The Other Side of Eight Mile: Suburban Population and Housing Supply

Abstract

∗This article establishes a linkage between decadal changes in suburban population and the supply of suburban dwelling units. It then estimates an econometric supply-and-demand model for 317 U.S. suburban areas for the 1970s, 1980s, and 1990s using the State of the Cities database. Suburban supply is more elastic than central city supply, with suburban estimates between +1.26 and +1.42. However, separate estimates by geographic region lead to supply elasticities of +0.89 for the northeastern quadrant of the United States and +1.86 for the remainder of the United States. This article addresses issues of population change and housing supply in U.S. suburbs. Central cities often have only limited opportunities for new construction, while surrounding suburbs “beyond Eight Mile Road” may have considerable vacant land to accommodate new employers and new residents. 1 This generalization, of course, oversimplifies. New Rochelle, NY; Evanston, IL; Brookline, MA; Royal Oak, MI; and Lakewood, OH, for example, were developed 100 or more years go. Many suburbs (Puentes and Orfield 2002) are fully built up, many have stopped growing or have experienced population losses, and some have problems of blight or poverty similar to central cities. This article establishes a linkage between decadal changes in suburban population and housing supply, differentiating between central cities and inner and outer suburban rings. It then estimates an econometric supply-and-demand model for 317 U.S. suburban areas for the 1970s, 1980s, and 1990s using the State of the Cities database. With almost all suburban areas characterized by increasing housing stock and in general more buildable land than the central cities, one would expect suburban supply price elasticities to exceed those of central cities. Using a similar model, Goodman (2004) estimated dwelling unit price elasticities between +0.03 and