings become too expensive, you get suburban office parks and Silicon Valley. Moreover, because the country is large and there are many cities, competition is fierce.

Conversely, if people don't want to live somewhere, they are free to leave. “Demand” in New Orleans was already a problem before Katrina. The population of the city hit its peak in 1965 and has been declining ever since. At the time of the hurricane, the city had a third fewer inhabitants than 40 years earlier. The metropolitan area wasn’t doing much better. The result was that although New Orleans is in the Sunbelt, where urban areas are generally booming, in many ways it is a Rust Belt city, think Detroit or Newark, with a sluggish economy, a lot of unemployment, and poverty. Research has shown that while cities grow extremely quickly, they decline slowly, since people’s homes and their attachment to a place act as a barrier to moving. Katrina cruelly removed that impediment for many New Orleanians.

Given weak demand and weak governmental leadership, the prognosis for recovery is not good. It’s going to take a massive federal program to deal with the hard case that is New Orleans.

At What Cost Suburbia?

In an article from the Federal Reserve Bank of Boston:

So, Maine's planning office is working on expanding available choices. Their goal is to use better urban design to address the issues that are pushing people out of built-up areas by promoting the construction of what they call "Great American Neighborhoods. "Based on traditional towns and villages, these neighborhoods ideally will be relatively dense — a ten-minute walk across — and will be built around a civic core such as a library or a school. They will include open space, such as a town green, and small-scale commerce. They will also have a decidedly Maine slant. "We are talking probably of lower densities than what would be acceptable in Atlanta, and the neighborhood has to have linkage to nature," says Della Valle.

Such development would help to limit sprawl — without limiting growth — by promoting more compact developments while addressing some of the lifestyle concerns people are worried about." (emphasis mine)


I found this article to be very informative, covering a lot of aspects of the subject of sprawl concisely and evenly. The negative aspects of sprawl are addressed, along with counterarguments. The question of externalities is covered, not only with the topic of higher taxes on fuel and car ownership to reduce the negative effects of increased air pollution (and a possible residual effect on lessening a demand for suburban housing), but also addressing the arguments that suburban development is subsidized (indicating that there is a perceived positive externality) by the absence of these higher taxes on fuel and the home mortgage interest deduction. In addition, a stated viewpoint is that unless local governments assess exaction fees against developers, "other people bear part of the expense of the new suburbanites location decision."

It is the last item that makes me feel uncomfortable if the result is to slow economic growth. If exaction fees are levied against developers, the price is passed on to the consumer and in this way some of the externality of additional tax burden or the effects of a decreased budget that would be borne by other consumers would be internalized by those that could afford to pay the price, thus allowing for economic growth and the freedom to choose (for those that could bear the cost). I'm okay with that. What I would worry about is whether those exaction fees were so high as to prohibit economic freedoms - and from what this article states, it is very hard to put a dollar amount on the "lifestyle concerns people are worried about". So who would be in charge of quantifying these things and then assigning a dollar value? I think there is too much leeway for politics there.

I'm also a little queasy at the thought of the type of planned development outlined above. I see subsidized building as backward-thinking. If we're so in love with the idea of subsidizing something, why not subsidize existing area businesses to operate in the urban areas? If there really is competition between urban and suburban areas, wouldn't this approach make more sense?

Cosmix: too little, too late...

In my humble opinion as a Jr. Economist, it would seem that the effort put forth by the city of Colorado Springs with the CosMix project is an attempt to make amends for lack of planning and underestimation of the growth of our suburban setting. While the effort will not be looked on with brazen eyes, it would seem that being one step behind the situation will continually leave the city one step behind the sprawl. For example, the poorly planned expansion of the Woodmen Rd and I-25 by-pass left southbound commuters wanting much in regard to the same number of lanes as before the project.

I think that the inefficiency of the local/state legislature is to blame for the retarded action time in regard to the city and state interstate expansion. I believe that the demand for legislature pertaining to effectively timed and implemented road repair/expansion.

By the time that this project is completed in the summer of '07 I believe that the current rate of growth will overshadow almost all efforts that the city is making in order to address the already over-crowded roads. Unfortunately the legislators cannot always plan on growth or even sprawl as it may be, but I believe that it is their duty as the elected officials of the city and county to make effective and efficient use of legislation, however ill timed it may end up.

Urban Sprawl Not Just a Problem for the Developed World

It seems to make sense that urban sprawl isn't just a problem that the developed world faces. As the article states, the developing world is facing problems with sprawl as well, but for different reasons. The developed world's sprawl seems primarily due to people choosing to move out of the cities, while sprawl in the developing world is occurring because there is nowhere else to live in the highly populated cities. Too many people are being born with nowhere to live inside the cities, so they are forced to move outward, unlike the people of the developed world, who choose to move outward.

The article suggests that the developing world faces sprawl because they have looked towards the developed world for ideas of how to plan for developing, and this has caused them to fall in the same sand pit as the developed world. One solution that the article suggests the developing world should look at to help solve the sprawl problem is reusing old buildings and land in the inner cities in a more efficient way, such as turning old abandoned schools or other building into housing or other more efficient uses. The article suggests that the problem and ultimately the solution to sprawl is to look at efficient uses of land space. I agree that land should be used in an efficient manner; however, I don't believe that this solves the problem.

While efficiency, by definition, makes the best use of the land possible, doesn't necessarily mean that it will solve or even inhibit sprawl. For instance, it depends on how efficiency is being weighed. What is more efficient, housing for people, or skyscrapers for businesses for income? From an economic standpoint, it may make more sense to use abandoned land in the inner city for enormous skyscrapers to attract more business, more taxes and wealth, which would force people to move outward because of lack of available land for housing in the inner city. In this situation, the land within the city appears to be being used in the most efficient manner (if efficiency is weighed heaviest by economics and wealth), yet sprawl will continue to exist because people are forced to live outside the city where land exists for housing. If too much land within the city is designated to housing, then it seems that you could either end up with too much housing and not enough people since there isn't enough land for businesses and thus no jobs so people don't want to live there, or if people do occupy all the dwellings then businesses would naturally follow to make profit from all the people and because people are making money, they would naturally want to move out of the concentrated areas (outside the city), creating sprawl or businesses would buy up housing within the city to build their business, which would force people to the outskirts to live. Either way it seems like you end up with sprawl, if you use the broad reasoning given in this article.

Sprawl almost seems to be a natural occurrence where cities exist. This article shows that it exists within high density cities in developing countries, and we know it happens within less dense cities within the developed world, which are two examples on both ends of the spectrum (one by necessity and one by choice of luxury). Within the developed world, sprawl happens by choice and within the developing world, sprawl happens by necessity, and in both situations would seem to still occur even if land was used in it's most efficient manner (because defining efficient land use in terms of housing doesn't curtail sprawl and neither does it seem that weighing efficiency in terms of building offices for economic benefits). Perhaps sprawl is a natural occurrence in cities by either necessessity, choice or other unknown reasons and perhaps this is why it is so difficult to address all of the major causes of sprawl and more importantly determining a solution for sprawl.