Wednesday, May 14, 2014

Urban Amenity Dynamics

Randy Walsh and I are writing a new Handbook of Urban Economics chapter on urban amenity dynamics.   Traditional examples of "fixed" amenities includes noting that San Francisco has better weather than Houston.  But, there are many other location tied amenities that change over time and migrants and real estate markets will respond to such dynamics.  Today's news provides two examples.

Example #1;  A Sriracha Factory in Irwindale, California.  This distant LA suburb is home to a stinky hot sauce factory.   The NY Times reports that neighbors want this factory to be regulated.  This highlights the California tradeoff.  The factory provides jobs for the low skilled but also creates odor pollution.  Will California's pursuit of "green cities" lead it to close?

Example #2:  In Dallas a new urbanist bike and running path called Katy Trail has opened up in what was a declining part of town called Uptown.  New bars and residential towers are co-agglomerating along the Katy Trail and a type of Richard Florida vibe is emerging.   The NY Times celebrates this progress in this piece.

Note that local environmental amenities are an emergent property of the choices of industrial plants (such as the hot sauce factory discussed above),  retail investors, residential real estate investors and diverse households.  If young hipsters locate in the previously declining Dallas Katy Trail area then this creates a vocal interest group using their own resources and voting and lobbying for more investment to rehabilitate previously blighted areas.    Note that there is no one individual "Bill Gates" or "Jeff Bezos" coordinating all of these decisions.   Walsh and I do a good job linking these ideas back to the serious peer reviewed literature. We will release this paper in the NBER series in a few months.