Sustainable Economic Development: Will Atlanta Be Ready for 2050?

Public Affairs Forum

October 22, 2014

An interview with Matthew E. Kahn, Professor, Institute of the Environment, Department of Public Policy, Department of Economics, Anderson School of Management, and School of Law, University of California–Los Angeles

Paula Tkac: Hi, I'm Paula Tkac with the Federal Reserve Bank of Atlanta. Today joining me is Matt Kahn, professor of economics at UCLA, who is here to talk to us tonight at the Public Affairs Forum about sustainable economic development. Welcome, Matt.

Matt Kahn: Thank you, Paula.

Tkac: So, Matt, you're an urban economist; tell me a little bit about what urban economists study.   

Kahn: The United States has over 300 cities, and most of us are not farmers anymore; most of us—80 percent of us—live in metropolitan areas. And a big question in urban economics is, moving forward, how can urbanites have a great future quality of life, of continued improvements in our standard of living?

Tkac: What are some of the quality of life challenges that cities may face as they try to plan their growth?

Kahn: There's three pieces to me: for children, for their quality of life in cities, their opportunities to get a good education; and then for adults, labor opportunities in the city, which industries are the current golden goose, which industries in the future might be the golden goose. For cities that don't have a good idea what might be their future golden goose, how do they set up opportunities so that future industries, the future Facebooks and Twitter, could thrive in their city.

And finally, for senior citizens, of issues of mobility, health care, so that they have a vibrant quality of life.

Tkac: Which cities are among the best at this kind of forward-looking planning?

Kahn: I actually don't know the answer to that! [laughs] What urban economists often focus on is where are "footloose" people moving to? And it's a very good sign in Atlanta that talented, footloose people continue to come here. A point that many urban economists have made is that people greatly value warm winters, and Atlanta does well there, as does my home of Los Angeles.

Tkac: I've heard a lot, especially outside of the United States, in the developing world, about an urbanization movement, and I've heard anecdotally about that within the United States more—as you were just talking about—more young people wanting to live in city centers. Are those anecdotes supported with the data; is that what we see in terms of mobility trends?

Kahn: A major fact that has played out across all U.S. metropolitan areas is that crime has fallen sharply since the 1990s—and I looked this up for Atlanta, it is also true. And, as crime falls in cities...cities offer great opportunities to interact with other people, to make new friends, and to experience greater variety. The vibrancy of big cities, whether it's Atlanta or Los Angeles, I think that's a major drawing fact, and so there's a little bit of a "chicken and egg" issue. Do young people follow jobs, or do jobs follow young people? So if Atlanta has a great quality of life downtown, and if young people live downtown, real estate developers build here, start-up firms locate here, and the mayor all of a sudden has a new golden goose that he or she might not have anticipated.

Tkac: So it's a virtuous cycle, perhaps?

Kahn: I think so, but with an anchor...one of the themes of my work has been the centrality of quality of life, that it's a little bit of an amorphous concept, but for those cities, center cities, that have great quality of life, starting with low crime, but also greenness, environmental amenities...this is a basis for building up the virtuous cycle, the domino effect that you just named.

Tkac: How does, let's say, public transportation and infrastructure feed into the quality of life, or the ability to attract folks into the city?

Kahn: There's a "field of dreams" question: If organizations like MARTA improve public transit, more people will ride it, if it goes to places people want to go. And for the real estate developers in Atlanta, do they now smell a new money opportunity of building high-rise condos and retail close to public transit stops? This can't be done overnight, but you can imagine a new urbanist vision for a certain subset of Atlanta's residents, where new transit development attracts young people and older people, not in love with their cars—this isn't everybody—but to offer a greater menu of choice. This sets off another virtuous cycle of restaurants, and upscale retail, and job centers agglomerating near the transit, and this not being about cars.

Tkac: If you had one piece of advice to give the mayor of Atlanta, or the mayor of another large city, I think it would be "pay attention to quality of life..." it sounds like an aspiration and a goal, but what are the tactics to get there?

Kahn: One smart thing to say here. I think it's very important to experiment. And so something cool about my California right now is that there's many local experiments going on. I'll give a couple of examples: there are, in San Francisco, they've been playing around with "time of day" parking prices, to see if you can reduce shortages of parking spots by charging more at peak times. I don't have a magic bullet of what the mayor of Atlanta should do as a recipe for building a heaven. But I would hope that the leadership is willing to experiment.

Tkac: So if it's an experienced good, you really need to understand what that experience is going to be like.

Kahn: Having reduced crime and more options for public schooling are two necessary conditions for great quality of life. But Atlanta is endowed with beauty here, with warm winter climate, and then when you combine that with some of these necessary street safety and street activity, I think that's the beginning of a winning formula.

I think another thing that people celebrate is how, in a diverse city of people of different ethnicities and incomes, what do different people have in common? How can center cities bring us all together? So I would hope—expect—that successful cities will experiment and see where the flowers bloom.

Tkac: So it almost sounds like a public-sector incubator, so we have those with private equity, and venture capital, entrepreneurs—get their ideas together and, again, try it out and see what gets funding, what has a market, that's...

Kahn: Yes, and you just made me realize a point I should have said: a key role for the public sector here is, in Atlanta and in many other cities, there's defunct land uses. And so, for example, my father works in New York City, and Con Edison had a defunct power plant. And I believe it was the job of the city to clean that thing up, and then developers were very happy to bid for the parcel. And so, I would hope in this age of big data—we haven't spoken about big data—in this age of big data, that the city of Atlanta is doing an inventory of what parcels of land it has, and which parcels, through small public investments, it could then auction off to private developers and through public and private partnerships.

And so, another factor driving future quality of life improvements in cities is big data—being able to track if crimes are occurring, where are the hot spots? And how to deploy scarce resources for fire and police, to those areas which, through big data, we know where the problems are.

Tkac: Well, thank you very much.

Kahn: Thank you.