Eco-nomics: Urban Centers Growing

By Patrick Emerson
Oregon Economics BlogThe Wall Street Journal has an interesting article about the relative increase in the size of cities proper versus their suburbs.  Their economics blog also discusses it.  Why is this happening?  I can think of three reasons (all touched on by the article and discussion):

1) The real collapse of housing has occurred in the suburbs. So people who have lost homes and people who might have considered buying homes in the suburbs are moving back/staying in the city proper.

2) Economists have a term called agglomeration externalities that is a bit of a catch-all term for all of the benefits of a lot of and/or concentrated economic activity.  Central cities might be a bit more recession resistant due to the concentration of population and economic activity.

3) Many cities have gone through a central city renaissance making them more attractive at the same time that dense living has become a bit of a virtue (or at least an ideal), and at the same time that economic factors (high gas prices, for example) have increased the cost of living in far out suburbs.

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