D. Spatial Distribution of Employment and Residence

1.  Employment and residence

a.  Commuting patterns

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b.  Median locations

• Distance that splits employment and residences in half

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c.  Employment density

• % of jobs that meet a density threshold

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d.  Employment subcenters

• Form to take advantage of economies of agglomeration - skills matching, sharing a labor pool, sharing intermediate inputs, knowledge spillovers

- Ex. - Firms in office clusters share restaurants and hotels (2.5 million sq. ft. of office space can support a 250-room hotel)

• Threshold is 10,000 workers

• Number of subcenters varies across metropolitan areas 

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(1)  Factors affecting number of subcenters

(a)  Population of metropolitan area - more population => more subcenters

(b)  Congestion - more congestion => more subcenters

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(2)  Role of subcenters in metropolitan economies

(a) Subcenters are numerous in both new and old metropolitan areas

(b) Most jobs are dispersed rather than being concentrated in CBDs and subcenters

(c)  Many subcenters are highly specialized

(d)  The central area has the largest and densest employment concentration

(e)  Employment density decreases as distance from the center increases

(f)  Subcenter firms interact with firms in the center

(g) Firms in different subcenters interact with each other

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2.  Monocentric city

• Jobs concentrated near city center

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a.  Rise of monocentric cities

(1) Innovations in intracity transportation:

• Omnibus (1827) and streetcar

• Cable cars (1873)

• Electric trolley (1886)

• Subways (1895)

=> decreased commuting cost, funneled people into city center

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(2)  Technology of building construction

• Balloon-frame building

• Elevators

=> increased density

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3.  Suburbanization

a.  Decentralization of manufacturing

(1) Intracity truck

• Trade-off between locating close to CBD (lower transport costs) and locating farther away (lower labor costs)

• Intracity truck made it less costly to transport finished products

• Firms locate in suburbs, with less costly labor

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(2) Intercity truck

• Long-distance travel feasible

• Could compete with rail and water, particularly for short hauls

• Firms no longer tied to central export node - could locate in suburbs if access to highways available

• Interstate highway system (authorized in 1956, mostly built by late 1970s) made truck transport easier

• Circumferential highways (beltways) gave more access points to highways

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(3) Automobile

• Workers can reach plants from anywhere in metropolitan area

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(4) Single-story plants

• Switched from multistory plants on small lots to single-story plants on big lots

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• Wanted to exploit new production technologies (assembly lines, forklifts)

• Land cheaper in suburbs

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(5) Suburban airports

• Air freight increasingly important.

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b.   Decentralization of office employment

• Improvements in communications technology reduced need for face-to-face contact

- E-mail

- Teleconferencing / Skype

- Facsimile (fax) machines

• Back office operations could be decoupled, located in suburbs

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c. Decentralization of population

• Due to:

(1) Increased income => increased demand for housing outweighs higher opportunity cost of commuting

(2) Lower commuting cost => decreases cost of living farther away from center

(3) Old housing in central-city

(4) Central-city fiscal problems => high taxes cause suburbanization, making fiscal problems worse

(5) Crime => more crime in central-cities

(6) Education => generally better schools in suburbs

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d. Decentralization of retailers

• Followed customers to the suburbs

(1) Impact of the automobile

• Before automobile, streetcar delivered customers to CBD - retailers with large economies of scale located there

• Automobile reduced intraurban travel costs

• Customers could get to suburban retailers

• More parking available in suburbs

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(2)  What is the future of retailing?

• Dead Mall Series

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4.  Urban sprawl

a.  Sprawl facts

• Urbanized land increased by higher percentage more than urban population

• Lower density in U.S. cities

• Density in U.S. cities has been declining

• Elasticity of  urbanized land to population smallest in the West

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b.  Causes of sprawl

(1)  Higher income => higher consumption of land

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(2)  Low cost of travel => can live farther away from job

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(3)  Cultural dimension - preference and acceptance of density differs by culture

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(4)  Impact of automobile and truck - allows movement away from fixed transportation infrastructure

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(5)  Public policy

(a)  Congestion externalities not included in price of commuting

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(b)  Tax deductibility of mortgage interest is a subsidy to housing => more housing consumed, more land consumed

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(c) Fringe infrastructure sometimes underpriced

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(d)  Zoning may require large lot sizes

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(e) European policies encouraging density

• Taxes on gasoline

• Higher taxes on automobiles

• Investment in transportation infrastructure

• Higher electricity costs => smaller refrigerators, more shopping trips

• Restrictions on large retailers

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c.  Consequences of sprawl

• More travel

• Technological improvements help with energy use, air pollution, and fuel consumption

• Loss of farmland

• Difficult to provide mass transit

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d.  Policy response

• Deal with policies that encourage sprawl

• Anti-sprawl policies - growth control, development taxes

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