Gas prices are way down. Another 'burb boom on the way?

[the urban politician]

The title is self explanatory.

The other day I saw $1.86 a gallon. I haven't seen that in so many years I can't even remember.

Perhaps the market is playing a "wait and see" approach, I can appreciate that.

But if this continues, perhaps we will see another boom in suburban/exurban development? Auto oriented sprawl, shopping centers, subdivisions, all of the SSP fav's will be back in full swing?

Center cities have come too far along to begin another downward spiral, that's one thing I'm confident about. But with millennials hitting their thirties and popping out kids, and the economic conditions being what they are......

Are the burbs about to boom again?

[CCs77]

I don't think gas prices have a significant role in that. During the years gas prices were high, there were indeed a reduction of consumption, but that was because of people using more transit (were available) trying to drive less by reducing unnecessary trips, trying to do more carpooling, using more efficient cars, etc. But I don't think a significant amount of people relocate their residence because of that. As I don't think that today a significant amount of people would move to exurban areas because the reduced price of gas. People willing to that, would do it anyway, that decision has more to do with other living choices than gas prices. The same applies to people willing to live in more urban areas, since that decision is also based in many more reasons that just gas prices.

Also, the relative reduction of expansion of suburbs during the past years, had more to do with other factors other than gas prices, mainly the huge contraction of the housing market after the bubble burst, but it is not like it disappeared. It has continued, reduced during the worst years of the recesion, but always continued.

[MonkeyRonin]

I don't think gas costs are so high that someone who would otherwise choose to live in a detached suburban house would trade that for an inner-city condo where they can take the train to work. Gas isn't even the largest cost when it comes to car ownership - anyone who can afford to finance, insure, and park a car can afford to fill it up.

The boom in urban areas has been the result of a change in taste, not gas prices.

[mhays]

Incremental price changes affect usage, without question. This has been shown with gas use trends. With cigarette taxes it's apparenly pretty predictable what people will do.

And some of that is about location decisions. It's not about what the average person will do. A lot of people aren't clearly in one camp or the other, and small factors can tilt their decisions.

But it won't mean reverting to the 80s model. Traffic is a major deterrent. Suburbanization required continuous expansion of road capacity, and we're not doing that as much these days, at least in most cities.

[Leo the Dog]

Urban sprawl will continue where there is developable land regardless of gas prices. Small towns that were once considered suburbs have urbanized and will continue to densify, adding jobs, thus creating a demand for their own satellite bedroom communities that people commute from.

I'm in the camp that cheap gas is great for the overall economy. More disposable income equates to more spending in other sectors of the economy, restaurants, retail etc...people would also purchase more gallons of gas, which has federal and state taxes that do not change with the price/gallon.

[mhays]

Much of the economy acts like zero-sum. If people spend less on gas, then that economic sector drops, as we're seeing in a lot of regions now, and not just the obvious regions (Seattle for example would have a big role in arctic drilling, though good riddance obviously). The net positive is more about the flow between countries if your country is one of the winners.

Meanwhile if people drive more and sprawl more, that puts stress on the road system, and causes several types of environmental damage (air, water, habitat destruction, etc.), etc.

[James Bond Agent 007]

I don't think high gas prices ever had much of an effect on suburban or urban development in the first place. The major effect it had was to make more people buy smaller cars. But these people in their smaller cars still moved to wherever in the suburbs they would have moved to before gas prices got high.

[the urban politician]

Thanks for the perspectives, everyone

[Kenneth]

The price of gas is probably the last thing to consider when choosing where to live. The prices are so iffy anyway, 1.80 today 5.00 tomorrow.

[McBane]

I recall also reading people jumping back aboard the SUV bandwagon because of low gas prices. Making such long term commitments based on the price of gas is ridiculous. Anybody who cites low gas prices as a reason to move to far flung suburbs deserves to be slapped.

[ChargerCarl]

Originally Posted by James Bond Agent 007

I don't think high gas prices ever had much of an effect on suburban or urban development in the first place. The major effect it had was to make more people buy smaller cars. But these people in their smaller cars still moved to wherever in the suburbs they would have moved to before gas prices got high.

This. The suburban boom is mostly about consumer choice and land use policies.

[animatedmartian]

Gas is $1.50 here in Michigan. By the premise of the thread, we should be in the midst of a population boom now.

[mhays]

These things are clearly factors, and they can move the needle on trends. But they're probably smaller factors than other stuff.

[Reverberation]

It doesn't matter. Once the distance between a person and their job get above about 25 miles, the cost of gas isn't the largest factor. Parents see that as having about 1-2 hours with their kids per day (unless there is an accident or they get to leave work at 4). So 45 minutes to an hour is the most amount of time people are willing to spend getting to work or getting home.

What it really means is that people who do drive to work are going to get to drive the cars that they really want. Europeans always love to criticize Americans for driving big trucks or cars that are needlessly sporty. Pure jealousy. They don't like driving some plastic eco-mobile made by the same company that made their dishwasher and dog food any more than Americans do. Cheap gas means they will splurge and get the car that takes premium fuel or get the Jeep instead of the Toyota Corolla. Basically whatever is left that the US Government hasn't regulated into the same spacey egg shaped mush as everything else.

That's just my opinion, I'm sure there are plenty of studies that say otherwise.

[mhays]

I'm surprised how little credence people give to what might be called "microinfluences". Every decision we make is the result of many factors. Sometimes we insist on one course nearly regardless, and sometimes (the vast majority of "decisions" we make) we can be influenced.

Likewise, driving rates and suburbanization trends aren't based upon the hardcore people switching sides, at least not often. They're based upon the non-hardcore people being influenced by any number of factors. If gas is a little cheaper that's one piece, along with any emotion/prediction about where those prices might go.

We saw this when gas prices rose/fell/rose, especially before the economy fell. The hardcores did what they do. But some people bought gas-efficient cars, transit did well (sometimes despite service reductions and fare increases due to expensive oil), travel stagnated a bit, young adults didn't buy as many cars, and so on. Vehicle miles traveled per capita dropped substantially and is still below the peak.

The same is true in a bunch of other fields, and the cause-effect is often more clear. Like I said, it's pretty predictable what will happen when cigarette taxes go up by a given amount. Transit planners study usage rates when the bus stop is x feet further away.

[ssiguy]

I don't think gas prices has anything to do with urban renewal. It may have an effect on long distance travel and certainly on the types of vehicles people are buying {ie compact car vs SUV} but the renewal to downtown is more cultural than economic.

Most people in downtown US cities still have cars as in most cities in the US have lousy transit anyway and of course that assumes they work downtown. Moving back downtown is a lifestyle choice and the need for urban vitality, diverse neighbourhoods, smaller lawns due to fewer kids, walkability, history, cultural, the arts...........things that simply are not available in your standard bland suburb.

Remember that most of the people heading back to live in the cities are white, well educated professionals......... a small increase in gas prices won't effect them much. Living downtown is nearly always more expensive especially for things like rent and there is little economic benefit to moving downtown. Downtown is where these people want to be regardless of the price. They may save money staying in the suburbs but what's the point of saving money if you don't like where you are living or the banality of what it offers.

Just as people don't move to the big cities from the farm or small towns to save money, they won't move back to the burbs for the same reason.

[mhays]

Yet in the healthier cities, new "luxury" buildings generally have a lot far fewer parking spaces than housing units.

[dave8721]

Housing prices seem to have as much of an influence as gas prices. At least locally here. In the run up to the real estate crash it was impossible for any middle class or even upper middle class family to buy a home in a decent close in area so many were forced to buy homes in far off suburbs. When the market crashed in 2008 or so close in homes suddenly became affordable (a home that sold for $1 million in 2007 could be had for $450k in 2009) so there was no reason for anyone to buy in the far off hinterlands. Now prices are rising to unaffordable levels for the vast majority of local buyers in close in neighborhoods, so once again people are forced to move as far out as they can afford.

[LouisVanDerWright]

Originally Posted by McBane

I recall also reading people jumping back aboard the SUV bandwagon because of low gas prices. Making such long term commitments based on the price of gas is ridiculous. Anybody who cites low gas prices as a reason to move to far flung suburbs deserves to be slapped.

And they probably will be in a few years once global demand recovers and prices rise. If you make a 30 year decision (like a mortgage) based on a transient 1, 2, or 3 year phenomenon, then you deserve all the consequences you get.

[Leo the Dog]

Originally Posted by animatedmartian

Gas is $1.50 here in Michigan.

That's awesome. $2.59 is the cheapest I've seen here.