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TheStreet Open House

Salmon: Why America's Population Density Is Falling

NEW YORK ( Reuters Blogs) -- I'm not sure why it took me until May 3 to find Paul Krugman's post from April 16 about population density, where he found a very odd fact buried in a new Census report. We know that the population of the U.S. is rising, and we know that the population of the U.S. is also becoming increasingly urban. As a result, urban density -- the number of people per square mile -- has to be going up.

And yet, if you calculate density the right way, weighting by population rather than by land area, you find something very odd: Density is actually going down.

Courtesy of U.S. Census Bureau

In the U.S. as a whole, population-weighted population density fell by 16 people per square mile between 2000 and 2010, while in metropolitan areas it fell by an enormous 405 people per square mile. What could be going on? The best answer, I think, comes from David Schleicher, a George Mason professor who's an expert on the political economy of urban areas.

If you look at property and land prices in America's cities, they rose impressively between 2000 and 2010, the property bubble and crash nothwithstanding. Cities are increasingly attractive and expensive places to live; that's a trend which isn't going away any time soon. And historically, when urban property values rise, it doesn't take long for property developers to pounce on the trend. New buildings rise; whole neighborhoods get rezoned. With billions of dollars at stake, politically connected developers normally find a way to get what they want somehow.

That's exactly what has happened in, say, Miami, where shiny new condos rise in lockstep with property values. But note something important about Miami: Those condos are being bought largely by foreigners, who have little if any political clout in the city. In most U.S. cities, by contrast, rising property values in recent years have meant something different: a rise in the number of politically powerful groups and individuals moving back into the city from the suburbs.

These rich and powerful have two important effects on urban density. Firstly, they decrease density just by moving to the city: they do that by dint of the fact that they live in larger homes with smaller families. My apartment in New York's East Village, for instance, is in a 1920s tenement building, which was converted into condos in 1984. During the condo conversion, the old layout, of four apartments per floor, was scrapped in favor of a new layout with only two apartments per floor. But the number of people per apartment didn't go up. And if the conversion were to take place today, the building would almost certainly be converted into "full-floor luxury residences," with a keyed elevator opening directly into monster spaces. Again, without any discernible increase in the number of people per apartment.


Rich people like to maximize the amount of space they live in, whether they're buying suburban McMansions or downtown lofts. As a result, higher property prices in dense urban areas are prone to making those areas less dense -- at least until the developers come along.

This is where the second important effect of the rich-and-powerful comes into play. These people tend to fall on the spectrum somewhere between NIMBY (Not In My Back Yard) and BANANA (Build Absolutely Nothing Anywhere Near Anything). Just look at the vitriol hurled by carless Soho residents, for instance, at New York's new bike-sharing stations. As urban areas become increasingly affluent, filled with wealthy politicians and their wealthier donors, it becomes harder and harder for developers to procure the zoning changes and construction permits they need in order to keep on producing new residential inventory.

The result is that the normal state of affairs -- where powerful individuals get trumped by even more powerful construction-industry inevitabilities -- is turned on its head, to the point at which new construction can no longer keep up with the de-densification endemic to gentrification. Bloggers may rail against this state of affairs -- both Ryan Avent and Matt Yglesias have written at great length about how important it is to allow new buildings to rise within urban areas -- but ultimately the natural conservatism of the rich is winning out, across the nation. If you want to move to a city where density is going up rather than down, you might just have to move to Miami. Or China.

-- Written by Felix Salmon in New York.

Read more of Felix's blogs at Reuters.

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