Betting on Atlanta
Betting on Atlanta
March 9, 2010
By EDWARD L. GLAESER
The New York Times
Atlanta has been one of the biggest boomtowns of the past decade but, like other such places, its housing market has received such a severe drubbing that its future seems far less secure.
Atlanta added 1.13 million people from 2000 to 2008, more than any other in the country except Dallas. But from 2005 to 2009, the number of annual building permits fell by 66,352, the biggest decline in any metropolitan area.
Will Atlanta continue to emerge as a mighty metropolitan economy, or will the housing downturn turn the area into a place that might have been?
The present and future of cities always reflect their past, so I’ll begin by sketching the arc of the city’s growth.
While America’s older cities were located on major waterways, Atlanta’s location was determined by the happenstance of railroad lines.
It was the eastern terminus of the state-subsidized Western and Atlantic Railroad, and the city’s name honors that line. During the 1860s, the city was first burned by the Union Army and then turned into a military capital during Reconstruction. In 1868, Atlanta became the state’s capital, and in the two decades after the war, Atlanta became an educational hub with the opening of Clark College and Atlanta University (now Clark Atlanta), Spelman College, Morehouse College and Georgia Tech, and the reopening of nearby Emory.
From 1870 to 1930, the population of Atlanta surged from 22,000 to 270,000 as its rail access and proximity to cotton country made it a natural location for factories like the giant Fulton Bag and Cotton Mill. Atlanta’s growth attracted entrepreneurs, like John Pemberton and Asa Griggs, who would turn an erstwhile patent medicine, Coca-Cola, into a global mega-brand.
In the 20th century, Atlanta grew along with the rest of the Sun Belt, but the city’s education, politics and scale made its success an exception even for the South.
The broader economic success of the old Confederacy reflects political improvements and regional convergence, the tendency for poor places to grow more quickly, which was documented by Robert Barro and others. The figure shows the negative correlation (minus 0.70) between median income in 1950 and growth in the logarithm of median income between 1950 and 2000.
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