By Dr. Mike Walden
When I moved to Raleigh in 1978 it was a sleepy state capital with little excitement and few downtown residents. Now, over forty years later, construction cranes dot the landscape of downtown. Raleigh is a magnet for young college graduates, tech and financial firms, and cutting-edge eateries. What city leaders four decades ago hoped for has come true. Raleigh is a destination with a national reputation.
Yet this success has brought challenges, with two in particular attracting the most attention. First is housing costs. The popularity of downtown and nearby locations has caused financial values of those sites to soar. But higher site costs require higher valued developments to make the investments work. Left out are moderate and lower priced dwellings and the households that can only afford them.
The second challenge is commuting. Households who are priced out of the downtown market locate in outlying areas where real estate costs are lower. The tradeoff is their commutes to downtown and central locations for work, school or shopping are now longer. Longer commutes create more congestion and higher levels of polluting emissions to the environment.
There are numerous policy suggestions to the housing and commuting issues prompted by the increased popularity of big cities. Limitations on new development, subsidized housing and mass transit have been tried or debated in many regions with revitalized inner cities.
There may be another approach that is now receiving attention. It’s the idea of “mini- cities”. Mini-cities, also known as live-work-play communities, combine residences, businesses, shopping, entertainment amenities and educational and medical facilities into one coordinated development. Households can live in the development, work there, and do much of their shopping and leisure time activities in the same general location.
Depending on the size of the mini-city, routine commuting and travel are minimized and replaced by walking, riding shuttles or trams, or even using a light-rail system built as an integral part of the development. The reduction in daily traffic travel is also a big plus for the environment.
Developers of mini-cities can be motivated to construct residences with a range of prices if doing so ensures a dedicated labor supply to businesses in the mini-city. Just like the general economy, mini-cities need a variety of skills and occupations paying different salaries.
If businesses in the mini-city know they will have access to an on-site, reliable labor force, they may be willing to subsidize both the construction and occupancy of dwellings marketed specifically to moderate and lower-income households.
In addition, regional residents who benefit from the improved environmental quality associated with the mini-city may support public subsidies for moderate and lower-income housing in the mini-city development.
The idea of mini-cities has already taken hold in North Carolina. Chatham Park near Pittsboro is a mini-city under construction. Others have been announced or planned for various regions in the state.
Are mini-cities only a concept for urban areas? Not at all. Mini-cities can also be adapted to small town and rural regions, especially if focused on a particular economic function. Mini-cities developed primarily for retirees have been proposed or built in several states. They cater to the growing older population and usually offer significant medical facilities for the residences.
Mini-cities can also be developed around a large employer, such as an auto assembly plant or a technology complex. In fact, such developments would be similar to the numerous textile towns of North Carolina’s past.
If current trends continue, North Carolina’s population could increase by 30 percent, equivalent to 3 million new people, by 2050. Adding this growth to our already strained urban regions could lead to considerable new costs in those locations. Mini-cities built in both urban and rural regions can moderate these costs and still allow for the benefits of growth to occur.
How and where we live are big components of our quality of life. You decide if mini-cities are a viable alternative to the kinds of development typically used to accommodate an increasing population.
Walden is a William Neal Reynolds Distinguished Professor in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.