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Is the bad economy good for cities?


A few days ago, someone asked a question on one of my listservs about the likely impact of America’s economic crises upon urbanism.

The best answer is: it depends.

Michael Lewyn | October 22, 2008, 9pm PDT
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A few days ago, someone asked a question on one of my listservs about the likely impact of America's economic crises upon urbanism.

The best answer is: it depends.

A few months ago, the economic crisis centered around foreclosures and rising oil prices.  As oil prices rose, commuting by car became more expensive, driving declined, and public transit ridership rose.   And even drivers wanted shorter commutes, thus making city life (or at least life in built-out, job-rich suburbs) more desirable.  To be sure, many commuters adjusted to these trends by purchasing more fuel-efficient cars.  But given the heavy one-time cost of switching cars, it was apparently more efficient for some commuters to move closer to work or avoid driving altogether.

But today, we appear to be on the verge of a broader recession.  Traditionally, recessions reduce transit ridership, for a couple of reasons.  First, a recession means fewer commuters, which means fewer transit riders. Second, a recession usually means declining state and local tax revenues, which means less money for public transit, which in turn usually means less transit service.  Since car-free commutes are a major advantage of urban life, transit service reductions make urban life less appealing relative to suburban life.  

And if reduced economic activity continues to lower oil prices by lowering demand for oil, driving might become more convenient again.  Furthermore, if declining revenues go far enough to endanger public spending on police and prisons, crime might rise.   And because cities already suffer more from violent crime than suburbs, increased criminal activity might widen suburbs' safety advantage.   

Thus, the continued recovery of cities is no longer a given.  A serious recession is bad for urbanism- rising oil prices much less so.  The future of transit-oriented urbanism depends on which trend is stronger over the next few years.

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