Job Sprawl as Deurbanization
A few years ago, Aaron Renn was writing, I think about the General Electric headquarters’ move from suburban New York to Downtown Boston in 2016, that in the future, city center jobs would go to high-value industries like corporate HQs and professional services, and then lower-end stuff like call centers would go in suburban office parks. At the time I didn’t understand the full meaning of this – I was still thinking of employment in a narrow city center of a few blocks rather than a broader region, like the 100 km^2 zone I use to compare the US with Canada and France because that’s the most granular data I have in the latter two countries. But in retrospect, Aaron was getting at a dangerous trend in which job markets deurbanize. This is not a new trend – office park sprawl goes back to the 1970s, and industrial sprawl even earlier – and to some extent it’s less about deurbanization and more about the urban job market reaching maximum size. But whatever the history of it, it’s a serious threat to economic performance – and the solution to it requires better public transportation.
Cities as job markets
I’ve written before about production theory. The only thing I have to add on the theory side is that since I wrote that post, I was at a talk that Alain Bertaud gave at Marron, about urbanization. The main topic of the talk was about urban growth and sprawl in the developing world, but at the beginning of the presentation, he gave some remarks about cities and corona. Zoom meetings like the one we had, he warned, were fine, but cities are fundamentally job markets that succeed through spontaneous interaction, and this spontaneity does not exist with remote work. This is to a large extent the new urban geography thesis of Paul Krugman or the work of Ed Glaeser – cities exist as places of production first, and this production requires close proximity.
Now, close proximity depends on technology. In a city with the transport technology of London circa 1800, close proximity means the scope of the City of London, and even 5 km is uncomfortably far. In a city with cars and highways, the distance is much greater – but it is not the same as commute distance. A half-hour drive is not spontaneous. When I asked American friends and coworkers about their productivity through the spring corona lockdowns, a Boston lawyer told me that lawyers wouldn’t even travel midday for clients for 20-30 minutes, since their time was too valuable – they’d schedule conference calls.
This does not mean that the entire work market has to be within such a short distance. It certainly helps, but different industries can cluster in different parts of the city. But there is a maximum distance within which the city is recognizably a single job market.
Aaron Renn’s bifurcation
Aaron talks about bifurcation a lot, between winners and losers. He relates the move of large corporate HQs to city centers to this bifurcation: city centers win by having higher-value added, higher-paying jobs, everyone else gets saddled with lower-end jobs. Moreover, these lower-end jobs are commodities – a call center can be anywhere – and therefore they compete on price and not quality, frustrating the attempt of any region on the margins of the US to climb up the value chain.
That said, even the sort of job sprawl of the 1970s, spearheaded by big companies’ move out of city centers to rich suburbs like GE to Fairfield and IBM to Armonk, represents the same threat to urban productivity. That was driven by snobbishness – the elite suburbanized, and then dragged jobs outside the city with it, for example GE did partly on spurious grounds of resilience in face of nuclear war destroying city centers. Today, the city gains higher-end jobs at the expense of the suburbs, the opposite of the situation in the 1970s. But the same situation of jobs outside one major core persists.
Is this polycentricity?
No. It’s become fashionable to speak of polycentric cities as the next evolution, to decongest old cores. But doing so requires the urban geography to have centers. I pointed out previously that Los Angeles may claim to be polycentric but is just weak-centered – the secondary centers have a few tens of thousands of jobs each at most. This is not like the big city centers one finds in Kyoto, Osaka, and Kobe, or even in the Rhine-Ruhr or Randstad.
Keihanshin, the Rhine-Ruhr, and Randstad are all agglomerations of historic cities. It is possible to also form polycentric regions out of new development – for example, Yokohama was founded as a 19th-century treaty port and then grew as a Tokyo suburb. Both New York and Paris have moved their central business districts by a few kilometers gradually, New York from Lower Manhattan to Midtown and Paris from Les Halles to around the Opera; both also have near-center business centers, like Long Island City or La Défense. Even then there’s likely to be some efficiency loss in decentralizing city center jobs this way, but it’s still easier to shuttle between Times Square and World Trade Center than between either and New Brunswick.
The public transit solution
In the 1970s, the abandonment of city centers was motivated by a desire to escape their poverty and a belief that the suburbs were the future. Urban poverty still exists but inner-urban wealth is considerable and increasing, and the belief that the suburbs were the future turned out to be incorrect – one cannot be a suburb of nowhere.
The model of suburbanization that can be sustained is one built from the late 19th century to about the 1950s and early 60s: jobs stay in the city, people go wherever.
Doing so requires three things: offices, dwellings, and a way of getting between them.
Offices mean commercial upzoning – some American cities are good about it, but the ones with the most demand, like New York, aren’t. In general there’s little appetite for commercializing near-center neighborhoods in the US, whereas Europe is looser about it and therefore new firms can sprout a few subway stops outside the primary center, for example Spotify two stops outside T-Centralen. Residences likewise require upzoning, especially for mid- and high-rise apartment buildings near subway stations where they exist and have capacity.
But in many cases, it’s required to also build up public transportation. Big central business districts feature hundreds of thousands of people converging on a small area at the peak, and the biggest go up into the millions. The highest-capacity form of transportation is required, which is rapid transit, never cars or surface transit.
Rapid transit and city centers are symbiotic, now as in 1910. An expansive rapid transit system, with high service quality, is required to serve city centers from multiple directions; and city centers are required to give people something to take the trains to, or else they’ll just drive everywhere and only take the train to the sports stadium or the airport.
And ultimately, city centers are required for economic efficiency, because of the importance of proximity for spontaneous economic and social interactions. Rapid transit also benefits from high efficiency – it’s very cheap to operate compared with the cost of car ownership. The alternative is a kind of deurbanization, in which people may live at high density relative to travel speeds but don’t form large clusters enabling the highest productivity.
“Offices mean commercial upzoning – some American cities are good about it, but the ones with the most demand, like New York, aren’t. In general there’s little appetite for commercializing near-center neighborhoods in the US, whereas Europe is looser about it and therefore new firms can sprout a few subway stops outside the primary center.”
This quote caught my eye and I want to know more. To what extent have newly emergent satellite CBDs been more the norm in Europe than the US? I’m curious about examples, especially since I’m less familiar with European job geography. American examples I can think of:
Atlanta: Midtown, Buckhead, Clifton/Decatur
DC: Rosslyn-Ballston corridor, Silver Spring, Bethesda
NYC: Long Island City, Jersey City
Boston: Cambridge, Seaport District
Chicago: West Loop
Philadelphia: University City
Houston: Energy Corridor (I-10)
London has Canary Wharf and Stratford, and Paris has La Défense. But it’s more common for CBDs to just creep outward one block at a time; in Berlin, there’s ongoing commercialization in both Kreuzberg and Gesundbrunnen, adjacent to Mitte.
Isn’t that basically what Chicago has done with the “West Loop” expansion attempt?
Yes, but that’s not a large job center.
Neither was Midtown 100 years ago. Not for white collar symbol manipulators anyway.
In fairness to Alon West Loop (generously defined as North and West of the Freeways, South of the railroad tracks and East of Ashland) looks to have around 30k jobs in on the map, which is an order of magnitude less than the Loop Proper.
Wait, that includes UIC, no?
I was rounding up, but UIC seems to present relatively few jobs. The area I describe above is 27k for all jobs, Going south to Roosevelt takes it to 30k, heading south of that to 16th st (basically up until the BNSF yard) takes it to 34k.
[West Loop west of the freeway] job growth is nascent. [West Loop east of the freeway] is a very successful transport/industrial-> office conversion with tons of jobs. River North similar, less extreme.
In addition to the Paris and London examples, there’s
Moscow International Business Center (MIBC), 4km outside city center and home to Europe’s tallest skyscraper cluster.
Kista in Stockholm. Home to Europe’s largest ICT cluster. Europe’s silicon Valley.
On a smaller scale there’s Business Park Sofia in Sofia, Bulgaria about 10mins from city center by subway. No higrises, but it’s a lot denser than the typical American office park.
University City isn’t really a Satellite CBD though. It’s . . 1-2 subway stops from the main CBD, which is creeping west on its own.
If you were to look at the Philly skyline, you wouldn’t recognize them as distinct places.
Seattle: U-District (in Seattle municipality) and Bellevue across the lake. Both have had recent zoning changes which I believe are the exact commercial upzoning Alon is arguing for.
U-District is the neighborhood immediately west of University of Washington and has a new subway under construction that will open in a few years, and Seattle has upzoned the area immediately around the subway station for towers (there’s currently exactly 1 tower, though the neighborhood is currently dense midrise). Bellevue was a classic 1980s freeway oriented job center with low density residential neighborhoods, but the city is very tower friendly, recently upzoning to allow 600′ across most of the CBD. Amazon recently announced they will drop in 30,000 jobs, which is leading to a flurry of new towers proposed; Bellevue CBD will have massively improved transit access in 2024 with a new light rail and several freeway ‘BRT’ lines opening. Bellevue and Seattle downtowns will be ~20 minutes by light rail, with Microsoft’s campus <15 minutes the other direction on the same line, so not exactly spontaneous but plenty close for a midday meeting.
King County’s Kirkland/Bellevue/Redmond/Bothell is the Silicon Valley to Seattle’s San Francisco. Oodles of tech jobs in wealthy, suburban cities. But with East Link opening and Bellevue’s office towers rapidly outshining the suburban office parks elsewhere in East King, I wonder if Bellevue will emerge as a good example of a polycentric job center and a case study on how to fix Silicon Valley? Basically, run Caltrain at subway frequencies and build 400′ towers in downtown Palo Alto.
Palo Alto would never allow towers…
Political issues aside, San Jose is the better candidate for a job center since its downtown is already a regional hub on road and transit networks and will have a subway line eventually (BART extension). There are issues with building towers in San Jose (airport height limits), but it’s certainly possible to have a dense mid-rise downtown.
” Even then there’s likely to be some efficiency loss in decentralizing city center jobs this way”
I wonder if there are examples of times where it would be helpful (or at least not damaging) if there were polycentric cities. Say for example Amazon’s HQ2 actually went to LIC, and other technology companies followed suit. That way you could still get same industry face-to-face random mixing in the polycenters, and the larger scale benefits of having a giant labor market where workers can hop between industries.
This kind of jobs sector map is a bit too granular to see if something like that already exists, unfortunately:
Long Island City is one subway stop from Grand Central. Or the LIRR stop before Penn Station on westbound trains. that stop there.
Polycentric cities seem to be either very car oriented or work best in areas where the subway/public transportation network is more like a collection of noodles so you don’t need to travel through downtown every time to get there. New York City’s subway doesn’t really work for a polycentric city because unless you are on the G line, you are going to need to go through Manhattan if you lived outside of Queens to get to Amazon’s LIC headquarters.
Well yeah – you’d need a polycentric transit network to serve a polycentric city
France still thinks that moving universities and research centres to the suburbs is the way forward. Case in point: Paris-Saclay , the “French silicon valley”, the “new Versailles”. Paris Télécom moved there last year. For an extra laugh, they hype up metro line 18 as a way to connect to Paris intra-muros (it does no such thing, the RER B will still be faster even though it just skirts the area).
I’m really not sure what you are sneering at. Saclay had its origins in the post-war expansion of government research and expansion of universities. Unless you think they had space in central Paris for the particle-accelerators etc for the nuclear physics followed by a dozen other modern tech. A bit like the NIH was established post-war on the outskirts (suburbs, Bethesda) of Washington DC–the famous Clinical Center-Building 10 opened in 1953. But perhaps it is more similar to Brookhaven National Labs established in 1947 in the middle of Long Island with its particle accelerators, ion beams, synchrotrons etc. Saclay was formally established in 1956 as a branch of University of Paris, became the independent University of Paris-Sud in 1971 and finally Université Paris-Saclay in January this year. It has integrated 3 universities (or will; 10k staff, 60k students + 23k post-grads), 9 Grandes Ecoles and another dozen research institutes. Most of this lot were already there in the region for decades, some for >60 years. The new thing, since 2015, is to integrate the sprawling campuses and it makes perfect sense. Just 3 months ago it achieved 14th in the world in the 2020 [Shanghai] Academic Ranking of World Universities. In Physics it is #1 in Europe. Researchers around the world in physics, agriculture or bio-medicine know the names Jouy-en-Josas, Orsay & Gif-sur-Yvettes (all around Saclay and now integrated).
As to M18, it connects to intra-muros Paris because it will be the main means of getting to RER-B at Massy-Palaiseau, though it will also connect to RER-C and the M14 extension to Orly airport. It might eventually connect to La Defense at Nanterre-la-Folie.
Télécom Paris had a perfectly good intra-muros location before being forced to move in this hardly-accessible area.
They moved into that site in the 13th arrondissement of Paris in 1937! Do you think telecoms have grown a little bit in scope for the nation’s main school in the discipline to be limited to a building almost a century old? Funny enough, being located in the 13th, Alon would have urged them to demolish and rebuild a hi-rise because the arrondissement allowed 31 storeys in the 80s — though I don’t know of any hi-rise non-residential except the Jean Nouvel Duo Towers (39 storeys) currently under construction, but it is right on the boundary line of Paris in a 50m block just on the other side of Boulevard Peripherique. There is new university stuff built in that sector (the eastern edge along the river below the Bibiliotheque Nationale), but no it makes more sense that they join the critical mass of physics & e-tech sciences at Saclay.
Reading this, I think that I am reading a post from an alternate timeline. You don’t know almost all office spaces stand empty?
Corona is here to stay, the future is remote work.
Office buildings are on the way out.
Office space demand is suppressed right now, but it won’t be that way forever. Working from home has made interaction with my colleagues a chore and I’m not the only one complaining about that. My employer is currently renovating a tower in Oakland with plans to consolidate 3 of it’s offices spread across the bay area suburbs of Concord, Walnut Creek, and San Ramon despite the current situation. Though it was in motion before the pandemic hit.
Yes finance departments can get quick wins today by delaying office space spending in response, but I can only imagine the productivity deficit over the next coming years expecially ROI on R&D.
No, I don’t know it, in countries that have beaten corona people seem to be back at the office.
There’s almost certainly going to be a balance between home working and office working in the future. This means office space demand will be lower – although I suspect peripheral office space will be affected more than central London.
Would Dallas, Houston, Austin be arguments against your argument that “ city centers are required for economic efficiency”? All have very weak CBDs and no rapid transit (all light rail is on the surface) and yet they, along with similarly modeled cities like San Antonio, Charlotte and Denver, have job growth and GDP growth as good or better than well performing strong center transit cities like NY, SF, SEA and far better than Chicago and Philadelphia.
While some large companies are returning to CBDs from adjacent suburbs just as many are moving Out of state to suburbs of Texas cities. You said you have to be a suburb of somewhere, but what if the suburb is the somewhere? Is it possible that in addition to the ‘telephone exchange’ urban model (interaction/spontaneity via everyone connected to the center via hub and spoke transit) that an ‘internet’ model (evenly spread nodes connected to many other nodes via cars) is equally viable?
It should be noted that these sunbelt cities have a higher standard of living than traditional center focused cities, due largely to lower housing costs. This is true for low income people as well, with the supplemental poverty rate that accounts for cost of living being lower. Whether this is an argument for the decentralized model (economic efficiency might be slightly less, but everyone lives better) or a factor that causes growth despite decentralized limitations (i.e. everyone would move back to NY if they built enough homes) I don’t know.
No, they’re arguments in favor of my thesis, as is Los Angeles. They have healthy population growth (except LA), but a lot of it comes from people fleeing high costs in California and New York, which is precisely the deurbanization I’m warning of. The highest-income regions of the US are the Bay Area, New York, Seattle, Boston, and Washington, but they’re not producing enough city center office space or enough urban housing that’s conveniently accessible to the city center office space, and therefore firms deurbanize or dislocate to lower-wage, lower-productivity regions.
I think that the missing piece of this line of thought should be stated explicitly. The sprawling, suburbanized sunbelt cities are growing at the cost of northeastern and west coast cities. Their growth is not “new” growth, it’s just growth being lost from those places. Those cities are playing a zero-sum game, which is exactly not what the economics of urban agglomeration is about.
I’m guessing that you’re referring to tax-, incentive-, poaching-based kinda political games that all cities and states play? Those are obnoxious, but the order-of-magnitude bigger story here is the development restrictions in NY/SF (DC/Boston a second tier), which can hardly be blamed on the building-boom towns.
You’re right; the movement to those places is at least partly (maybe even largely) the fault of the places people are leaving. Nonetheless, the point is that by not having those people move into locations that are as dense as those they left, there’s less interaction, less activity, less growth occuring than there’d have been otherwise.
I’m biased in favor of walkable/transit/CBD cities, but I don’t think those examples match your story that well.
SF’s income-driving specialization started in its burbs.
Boston’s is still not in its CBD.
DC’s has nothing to do with any economic logic.
Seattle isn’t particularly CBD-oriented.
Also, has anybody investigated how much survivorship bias from housing costs affects these income numbers? Imagine cities Alpha and Beta with equally innovative job centers, but Alpha is no-build and Beta is free-build. Alpha is going to measure as significantly higher-income as lower-income people are driven to Beta, even though we held innovation constant.
Silicon Valley started in a pretty big edge city – not the drip-drop LA job centers with 30,000 jobs at one place without much structure to where they all are, but rather big office parks that are all in the same general area within the region, so there could be spontaneous interaction and easy job changes.
And I looked at the effect of migration on incomes in New York and California in the 2000s. The effects were minimal in both states, and in New York the direction actually went the other way from what’s expected.
Silicon Valley started in a pretty big edge city
It was a string of conventional railroad suburbs.
These conventional raidroad suburbs were also tiny in population when Silicon Valley started too. Many were practically rural. Palo Alto had a little over 25,000 people in 1950. San Jose was only 95,000 people. Santa Clara county slightly under 300,000 people. San Mateo less than 250,000 people.
Yes, and as Silicon Valley turned into more than Stanford’s pet project, that area got bigger, just as Manchester and Birmingham grew in the Industrial Revolution.
The transistor was invented in 1947. Shockley didn’t move back to California until 1956.
“ rather big office parks that are all in the same general area within the region, so there could be spontaneous interaction and easy job changes.”
But as myb6 pointed out, if Silicon Valley achieved good spontaneous interaction then that undercuts your argument that suburbanization/deurbanization is bad and CBDs are necessary for such spontaneity. Silicon Valley is very much suburban office parks of the GE/IBM style you criticize in your post. From Facebook HQ to Cisco at Tasman north is 17 miles, easily the 30+ min (far more if 101 is congested) you state is too far for spontaneity, and that doesn’t take you through Stanford Research Park or Cupertino/Apple. For comparison all of Manhattan is only 13 mi long.
If Silicon Valley could make that distance work, why not Dallas-Irving (12 mi) or Houston to Uptown (10 mi)?
Silicon Valley is a good example of how freeway work great until they don’t. In the 60s and 70s, traffic was (relatively) light and housing was cheap. Spontaneous interaction was abundant. Silicon Valley broke down later when the trip density exceed the freeway capacity, plus the region failed to built housing near job creation so VMTs spiked even more
In some parts of America, land is cheap and traffic is minimal. In those regions, transit really only exists to serve those unable or unwilling to drive. Silicon Valley was one of those places in the mid 20th century, but not any more.
A contemporary example of spontaneous interaction without urban density might be fracking, which was developed through of series of innovations and idea cross-pollinations in west Texas in the last decade. Clearly, west Texas is sparsely inhabited so engineers don’t need trains to talk shop in Odessa dive bars. But since most 21st century innovation probably doesn’t involve resource extraction in rural America, I think Alon’s argument holds.
Alon I’d be interested to learn what you found in more detail, regarding migration and incomes. I’m not even sure what to test, we’re comparing with a hypothetical, and some of the more straightforward tests I can think of wouldn’t really tell us much, too much confounding going on (eg pre-existing differences in income across metros, different mobility across S-E groups, family formation effects, etc).
AJ I completely agree, I think building housing and transit where there’s demand is great policy; rather, I’m skeptical that [urban form -> innovation/income] is a notable effect relative to [innovation/income -> demand for urbanity], because the historical case for that doesn’t seem very strong. I’m probably not expressing myself perfectly, let me know if that’s legible.
It’s probably a both/and? Economic prosperity creates population clusters (production theory), which communities then organize into an urban form. Separately, agglomeration is shown to correlate with productivity, and innovation theory posits that interactions encourage innovation, which then suggests ‘good’ urban form creates more productivity and growth than bad urban form. It’s these two actions (growth -> urban form; urban form -> growth) that drive the economic flywheel that has been accelerating since the 1st industrial revolution and the dawn of modern urbanization.
“Economic prosperity creates population clusters (production theory)”
Just curious, how does this work?
“People move to gain (better) employment” would be the short answer, I suppose. ‘Prosperity’ simply has to be relative, not absolute, to drive migration.
1. My favorite example: in 1950, Detroit had the same population as Los Angeles (1.8 million). A high school grad (of any skin color) could get a job putting bumpers on pickups, get married, buy a house, raise two kids, and point them to college. When the Germans and Japanese recovered from WWII, the “good times” ended and the outward migration began. Detroit is presently 670k population.
2. Shockley’s contribution to Silicon Valley (besides co-inventing the transistor and understanding that silicon was the material of the future) was teaching/training the “Traitorous Eight” who went on to found multiple semiconductor companies in the same locale.
3. Silicon Valley was originally “anchored” by Hewlett Packard in Palo Alto. A successful technology company started in a garage and founded/run by very smart and motivated people. Ampex then invented the video tape recorder and went one city north.
4. Before HP, the Varian brothers invented the klystron tube (microwave) at Stanford which made airborne radar possible for the Allies.
5. Going back further, the real original Silicon Valley tech guy was Doc Herrold, who in 1909 built the worlds first consumer broadcast radio station in downtown San Jose.
6. FYI. When Hal David wrote the lyrics to “Do You Know The Way To San Jose”, it was based on his memories of being stationed in Monterrey during WWII, and coming up to the “big city” of San Jose on leave.
Just to point out that (3) (Hewlett-Packard) was 15 years before (2), and that both Hewlett and Packard were Stanford grads. Also it was HP who set the trend of very liberal workplaces famously imitated by most other SV startups, small and big. Indeed quite a lot of those startups were started by people spinning out ideas/tech/expertise/cred from HP. Lots of examples including of course Steve Wozniak, but also, in my field, automated DNA sequencing*.
Which reminds me of one of the most famous collaborations of all-time: the Cohen-Boyer patents on recombinant DNA. Alon says collaborations of greater than 30 mins travel are unlikely but the Bay Area is a bit of an exception. Howard Boyer was at UCSF (as it happens by fluke I worked in his old labs on the 15th floor of the Health Sciences East building) while Stanley Cohen was (is) at Stanford. Their patent earned $300m for Stanford alone, and led to creation of the world’s second (and to this day most successful) biotech, Genentech, located halfway between the two universities. In fact UC-Berkeley also played a big role in the birth of that science and the biotech that was spun out from these three institutes. Most people think of e-tech when they think of the Bay Area but these three institutes stand at the apex of the biotech revolution and swapped ideas and personnel between themselves and industry. Indeed just last week Jennifer Doudna of UC-B won the Nobel for CRISPR and she has created or is on the board of a dozen biotechs.
*HP was the premium biomedical equipment company in the world so no surprise that they were targetted by the inventors (from CalTech) for a roadshow demonstration of the technology in the hope of funding. HP passed but several of the HP engineers at the preview decided it was a winner and left HP to take up the new technology in a new company ABI (Applied Biotechnology Inc), and as they say, the rest is history. ABI was based in Foster City. This was the company that, over the next few decades (and name changes), built the machines that did the heavy lifting for the Human Genome Project. Also the other (#2) company in the world was in Mountain View.
That really isn’t true… Detroit was racially segregated and union jobs went to white and not black workers.
1: Part of that is the decrease in household size in the past 70 years.
2; They didn’t actually start producing stuff in volume until the 60s. The population in 1950 is mostly irrelevant.
3 Wikipedia says HP had 215 employess in 1959. Using vacuum tubes.
4 The magnetron make airborne radar possible.
5. …. using vacuum tubes
Detroit was racially segregated and union jobs went to white and not black workers.
The whole country was “harmonious”. There were severe labor shortages and they hired anybody who was still breathing.
“It should be noted that these sunbelt cities have a higher standard of living than traditional center focused cities, due largely to lower housing costs. This is true for low income people as well, with the supplemental poverty rate that accounts for cost of living being lower.”
I am going to challenge this statement, particularly the part about low-income quality of life being better in these places. I agree it’s way more comfortable to be middle class (and up) in these low-cost sunbelt cities, but there are hidden costs that seriously screw over low-income people.
First and foremost is car ownership. In these cities, the vast majority of jobs require a vehicle to access. Low-income households get stuck with the Sisyphean choice of having car payments eat up a bunch of their income, or have limited job opportunities and spend a bunch of time trying to take care of ones’ needs on a piss-poor public transit system. https://htaindex.cnt.org/
The second hidden cost is in the lower levels of physical activity and the healthcare costs it creates. In auto-oriented cities, physical activity has to come out of leisure time, via gym ownership, time to run, etc. The working classes who work long hours do not have the time for these things, and also do not get exercise via the pedestrian chore-running typical in NYC. This leads to lower life expectancies and worse health outcomes for low-income people throughout the sunbelt, even after controlling for race, access to health insurance, etc.
Agreed, and I’m glad someone challenged those statements about ‘quality of life’. It is entirely an American view of ‘quality’, and an American econocrat at that. On that issue, your second point (‘second hidden cost’) is the more important one, especially as it also is impacted by the bizarre situation of employment-dependent healthcare insurance. The true cost of the American way of urbanisation and ‘living to work’ is beyond measure, which is why statements like this (below) from econocrat Michael Boskin in Project Syndicate a few days ago are so seriously misleading:
And it’s not solely healthcare (which is a huge part of quality of life) but also childcare, paternity/maternity leave, educational costs and unequal accessibility etc etc. As the whole world watches this election farago like never before, the horrorshow is clearer than ever.
“I am going to challenge this statement, particularly the part about low-income quality of life being better”
First off I will agree with you and Michael James that “quality of life” was probably not the best choice of words for my point. Many factors go into quality of life, including health, and for some people higher cost of living is acceptable if it means access to a vibrant urban environment, or an active arts scene, etc. However…
“there are hidden costs that seriously screw over low-income people.”
First off the supplemental poverty rate factors not just transportation but goods, healthcare, taxes, and even government assistance (cost reduction). Metro area results are unmistakable: SF/San Jose, DC, LA, Boston, NY, Seattle fill out the top twenty (with related MSAs like Oxnard, Bridgeport, etc.) with a poverty line of 35-45k, while MSAs like Dallas, Houston, Atlanta, Charlotte rank below the top 50 with poverty lines of 30k or less (Miami and Austin rank near the top with poverty lines of 32-33k). Note state level comparisons are different with NY similar to Georgia due to poverty being more rural.
Cars are more expensive than using transit, but median 1bd rent in SF is $2,767 while in Dallas it is $1,288; there is no way someone paying 15k a year in rent is paying 17k for a car to make up the difference even before adding in SF transit costs.
Your H+T (housing + transportation) link appears to be a flawed methodology. They are not comparing actual housing and transportation costs, they are comparing actual housing costs plus *a model* of what they think transportation costs *should be*. The model has issues: they only include the cost of cars up to 10 years old, even though many people buy older cars or keep cars longer; they use the CPI-Urban cost index for car ownership – although I don’t know details this would bias against suburban/exurban areas by using higher urban costs; their Transit Area Shed assumes a 30 min ride with 1 transfer even though longer trips with multiple connections are common in the best US transit areas (driving up cost paying a PATH then a subway fare, multi-zone Caltrain trips, etc.)
As an example of the the model’s flaws, it gives a range of H+T costs relative to median income as 12-82% in the SF Bay region, but 24-116% in the Charlotte area. It is absurd to suggest that in any census block people are paying more than they earn on just housing and transportation (do they have a no limit credit card and a bank that doesn’t care when they miss payments?) without spending anything on food, clothing, etc. And somehow what everyone acknowledges is the most expensive metro in the country is actually more affordable than a metro known for affordability (I’m sure people are going to start flooding back to CA any day now once they realize how much more expensive it is in Charlotte, Nashville, etc.) It seems clear the model over-inflates the cost of car ownership.
You have the issue backwards. For professional/upper class people who can afford to live in select neighborhoods with good transit access to their jobs the ability to not pay for a car is a bonus adding to their disposable income. For low-income people paying hundreds of dollars less on an apartment far outweighs the difference between a monthly transit pass and gas/insurance/etc., especially when you consider the time advantage of cars over transit trips for almost anything except peak travel to center cities.
The official HMRC calculation in the UK is that running a car costs 45p a mile. Assuming 10k miles a year that’s £4500 a year. That should be achievable with something like a new VW Golf taking it to the dealership. For an old car without using genuine parts fitted in a backstreet garage even in the UK is surely only going to set you back 30p a mile and perhaps 30 cents a mile in the US as costs are lower.
It’s a measure relative to median income so that is easy to understand why it can exceed 100%–I’m surprised it is not higher but of course median income is much higher in the Bay Area. Rents on average may be a lot lower in Charlotte but so is median income. It really just shows up the inequality in desirable work/living areas and that a significant fraction of people are way above the median, enough to force up median rents.
The thing about car-ownership is how much it impacts both cost-of-living and quality-of-life. In most American housing situations every adult household member has to have a car, and use it a lot, while in compact Eurocity-developments most will be single-car households and a significant number will be zero car. Plus they won’t use their car nearly as much. Then there is the awful effect of car-dependency on quality-of-life which eventually catches up with a big, sometimes disastrous, impact on cost-of-living (more personal bankruptcies in US are due to an adverse health event than any other cause).
Re your final para, the problem with most American cities (only true exception is NYC) is that even apartment dwellers and the poor must drive to hold down a job. Those who don’t/can’t drive, often have a shocking burden trying to survive via public transit. And if they have a car it will often be an old clunker that is unreliable and adds its own measure of poor quality-of-life, like that tiktok guy 420doggface208.
I’m wondering if changes in architectural tests were just as important in the dominance of the car was another important factor in job sprawl. From late 19th century to the mid-20th century, having a big fancy office building or skyscraper as corporate headquarters was important in the United States. It was a sign you arrived as a company. Mid-20th century caused a change in this. Having a big fancy office building or sky scraper became less important, especially outside New York, Chicago, and I guess San Francisco to an extent. Now it was having an entire campus and low lying series of buildings to yourself that meant you arrived as a company.
It shortened upper management’s commute. So they convinced themselves it was fabulous to be in a office park.
A lot of the high tech industries needed more generous space that a CBD could offer too, at least for their labs.
I want to challenge the premise that higher wages means higher productivity. That’s only true if labor markets are competitive, which we have ample reason to doubt.
The explanation with the best evidence is that wages for top managers are determined by agency costs and wages for everyone else are determined by market power. Even excluding top managers, workers with less power (nonwhite, mothers) will be more underpaid than white men, meaning wage comparisons tell us very little. We need an independent measure of productivity.
Recently, tech companies have cut wages for people who relocate away from SF. Since everyone is working from home now, it can’t be that workers who live farther from SF are less productive. If firms pay workers outside SF less than pay reflects housing costs, not productivity.
I do not like the suburbs myself. I think there’s a lot of value in cities. But, if labor markets aren’t competitive, I am not sure how anyone can measure labor productivity with wages.
“workers with less power (nonwhite, mothers) will be more underpaid than white men”
First provide evidence of that, before using it as evidence of a disconnect between wages and productivity.
“If firms pay workers outside SF less than pay reflects housing costs, not productivity.”
Only in the short term. Work teams which have been put together in SF tend to be productive, and they remain productive if the workers need to work remotely for a year. But let’s say 10 years down the line, when a new team needs to be put together, it will not be possible to put together an equally talented and productive team outside the physical limits of SF.
(Or else maybe it will be possible to put together an equally good team working remotely, due to remote work software which has only developed in the last few years and not had its full market impact yet. In that case, SF employers will not be able to compete while paying SF salaries, and tech jobs will drain out of SF until there are equal to elsewhere.)
The creation of a CBD requires a much larger driving force than just public transit. When public transit actually creates a CBD (e.g. Shinjuku) it is often unintended than planned.
> [North American LRTs] run on entirely dedicated tracks
I’m going to quibble with this a bit. The LRT in Waterloo Region, Ontario has a section of track that was preexisting freight track, and is still used for overnight freight service.
Commented on the wrong post.