Commuting, Land-Use, and Urban Economic Productivity

Much of today’s urban transportation planning focuses on transit and “smart growth.” According to this set of ideas, suburbanization (aka “sprawl”) is bad and should be discouraged, while higher density is good and should be increased, so that “we can get people out of their cars” and do other good things like enabling lots more people to walk or bike to work. But what if this set of policies turned out to be a recipe for urban decline?

That is the implication of a pair of detailed papers released in January 2015 by the Marron Institute of Urban Management at NYU, both researched and written by Shlomo Angel and Alejandro Blei. If their analysis is correct (and I think it is), much of current transportation and land use thinking is mistaken.

“Commuting and the Productivity of American Cities” explains the basics of urban agglomeration economics—that we have large urban areas because a large and diversified mix of people and companies enables far more positive-sum transactions to take place (such as individuals finding jobs that best match their skills, and vice-versa for employers). The paper first provides empirical data for 347 U.S. metro areas, finding that the labor market—defined as the actual number of jobs reached in less than a one-hour commute—nearly doubles when the workforce of the metro area doubles. But the increase in commute time is only 7% rather than the expected 41%. They identify three mechanisms that lead to this empirical result: some increases in residential density, locational adjustments of residences and workplaces, and increases in commuting speeds thanks to better transportation infrastructure.

The main implication of this research is that “the more integrated metropolitan labor markets are, the more productive they are.” And therefore transportation policies should promote:

• Speedier rather than slower commuting;
• More rather than less commuting; and,
• Longer rather than shorter commutes.

These policies expand the “opportunity circles” of both employees and job-seekers. But they are the opposite of what those who are promoting “jobs-housing balance” try to achieve: to get people to work closer to where they live, accepting a convenient job rather than the best (most economically productive) job.

The companion paper provides supporting evidence. It seeks to identify which of five possible models of urban form best represents the reality of today’s metro areas. These range from one with the largest fraction of jobs in a traditional central business district to one where jobs and people are in close proximity in small sub-centers across the urban landscape, minimizing commute distances (very high jobs-housing balance). The authors use a stratified sample of 40 of the 50 largest U.S. metro areas to identify how prevalent each of these models is:

1. Monocentric (one central urban core with the majority of jobs)
2. Polycentric (a small number of job sub-centers)
3. Mosaic of many live-work communities (maximum jobs-housing balance)
4. Maximum dispersal (commutes from everywhere to everywhere)
5. Constrained dispersal (combination of 2 and 4).

For the 50 largest US metro areas in 2000, the median fraction of jobs in the urban core was 10%, so the monocentric model is a poor fit. Polycentric does somewhat better, with about 25% of jobs in sub-centers plus the CBD. The mosaic of live-work communities does worst of all, accounting for only about 7.7% of jobs. They end up concluding that the constrained dispersal model is the best fit for the actual data, with 75% of actual jobs dispersed, in a hybrid of the polycentric and maximum dispersal models. And while this outcome is not frozen for all time, they point out that “the future of our cities is path dependent,” meaning that they cannot simply be restructured into a different form by fiat.

The authors conclude that the productivity advantages of cities are now metropolitan in scale—specifically, that:

The agglomeration economies associated with clustering—a large and diverse labor pool, knowledge exchange within industries and across different sectors, shared infrastructure, shared inputs, shared services and amenities, a diverse industry mix that reduces economic shocks, and the presence of large internal markets—are all metropolitan in scope rather than pertaining to concentrations of people and jobs within metropolitan areas.

In order not to undercut metro area economic productivity, transportation and land-use policies should enable people and companies to maximize the size of their opportunity circles, by facilitating faster, longer-distance commuting.

Everyone concerned with transportation and land-use policies should read these important papers.

(This article first ran in the December issue of Surface Transportation Innovations)
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