Yesterday’s post on population loss from rural areas generated some really interesting comments.
My main goal was to highlight some of the potential challenges facing rural areas, which I think is important. But as some people rightly pointed out: My home town of Waiuku is not exactly struggling to survive. Indeed, unlike much of rural New Zealand Waiuku’s population has been increasing and the general consensus is that it will continue to grow.
As I expect will the populations of many similar smaller rural towns in the Auckland region, such as Clevedon, Warkworth, and Helensville. And the growth is not just limited to the Auckland region; Kerikeri and Whakatane are two small rural towns that have been on my “superstar” list for a long time now.
But how, you might ask, can I be worried about population decline in rural areas while simultaneously observing that some small rural towns are growing gangbusters? General answers to that question is what this post is about, namely economic patterns in urban development. My main suggestion is that the rapid growth of a few of these small towns can be explained by their proximity to a larger urban area.
Economic patterns in urban development are important because they help you to understand the shape and structure of urban areas. Of course there’s other random things at play, most obviously geography, but there’s also underlying patterns that crop up with unerring regularity. I’m not an expert on all of these patterns, but I know enough to find them interesting.
The first, and probably most important, pattern to observe exists between what economists refer to as land rents and distance to the city centre. Below is a map of estimated land rents [$/sqm] in Auckland, which I made as part of my masters thesis. I say “estimated” because land rents are not often able to be observed independently from the physical improvements that they support, as such you have to “net out” the value of the improvements.
What you see here is a pretty clear trend towards declining land values as one moves away from the city centre. Several plausible economic factors contribute to this decline, such as transport costs and agglomeration economies. There are also historic advantages that come from being the city centre, such as proximity to cultural amenities, which push up land values there. This pattern of declining land rents is usually referred to as the monocentric city pattern.
At this point you might be thinking “gotcha!” – what about sub-centres? Surely they prove the monocentric city theory wrong. Well, not really; the theory has over time been adapted, or more appropriately said extended, to deal with what is technically known as polycentric urban areas with multiple sub-centres.
Glaeser and Kahn developed an economic model of urban development that allows for the emergence of sub-centres at a certain distance from the city centre, in response households and business seeking to minimise their transport costs. This manifests as sub-centres located at a certain distance from the city centre, as illustrated in the slide below.
In the image land rents are on the vertical axis and distance to the city centre and on the horizontal.
This shows declining land rents around the city centre and an emerging sub-centre. The catalyst for the development of the sub-centre is when the economic benefits of doing so (i.e. the capitalised value of the transport cost savings attributable to the sub-centre, which is represented by the area of the small triangle) exceed the fixed costs of setting it up – usually the residual value of agricultural land and any infrastructure costs (represented by the horizontal p_agr line).
Voila! We now have a plausible economic explanation for Manukau, Albany, and Henderson. What’s important to note is that the emergence of sub-centres is above has been simplified to two (d,p) dimensions, whereas in reality cities grown in three dimensions (d,y,p). Not only does this hint at the presence of multiple sub-centres all located a specific distance from the city centre, but layers of sub-centres around sub-centres. Think of it as a Russian doll of sub-centres, if you like.
Which brings us to the interesting topic of “fractals”, which are a field of mathematics that considers self-repeating complex patterns. Wikipedia defines fractals as follows:
The general consensus is that theoretical fractals are infinitely self-similar, iterated, and detailed mathematical constructs having fractal dimensions, of which many examples have been formulated and studied in great depth. Fractals are not limited to geometric patterns, but can also describe processes in time. Fractal patterns with various degrees of self-similarity have been rendered or studied in images, structures and sounds and found in nature, technology,art, and law.
Fractals are relevant to economic patterns in urban development because they seem to explain the patterns seen in sub-regional development, as seen below for Tokyo (source) from 1960 to 1995. Here you see a pattern of the central city with radial transport links connecting to peripheral sub-centres.
Over time the transport links are extended and the more sub-centres tend to develop, athough these new centres seem to be usually smaller and less dense than the ones closer to the city – exactly as we would expect from the simple two-dimensional model presented by Glaeser and Khan.
This is actually an example of an “adaptive nework”, which given a certain starting point (population and network) describes the process by which urban areas and their transport networks might expand. And perhaps even more interestingly, such networks are found in natural structures as well.
A group of Japanese researchers, for example, found that “brainless slime” was able to replicate the structure of the Tokyo subway. The reserachers duplicated“the layout of the area around Tokyo: They placed the slime mold in the position of the city, and dispersed bits of oat around the “map” in the locations of 36 surrounding towns.” This (somewhat over the top) article described the process as follows:
The mold explored slowly at first, but like any good transportation engineer it began to figure out traffic patterns. To continue growing and exploring, the slime mold transforms its Byzantine pattern of thin tendrils into a simpler, more-efficient network of tubes: Those carrying a high volume of nutrients gradually expand, while those that are little used slowly contract and eventually disappear [ScienceNOW Daily News]. When the mold got its system settled, researchers say, it looked rather similar to the actual Tokyo subway system, as you can see in the illustration.
The result is illustrated below (source). If one was being cheeky one might say that the mould developed a more efficient network than your average transportation engineer ;).
Not that I think we should read too much into the ability for mould to replicate a subway network (this seems vaguely reminiscent of a Simpons episode, or maybe it was SouthPark?)
But how does all of this relate to Waiuku?
Well, let’s be honest and accept that Waiuku, and most small towns in New Zealand, were probably established by people who weren’t thinking too much about these types of economic patterns.
Waiuku’s initial settlement was probably in response to its geographical advantages, and the original residents were probably just looking for a place to stick a spade in the ground and call home. From these humble beginnings Waiuku probably developed as a local town servicing surrounding agricultural hinterland, a small localised example of Krugman’s theories on new economic geography (i.e. regional/peripheral economic interactions).
Then came an external shock in the form of the Glenbrook Steel Mill – which had two major economic impacts. First, it greatly increased the supply of relatively well-paid manufacturing jobs in the area and hence in turn increased the residential population it could support. Second, it catalysed major improvements in transport infrastructure connecting Waiuku to the rest of the country. Indeed, it was only around the 1960s that the road from Waiuku to SH1 was first sealed.
Meanwhile, however, a more gradual external economic shock was looming on the horizon: Auckland continued to grow, especially to the south. This – in combination with the improved transport links – enabled residents to shop further afield, in places like Manukau. This in turn led to the gradual erosion of the intensity and diversity of commercial activity in Waiuku. The town was increasingly dependent on Auckland for employment and general retail activities.
And that’ trend has continued: Waiuku is a residential satellite town whose ability to support its population is almost entirely contingent on two things: 1) the Steel Mill and 2) metropolitan Auckland. Naturally, as the local residential population has grown the town’s ability to support more diverse commercial activities has also increased. But this growth is not attributable to Waiuku itself, but more the combination of its proximity to Auckland.
The key point is this: While the geographic, historical, and socio-economic factors influencing urban development are many and varied, some regular patterns/processes seem to emerge. In particular, small rural towns on the periphery of larger urban centres will become increasingly dependent on the latter for their well-being and growth. But this growth is not independent from the growth of the nearby city; it’s intrinsically linked to it.
It also suggests that places like Waiuku and Whakatane, which do have growing populations, may be the “rural” exception, rather than the rule.