The Economics of Urban Sprawl: Inefficiency as a Core Feature of Metropolitan Growth

By Ciscel, David H. | Journal of Economic Issues, June 2001 | Go to article overview

The Economics of Urban Sprawl: Inefficiency as a Core Feature of Metropolitan Growth


Ciscel, David H., Journal of Economic Issues


Modem cities are both vibrant and chaotic. New businesses rise; ideas, scientific research, and commercial innovations are created; and the arts and humanities pulse. Unfortunately, problems are created as well, and sprawl--geographic growth unrelated to population pressures--compounds and complicates them (Katz and Bradley 1999). This paper is a study of urban sprawl in Memphis, Tennessee, USA. Like most urban areas, Memphis experienced considerable sprawl during the last half of the twentieth century. It has grown east in Shelby County from the Mississippi River, along the Mississippi state line, toward rural Fayette County. As it enters the twenty-first century, Memphis is poised to annex the rest of unincorporated Shelby County.

Urban sprawl already affects two of the other four counties of the Memphis metropolitan statistical area (MSA)--Desoto, Mississippi, and Crittenden, Arkansas--and is beginning to appear in the last two MSA counties--Fayette and Tipton, Tennessee. A large gambling industry, which provides thousands of jobs to the urban area, is located just outside and south of the MSA in Tunica County, Mississippi. These expansions exist outside both the local and state jurisdictions of the city of Memphis and its older satellite cities, but all five of these MSA counties, plus Tunica, are clearly part of the Memphis metroplex.

The new economic and social burdens that urban sprawl creates are not immediately apparent. The high costs--both current and future--of urban sprawl are swamped by its immediate advantages. Indeed, for most urban residents sprawl seems to be a fundamental part of the process of urbanization.

Researchers interested in urban sprawl raise two issues: social inequity and economic inefficiency (Bressi 1994; Sampson 1999; Sierra Club 2000). Most critiques focus on the first--the unfairness in the delivery of services, jobs, and environmental conditions suffered by the elderly, young, and poor living in older, less maintained neighborhoods. All residents tend to finance, through their taxes, new suburban subdivisions, but urban residents in need of social services find it difficult to access the best new ex-urban facilities and services. This paper focuses instead on the latter issue--the ways sprawling cities use resources inefficiently. Sprawl raises the costs of operating urban infrastructure. Consequently, the short-run competitive advantage of new suburban malls and neighborhoods becomes a long-run disadvantage in higher maintenance expenses. And it is the structure of urban sprawl, with its functional segregation of residential and commercial activities, which is the clear source of the cost inefficiency.

Economic Inefficiency in Memphis

This study examines three components of the Memphis MSA economy with a focus on today's provision of social infrastructure and its impact on the economy of tomorrow.

Jobs, Business, and Housing

Urban sprawl in Memphis has created an interesting anomaly. Low-income residents tend to live in the city but work in the suburbs, while high-income residents work in the city but live in the city. New service jobs in the suburbs are often a great distance from the urban service workers employed in them. Likewise, housing for the affluent usually is a great distance from the higher-paying jobs in the core city, creating a functionally segregated urban environment.

A review of four important industrial sectors of the regional economy illustrates the 1992 economic structure of Memphis, separating the city from the rest of the MSA (US Department of Commerce 1999a). In each sector, the city has the majority of the establishments and sales relative to the suburbs, which include the four rural counties outside Shelby County:

* 64.8 percent of establishments and 68.4 percent of shipments in manufacturing.

* 74.6 percent of establishments and 66.1 percent of sales in wholesale trade. …

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