By Paul Krugman
Noble prize-winning Paul Krugman writes about Atlanta sprawl and how Atlanta is being constrained by increasing traffic as a result of it, while mass transportation remains impractical because of a continued bias towards low density single family homes.
Says Krugman:
Today I want to mostly take a break from politics — but only mostly, because these days everything is political. Instead, I’m going to talk about versions of urbanization, inspired by a Wall Street Journal article about Atlanta.
But Atlanta’s growth has been slowing recently, and last year, for the first time since these data started being collected, net domestic migration went negative. It’s a small decline, but startling for a city that was for decades a magnet for Americans leaving both small towns and coastal cities.
Why is Atlanta’s boom petering out? The Journal, and many other discussions, focus on two problems: Affordability and traffic. Both problems are clearly visible in the data. And I’d argue that they’re closely related. What we’re seeing in Atlanta, I’d suggest, are the limits of sprawl.
Start with affordability. To be honest, the last time I even thought about housing prices in Atlanta was during the 2000s housing boom and bust. Back in 2005, when I warned that we were facing a major housing bubble that was beginning to deflate, I suggested that we think of Atlanta as part of Flatland — the central part of the country, where the relative absence of land-use restrictions made it easy to build more housing when demand increased:
When the demand for houses rises, Flatland metropolitan areas, which don’t really have traditional downtowns, just sprawl some more. As a result, housing prices are basically determined by the cost of construction. In Flatland, a housing bubble can’t even get started.
Indeed, Atlanta was basically insulated from the 2000s housing price bubble, and suffered only a modest price decline in the aftermath of the financial crisis that occurred after that bubble burst.
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