Urban Growth and Decline: The Role of Population Density at the City Core
Fee, Kyle, Hartley, Daniel, Economic Commentary (Cleveland)
In recent decades, some cities have seen their urban centers lose population density, as residents spread farther out to suburbs and exurbs. Others have kept populous downtowns even as their environs have grown. Population density in general has economic advantages, so one might wonder whether a loss of density, which may be a symptom of negative economic shocks, could amplify those shocks. We look at four decades of census data and show that growing cities have maintained dense urban centers, while shrinking cities have not. There are reasons to think that loss of population density at the core of the city could be particularly damaging to productivity. If this is the case, there could be productivity gains from policies aimed at reversing that trend.
The majority of people in the United States- eight out of ten- live in urban areas, or cities with more than 2,500 residents. Most economists who study cities believe that people tend to cluster together because they can work together more efficiently. In fact, denser areas are in general more productive than sparsely populated ones.
But there has been a trend over the past several decades of people spreading out. First, suburbs sprang up around nearly every large city, then outer-ring suburbs, and now exurbs. Some cities held onto residents in their central cities as their borders grew, while others lost density at their cores.
At the same time, many major cities struggled economically while others began to thrive. Former industrial powerhouses like Cleveland, Detroit, and Buffalo declined as the industries they depended on evolved. Meanwhile, cities like Boston, Chicago, and Philadelphia weathered the transition more successfully. At the other end of the spectrum, cities like Atlanta, Dallas, and Phoenix have grown rapidly.
One might wonder, since population density is correlated with productivity in general, whether it is also correlated with productivity within a metropolitan statistical area (MSA), and how density adjusts in different parts of an MSA as the population of the MSA grows or shrinks.
We take a detailed look at changes in population density within MSAs, focusing on differences between growing and shrinking MSAs. We see how patterns have changed over the past four decades. We find that growing MSAs have generally maintained dense urban centers, while shrinking MSAs have not.
Trends in City Populations
We examine population changes in about 180 metropolitan statistical areas (MSAs), using data from the 1980, 1990, 2000, and 2010 U.S. Census. We focus on these MSAs because each one contained at least 50 census tracts in 2000. We use city and MSA boundaries from 2000 so as to hold the geographical area constant (even though city and MSA boundaries may change over time).
Figure 1 shows average changes in the population density of census tracts as a function of the distance of the census tract from the central business district of the largest city in the MSA. Growing MSAs are on the left, shrinking MSAs are on the right.
Panel A shows that the peak increase in population density in MSAs that were growing during the 1980s occurred about 10 miles away from the central business district. Panel B shows that this pattern was even more pronounced in MSAs that were growing during the 1990s.
Panel G shows a much different pattern of changes in population density for MSAs that were growing during the 2000s. The biggest increase in population density was near the central business district, while there was smaller growth in population density farther away from the central business district. This may be due to gentrification and redevelopment of neighborhoods closer to the city center.
Panel D shows a big drop in population density near the central business district for cities that were shrinking during the 1980s. However, at distances between 20 and 30 miles from the central business district, population density was actually increasing during this period. …