Working Paper #647
High Gas Prices and Urbanism
Witold Rybczynski
Development Macroeconomics Urban
The price of crude oil has gone from a low of $16 a barrel at the beginning of 1999 to more than $140 in the summer of 2008. If energy prices continue to rise-or even if they merely stay at high levels for an extended period of time-that will have an effect on urbanization patterns. Compact cities, which have mass transit, walkable neighborhoods, concentrated services, and energy-efficient housing, may benefit. Suburbs will have a more difficult time adjusting and will probably have to consider densification and more efficient buildings. Close-in, older suburbs may have a competitive advantage; far-out exurban development is likely to be less favored. Much depends on the possible development of alternatives to gasoline-powered automobiles. Much of the impact of expensive oil will be offset by the use of smaller and more efficient cars, and by technological improvements to the efficiency of heating and air-conditioning.