Gas Prices May Revive Cities

Urban planners finally see a way to curb sprawl.

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That's a tall order that would require billions in public infrastructure investment and a massive shift in taxpayer subsidies from highways to other infrastructure. That's not likely to happen—at least, not yet. At $4 per gallon for gas, Americans are paying an average of about $500 more to fill up a car this year over last year. That may dent the family budget, but it's hardly enough to trigger a wholesale reimagining of the American Dream. Not to mention that new automobile technology that features plug-in hybrids, electric cars, and hydrogen-powered cars may blunt the impact of gas prices and allow plenty of Americans to enjoy life as they've known it for decades.

Nevertheless, changes in settlement patterns are already occurring, albeit incrementally. And if the price of energy continues to snowball, so will the changes in people's behavior. "American zoning has largely separated land uses," says Tom Murphy, a former mayor of Pittsburgh and a senior resident fellow at the Urban Land Institute. But across the country, officials are already rethinking that notion. California's new effort to reduce greenhouse gas emissions is requiring some developers to assess how far residents will have to drive to reach schools, work, and shopping by automobile. "That can be reduced by putting a shopping center in the middle of a development instead of the edge," Murphy says. The once prototypical car-centered western metropolis of Salt Lake City is aggressively adding light rail commuter lines. So is Denver. With the help of Campanella and his students, modest Hillsborough, N.C., recently lobbied for commuter rail service to the state's bustling research triangle in Raleigh. Chicago, Minneapolis, and other Midwestern cities are joining their East Coast counterparts in growing dense with condominiums. "That was a trend beginning anyhow," Murphy says. "There's every reason to believe that's going to accelerate significantly."

Lawrence Yun, an economist for the National Realtors Association, is already seeing the evidence. Yun was amazed at the 3,000 responses he received from a recent survey of the nation's realtors. "People are now saying affirmatively they want to live closer to town centers and have a shorter commute," Yun says. "And smaller homes mean less energy consumption." Homes in the exurbs are "being hammered on two fronts, gas and heating and cooling costs." Realtors are reporting that they are having a difficult time even getting people to show up at open houses in some distant suburbs. Homes in cities and close-in suburbs are not only selling faster than homes in far-flung suburbs, they are appreciating more rapidly. That's especially noteworthy. While homes inside thriving cities, such as New York or Washington, have always been more expensive than in the suburbs, they tended to appreciate at the same clip. Not any more. Houses closer to the urban core are now outpacing their peers on the fringes. "Areas in the suburbs requiring long commutes are very weak," he says.

Some cities are better poised to take advantage of this trend than others. Namely, those that are already have strong urban cores and public transit lines. Meanwhile, developers are buying up abandoned rail lines, anticipating their revival as people ditch their cars. Duany says he's betting on oil-rich Texas, the very home of suburban sprawl and the derisively dubbed McMansion. "Dallas has more retrofitted downtown suburbs than any place," Duany says. "I'm always betting on Texas. It's such a can-do place." Duany's calling on American city planners to look at Europe's many thriving cities, where gasoline has always been expensive. But, he says, "we can also learn from our own cities of the past"—back when the automobile was the future.