Month March 2011

Despite the general feeling among urbanists that the city is making a comeback after half a century of neglect, I still read from a lot of suburbanists (a catch-all term I’m using to describe Joel Kotkin, Wendell Cox [see comments], etc.)—and even the mainstream media—that cities are still losing population. I don’t have a lot of patience for statistics, so it all becomes a sort of he said/she said argument to me, but here’re a few opinions from the pro-“cities are becoming more desirable” side. First, here’s Ryan Avent, who argues that looking at population stats is misleading without taking into account prices: But of course, population growth is an unreliable indicator of demand, because of the all important supply side of the market. Imagine two areas: Gotham and Pleasantville. Say the demand to live in Pleasantville increases a little while the demand to live in Gotham soars. And say that due to differences in land use restrictions, housing supply responds dramatically in Pleasantville and very little in Gotham. Then what we’ll observe in Pleasantville is a rapid increase in population and slower growth in prices, and what we’ll observe in Gotham is rapid growth in prices and slower growth in population. And this is exactly what we have observed in the real world. Suburbs have seen massive housing growth and rapid population growth, but prices in central cities have soared, even in many places where population numbers are level or falling. If no one wanted to live in central cities, prices for homes there would not rise. And indeed, several decades ago, prices for homes in big central cities were dropping. But that trend has clearly reversed. You can’t draw conclusions about demand shifts from population numbers alone. This is a very simple point, and yet its repeatedly ignored. […]