High Gas Prices Driving People to Cities

It may be painful to pay $60 every time you fill your gas tank, especially if you live in the 'burbs and have to commute to work. But the trend in rising gas prices is turning out to be a positive thing for cities.

Joe Cortright, with CEOs for Cities, recently released a report that showing that high gas prices and suburban living have contributed to the collapse of the housing market.

Those who live in the suburbs usually have to commute to work, because suburban living generally provides very few transportation alternatives, and residents are limited to expensive car trips. As a result, housing prices in distant neighborhoods are faring far worse during the housing crisis than those in downtown areas, according to the report.

In Chicago, for example, the average house in the 60618 zip code (5.6 miles from the city's downtown loop) appreciated from $374,000 to $410,000 (an increase of $36,000) between the fourth quarter of 2006 and the fourth quarter of 2007, according to the report. Meanwhile, a house in suburban Buffalo Grove (60089) that sold for the same price in 2006 declined by $30,000 over the course of the same year.

Bob Johnson, with the City of Lansing, says Lansing hasn’t tracked the impact of gas prices on Downtown living.

“It’s difficult to say if the increase in petroleum is getting more people to move downtown,” Johnson says. “People are moving down here already.”

But Johnson says there’s “no question” that high gas prices are part of the equation. People moving into Downtown Lansing are attracted to access to public transportation and the area's walkability.

“It (gas price) doesn’t require people to change where they currently live, but it does require them to change what they support,” Johnson says.

Johnson says at this point, it’s critical for the public to have a discussion about mass transit, which needs to be more widely accessible in the area.

View the report, titled "Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs," click here.

Source: Bob Johnson, City of Lansing

Ivy Hughes, development news editor, can be reached here.