The Economics of Urban Density

Density boosts productivity and innovation, improves access to goods and services, reduces typical travel distances, encourages energy efficient construction and transport, and allows broader sharing of scarce urban amenities. However, density is also synonymous with crowding and makes living and moving in cities more costly. We explore the appropriate measurement of density and describe how it is both a cause and a consequence of the evolution of cities. We then discuss whether and how policy should target density and why, in practice, the tradeoff between its pros and cons is unhappily resolved by both market and political forces.