TRANSPORTATION AND METROPOLITAN DEVELOPMENT KSG HUT251/GSD 5302 Transportation Policy and Planning, Gomez- Ibanez OUTLINE OF CLASS (1) TRANSPORTATION AND METRO POPULATION Agglomeration benefits and costs Role of government in managing agglomeration Office rents as a signal (2) TRANSPORTATION AND METRO LAND AREA/DENSITY Land use as a tool to shape transportation Transportation as a tool to shape land use Simple monocentric commuting model
Transcript
TRANSPORTATION AND METROPOLITAN DEVELOPMENT
KSG HUT251/GSD 5302 Transportation Policy and Planning, Gomez-Ibanez
OUTLINE OF CLASS
(1) TRANSPORTATION AND METRO POPULATION Agglomeration benefits and costs Role of government in managing agglomeration Office rents as a signal
(2) TRANSPORTATION AND METRO LAND AREA/DENSITY Land use as a tool to shape transportation Transportation as a tool to shape land use Simple monocentric commuting model
METRO POPULATION AND TRANSPORATATION
WHY CITIES?BENEFITS OF AGGLOMERATION
Economies of scale within firms Agglomeration economies (economies across firms and
households) In production:
Within industries (localization economies--clusters) Across industries (urbanization economies--diversity)
In consumption
EMPIRICAL ESTIMATES OF AGGLOMERATION ECONOMIES Typical: 4% to 20% increase with each doubling of
metro population Effects fall off with distance Effects seem to vary significantly by industry
METRO POPULATION AND TRANSPORATATION
WHY CITIES?
COSTS OF AGGLOMERATION Intercity: transportation of raw materials to and
finished product from metro area Urban:
o Scarcity of centrally located siteso Congestion, pollution, flooding
CITY SIZE Tradeoff between MB and MC of agglomeration Market not necessarily optimal given that both benefits
and costs involve externalities
METRO POPULATION AND TRANSPORATATION OPTIMAL CITY SIZE (AFTER ALONSO)
MSB
MSC
SOCIAL COST AND BENEFIT OF AGGLOM-ERATION
CITY POPULATION
METRO POPULATION AND TRANSPORATATION
ROLE OF CITY GOVERNMENT
MAXIMIZE AGGLOMERATION BENEFITS Business climate Identify, nurture clusters
Transport, water, sewage, sanitation, flooding Efficient land controls
Titles, density and use controls, state-owned lands
COSTS EASIER FOR GOVERNMENT TO INFLUENCE THAN BENEFITS?
METRO POPULATION AND TRANSPORATATION
ROLE OF CITY GOVERNMENT
MB
MC efficient
SOCIAL COST AND BENEFIT OF AGGLOM-ERATION
CITY POPULATION
MB efficient
MC
METRO POPULATION AND TRANSPORATATION EXAMPLE: CENTRAL OFFICE DISTRICTS
• WHY CENTRAL LOCATIONCon: ● Multi-centric citiesPro: ● Highest rent = most acute tradeoff
● Reflects conditions in secondary centers
• WHY OFFICESCon: ● Only one building type (5-10% of
space)Pro: ● Every city has offices
● Office demand expanding (services)● Mainstay of center
• DATAClass A offices: primary business district, up-to-date systems,
large and flexible floor plates, professionally managed
METRO POPULATION AND TRANSPORATATION
OFFICE SUPPLY AND DEMAND
D
S
PRIVATE COST AND WILLING-NESS TO PAY
SQUARE METERS OF CENTRALLY LOCATED OFFICES
METRO POPULATION AND TRANSPORATATION
IMPORTANCE OF INFRASTRUCTURE AND LAND REGULATIONS
Class A office rent ($m2)
Metro pop (mil)
CountryGDP per
capita ($)
Class A&B
offices (mil m2)
CityAt nom. X rate
At PPP X rate
Mumbai 537 2609 19.8 718 2.5
Tokyo 1137 995 34.2 35,215 25.9
London 1162 1021 12.0 36,420 22.6
New York 607 605 21.9 42,007 42.0
Jakarta 145 428 16.6 1,302 4.6
29 Asian Metro Areas,2005 Rents at PPP Exchange Rates
Ho Chi Minh
MelbourneWellington
BangaloreHyderbad
ChennaiGuangzhou
Hong KongBeijingKolkata
Manila
Jakarta
Seoul Tokyo outer
Tokyo inner
Shanghai
DehliMumbai
0
500
1,000
1,500
2,000
2,500
3,000
0 10 20 30 40
Metro population (millions)
Ren
t in
inte
rnati
on
al $
p
er s
qu
are
mete
r
TRANSPORTATION AND METRO LAND USE/DENSITY
LAND USE/DENSITY ‹―› TRANSPORT
LAND USE TO SHAPE TRAVEL BEHAVIORPROPOSALS
Increase overall density Jobs/housing balance Neo-traditional neighborhoods, transit-oriented
development (higher density, grid vs. cul-de-sac streets, local retail)
Smart growth (a little bit of all three)
TRANSPORTATION TO SHAPE LAND USETYPICAL CONCERNS: INCREASE OVERALL DENSITY
OR REVITALIZE CENTER
TRANSPORTATION AND METRO LAND USE/DENSITY
LAND USE/DENSITY ―› TRANSPORT
1. INCREASE OVERALL DENSITYIDEA: Replicate Europe (Newman and Kenworthy)PROBLEMS:
Other contributing factors? Cost in other objectives?
2. JOBS HOUSING BALANCEIDEA: Shorten work tripsLIMITATIONS:
Jobs-housing balance is self correcting Residential location is not determined just by work trip
TRANSPORTATION AND METRO LAND USE/DENSITY
LAND USE/DENSITY ―› TRANSPORT
3. NEO-TRADITIONAL NEIGHBORHOODS, TRANSIT-ORIENTED DEVELOPMENT
IDEA: Make local walk trips and/or transit work trips easier (e.g., slightly higher density, grid streets instead of cul de sac, local retail)
LIMITATIONS: Modest effects
4. SMART GROWTHIDEA: Combination of all threeLIMITATIONS:
Political acceptability Modest effect on travel? Modest savings in infrastructure
TRANSPORTATION AND METRO LAND USE/DENSITY
TRANSPORT ―› LAND USE/DENSITY
SCALE OF CONCERN Can transportation policy influence how closely
residences and workplaces locate to the metropolitan center or overall density?
THREE REASONS FOR MODEST EFFECT1. PARALELLS WITH THE PAST MISLEADING
Past changes in accessibility larger (e.g. walk to streetcar to auto)
Other factors were involved (especially changes in income, industry mix)
TRANSPORTATION AND METRO LAND USE/DENSITY
TRANSPORT ―› LAND USE/DENSITY
2. ANY RESPONSE TO CHANGE IS SLOW Building stock is fixed, durable, heterogeneous
(Pickrell p. 413) Neighborhood characteristics important and hard to
alter (e.g., public schools, class and race)
3. TRANSPORT CHANGES ESTABLISH CONFLICTING INCENTIVES FOR RESIDENTIAL DENSITY
E.g. an decrease in time or cost commuting to the CBD: Allows CBD workers to move residences farther out,
but Increases the number of workers commuting to the
CBD
TRANSPORTATION AND METRO LAND USE/DENSITY
TRANSPORT ―› LAND USE/DENSITY
TRANSPORTATION MORE LIKELY TO AFFECT LAND USE
At small scale than large (e.g. which suburb not suburb vs. center)
In fast growing city rather than slow Where transportation incentives support
rather than conflict with other forces (such as income and industry mix)
Distance from CBD Distance from CBD Distance from CBD
Commuting cost Housing cost Gross price of location = C+H
MONOCENTRIC MODELAll work in CBD
RESIDENTIAL LOCATION: How far out to live
Distance from CBD Distance from CBD Distance from CBD
Commuting cost Housing cost Gross price
SIMULTANEOUS CHOICE OF LOCATION AND HOUSING TYPE
Single family
Single family
apt
apt
Distance from CBD Distance from CBD Distance from CBD
Disequilibrium Equilibrium Components of gross price gross price gross price
LOCATIONAL EQUILBRIUM (assuming all houses, households identical)
Structure cost
Land price
Commuting cost
RELATIONSHIP BETWEEN TRANSPORT COSTS AND LAND RENTS
Distance from CBD Distance from CBD
EFFECTS OF A CHANGE IN COMMUTING COSTS ON LAND RENTS
Structure cost
Land price
Commuting cost
Increase in commuting costs
Decrease in commuting costs
Remember how land rent determined
Land rent pivots with
RESIDENTIAL LOCATION
IF COMMUTING COSTS TO CENTER DECLINE
1. Increases real incomesa. Increases housing consumption −›move outb. Increases value of travel time −›move in
2. May also reduce MC of commute −›move in
INCREASE1. Decreases real incomes
a. Decreases housing consumption −›move outb. Decreases value of travel time −›move in
2. May also increase MC of commute −›move in
WORKPLACE LOCATION
MANY COMPETING CBDs AND SBDs
TWO TYPES OF INDUSTRIES
•POPULATION SERVING
•Retail sales, local services
•BASIC OR EXPORT
•Export oriented
•Compete with other CBDs and SBDs
NET EFFECTSCHANGE IN COMMUTING COSTS TO CBD
INCREASE DECREASE
RESIDENCES OUT IN
EMPLOYMENT POP SERVING OUT IN BASIC IN OUT
NET EFFECTS JOBS IN CBD MORE LESS RES. DENSITY ? ?
METRO DEVELOPMENT AND TRANSPORATATION CONCLUSIONS• City population and density a product of tradeoff between
agglomeration economies and costs, a chief cost being urban transport and congestion
• There is little reason to believe that the market will result in the optimal size or density since agglomeration economies and congestion costs are externalities
• The underpricing of transport probably makes overall population and central employment larger than it should be, but the effects on residential density are ambiguous.
• Beware of arguments that transportation policy will have a large effect on density. They are often based on misleading historical analogies, ignore the durability of the building stock, or offsetting effects.
• Controls on land use or density may be a relatively expensive way to correct for transport mispricing
