It's no coincidence that concern about suburban sprawl
is growing just as the New Economy is emerging.
That's because the forces driving economic change --
new industries and jobs, the information technology revolution,
globalization, competition, and dynamism --
are also reordering the geography of America. Dispersal
and decentralization of businesses and households is
clearly part and parcel of the New Economy.
Major technology-driven transformations have always
marked new eras in American urbanization. The
growth of manufacturing along with the new technologies
of rail, electricity, steel, and water and sewage systems
largely created the compact industrial city before
the turn of the century. Shortly thereafter, automobiles,
highways, telephones, and mass production manufacturing
paved the way for the hub-and-spoke metropolis
with its urban core and "bedroom" suburbs.
An equally significant change is underway at the end
of the 20th century. In the New Economy metropolis,
new information technologies allow businesses and industries
to disperse regionwide. As a result, the populations
of some urban cores and older inner-ring suburbs
dwindle while residential development spreads far beyond
existing metropolitan fringes.
The common conception of the metropolitan area as a
place with a single economy centered among downtown
skyscrapers and inner-ring factories no longer describes
the contemporary metropolis. By the early 1990s 57 percent
of office stock in America was located in the suburbs,
up from 25 percent in 1970. And office jobs now
account for more than 40 percent of all jobs in the economy,
up from 32 percent in 1970.
These trends are evident nationwide. The city of
Milwaukee lost 14,000 jobs between 1979 and 1994 while
its inner-ring suburbs gained 4,800 and outer-ring suburbs
gained a staggering 82,000. Chicago's three densely
developed centers of suburban employment -- O'Hare
Airport, Schaumburg, and central Du Page county-- accounted
for 27 percent of total net employment growth
in the metropolitan area in the 1980s. Metropolitan
Atlanta's share of regional jobs declined from 40 percent
in 1980 to 28 percent in 1990. Its northern, predominately
white suburbs absorbed nearly the entire share of jobs
lost by the city, worsening employment prospects for
minorities concentrated in central and southern Atlanta.
The bedroom community lifestyle, typified by workers
commuting to and from the central city, is becoming
an anachronism. Today, many suburbanites rarely travel
to central cities for work, shopping, or entertainment.
Others still commute to the city for work but attend to
the rest of their daily needs in the suburbs.
The centrifugal forces sowing businesses throughout
metropolitan areas allow workers to live farther and farther
from the city centers without enduring inordinately
long commutes. For example, an increasing number of
people working in the high-tech "I-270 Corridor" in
Montgomery County, Md., located roughly 10 to 20
miles north of Washington, commute from as far away
as Frederick, Md., some 50 miles north of the District of
Columbia line, or even from West Virginia, some 70 or
more miles distant.
This kind of sprawl doesn't necessarily reduce population
densities within existing metropolitan boundaries.
On the contrary, the "urbanization" of formerly "suburban"
areas is precisely what's driving the sprawl debate.
City dwellers who moved to relatively close-in suburbs
"to get away from it all" -- to experience the equivalent
of Frank Lloyd Wright's Broadacre City -- are increasingly
wondering what happened to their semi-rural
good life. For example, while population density in the
city of Chicago fell from 16,000 persons per square mile
in 1950 to 12,000 in 1990, density in already developed
suburbs increased from 400 to 1,200 persons per square
mile, largely the result of "in-fill" construction on previously
undeveloped land and multifamily-home construction.
Between 1980 and 1990, population density in
the built-up areas of the largest 40 U.S. metropolitan
areas actually increased 14 percent, from 456 to 523 persons
per square mile.
Development on the far fringes of metropolitan areas,
meanwhile, often leapfrogs existing metropolitan development
by miles, causing overall population densities to
decline. For example, while the population of the
Philadelphia metropolitan region has grown by only
100,000 since 1960, the geographic region itself is now 32
percent larger, representing the development of 125,000
acres of open space. Likewise, the Chicago metropolitan
region's population grew by only 4 percent from 1960 to
1990 but its residential land area expanded by 50 percent.
Businesses and households are moving progressively
farther away from cities because they want to.
Congestion, high taxes, inadequate schools, crime, and
the like have encouraged more and more businesses and
households to depart.
And new technologies also make it easier for businesses
and households to locate wherever they want. A
rapidly growing share of the economy consists of information
transactions -- stock trades, insurance forms, or
point-of-sale data. Thus, the power of technology to reshape
the geography of employment has never been
greater. E-mail, faxes, electronic data transfer, smart
phone systems, the Internet, and intranets have made it
easier for a variety of firms to locate at a distance. This
trend will increase as the digital economy grows.
For example, in the past a company's information-processing
back office had to be in close physical proximity
to the firm's front office. Today, electronic digital
transactions eliminate this need. Telecommunications
systems allow many banking and insurance companies
to move customer-service and paper-processing centers
to suburbs or smaller metropolitan areas with lower
costs. Computerized ordering systems also enable manufacturers
and warehouses to locate on the periphery.
The suburbs, in fact, are a desirable location for many of
the fastest growing sectors of the economy. Many of
America's new growth industries do not depend on the
face-to-face contacts made possible in central cities. This
explains why the core counties of metropolitan areas
command a declining share of such industries as computer
processing, banking and insurance, corporate administration,
and communications. For example,
two-thirds of all computer and data-processing jobs in
metropolitan areas are in the suburbs, and almost half of
all insurance, banking, and hotel jobs are outside the
core metropolitan counties.
Manufacturing is also dispersing. Between 1985 and
1992 the core counties of the 15 largest metropolitan
areas lost more than 775,000 manufacturing jobs, as
manufacturing shifted to less costly suburban areas or to
smaller cities. High-tech manufacturing is even more
suburbanized than manufacturing as a whole. The campus-
like offices and research parks hugging the outer
beltways of major metropolitan areas more accurately
symbolize business location in America today than do
old urban factories or downtown office towers.
The technology revolution also allows people to live
and work on the urban fringe. For example, when a
Phoenix resident calls the local transit authority for information,
the person answering the phone is likely to
be working at home, linked to the transit system's computer
remotely. Such telecommuting will let people live
ever farther from "the office." People with such a
lifestyle need not be cut off from "urban" amenities in
rustic isolation. On the contrary, improved technology
makes urban amenities feasible. Modern septic systems
can substitute for urban sewer systems, satellite dishes
for cable television, and electronic home commerce for
in-store shopping and services.
If the New Economy metropolis is inherently more dispersed,
should policymakers simply stop trying to make
metropolitan areas more livable? Of course not. We
should forge new policies transcending those offered by
urban revivalists on the left and laissez-faire anti-planners
on the right.
Many liberal urbanists vainly seek to return to the old
densely populated urban forms epitomized by New
York City. They argue that sprawl is largely a result of
bad public policy. If the federal government had not
spent all that money on roads or helped make single-family
housing affordable for tens of millions of
Americans, the logic goes, most of us would now be
happily living in row houses or apartments in densely
populated cities. The urbanists' preferred solutions for
sprawl include regional tax-base sharing and regional
government. Leaving aside the fact that most Americans
say they would rather live in low-density, single-family
housing, often 30 miles from a major city, such solutions
ignore the powerful economic forces propelling movement
away from the urban core.
Laissez-faire conservatives, meanwhile, argue that
any government intervention in the market forces generating
sprawl will inevitably lead to bad outcomes. This
view ignores that economic-driven dispersion need not
result in "leapfrog" development miles beyond the outer
rings of existing development or in "doughnut hole"
metro areas. In addition, many conservatives won't acknowledge
that market forces don't necessarily yield efficient
development patterns. The former Congressional
Office of Technology Assessment estimated that
sprawled development raises infrastructure costs as
much as 20 percent. Most of these costs are not borne by
businesses or households in the newly developed areas
but rather by governments, other businesses, and house-holds
that directly or indirectly subsidize infrastructure
development. This state of affairs makes sprawl much
worse. For example, according to one estimate the city of
Phoenix and Maricopa County subsidize new suburban
development in metropolitan Phoenix to the tune of
over $12,000 per dwelling unit.
At a minimum, New Democrats seeking to ease the
worst effects of sprawl should do three things:
First, New Democrats should not disparage most
Americans' locational choices and assume that everyone
wants and ought to live in cities. Accordingly, New
Democrats should avoid unduly restricting development
in the outer suburbs. In most areas, population and
household growth alone -- not to mention increases in
home-ownership rates and lot sizes -- will force metropolitan
boundaries outward. We should channel expansion
in a way that discourages leapfrog development
and preserves sensitive environmental areas.
Second, New Democrats should stop subsidizing
sprawl and make new development pay its own way.
Policies, including marginal cost pricing of utilities and
other services, development levies and impact fees, and
full-cost recovery regulations use the market's own signal
mechanism -- price -- to encourage more cost-effective
urban development patterns. Unfortunately, some
states have chosen to combat sprawl by simply buying
open space, rather than by making new development
pay its way. This is akin to running ads against smoking
while continuing to subsidize tobacco growers.
Third, New Democrats should advocate in-fill development
in urban and older suburban areas. For example,
recent efforts to foster downtown housing in many cities
should be expanded upon. We also should actively sup-
port growth in smaller and mid-size metros. Siphoning
off some growth from large, congested, sprawling metros
to smaller places will reduce sprawl in the former
and boost the economic prospects of the latter. In this regard,
recent efforts to move some federal facilities out of
the Washington metro area to less densely populated
West Virginia were good regional policy.
The days of the old economy composed of large organizations
with stable employment, stable markets, and
stable competition are over. So too is the era of old industrial
cities surrounded by compact, dense patterns of
residential development. Rather than try to recreate the
past or throw our hands up in despair at our inability to
shape the future, we need to understand the fundamental
dispersing forces in the New Economy and begin to
craft policies that make lives better for all Americans.
