Academic journal article Economic Perspectives

Employment Subcenters in Chicago: Past, Present, and Future

Academic journal article Economic Perspectives

Employment Subcenters in Chicago: Past, Present, and Future

Article excerpt

Introduction and summary

Employment in large American metropolitan areas has become increasingly decentralized over time. However, employment is not distributed evenly throughout the suburban landscape. Firms congregate at highway interchanges, along rail lines, and in former satellite cities. An employment subcenter is a concentration of firms large enough to have significant effects on the overall spatial distribution of population, employment, and land prices. Large subcenters can look remarkably similar to a traditional central business district (CBD), with thousands of workers employed in a wide variety of industries. A polycentric city--a metropolitan area with a strong central business district and large subcenters--can potentially combine the advantages of the traditional centralized city and a more decentralized spatial form. Large subcenters offer agglomeration economies to firms, while potentially reducing commuting times for suburban workers. As traffic congestion increases in the suburbs, an important advantage of subcen ters over more scattered employment is they can potentially be served effectively with public transportation. As a result, the location and growth patterns of subcenters in major cities are of interest to policymakers.

In this article, I document the growth of employment subcenters in the Chicago metropolitan area from 1970 to 2000. I also use employment forecasts generated by the Northeastern Illinois Planning Commission to identify subcenters for 2020. Chicago had nine subcenters in 1970. The number of subcenters rose to 13 in 1980, 15 in 1990, and 32 in 2000, and is projected to drop to 24 in 2020. Existing subcenters are becoming larger and are particularly likely to expand along major expressways. I use a formal cluster analysis to categorize the subcenters by employment mix in 1980, 1990, and 2000. Although Chicago's subcenters had high concentrations of manufacturing jobs in the past, the industry mix now closely resembles that of the overall metropolitan area.

I use distance from the nearest subcenter as an explanatory variable in employment and population density regressions (density is the number of workers or residents per acre). The results imply that the traditional city center still has a significant and widespread influence on densities in the Chicago metropolitan area. Firms tend to locate near important parts of the transportation system--near highway interchanges and rail stations and along freight rail lines. Subcenters also have pronounced effects on the distribution of jobs: Employment density rises significantly near subcenters. However, apart from O'Hare Airport, Chicago's subcenters are still not large enough to increase population density in neighboring areas. Construction of high-density housing near subcenters could potentially reduce aggregate commuting costs.

Subcenters are not unique to the Chicago metropolitan area. In related work, McMillen and Smith (2004) have identified subcenters in 62 large American urban areas in 1990. All but 14 of these cities have employment centers. The Los Angeles and New York metropolitan areas have the most subcenters, with 46 in Los Angeles and 38 in New York. In all 62 of these urban areas, employment density continues to decline significantly with distance from the traditional city center. Employment density also declines significantly with distance from the nearest subcenter in those cities following a polycentric form. Using the subcenter count as the dependent variable for a Poisson regression, I find that the number of subcenters rises with the urban area's population, and cities with higher commuting costs tend to have more subcenters.

Subcenters in the Chicago metro area

Subcenters are areas outside the traditional central business district with employment levels large enough to have significant effects on the overall spatial distribution of jobs and population. Subcenter locations are not always obvious or easy to identify beforehand. …

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