An interesting recent article in Atlantic Cities asked the question of whether we’ve reached “Peak Sprawl”?
Metropolitan Atlanta, long a symbol of car-dependent American sprawl, has recently passed a threshold where a majority of its new construction spending is now focused in high-density, “walkable” parts of town.
Since 2009, 60 percent of new office, retail and rental properties in Atlanta have been built in what Christopher Leinberger calls “walkable urban places” – those neighborhoods already blessed by high Walk Scores or on their way there. That new construction has taken place on less than 1 percent of the metropolitan Atlanta region’s land mass, suggesting a shift in real estate patterns from expansion at the city’s edges to denser development within its existing borders.
“This is indicative that we’re seeing the end of sprawl,” says Leinberger, a research professor with the George Washington University School of Business, who led the study in conjunction with Georgia Tech and the Atlanta Regional Commission. “It does not say that everything turns off. There will still be new drivable suburban development. It’s just that the majority will be walkable urban, and it will be not just in the redevelopment of our downtowns, but in the urbanization of the suburbs.”
Sure Atlanta is just one place, but in recent decades it has taken over from Los Angeles as the real poster child of urban sprawl – which really makes one think that if sprawl seems to be on its way out in Atlanta then it’s really time to sit up and take notice.
There’s also a really interesting connection between the different shape of our built environment going forward and the road to economic recovery:
“People might be saying, ‘Oh, get real Leinberger.’ But we invest 35 percent of our wealth in the built environment,” he says. That refers to both infrastructure and real estate. “So, it’s a pretty significant sea change in how we build the country. The country’s going to look fundamentally different over the next generation than it has over the past two generations.”
Plenty of other people will inevitably argue that it’s too soon to declare sea changes of any kind while the recovery is still ongoing (we have, after all, been having the exact same conversationabout trends in the decline of driving). Won’t we go back to building how we’ve been building for decades once the economy picks back up? Perhaps it’s the economy, and not changing consumer tastes, that’s holding sprawl at bay?
Leinberger looks at his data, and then looks at this question differently.
“I think there’s a cause-and-effect issue here,” he says. “I think that when the economy picks up steam, it’s going to be because we learn how to build walkable urban places. Real estate caused this debacle, and real estate has always acted as a catalyst for economic recoveries.”
He figures we’re sputtering along at 2 percent growth precisely because we’re not building enough of the walkable urban product that the market wants. “And it’s signaling with pretty flashing lights,” he says, “to build more of this stuff.”
The connection made with driving trends is a particularly interesting one because I think that fundamentally they both relate to two particularly important demographic changes going on in both the USA and New Zealand (and obviously other developed world countries):
- The baby boomers are shifting into retirement age and therefore both not driving as much as well as wanting different housing options from the large standalone houses they’ve lived in for decades.
- Younger people (Gen Y, Millennials or whatever you want to call them) aren’t following the same housing and travel trends as their parents – instead driving less and often preferring more urban and walkable environments. Technological change may be playing an important role in this shift.
I think that this cuts to the heart of why we find the gutting of the Unitary Plan’s provision for intensification in inner areas so frustrating. It’s not (just) that providing for intensification will lead to better transport and other outcomes, it’s that all signs suggest the type of housing Auckland will most need in the future – to respond to these changes demographics and in step with international trends – will be smaller apartments and terraced housing in walkable, inner suburban areas with good access to public transport.
We talk quite a bit on this blog about the importance and value of agglomeration, which is the additional level of productivity which comes from locating activities close to each other. Agglomeration is why Auckland growing will be good for all New Zealanders, and at a smaller scale why central parts of Auckland growing will be good for all of Auckland. While agglomeration economies are well studied in terms of observing that they most definitely do actually exist, it has been a little less certain exactly why they exist.
A recent article in The Atlantic Cities reports on research done by MIT (Boston version, not Manukau version) on this question – with some perhaps unsurprising but at the same time interesting results:
There have been plenty of theories. Adam Smith famously figured that people become more productive when we’re able to specialize, each of us honing a separate area of expertise. And when lots of us elbow into cities, we’re able to specialize in ways that we can’t when a rural farmer must also double as his own butcher, accountant and milkmaid. Other economists have suggested that cities become great agglomerators of industry when factories cluster together around economies of scale and communal access to transportation.
“We think there’s an underlying completely different way of thinking here, which is very different from the economist’s way of thinking,” says Pan, a doctoral candidate in computational social science in the MIT Media Laboratory’s Human Dynamics Lab. Previous work by researchers at the Santa Fe Institute has proven the math behind the power of cities: As they grow in population, all kinds of positive outcomes like patents and GDP and innovation (and negative ones like STDs and crime) grow at an exponential factor of 1.1 to 1.3.
This means that all the benefits (and downsides) that come from cities don’t just grow linearly; they grow super-linearly, and at roughly the exact same scale, with a growth rate that looks on a graph something like this blue line (a linear relationship is shown in red):
As for why this happens, though, Pan pushes aside theories about the location of manufacturing or the specialty of trade. “It’s more fundamental than that,” he says. “Cities are about people. It’s just that simple.”
We have discussed the work of the Santa Fe Institute in before in this post with a video presentation by theoretical physicist Dr Geoffrey West.
The full paper in which the study is published highlights that fundamentally it’s the density that we’re able to form social ties which generates the super-linear increase in outcomes. As noted, “the larger your city, in other words, the more people (using this same super-linear scale) you’re likely to come into contact with.”
However, unlocking the potential of cities is dependent upon ensuring that sufficient transport infrastructure is available for the city to effectively function as a large connected entity, rather than just a series of smaller disconnected placed which just happen to be next to each other. This is detailed further below:
“What really happens when you move to a big city is you get to know a lot of different people, although they are not necessarily your ‘friends,’” Pan says. “These are the people who bring different ideas, bring different opportunities, and meetings with other great people that may help you.”
Maybe this doesn’t sound like a novel discovery – that the inherent power of cities lies in our individual connections to each other. Other researchers have nipped at a similar idea, calculating, for example, the “social interaction potential” of place. But until recently, most economic thinking sidestepped the sheer value of human interaction in favor of explanations about the proximity of manufacturing, or the processes of production.
This explanation for the power of cities also raises some curious questions about those places that remain an exception to the model. In some African cities and Eastern mega-cities, innovation and productivity don’t grow super-linearly. Populations grow, but the benefits don’t accrue with them as we would expect. This is likely because transportation infrastructure in those places is so poor that people aren’t able to connect across town to each other. “To live on the west side of Beijing,” Pan says, you never go to the east side.”
What I find fascinating is to analyse whether the internet has the ability to change this fundamental relationship – because it’s now so easy to be in instant contact with a huge number of people no matter where you are. Yet none of the recent research seems to suggest that technological advances make agglomeration less important – in fact it seems like as employment specialises more and more, agglomeration actually becomes more critical than ever.
The post I wrote a week or so ago, asking the question of whether Auckland should grow at the pace, or to the extent, of current projections, generated more comments than any other post on this blog ever. There has also been an ongoing flow of letters to the editor in the NZ Herald questioning whether it’s in New Zealand’s best interest, including Auckland’s best interest, to see such a significant chunk of the country’s future population growth in one city.
This situation seems to arise from a lot of people not liking the extent to which the Unitary Plan proposes intensification within Auckland but also not really liking the alternative of seeing Auckland sprawl further and further into the countryside. Put simply, given the choice of “up”, “out” or “both” they think there’s another option of “neither” (or at least not to the extent proposed). Seeing further projections of worsening traffic conditions over the next 30 years, even if we spend an eye-watering amount of money on transport infrastructure, probably reinforces these thoughts.
Personally I don’t mind the prospect of Auckland growing so much, as long as we ensure that growth happens in a way that’s well designed and properly pays for itself. I like the hustle and bustle of a big city, I like Auckland’s growing diversity, I think that 1.5 million is a messy population: big enough to experience the problems of a big city but not quite big enough to afford solutions or enjoy the benefits of being a proper big city. But a lot of people don’t think this way – some because they’re fearful of change and others because they see the cost of this, they see other parts of New Zealand suffering from depopulation and they see the potential efficiencies from spreading the burden and benefits of growth more widely.
Whilst there do appear to be some fairly valid arguments in favour of distributing the country’s future population growth a bit more evenly, the really tricky question is “how?” If Auckland’s high property prices don’t already put people off living here enough, then it’s hard to see what ‘could be done’ to change things.
One possible option came to my mind when reading a recent Atlantic Cities article on the impacts of high speed rail on second and third tier cities. Generally the effects on those cities were quite significant:
Through facilitating market integration, bullet trains will stimulate the development of second- and third-tier cities. By offering households and firms a larger menu of location alternatives, bullet trains help to protect the quality of life of the growing urban population. We document that this transport innovation is associated with rising real estate prices in the nearby secondary cities.
What does that actually mean? The Atlantic Cities article provides further explanation:
The idea works like this: by reducing travel time, high-speed rail effectively pushes secondary cities closer to major cities. (That’s especially true for places roughly 60 to 470 miles apart — too far to drive but often not far enough to justify the cost of flying.) This enhanced proximity enables employers to base themselves in the major city and create satellite offices in the now-accessible secondary cities where rents are much cheaper.
Meantime, employees themselves can settle in secondary cities and have the amenities of the major cities without (again) the high cost of living and also without draining public resources. That relieves the crowded infrastructure of the major cities, in particular traffic congestion, and also may lead to less sprawl, promoting a more sustainable development pattern. As Zheng and Kahn portray it, the situation offers the best of both worlds.
There’s increasing evidence that of this effect in China:
The researchers found evidence that housing prices are appreciating in the secondary cities connected to Beijing, Shanghai, and Guangzhou by the bullet systems. These spikes in real estate reveal a rise in the market potential of the satellite areas, according to the study.
Zheng and Kahn point to three main factors that can trigger this market integration effect. First, there must be a reasonably high population density in a high-speed corridor. Next, there must be sufficient secondary cities to handle the extra population load. Third, the competing travel modes must already be congested or at capacity.
The article makes a series of comparisons to the proposed High Speed railway line in California.
While New Zealand is unlikely to see “true” high speed rail anytime in the next century, it strikes me that cities like Hamilton and Tauranga fit pretty well into the role of “second and third tier cities” which could feed off Auckland to a greater extent if a transport option was provided which brought them within a more reasonable commuting time from Auckland. Something like a rail system offering 160-180 kph speeds that could mean less than an hour’s travel to Hamilton and less than an hour and a half from Tauranga.
Of course achieving such an outcome would require really massive investment. Not only would the existing rural sections of the line need to be electrified and substantially upgraded, but extra ‘express tracks’ would need to be provided within the Auckland metropolitan area to ensure that these express trains were able to bypass metropolitan rail services. You’d need full grade separation, probably some major sound walls and so forth.
However, such a project could quite conceivably end up being the cheaper option when compared to more and more transport upgrades within Auckland itself – especially compared to motorway projects such as an Additional Harbour Crossing or adding more and more lanes to existing motorways for smaller and smaller marginal benefit. By leveraging off Auckland to a greater extent, perhaps it would be feasible for Hamilton to grow to 500,000 people or more – taking significant pressure off the growth of Auckland. Even with a super-fast train I don’t think I’d want to live there, but perhaps some people would.
Something like this seems about the only way, unless you start to get really draconian about where people live, to take growth pressure off Auckland. Unless there are other ideas out there?
An article from The Atlantic Cities notes the results of a survey into what piece of technology people could least live without: TV, cellphone, computer or car. The results differ quite a lot by age:Yet another sign that young people just aren’t into driving anymore?
No. Not anything about the temperature, spicyness or physical attractiveness. High Occupancy Toll Lanes are a fairly recent phenomenon becoming increasingly widespread throughout the USA. A recent Atlantic Cities article covers the introduction of a pretty large scheme, implemented by way of a public private partnership (PPP) in Washington DC:
The expanded roadway – two lanes in each direction, from the I-95 interchange to Tysons Corner – will be made of High-Occupancy Tolls, or HOT lanes. Carpools of three or more, buses and motorcycles (but not hybrids) can drive them for free. Anyone else who wants in will have to pony up according to a dynamic pricing scheme, and there’s no limit to what that could cost.
The $2 billion system was built in a public-private partnership between the state and Fluor Transurban, an engineering and construction conglomerate. Virginia put up about $400 million. The private firms paid for the rest (with the help of a hefty federal loan) in exchange for the right to collect the toll fees for the next 75 years.
Fluor Transurban is guaranteeing a minimum speed on the HOT lanes of 45 miles an hour. That means the toll price will vary according to demand to maintain the steady flow of traffic. The companies estimate that the average ride will cost between $3 and $6 (tolls will be in effect at all hours of the day, not just during rush hour). But there’s no ceiling to what the system may charge drivers to achieve that goal, if it turns out everyone heading to Tysons Corner is willing to pay a ton of money to get there.
These lanes are an interesting convergence of trying to both increase car pooling (the high occupancy bit) as well as being some form of congestion pricing (the toll bit). Proponents of the schemes cite the lanes as not only providing a congestion free option for those using the lane, but also reducing congestion in the general traffic lanes (presumably due to the car pooling). But the scheme comes with its challenges:
If this infrastructure is now managed by private companies, will their interests always align with the public good? Fluor Transurban, for instance, stands to lose money with every carpool that enters the lanes for free. And isn’t there something ethically dubious about enabling drivers who’ve got the money to pay for faster commutes, while low-income commuters continue to pay for transportation with their time?
These toll lanes will offer the equivalent of driving in first class. But some public money did go into providing that premium experience, and the lanes will be patrolled by publicly funded state police.
For transportation engineers, the project poses just as many logistical questions as philosophical ones. Will people really use this system the way Fluor Transurban expects them to? How much will they be willing to pay? And how long will it take drivers to catch on to the new infrastructure? The technology itself is so complex the Washington Post even published a user’s guide for its readers (no, the price of the toll won’t change on you while you’re driving; yes, you will be caught – and pursued by collectors – if you try to beat the system).
I think I’d feel reasonably comfortable with HOT lanes being implemented in Auckland as long as they were done so in a relatively inexpensive way by converting an existing lane – rather than spending megabucks to add additional lanes. Though there’s still something a bit queasy around forcing lower income commuters to pay for transportation with their time. The fact that everyone gets stuck in congestion, no matter how rich or poor they are, has always seemed something of a leveller. But perhaps I’m being too ideological there?
What are your thoughts? Could something like this work in Auckland? Would it reduce congestion? Is reducing congestion really that important? So many interesting questions.
Another really interesting article from The Atlantic Cities, this time looking at the price premium people are increasingly willing to pay to locate in a walkable neighbourhood:
Instinct probably tells you that you’ll pay a lot more to live in a downtown apartment, above a grocery store, next to a bar strip and within walking distance of your work place than you will to settle into a comparable home in a bedroom community outside of the city. As this model of compact urban living grows more popular – and every new housing projection reaffirms that it is – walkable places are also growing more expensive.
Just how much more expensive, though, may shock you. New research from the Brookings Institution has created a five-tiered scale of walkability for metropolitan neighborhoods, from completely non-walkable places (exurban residential communities where everyone gets around by car) to mixed-use, dense and amenity-rich neighborhoods where you may not need a car at all (think, in the Washington, D.C., region, Dupont Circle and Georgetown).
Brookings researchers Christopher Leinberger and Mariela Alfonzo wanted to put hard numbers to the difference between these places. Looking at the Washington, D.C., region, they’ve calculated that moving from a Level 1 to a Level 2 walkable neighborhood (from a non-walkable place to a slightly less non-walkable one), you will wind up paying $301.76 a month more in rent for a similar home. If you’re really moving up in the world – from, say, that car-dependent exurb to a Georgetown flat – that means the premium to live in a walkable urban community may run you as much as $1,200 a month.
I think we’re seeing similar trends in Auckland, with recent house price statistics once again showing the strongest gains (prices compared to the previous November 2007 peak) in inner isthmus areas, whereas house prices have been static or even falling in the outer suburbs and rural towns.
Leading the Auckland pack are Kingsland (up 19 per cent to the end of March), Grey Lynn (up 17.9 per cent) and Mt Eden (up 16.1 per cent).
Then, all above 10 per cent, come Western Springs, Epsom, Westmere, Meadowbank, Pt Chevalier, Sandringham, Lynfield, Onehunga, Glendowie and Mt Albert.
While outer areas such as Wellsford (down 17.4 per cent), Clendon Park (down 14 per cent) and Manurewa East (down 12.3 per cent) are struggling, prices in the central Auckland suburbs continue to rise.
Back to the USA:
…all of this means that truly walkable urban communities are much more economically vibrant than their drivable suburban neighbors. For each step up this walkablity ladder (which was constructed using the Irvine Minnesota Inventory of urban design dimensions linked to walkability), a store is likely to boost its retail sales by 80 percent, in part thanks to all this sidewalk traffic. The value of your home is likely to go up by $81.54 per square foot. Average rent per square foot of office space, meanwhile, goes up $8.88. (These are all, by the way, correlations, not causal explanations, although Leinberger expects that urban researchers will prove that link eventually.)…
…“It wasn’t that many years ago that walkable urban places had a price penalty associated with them, not a price premium,” Leinberger says. “That’s the structural shift. And when you have a structural shift, it’s important to change your public policy to take it into consideration.”
Those “walkable urban places” he’s talking about did not necessarily have people walking around in them 20 years ago (“Maybe they were running around because they were fearful of being mugged,” Leinberger says). These were the inner-city neighborhoods that middle-class city-dwellers abandoned decades ago. Over time, they deteriorated. They became the cheap places to live. And now that trend is reversing.
Surely the development market in Auckland will catch on to these trends eventually and we’ll see a boom in the provision of inner-city housing (as long as our planning rules provide for it). Surely.
A really thought-provoking article in the Atlantic Cities looks at whether we need to fundamentally change our approach to congestion:
With a few notable exceptions, transportation planning practice in the United States is focused on managing or eliminating traffic congestion. Regardless of whether planners are advocating for highway infrastructure to improve level-of-service, or transit projects intended to “get cars off the road,” the underlying assumption is that congestion relief is an unmitigated good.
Such arguments are often based on the idea that traffic congestion and vehicle delay are bad for the economy. According to the Texas Transportation Institute, vehicle delay costs Americans $115 billion in wasted fuel and time each year. The common interpretation of such statistics is that our cities and regions would be so much more economically productive if only we could eliminate the congestion that occurs on urban streets.
But this begs the question: is traffic congestion really a drag on the economy? Economies are measured not in terms of vehicle delay or the amount of travel that people do, but in terms of the dollar value of the goods and services that they produce. If it is true that congestion is detrimental to a region’s economy, then one would expect that people living in areas with low levels of traffic congestion would be more economically productive, on a per capita basis, than those in areas with high levels of congestion.
It certainly seems that when it comes to transport planning, congestion is the ultimate evil that we will do just about everything to rid ourselves from. Auckland’s history, building such city-destroying pieces of infrastructure like spaghetti junction, Mayoral Drive, Grafton Gully and Hobson/Nelson streets, were all done in the name of getting rid of congestion. We also spend billions and billions of dollars of public money each year on transport – once again mainly in the name of ridding ourselves of congestion.
It had better be worth it right? Congestion must really be terrible for our society, our economy and our environment if we are willing to go to such extreme lengths to rid ourselves of it.
The researchers who wrote the Atlantic Cities article tested whether higher levels of congestion had some relationship with the economic success of a place. Presumably, if congestion is so utterly terrible for the economy (as is so often claimed, especially by road building companies interestingly enough) then cities with higher levels of congestion should also have worse economies. Except it seems the opposite is true:
With the help of my research assistant Wenhao Li, I sought to determine whether vehicle delay had a negative effect on urban economies. I combined TTI’s data on traffic delay per capita with estimates of regional GDP per capita, acquired from the U.S. Bureau of Economic Analysis. I used 2010 data for both variables, converted them to their natural logs, and modeled them using regression analysis.
And what did I find? As per capita delay went up, so did GDP per capita. Every 10 percent increase in traffic delay per person was associated with a 3.4 percent increase in per capita GDP. For those interested in statistics, the relationship was significant at the 0.000 level, and the model had an R2 of 0.375. In layman’s terms, this was statistically-meaningful relationship.Such a finding seems counterintuitive on its surface. How could being stuck in traffic lead people to be more productive? The relationship is almost certainly not causal. Instead, regional GDP and traffic congestion are tied to a common moderating variable – the presence of a vibrant, economically-productive city. And as city economies grow, so too does the demand for travel. People travel for work and meetings, for shopping and recreation. They produce and demand goods and services, which further increases travel demand. And when the streets become congested and driving inconvenient, people move to more accessible areas, rebuild at higher densities, travel shorter distances, and shift travel modes.
This is a really interesting finding. It suggests that congestion may not necessarily be something we need to worry about terribly as being an inhibitor of economic growth. In fact, some of the responses to congestion – moving to more accessible areas, building at higher densities, using public transport more – may actually boost economic growth through reducing the amount we need to spend on cars (money that generally flies out of the country to the Middle East) and also boosting things like agglomeration benefits: productivity gains when we cluster activity together.
Of course in some areas, congestion will have a dampening effect on economic growth. This is mainly in terms of adding time it takes to shift stuff around the city. But the answer to that issue may well not be in building more roads, or even undertaking any measures to actually reduce overall congestion. It’s to give freight a congestion-free alternative:
It is nevertheless true that goods movement is growing in the United States, making it a transportation issue that cannot be dismissed lightly. Should a region discover that it needs additional capacity for freight traffic, plenty of capacity can be found by converting a “free” highway lane into a truck-only toll lane, which not only allocates highway capacity for goods movement, but which also generates the revenues needed to pay for the highway’s maintenance. Given that highway infrastructure in the United States is aging and in growing need of repair, and that the ongoing decline of federal gas tax revenues has made it difficult for many state and local governments to fund basic highway maintenance, such solutions are likely to look increasingly attractive in the future.
From a freight perspective, who cares how congested the roads are if you’re able to avoid that congestion. The same is true for developing a top-class public transport system – congestion no longer become relevant if more and more people can simply avoid it by catching the train or catching a bus along a bus lane or busway.
I think it’s time we got over our obsession with reducing congestion. It seems pretty clear that higher levels of congestion don’t dampen economic growth. We’ve just always based our transport policy around reducing congestion because it’s annoying – but if we develop better alternatives: tolled freight lanes for trucks, better railways, busway and bus lanes for people, then congestion doesn’t really matter anymore. As a bonus there’s probably a good chance that would all be much cheaper, and certainly less destructive, than our obsession with getting rid of congestion. So we can spend our money on more important things like health, education or even return some of it to the people. And we can save our cities from further destruction.
It’s a whole new way of thinking though…. are we ready for it?