Cities, Ideas and Housing

Edward L. GlaeserHarvard University

The Central Paradox

• Why is it that in an era in which transportation and communication costs have virtually vanished, cities have become more important than ever?

• Urban resurgence is visible in high income levels, robust housing prices, and a concentration of innovation in urban areas.

Log density, 2000

Log GMP in 2005 (2001 dollars), Fitted values

2 4 6 8

22

24

26

28

Akron, O

Albany-SAlbuquerAllentow

Ann Arbo

Ashevill

Atlanta-

AtlanticAugusta-

Austin-R

Bakersfi

Baltimor

Baton Ro

Beaumont

Binghamt

Birmingh

Boise Ci

Boston-C

Boulder,

Bridgepo

Brownsvi

Buffalo-

Canton-M

Cape Cor

Charlest

Charlest

Charlott

Chattano

Chicago-

Cincinna Clevelan

ColoradoColumbia

Columbus

Columbus

Corpus C

Dallas-F

Davenpor

Dayton,

Deltona-

Denver-A

Des Moin

Detroit-

Duluth,

Durham, El Paso,

Erie, PAEugene-S

EvansvilFayettev

FayettevFlint, M

Fort ColFort Smi

Fort Way

Fresno,

Grand Ra

Green Ba

Greensbo

GreenvilHarrisbu

Hartford

Hickory-

Houston-

Huntingt

Huntsvil

Indianap

Jackson,

Jacksonv

Kalamazo

Kansas C

Killeen-Kingspor

Knoxvill

LakelandLancasteLansing-

Las Vega

Lexingto

Lincoln,

Little R

Los Ange

Louisvil

Madison,

Manchest

McAllen-

Memphis,

Miami-Fo

Milwauke

Minneapo

Mobile, Modesto,MontgomeNaples-M

Nashvill

New Have

New Orle

New York

Norwich-

Ocala, F

Ogden-Cl

OklahomaOmaha-Co

Orlando-

Oxnard-T

Palm Bay

PensacolPeoria,

Philadel

Phoenix-

Pittsbur

Portland

Portland

Port St.

Poughkee

Providen

Provo-Or

Raleigh-

Reading,

Reno-Spa

Richmond

Riversid

Roanoke,

Rocheste

Rockford

Sacramen

St. Loui

Salem, O

Salinas,

Salt Lak

San Anto

San Dieg

San Fran

San Jose

Santa Ba

Santa Cr

Santa RoSarasota

Savannah

Scranton

Seattle-

Shrevepo

South BeSpartanb

Spokane,

Springfi

Springfi

Stockton

Syracuse

Tallahas

Tampa-St

Toledo, Trenton-

Tucson,

Tulsa, O

Utica-Ro

Vallejo-

Virginia

Visalia-

Washingt

Wichita,

Wilmingt

Winston-Worceste

York-HanYoungsto

Urbanization Across the World

Log of GDP 1998

% population urban 1998, WDI200 Fitted values

6 8 10

0

50

100

Poland

Philippi

Honduras

GhanaGuatemal

VenezuelUnited K

Germany,

Nigeria

Peru

Kenya

Italy

Cote d'I

Uganda

Brazil

Angola

Korea

FranceCanada

Indonesi

Tanzania

Mexico

Mali India

South af

Argentin

Bolivia

Banglade

TurkeyJordan

Pakistan

Egypt

Iceland

El Salva

Mozambiq

Mauritan

Greece

Nicaragu

Hong Kon

New Zeal

Fiji

Morocco

Belgium

Hungary

Papua Ne

Malaysia

Zambia Central

Guinea

Finland

Ethiopia

Sierra L

Paraguay

Saudi Ar

Ecuador

Switzerl

Cameroon

Portugal

Syria

Comoros

Bahrain

Tunisia

Togo

Thailand

Dominica

Cyprus

Australi

Spain

Mauritiu

Algeria

Norway

Israel

Burundi

Luxembou

Iran, I.

Niger

Senegal

SwazilanLesotho

United S

Guyana

Jamaica

Western

Ireland

NetherlaMalta

Panama

MalawiGuinea-B

Gambia

Colombia

Gabon

Zimbabwe

Chad

United A

MadagascChinaZaire

Benin

Sudan

Denmark

Nepal

Sweden

Costa Ri

Japan

Congo

Chile

Trinidad

Uruguay

Yemen, N

Singapor

Bahamas,

Austria

Botswana

Haiti

Sri Lank

The Hypothesis

• One major effect of globalization has been an increase in being smart.

• You become smart by being around other smart people– we are a social species.

• Cities, like Boston and New York and London and Bangalore make that possible.

• The same death of distance that did so much to hurt Detroit helped NYC.

The Urban Role in Civilization

• Start with the basics: clothing and food. • By the time you get to our own country, it is

cheap enough to ship food that you get “food cities,” but 1,000 years, cities like Bruges and Florence were “clothing cities” specializing in wool.

• Urban density enabled markets to work and spread human capital and shared machines.

The Gifts of Urban Density

• Art in Flanders (van Eycks, Campin, Memling)– Commercial patrons and learning

• Religion– The Brethren of the Common Life (Adrian IV,

Erasmus, Martin Luther)

• Education and Literacy– Caxton and Gutenberg

• Political unrest and democracy (Coninck)

The Problematic 20th Century

• The Automobile made public transportation oriented cities seem somewhat obsolete.

• The truck freed manufacturing from needing to cluster around ports and rail stations.

• Declining transport costs created a rise in consumer cities over cities oriented around productive advantages like waterways.

The Decline of the Costs of Moving Goods

Dolla

rs p

er

Ton M

ile (

Real)

Railroad Revenue per Ton Mileyear

1890 2000

.02323

.185063

Figure 8: Density and City Growth 1920-1980dens20

Population Grow th 20-80 Fitted values

947.754 23869.5

-.545373

2.46159

NEW YORKCHICAGO,

PHILADEL

DETROIT,

CLEVELAN

ST. LOUI

BOSTON,

BALTIMOR

PITTSBUR

LOS ANGE

BUFFALO,

SAN FRAN MILWAUKEWASHINGT

NEWARK,

CINCINNA

NEW ORLE

MINNEAPO

KANSAS CSEATTLE,

INDIANAP

JERSEY CROCHESTE

PORTLAND

DENVER,

TOLEDO,

PROVIDEN

COLUMBUS

LOUISVILST. PAUL

OAKLAND,

AKRON, O

ATLANTA,

OMAHA, N

WORCESTE

BIRMINGH

SYRACUSE

RICHMOND

NEW HAVE

MEMPHIS,

SAN ANTO

DALLAS,

DAYTON,

BRIDGEPO

HOUSTON,

HARTFORD

SCRANTON

GRAND RA

PATERSON

YOUNGSTO

SPRINGFI

DES MOIN

NEW BEDFFALL RIV TRENTON,

NASHVILL

SALT LAK

CAMDEN,

NORFOLK,

ALBANY, LOWELL,

WILMINGT

CAMBRIDG

READING,

FORT WOR

SPOKANE, KANSAS C

YONKERS,

DULUTH,

TACOMA,

ELIZABET

LAWRENCE

UTICA, N

ERIE, PA

SOMERVIL

WATERBUR

FLINT, M

JACKSONV

OKLAHOMA

SCHENECT

CANTON,

FORT WAY

EVANSVILSAVANNAH

MANCHEST

ST. JOSE

KNOXVILL

EL PASO,

BAYONNE,

PEORIA,

HARRISBU

SAN DIEG

WILKES-B

ALLENTOW

WICHITA,

TULSA, O

TROY, NY

SIOUX CI

SOUTH BE

The Move to Warmth

Figure 24: 1980-2000 Population Growth and Mean January Tmp.January mean temperature 1980

Log Change in Population 1980-2 Fitted values

0 20 40 60 80

0

.5

1

Albany-S

Albuquer

Allentow

Atlanta,

Augusta-

Austin-S

Bakersfi

Baton Ro

Beaumont

BirminghBoston-W

Buffalo-

Canton-M

Charlest

Charlott

ChattanoChicago- Cincinna

Clevelan

ColumbiaColumbus

Corpus C

Dallas-F

Davenpor

Dayton-S

Denver-B

Des Moin

Detroit-

El Paso,

Fort Way

Fresno,

Grand Ra GreensboGreenvil

HarrisbuHartford

Honolulu

Houston-

Huntingt

Indianap Jackson,

Jacksonv

Johnson Kalamazo

Kansas CKnoxvill

Lafayett

Lancaste

Lansing-

Las Vega

LexingtoLittle R

Los Ange

Louisvil

Memphis,

Miami-Fo

Milwauke

Minneapo

Mobile,

Nashvill

New Have

New Orle

New York

Norfolk-Oklahoma

Omaha, N

Orlando,

Peoria-P

Philadel

Phoenix-

Pittsbur

Portland

Providen

Raleigh-

Richmond

Rocheste

Rockford

Sacramen

Saginaw-

St. Loui

Salt Lak San AntoSan Dieg

San Fran

Sarasota

Scranton

Seattle-

Shrevepo

Spokane,

Springfi

Stockton

Syracuse

Tampa-St

Toledo,

Tucson,

Tulsa, O

Washingt

West Pal

Wichita,

Youngsto

CityCity 1950 Pop.1950 Pop. 2000 Pop. 2000 Pop. ChangeChange

New YorkNew York 7,891,9577,891,957 8,008,2788,008,278 +1.5 %+1.5 %

ChicagoChicago 3.620,9623.620,962 2,896,0162,896,016 -20%-20%

PhiladelphiPhiladelphiaa

2,071,6052,071,605 1,517,5501,517,550 -27%-27%

Los Los AngelesAngeles

1,970,3581,970,358 3,694,8203,694,820 +87%+87%

DetroitDetroit 1,849,5681,849,568 951,270951,270 -52%-52%

BaltimoreBaltimore 949,708949,708 651,154651,154 -32%-32%

ClevelandCleveland 914,808914,808 478,403478,403 -48%-48%

St. LouisSt. Louis 856,796856,796 348,189348,189 -60%-60%

WashingtoWashingtonn

802,178802,178 572,059572,059 -29%-29%

BostonBoston 801,444801,444 589,141589,141 -26%-26%

The Rebirth of Boston, NYC

• Idea-oriented industries rose in places that were once centers of manufacturing.

• Finance in New York and an urban chain of ideas– Understanding risk and return with data– The sale of riskier assets (Milken)– The use of risky assets to restructure companies (KKR)– The nationwide sharing of risk (Ranieri and MBSs)– The sale of data tools (Bloomberg)

• Finance, management consulting, computers, biotech in Boston

What Do They Make in Bangalore?

• The quintessential example of the flat world is actually a hotbed of learning via proximity.

• Milan thrives and Turin fades.• Minneapolis excels and Cleveland doesn’t. • Birmingham reinvents itself (it always was an

intellectual polis); Manchester doesn’t.

Figure 51980 Share of Skilled Workers

Change Income 1980-2000 Fitted values

.02 .04 .06 .08 .1

0

.2

.4

.6

Akron, O

Albany-S

Albuquer

Allentow

Atlanta-

Austin-R

Bakersfi

Baltimor

Baton Ro

Birmingh

Boston-Q

Buffalo-

Canton-M

Charlest

Charlott

Chicago-

Cincinna

Clevelan

Columbia

Columbus

Dallas-P

Dayton,

Detroit-

El Paso,

Fort Lau

Fort Way

Fresno, Gary, IN

Grand Ra

Greensbo

Harrisbu

Hartford

Honolulu

Houston-

IndianapJackson,

Jacksonv

Kansas C

Knoxvill

Lancaste

Las Vega

Little R

Los Ange

Louisvil

Memphis,

Milwauke

MinneapoNashvill Nassau-S

New Orle

New York

Newark-U

Oklahoma

Omaha-CoOrlando,

Oxnard-T

Philadel

Phoenix-

Pittsbur

Portland

Providen

Richmond

Riversid Rocheste

Sacramen

Salt LakSan Anto

San Dieg

San Fran

San Jose

Seattle-

Spokane,

Springfi

St. LouiStockton Syracuse

Tacoma,

Tampa-St

Toledo, Tucson,

Tulsa, O

WashingtWest Pal

Wichita,

Youngsto

Population Growth in the Northeast and Midwest

coef = .01169126, se = .00161765, t = 7.23

e(

dp

op

| X

)

e( bagrad90 | X )-10.4384 24.0572

-.310423

.311965

Steubenv

Johnstow

Altoona,

Lima, OH

Mansfiel

Youngsto

Williams

LewistonJackson,

Joplin,

Janesvil

Wausau,

St. Jose

Kokomo,

Sharon, Scranton

Sheboyga

Canton--

York, PA

Jamestow

Elkhart-

Decatur,

Evansvil

Reading,

Saginaw-Terre Ha

Elmira,

Glens FaRockford

Utica--R

Sioux Ci

Fort Way

Erie, PA

Muncie,

Lancaste

Benton HDubuque,

Duluth--

Eau Clai

Peoria--

St. ClouAppleton

Waterloo

Allentow

Davenpor

Toledo,

Green Ba

Bangor,

Grand Ra

Harrisbu

Detroit-

Springfi

Pittsbur

Clevelan

Buffalo-

Dayton--

South Be

CincinnaLa Cross

Binghamt

Indianap

Kalamazo

Providen

St. Loui

Sioux Fa

Milwauke

Syracuse

Springfi

Pittsfie

Rapid Ci

Grand Fo

Wichita,

Cedar Ra

New LondSpringfi

Bismarck

PhiladelTopeka,

Omaha, N

Des Moin

Rocheste

Kansas C

Columbus

Chicago-

Albany--Lansing-

Fargo--M

New York

Lafayett

Hartford

Minneapo

Portland

Lincoln,

Boston--

Barnstab

BloomingBurlingt

New Have

Rocheste

State CoBlooming

Champaig

Madison,Columbia

Lawrence

Iowa Cit

Figure 42000 Share of Skilled Workers

Log Wage Residual 2000 Fitted values

.05 .1 .15

9.6

9.8

10

10.2

Albany-S

AlbuquerAllentow

Atlanta-

Austin-R

Bakersfi

Baton RoBirmingh

Buffalo-Canton-M

Charlest

Charlott

Chicago-

Columbia

Columbus

Dayton,

Fort Way

Fresno,

Grand Ra

GreensboHarrisbu

Honolulu

Indianap

Jackson,

Kansas C

Knoxvill

Lancaste

Las Vega

Little R

Louisvil

Memphis,

Minneapo

Nashvill

New Orle

New York

Oklahoma

Omaha-Co

Orlando,

Phoenix-

Pittsbur

Richmond

Rocheste

Salt Lak

San Anto

San Dieg

San Fran

Spokane,

St. Loui

Stockton

SyracuseTampa-St

Toledo,

Tucson,

Tulsa, O

West Pal

Wichita,

Youngsto

hsGrad00 over popOver2500

Log of Housing Price in 2000 Fitted values

12.91 52.3833

10.8667

12.9988

Akron, O Albany-S

AlbuquerAllentow

Atlanta,Austin,

Bakersfi

Baltimor

Baton RoBirmingh

Boise Ci

Boston,

Buffalo-

Canton,

CharlestCharlott

Chicago,

CincinnaClevelan

Colorado

Columbia

Columbus

Dallas-FDayton-S

Denver-B

Detroit,

El Paso,

Fort Lau

Fort Way

Fresno, Grand RaGreensboHarrisbu

Hartford

Honolulu

Houston-

Indianap

Jackson,

Jacksonv Kansas CKnoxvill

Lakeland

Lancaste

Las Vega

Little R

Los Ange

Louisvil

McAllen-

MelbournMemphis,

Milwauke

Minneapo

Modesto,

Monmouth

Nashvill

New Orle

New York

Norfolk-

Oklahoma

Omaha, NOrlando,

Pensacol

PhiladelPhoenix,

Pittsbur

Portland

ProvidenRaleigh-

Richmond

Riversid

Rocheste

SacramenSalt Lak

San Anto

San Dieg

San FranSan Jose

Sarasota

Scranton

Seattle-

Spokane,Springfi

St. Loui

Stockton

Syracuse

Tacoma,

Tampa-StToledo,

Tucson,

Tulsa, O

Ventura-

Washingt

West Pal

Wichita,Youngsto

0.0

5.1

Cha

nge

in P

erce

nt w

ith B

A 1

990-

2000

.1 .2 .3 .4 .5Percent of Adults with BA Degree in 1990

What is good about urban poverty?

• Cities tend to contain a large number of poor people, but that reflects urban strengths more than urban weaknesses.

• In places like Boston, there is opportunity, ethnic networks, and life without cars.

• Cities aren’t making people poor, they are bringing them in.

• Policies that are good to poor people in cities will attract more of them and that is o.k.– the really problem is the artificial equality of suburbs.

Why are so many people still in the rustbelt?

• The rustbelt was built on manufacturing around the waterways.

• Erstwhile creative hubs like Detroit evolved into goods producing machines, but declining transport costs led manufacturing to move.

• Now there is little obvious comparative advantage to these places and the weather isn’t great.

Spe

cifie

d ow

ner-

occu

pied

hou

sing

Families: Median family income i38455 81052.5

77494.6

441903

Akron, OAlbany-SAlbuquer

Allentow

Atlanta-Austin-RBaltimor

Baton Ro

Bethesda

Birmingh

Boston-Q

Bridgepo

Buffalo-

Cambridg

Camden, Charlott

Chicago-

CincinnaClevelan

Columbia

ColumbusDallas-PDayton, Detroit-

Edison,

Essex Co

Fort Lau

Fort WorFresno, Gary, IN

Grand RaGreensbo

Hartford

Honolulu

Houston-

IndianapJacksonv Kansas CKnoxvill

Lake Cou

Las Vega

Little R

Los Ange

LouisvilMemphis,

MilwaukeMinneapo

Nashvill

Nassau-SNewark-U

New Have

New Orle

New York

Oakland-

Oklahoma

Omaha-CoOrlando,

Oxnard-T

PhiladelPhoenix-

Pittsbur

Portland

ProvidenRaleigh-

Richmond

Riversid

Rocheste

Sacramen

St. Loui

Salt Lak

San Anto

San Dieg

San Fran San Jose

Santa An

Sarasota

Scranton

Seattle-

Springfi

Syracuse

Tacoma,

Tampa-St Toledo,

Tucson,

Tulsa, O

Virginia

Warren-F

Washingt

West Pal WilmingtWorceste

Youngsto

Should we be trying to fight history?

• There are good economic reasons for these places declines, government policy is ill equipped to undo them and is often counter-productive.

• Do we really want to push people to stay in declining areas?

• Often place-based efforts look much less productive than people-based efforts (head start

The Rise of the Consumer City

• While clusters of genius are more important than ever, they are no longer tied down by productive amenities

• Increasingly, cities have formed in places where people want to live.

• At the same time, more attractive older cities have become increasingly attractive to people who like density.

When are high real wages bad?

Declining Real Wages and the Rise of the Consumer City

The Rise of Reverse Commuting

Are some cities becoming gateless gated communities?

• Over the past 40 years, there has been a revolution in property rights regarding development, some of this is good, some is bad.

• Suburbs, not cities, are the center of this. • Still, a large number of cities are increasingly

making it harder to build. • This is where Jane Jacobs was wrong.

Density in 1980

Change in Housing Value 80-2000 Fitted values

6.20658 12.3905

-.225138

.993174

Akron, O

Albany-S

Albuquer

Allentow

Atlanta,

Austin,

Bakersfi

Baltimor

Baton Ro

Birmingh

Boise Ci

Boston,

Buffalo-Canton,

Charlest

Charlott

Chicago,Cincinna

Clevelan

Colorado

Columbia

Columbus

Dallas-F

Dayton-S

Denver-BDetroit,

El Paso,

Fort Lau

Fort Way

Fresno,

Grand Ra

Greensbo

Harrisbu

HartfordHonolulu

Houston-

Indianap

Jackson,

Jacksonv

Kansas C

Knoxvill

Lakeland

Lancaste

Las Vega

Little R

Los Ange

Louisvil

McAllen-

Melbourn

Memphis,

Milwauke

Minneapo

Modesto,

Monmouth

Nashvill

New Orle

New York

Norfolk-

Oklahoma

Omaha, N

Orlando,

Pensacol

Philadel

Phoenix,Pittsbur

PortlandProviden

Raleigh-

Richmond

Riversid

RochesteSacramen

Salt Lak

San AntoSan Dieg

San Fran

San Jose

Sarasota

Scranton

Seattle-

Spokane,

Springfi

St. LouiStockton

Syracuse

Tacoma,

Tampa-StToledo,

Tucson, Tulsa, O

Ventura-

WashingtWest Pal

Wichita,

Youngsto

5000

010

0000

1500

0020

0000

2000

$

1950 1960 1970 1980 1990 2000year

10th 50th 90th

Average Values, 316 MSAsFigure 1: Changes Across the House Price Distribution

Prices and Permits across Larger Metropolitan Areas

2005 H

ousin

g P

rice

Permits 2000-5/Stock in 20000 .1 .2 .3

0

200000

400000

600000

Akron

Albany-SAlbuquer

Allentow Atlanta-

Augusta-

Austin-R

Bakersfi

Baltimor

Baton Ro

Bethesda

Birmingh

Boston-Q

Bridgepo

Buffalo-

Cambridg

CamdenCape Cor

CharlestCharlott

Chattano

Chicago-

CincinnaClevelan

Colorado

ColumbiaColumbus

Dallas-PDayton

Deltona-

Detroit-

Edison

El Paso

Essex Co

Fort Lau

Fort Wor

Fresno

GaryGrand Ra GreensboGreenvilHarrisbu

Hartford

Honolulu

Houston-Indianap

Jacksonv

Kansas CKnoxvill

Lake Cou

Lakeland

Las Vega

Little R

Los Ange

Louisvil

Madison

Memphis

Milwauke

Minneapo

Nashvill

Nassau-S

Newark-U

New Have

New Orle

New York

Oakland-

OklahomaOmaha-Co

Orlando-

Oxnard-T

Palm BayPhiladelPhoenix-

Pittsbur

Portland

Portland

PoughkeeProviden

Raleigh-Richmond

Riversid

Rocheste

Sacramen

St. Loui

Salt Lak

San Anto

San Dieg

San Fran

San Jose

Santa An

Sarasota

Scranton

Seattle-

Springfi

Syracuse

Tacoma

Tampa-St

Toledo

Tucson

Tulsa

VirginiaWarren-F

Washingt

West Pal

Wichita

Wilmingt

Worceste

Youngsto

Metropolitan statistical area

Change, 2000 to 2006

Number Percent

Atlanta-Sandy Springs-Marietta, GA 890,211 21.0

Dallas-Fort Worth-Arlington, TX 842,449 16.3

Houston-Sugar Land-Baytown, TX 824,547 17.5

Phoenix-Mesa-Scottsdale, AZ 787,306 24.2

Riverside-San Bernardino-Ontario, CA 771,314 23.7

Los Angeles-Long Beach-Santa Ana, CA 584,510 4.7

New York-Northern New Jersey-Long Island, NY-NJ-PA 495,154 2.7

Washington-Arlington-Alexandria, DC-VA-MD-WV 494,220 10.3

Miami-Fort Lauderdale-Miami Beach, FL 455,869 9.1

Chicago-Naperville-Joliet, IL-IN-WI 407,133 4.5

Las Vegas-Paradise, NV 401,801 29.2

Orlando-Kissimmee, FL 340,292 20.7

Tampa-St. Petersburg-Clearwater, FL 301,718 12.6

Sacramento--Arden-Arcade--Roseville, CA 270,260 15.0

Austin-Round Rock, TX 263,802 21.1

Charlotte-Gastonia-Concord, NC-SC 252,613 19.0

Prices and Permits in ManhattanM

an

ha

ttan

pe

rmits

, un

its

year

Re

al h

ou

sin

g p

rice

s

Manhattan permits, units Real housing prices

1950 1960 1970 1980 1990 2000

0

3000

6000

9000

12000

15000

18000

.6

.7

.8

.9

1

The Declining Height of Manhattan Buildings

Fra

ctio

n o

f Un

its in

Bu

ildin

gs

Talle

r th

an

20

Sto

rie

s

Year Built1901-29 1930-59 1960-69 1970-79 1980-89 post1990

0

.2

.4

.6

.8

1

Density and New Construction

Log of Housing Density 2000

Log of Permits per Square Mile .

0 2 4 6 8

-2

0

2

4

6

Akron

Albany-S

Albuquer

Allentow

Anchorag

Ann Arbo

Appleton

AshevillAthens-C

Atlanta-

Atlantic

Auburn-O

Austin-R BaltimorBarnstab

Bellingh

Bethesda

Billings

Blooming

Boise Ci

Boston-Q

BoulderBremerto BridgepoBurlingt

Burlingt

CambridgCamden

Cape Cor

Charlest

Charlott

Charlott

Cheyenne

Chicago-

Chico

CincinnaClevelan

Colorado

Columbia

Columbus

Corvalli

Dallas-P

DaytonDes Moin

DoverDurham

Edison

Essex Co

Eugene-S

Flagstaf

Fort Col

Fort Lau

Fort Wal

Fresno

Gary

Grand Ju

Grand RaGreeley

Green Ba

GreensboGreenvil

Hagersto

Harrisbu

Hartford

Holland-Honolulu

Huntsvil

Indianap

Iowa Cit

Jacksonv

KalamazoKansas C

Kennewic

Lafayett

Lake Cou

Lancaste

Lansing-

Las Vega

LawrenceLebanonLexingto

Lincoln

Los Ange

Louisvil

Madera

MadisonManchest

Medford

Merced

MilwaukeMinneapo

Missoula

ModestoMonroe

Myrtle B

Napa

Naples-M

Nashvill

Nassau-S

Newark-UNew Have

New York

Norwich-

Oakland-Ocean Ci

Ogden-ClOlympia

Orlando-

Oxnard-T

Philadel

Phoenix-

Pittsfie

PortlandPortland

Port St.

PoughkeeProviden

Provo-Or

Racine

Raleigh-

Reading

Redding

Reno-Spa

RichmondRiversid

Roanoke

Rocheste

Rockingh

Sacramen

Salem

Salinas

Salt Lak

San Dieg San Fran

San Jose

San Luis

Santa An

Santa Ba

Santa Cr

Santa Fe

Santa Ro

Sarasota

Seattle-

SheboygaSpokane

SpringfiState Co

StocktonTacoma

Tallahas

Trenton-

Tucson

Vallejo-Virginia

Warren-F

WashingtWest Pal

WilmingtWilmingtWinston-Worceste

Yakima

York-Han

Yuba Cit

Fraction of Communities With Wetlands, Septic, Subdivision, and Cluster Provisions, 1975-2004

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Wetbylaw

SeptRule

Subdrule

Cluster

Notes -- Communities who adopt provisions at unknown dates are excluded from fraction.

Akron

Albuquer

Allentow

Atlanta-

Austin-R

Bakersfi

Baltimor

Baton Ro

Beaumont

Bellingh

Bethesda

Birmingh

Boise Ci

Boston-Q

Boulder

Bridgepo

Buffalo-

Cambridg

Camden

Canton-M Charlest

CharlottChicago-CincinnaClevelan

Colorado

Columbia

Columbus

Corpus C Dallas-PDayton

Deltona-

Des Moin

Detroit-

Edison

Essex Co

Flint

Fort Col

Fort LauFort WayFort Wor

Fresno

Gary

Grand Ra

Greensbo

Harrisbu

Honolulu

Houston-IndianapJacksonv

Kansas C

Lake Cou

Lansing-

Las Vega

LexingtoLittle R

Los Ange

Louisvil

Memphis

MilwaukeMinneapo

Modesto

Napa

Nashvill

Nassau-S

Newark-U

New Orle

New York

Oakland-

Ogden-Cl

Oklahoma

Omaha-Co

Orlando-

Oxnard-T

Peoria

Philadel

Phoenix-

Pittsbur

Portland

Providen

Raleigh-

Reno-Spa

Richmond

Riversid

RochesteSacramen

St. Loui

Salinas

Salt Lak

San Anto

San Dieg

San Fran

San Jose

San LuisSanta An

Santa Ba

Santa Cr

Santa RoSarasota

Seattle-Spokane

Stockton

Tacoma

Tampa-St

ToledoTucsonTulsa

Vallejo-

Warren-F

Washingt

West Pal

Wichita

Wilmingt

Winston-

Worceste

-.4

-.2

0.2

.4.6

Rea

l App

reci

atio

n in

the

1990

s, .1

=1

0%

-.5 0 .5 1Real Appreciation in the 1980s, .1=10%

Figure 1: Real House Price Appreciation in the 1980s and 1990s

What is good about sprawl?

• While some cities are thriving, Americans are still moving to the car-oriented sunbelt and for understandable reasons.

• While cities do well for the rich and the poor, car-based cities provide faster commutes, cheaper homes (and goods) for middle income Americans.

• Cities must do better in competing for this segment of the population.

avg. vehicles available per hhol

growth Fitted values

.6 2.3

-.129964

.852277

July Temperature

Pop growth, 1990s .

60 70 80 90 100

0

50

100

Akron, OAlbany-S

Albuquer

Allentow

Ann ArboAppleton

Atlanta,

AtlanticAugusta-

Austin-S

Bakersfi

Baltimor

Baton Ro

BeaumontBergen-P

Biloxi-G

Binghamt

Birmingh

Boise Ci

Boston-W

Brownsvi

Buffalo-

Canton-M

Charlest

Charlest

Charlott

ChattanoChicago,

Cincinna

Clevelan

Colorado

Columbia

Columbus

Columbus

Corpus C

Dallas,

DavenporDayton-S

Daytona

Denver,

Des Moin

Detroit,Dutchess

El Paso,

Erie, PA

Eugene-S

EvansvilFayettev

Flint, M

Fort LauFort Mye

Fort Pie

Fort Way

Fort WorFresno,

Gary, IN

Grand RaGreensbo

GreenvilHamilton

Harrisbu

Hartford

Hickory-

Honolulu

Houston,

Huntingt

HuntsvilIndianap

Jackson,

Jacksonv

Jersey CJohnson

Kalamazo

Kansas C

Killeen-

Knoxvill

Lafayett

Lakeland

Lancaste

Lansing-

Las Vega

LexingtoLittle R

Los AngeLouisvilMacon, G

Madison,

McAllen-

Melbourn

Memphis,Middlese

Milwauke

MinneapoMobile,

Modesto,

Monmouth Montgome

Nashvill

Nassau-SNew HaveNew Lond

New Orle

New YorkNewark,

Newburgh

Norfolk-

Oakland,OklahomaOmaha, N

Orange C

Orlando,

Pensacol

Peoria-PPhiladel

Phoenix-

Pittsbur

Portland

Providen

Provo-Or Raleigh-

Reading,

Reno, NV

Richmond

Riversid

Rocheste

Rockford

Sacramen

Saginaw-St. Loui

Salem, O

Salinas,

Salt LakSan Anto

San Dieg

San FranSan Jose

Santa Ba

Santa RoSarasota

Savannah

Scranton

Seattle-

Shrevepo

Spokane,

Springfi

Springfi

Stockton

Syracuse

Tacoma, Tampa-St

Toledo,

Trenton,

Tucson,

Tulsa, O

Utica-Ro

Vallejo-Ventura,

Visalia-Washingt

West Pal

Wichita,WilmingtYork, PA

Youngsto

Green Cities

• Urban residents are much less likely to drive than their suburban counterparts.

• Urban residents live in smaller homes that use less energy.

• Since we don’t tax carbon properly, this means that there are too few people in cities.

• The environmental consequences of environmentalism.

Sources of CO2 Emissions

• Private Gasoline Consumption (Cars)

• Public Transportation Emissions

• Home Electricity

• Home Heating: Natural Gas and Fuel Oil

A Few Caveats

• We are not including anything about industry

or workplace.• We will use a 43 dollar per CO2 ton cost; this

is highly debatable (about ½ Stern Report). • Scale it up or down as you like. • Average vs. marginal homes matter, especially

in heating efficient.

MSA Name

Gallons of Gas for

Automobiles

Emissions from Public

Transportation (Lbs of CO2)

Emissions from Home

Heating (Lbs of CO2)

Electricity in

Megawatt Hours

NERC Factor

Carbon Dioxide

Emissions Cost ($ per

year)

Rank out of

67 Areas

New York, NY 732 2328 11936 7.2 1400 893 6Los Angeles-Long Beach, CA 964 350 6695 8.4 1007 820 3Chicago, IL 1002 1882 12341 10.1 1614 1163 32Boston, MA 967 870 15754 8.3 1185 1058 19Philadelphia, PA 929 1499 14108 12.8 1614 1248 43Detroit, MI 1124 338 17872 9.6 1614 1292 54Washington, DC 1065 1778 5968 14.3 1543 1180 33Houston, TX 1120 506 5255 19.3 1555 1334 63San Francisco, CA 985 631 7074 6.9 1007 813 2Atlanta, GA 1213 411 9425 15.5 1472 1313 58

Table 1: Annual CO2 Output Emissions

CO2 Emissions Cost

Wharton Regulatory Index .

800 1000 1200 1400

-1

0

1

2

Akron, O

Albany--

Albuquer

Atlanta,

Austin--

Baltimor

Birmingh

Boston--

Buffalo-

Charlott

Chicago,

Cincinna

Clevelan

Columbus

Dallas,

Dayton--

Denver,

Detroit,

Fort Lau

Fresno,

Grand Ra

Greensbo

Greenvil

HartfordHartford

Houston,

IndianapKansas CLas Vega

Los Ange

Louisvil

Memphis,

Miami, F

MilwaukeMinneapo

Nashvill

New Orle

New York

Norfolk-

Oklahoma

Orlando,

Philadel

Phoenix-

Pittsbur

Portland

Providen

Raleigh-

Richmond

Riversid

Rocheste

Sacramen

St. Loui

Salt Lak

San Anto

San Dieg

San Fran

San Jose

Sarasota

Scranton

Seattle-

Syracuse

Tacoma,

Tampa--S

Tucson,

Tulsa, O

Washingt

West Pal

City-Suburb Differentials

• For each metropolitan area, we can also calculate the difference between urban and suburban energy usage.

• Calculate gas usage by central city vs. suburb.• Convert public transit by ridership using

census figures. • Calculate energy spending using the IPUMS

for central city vs. suburb.

MSA Name

Suburb-City Difference in Gas for

Automobiles (Gallons)

Suburb-City Difference in

Public Transit Emissions (Lbs

of CO2)

Suburb-City Difference in Home Heating Emissions (Lbs

of CO2)

Suburb-City Difference in

Household Electricity

(Megawatt Hours)

Suburb-City Difference in Cost of CO2

Emissions (Dollars)

Rank out of

41 MSAs

New York, NY 263 -2367 6497 2.7 302 1Los Angeles-Long Beach, CA 28 -229 -382 -1.7 -36 40Chicago, IL 233 -2624 -2449 0.9 38 27Boston, MA 280 -1091 3413 0.9 214 3Philadelphia, PA 291 -2286 256 2.4 185 4Detroit, MI 186 -1214 -6702 -0.3 -88 41Washington, DC 227 -2280 80 3.4 180 5Houston, TX 118 -561 675 2.9 158 6San Francisco, CA 169 -939 1726 1.8 142 10Atlanta, GA 272 -1242 35 3.4 220 2

Table 2: City-Suburb Differences in CO2 Emissions

Towards a Level Playing Field

• Cities are important and while they should not be subsidized, they do deserve a level playing field.

• Anti-urban bias # 1: caring for the urban poor is expensive and should be everyone’s responsibility.

• Anti-urban bias # 2: failure to correct environmental externalities

• Anti-urban bias # 3: failure to let cities grow.