Some notes from my Urban Economics Class

My favorite concept from the Urban Economics class I took with Dick Voith in 2007 was this:

Housing durability is bad for a city's health when the city is in decline. Since taking the course, my mind has gotten fuzzier and fuzzier on why this counter-intuitive statement is true (if you think it's not counter-intuitive, tell an architect that buildings are built to last too long). A couple of days ago, I found some note from the class. I think these are references to Edward Glaeser's writings on the subject:

1. city growth rates are skewed so that cities grow more quickly than they decline;
2. urban decline is highly persistent;
3. positive shocks increase population more than they increase housing prices;
4. negative shocks decrease housing prices more than they decrease population;
5. if housing prices are below construction costs, then the city declines; and
6. the combination of cheap housing and weak labor demand attracts individuals with low levels of human capital to declining cities.

In addition, durable housing helps account for the connection between urban decline and poverty. The simple correlation between the family poverty rate in 1999 and population growth in the 1990s for places with at least 100,000 residents is _0.48. when urban productivity falls, the most active members of the labor force will naturally flee; but durable housing ensures that their homeswill then be occupied by those that are less connected to the labor market. As our model suggests, the correlation between poverty and a decline in population disappears after one controls for the presence of abundant, cheap housing. this finding may help us understand why declining cities so often are the centers of social distress.

I don't know exactly where this text comes from, but I'll find out. My guess is that it's Voith's powerpoint from the class, and some of Glaeser's text.

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