With dense, mixed land use, workers have a bigger pool of jobs within a reasonable commuting distance, and employers have a larger pool of potential employees.
By Ryan McGreal
Published July 30, 2013
A recent column by economist Paul Krugman suggests that income inequality may be related to sprawling land use:
[I]n Detroit's case matters seem to have been made worse by political and social dysfunction. One consequence of this dysfunction has been a severe case of "job sprawl" within the metropolitan area, with jobs fleeing the urban core even when employment in greater Detroit was still rising, and even as other cities were seeing something of a city-center revival.
Fewer than a quarter of the jobs on offer in the Detroit metropolitan area lie within 10 miles of the traditional central business district; in greater Pittsburgh, another former industrial giant whose glory days have passed, the corresponding figure is more than 50 percent. And the relative vitality of Pittsburgh's core may explain why the former steel capital is showing signs of a renaissance, while Detroit just keeps sinking.
When comparing more successful, dynamic cities, like Pittsburgh, with less successful cities, like Detroit, the former have done a better job of concentrating new developments - and new jobs - in their relatively compact urban centres.
When jobs are spread thinly over a large area, the cost of commuting goes up and transit becomes less cost-effective. This disproportionately punishes poorer households, who have a harder time paying to operate the multiple automobiles necessary to reach distant jobs. The result is higher income inequality and less social mobility.
This is an important lesson for Hamilton, especially given the very high lifecycle cost of servicing new, low-density greenfield development and the comparatively low cost of retaining its existing stock of heritage buildings.
While the property speculators who own large swaths of Hamilton's downtown core claim they can't afford to renovate their old buildings, independent property owners are proving them wrong, reclaiming derelict buildings, renovating them for new uses and filling them with paying tenants - including employers.
As David Blanchard explained in an interview about his company's plan to demolish the buildings at 18-28 King Street East and build a large-footprint new development, "It has to be a large tenant because those small tenants can't afford the kind of rent that is going to have to be charged for a brand new building like that."
This is bad news for Hamilton's prospects at creating (rather than poaching) jobs.
The kind of young, high-growth innovative businesses that are proven to be net job creators need affordable space in old buildings during their crucial start-up years.
Jane Jacobs recognized this back in the 1960s when she wrote The Death And Life Of Great American Cities:
[O]nly operations that are well established, high-turnover, standardized or heavily subsidized can afford, commonly, to carry the costs of new construction. Chain stores, chain restaurants and banks go into new construction. ...
But the unformalized feeders of the arts - studios, galleries, stores for musical instruments and art supplies, backrooms where the low earning power of a seat and a table can absorb uneconomic discussions - these go into old buildings.
Perhaps more significant, hundreds of ordinary enterprises, necessary to the safety and public life of streets and neighborhoods, and appreciated for their convenience and personal quality, can make out successfully in old buildings, but are inexorably slain by the high overhead of new construction.
As for really new ideas of any kind - no matter how ultimately profitable or otherwise successful some of them might prove to be - there is no leeway for such chancy trial, error and experimentation in the high-overhead economy of new construction. Old ideas can sometimes use new buildings. New ideas must use old buildings.
Unfortunately, Hamilton's perverse system of regulatory incentives actually punishes and deters the kind of small-scale investment and development that the City's Downtown Secondary Plan recognizes as the best path to revitalization.
It gets even worse. As a recent C.D. Howe study demonstrated, the cost of sprawling development and widely distributed employment includes the opportunity cost of lost chances to match people with jobs because it's too difficult to commute.
With fewer opportunities to match workers with work, the whole region ends up less economically dynamic. With dense, mixed land use, workers have a bigger pool of jobs within a reasonable commuting distance, and employers have a larger pool of potential employees from which they can put together dynamic teams.
Since land gets cheaper the farther it is from urban centres, the people who suffer the most from sprawling land use are the poor, who tend to be the farthest from job opportunities as well as the least able to afford long commutes.
And for a family earning less than the median household income, the ability to own one car instead of two - or no cars instead of one - and still function effectively can make a huge difference in quality of life.
So we can add improved socioeconomic equity to the long list of net benefits that accrue to good urban land use.
with files from Nicholas Kevlahan
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