Environment and Planning A 1997, volume 29, pages 865 - 886

Polycentrism, commuting, and residential location in the

San Francisco Bay area

R Cervero, K-L Wu
Department of City and Regional Planning, University of California, Berkeley,
228 Wurster Hall, Berkeley, CA 94720, USA; e-mail: rob@ced.berkeley.edu
Received 23 April 1995; in revised form 28 December 1995

Abstract. The San Francisco Bay Area has taken on a distinct polycentric metropolitan form, with
three tiers of hierarchical employment centers encircling downtown San Francisco, the region's
primary center. In this paper it is found that polycentric development is associated with differentials
in suburban and urban commute trip times: commute trips made by employees of suburban centers
are shorter in duration than commute trips made by their counterparts in larger and denser urban
centers. Differentials were even greater, however, with respect to commuting modal splits. Lower
density, outlying employment centers averaged far higher rates of drive-alone automobile commut-
ing and insignificant levels of transit commuting. Smaller, outlying centers were also the least
self-contained, with a large number averaging twenty or more times as many external as internal
commutes. The effects of housing availability and prices on the residential locational choices of
those working both in urban and in suburban employment centers are also investigated in this
paper. Locational choices are stratified by occupational class and type of center. High housing prices
in and around employment centers were found to displace workers to residences in other subregions,
except in the case of professional workers in fast-growing, outlying centers. These workers were
attracted to higher-priced nearby housing. In the empirical analysis, significant segmentation in
housing choices among workers in fast-growing suburban centers was found. This could be partly
due to selective land-use policies implemented by local governments in these areas.

Introduction
The geomorphology of most US metropolitan areas has changed from a single-
centered to a more polycentric form over the last half of the 20th century. Studies
show polycentric models statistically explain today's spatial distribution of popula-
tion and employment better than do monocentric models (Gordon et al, 1986;
McDonald and Prather, 1994; Small and Song, 1992). Using minimum thresholds
related to employment densities and size (or floorspace), analysts have identified
thirteen subcenters in greater Washington, DC (Garreau, 1991), seventeen in greater
Atlanta (ARC, 1985), and twenty-two in the Houston area (Rice Center, 1987). Four
separate studies of the Los Angeles area, using 1980 census data, have identified
anywhere between six and fifty-four subcenters there (Giuliano and Small, 1991;
Gordon et al, 1986; Heikkila et al, 1989; Song, 1992). More recently, Speare (1994)
counted 188 central places in greater Los Angeles, sixty-five in metropolitan Detroit,
and thirty-nine in the Houston - Galveston region. Research is less clear on the degree
to which polycentric growth has followed a central-place, hierarchical pattern versus a
pattern that is less organized or defined. Baerwald (1982) identified suburban growth
in the Minneapolis—St Paul area as being predominantly linear or corridor-like in
form, following the alignment of axial freeways. In a study of six large US metropolitan
regions, Pivo (1990) concluded that most office jobs were located in small and
moderate-sized, low-intensity clusters aligned along freeway corridors. Gordon et al
(1986) and Giuliano and Small (1991) have likewise found that, except for several
large concentrations, small-scale clustering best characterized subcentering in the
Los Angeles region. The decentralization process in contemporary urban America is
complex and not easily characterized,-seemingly ranging from small-scale clustering
866 R Cervero, K-L Wu

along corridors, or what Pivo (1990) has called "a net of mixed beads", to a more
hierarchical structure of subcentering.
A lively policy debate has emerged from the trend toward polycentrism. A num-
ber of policy analysts have probed the question: 'has the migration of jobs to suburbs
and the formation of subcenters put more Americans closer to their workplaces,
thus reducing average commute times and distances?' Evidence on this question is
mixed. Gordon et al (1986) have argued that from a regional mobility standpoint the
polycentric metropolis is inherently superior to the strong central-city metropolis.
Using data from the 1980 census and 1985 American Housing Survey, they found that
average commute times fell for eighteen of the twenty largest US metropolitan areas
during the first half of the 1980s, a period of rapid job decentralization, concluding
that "polycentric or dispersed metropolitan structures are favorable to short com-
mutes" (Gordon et al, 1991, page 419). Using zonal-level data on intrametropolitan
travel for Baltimore in 1977, Dubin (1991) found that average commute times were
shorter for peripheral employment centers, although workers traveled slightly longer
distances. Suh (1990) showed that more compact suburban forms are associated
with shorter average commutes, concluding that subcentering leads to more efficient
commuting than scatteration or sprawl.
A body of research on 'wasteful', or 'excess', commuting has also shed light on this
question. In a study of fourteen US and twenty-one Japanese metropolitan areas,
Hamilton (1982) showed that actual commute distances in the 1970s were around seven
times longer than those predicted by the monocentric model.(1) As in actuality
the metropolitan areas Hamilton studied were multicentered and not monocentric, the
finding of excess commuting suggested that polycentric urban growth has given rise
to longer commutes. Another interpretation, however, is that factors other than
proximity to workplace have influenced where workers reside, accounting for a
lengthening of commutes. Hamilton (1982, page 1051) concluded that "decentraliza-
tion of employment has resulted in no reduction in commuting despite the movement
of jobs toward residences but, rather, a slight increase on average". Subsequent
work by White (1988) and Suh (1990) suggested relatively little excess commuting
when the actual geographic distribution of employment is accounted for and a linear
programming algorithm is used to swap homes or jobs so as to minimize total
commuting costs. However, more recent work by Small and Song (1992), who applied
White's calculations to Los Angeles County by using small-zone journey-to-work
data, corroborates the general order of magnitude of Hamilton's original finding of
excess commuting and contends that White's estimates of excess commuting were
downward biased because of data aggregation. Small and Song conclude this finding
is more an indictment against traditional location models based on commuting
cost-minimization assumptions than an indictment against polycentric development.
That is, factors other than proximity to workplace, such as quality of schools and
neighborhoods, appear to be stronger determinants of residential location.
Recent national statistics suggest a trend toward longer commutes during the
1980s period of rapid decentralized growth in the USA. According to the National
Personal Transportation Survey, the average journey-to-work in the USA increased
in length from 9.2 miles in 1983 to 10.6 miles in 1990 (Hu and Young, 1992), which,
according to Bookout (1992, page 10), reveals "an even poorer relationship between

(1)
Using empirically derived negative exponential density gradients for these cities, Hamilton
measured the required commute as the difference in the average distance of population to the
center and the average distance of employment to the center. Wasteful commuting was defined
as the difference between the actual commute and the required commute.
Polycentrism, commuting, and residential location 867

jobs and housing than experts expected to find". Using census data, Rosetti and
Eversole (1993) show that mean commute times increased during the 1980s in thirty-
five of the thirty-nine US metropolitan areas with 1990 populations over one million.
Given that around two thirds of all metropolitan employment growth in the USA
during the 1980s occurred outside of central cities (Hughes, 1992), these statistics cast
doubts on whether polycentric development, ipso facto, shortens commutes.
Another relevant line of research that has also produced mixed results has been on
the effects of office relocations on the journey to work. In his study of office relocations
in greater London, Daniels (1972) found that most employees experienced a longer-
distance commute after their firm relocated from downtown to the suburbs because
most workers chose not to disrupt their family living situation by relocating their
residences. He also documented a dramatic switch in commuting modes, from public
transit to the private automobile. Daniels (1981) found, moreover, that effects were
not only short-term but indeed held over the long run. In other studies (Bell, 1991;
Cervero and Landis, 1992; Ley, 1985; O'Connor, 1980; Wabe, 1967) average commute
distances were found to change little after firms relocated to suburbs; however, the
average duration of commutes fell in all cases. As in Daniels's study, these studies
also showed that the most significant change was a decline in mass transit usage.
One possible explanation for why commutes might lengthen as jobs decentralize
and regions become more polycentric are spatial mismatches in housing and employ-
ment growth (Cervero, 1989b). Lack of affordable housing (Pollakowski and Wachter,
1990), fiscal and large-lot zoning (Rolleston, 1987; Windsor, 1979), racial discrimina-
tion (Ellwood, 1986; Ihlanfeldt and Sjoquist, 1991), and other exclusionary practices
have displaced some suburban workers to residential communities far from their
jobs, some have argued. In response, some regions of the USA, such as Southern
California, have proposed setting jobs-housing balance targets in the hope of
improving regional mobility and reducing air pollution (Hamilton et al, 1991).
Giuliano (1992), Downs (1992), and Giuliano and Small (1993) have criticized such
initiatives on the grounds that most trips are for nonwork purposes, that balance is
unattainable for most two-earner households, and that many factors other than
proximity to work influence residential location choice. Recent research in the
Los Angeles region (Wachs et al, 1993) and greater Washington, DC area (Levinson
and Kumar, 1994), moreover, suggests that jobs-housing imbalances recede over
time, as jobs and housing co-locate to economize on commuting.
Given these varying interpretations about the implications of decentralized
growth and subcentering, more empirical inquiries are needed as more journey-to-
work data become available. In this paper we use the recently released 1990 Census
Transportation Planning Package (CTPP, Bureau of Census, Washington, DC) to
analyze and map subcentering in the San Francisco Bay Area, examine its effects
on commuting, and explore factors shaping residential locational choices among
subcenter employees. As most published research to date on polycentric development
has been based on censuses that predate the 1980s, a period of rapid suburban
employment growth in the USA (Cervero, 1995; Hughes, 1992), analyses based on
more recent journey-to-work data should enrich our understanding of how subcenter-
ing and commuting mutually affect each other.
We start off by defining and mapping employment centers in the Bay Area
with use of density and size criteria. Four hierarchies of centers and subcenters are
identified. Commute times, modal splits, and rates of internal commuting among
employment center classes are then compared. The implications of polycentric vis-
a-vis monocentric development on commute patterns are discussed. This is followed
by an analysis of factors shaping the residential location choices of workers with
868 R Cervero, K-L Wu

jobs in fast-growing versus more mature employment centers. We hypothesize that

workers in lower-earning occupations are displaced by high housing prices in the
vicinity of their workplaces, and we test this hypothesis by using a push-pull singly
constrained gravity model. Evidence that certain classes of workers are priced out
of local housing markets can lend credence to programs (such as the relaxing of
zoning restrictions) that reduce frictions to residential mobility. The paper concludes
with a discussion of the public policy implications of the research findings.

Defining and classifying Bay Area employment centers

Various methods have been used to define metropolitan centers and subcenters;
however, most authors have employed some notion of identifying peaks in the spatial
distribution of population or employment, or both. As other authors (such as
Cervero, 1989a; Giuliano and Small, 1991; 1993; McDonald, 1987), in this paper we
use concentrations of employment rather than population to define centers. This
conforms to classical urban economic models wherein employment activities are the
dominant regional land uses, outbidding other activities for choice locations and
setting into motion subsidiary locational choices. Although traditional theory holds
that housing locations are residual to the location of firms and industries, some
researchers, notably Simpson (1987), have challenged this assumption by showing
employment locations are more strongly predicted by the distribution of residences
than vice versa.
According to Song (1994, page 1537), the definition of employment centers should
"incorporate adjacent high-density zones and restrict attention to centers large enough
to exert a potentially significant influence on urban structure". Consistent with this
observation, approaches used to date to identify employment centers have included
visual inspections of density maps (Gordon et al, 1986), definition by size and specia-
lization of employment (Cervero, 1989a; Dunphy, 1982), and specifications of mini-
mum-density thresholds (Giuliano and Small, 1991; McDonald, 1987; McDonald and
McMillen, 1990; McDonald and Prather, 1994; Wu, 1994).
For our study, data on place of employment were obtained from Part II of the
1990 CTPP for the San Francisco Bay Area, released in early 1994. Employment
data, stratified by occupations, were available for the 1382 census tracts in the nine-
county Bay Area.(2) Employment densities, defined in terms of workers per acre,
were computed from the CTPP data at the census-tract level for the core (most
highly urbanized) parts of the region and are shown in figure 1. In 1990, much of the
region's employment followed major transportation infrastructure, notably freeways
and rail services (including the commuter rail line, CalTrains, and the urban rail
system, BART) that span both sides of the San Francisco Bay in a diagonal fashion.
The three most prominent employment clusters are the city of San Francisco (on the
western peninsula), Oakland - Berkeley (on the eastern half of the Bay), and Silicon
Valley-San Jose (to the south). Even more revealing is the three-dimensional surface
plot of employment densities for the core of the region (figure 2). San Francisco's
preeminance as the Bay Area's largest and densest enclave of employment is evident.
Oakland and Berkeley stand out as second-tier centers. Silicon Valley, one of the
world's premier high-technology centers, is also a significant subcenter; however,
its development is less peaked than the others. This reflects Silicon Valley's built
(2)
The nine counties, in order of population size, are: Santa Clara, Alameda, Contra Costa,
San Mateo, San Francisco, Marin, Sonoma, Solano, and Napa. CTPP data were available for
the 1099 Traffic Analysis Zones for the nine-county region. These were converted to census
tracts by using equivalency tables provided by the Metropolitan Transportation Commission,
the region's transportation planning organization.
Polycentrism, commuting, and residential location 869

Pacific Ocean

Employment density
(workers per acre)
^4
• H 4.01-7
a n 7.01 -12
«H>12.()I

Figure 1. Employment densities in the core of the San Francisco Bay Area, 1990.

Bay Area Counties

Figure 2. Three-dimensional employment-density model for the San Francisco (SF) Bay Area.
870 R Cervero, K-L Wu

environment of low-rise, campus-style office and industrial parks spread over a

70-square-mile area. Overall, a polycentric urban structure with some degree of hier-
archy is evident from the three-dimensional plot.
As Giuliano and Small (1991) and Song (1994), we have defined centers on the
basis of employment size and employment density. One criterion for constituting an
employment center (EC) in our study is that there be a contiguous set of census tracts
with employment densities that exceed the regional average of 7 workers per gross
acre. The second criterion is that the combined tracts of a center must sum to at least
10000 workers. Our criteria are more permissive than those used in the two
Los Angeles area studies. Giuliano and Small (1991) set 10 workers per acre, and 10 000
employees, as the minimum thresholds for contiguous tracts. Song's (1994) minimum
criteria were even more stringent: 15 workers per acre, and 35 000 employees.
Applying our criteria, twenty-two ECs were identified in the Bay Area. These
twenty-two centers were further stratified into four hierarchical groups, or classes. In
table 1 we list the twenty-two ECs and describe how they were grouped, and in
figure 3 we show the locations of the centers, identified by group membership, in the
region. The region's primary center is San Francisco, with the largest employment
concentration and by far the highest employment densities. The four second-tier cen-
ters, Oakland, Berkeley, Silicon Valley, and downtown San Jose, average fairly large
Table 1. San Francisco Bay Area employment centers and classification criteria.

Job location Employment size, E Employment density, W

(number of workers) (number of workers per
acre)

Group \: E> 300000; W> 40

San Francisco 462 731 64.5
Group 2: 100000 < E< 300000, or 45 000 <E< 300000; W> 13
Oakland 99 042 34.1
Berkeley 46 866 28.2
Silicon Valley 263 840 13.5
Downtown San Jose 77 256 16.7
Group 3: 25 000 < E < 100000; W> 10
Walnut Creek 35 752 20.4
San Carlos 36448 16.2
Emeryville 32 380 14.1
San Mateo 25 548 14.2
San Francisco Airport 83 091 14.0
Concord 28 492 18.4
Hayward 27 462 14.5
Redwood City 77 737 11.1
Group 4: 10 000 < E < 25 000; W > 1
South San Jose 14787 15.0
Fremont 10915 13.1
Palo Alto 10067 10.6
Cupertino 12231 12.2
San Ramon 15 876 8.8
San Rafael 20 670 8.9
San Leandro 22 720 8.9
Vallejo 16 384 11.6
Pleasanton 17 694 7.0
Note: An employment center is defined as a contiguous set of tracts, each with a density
above 7 workers per acre.
Polycentrism, commuting, and residential location 871

employment bases and moderate-to-high employment densities, and lie in the

urbanized flatlands that ring the San Francisco Bay. Oakland and Berkeley are more
mature centers, whereas Silicon Valley and Downtown San Jose are newer, faster-
growing centers, with economic bases primarily in the sectors of electronics,
computer and semiconductor manufacturing, and business services. Silicon Valley
stands out in terms of size of work force (closer to San Francisco's than to those of
the other second-tier centers), though it has moderate employment densities. Eight
third-tier centers were identified, split between the east and west Bay Area. The
remaining nine centers, which largely ring the periphery of the region, have
10 000 - 25 000 workers and comparatively low densities.

Figure 3. Locations of employment centers, by class of center, for the San Francisco Bay Area.
In table 2 employment and population characteristics of the four classes of ECs
are summarized. The table reveals a clear hierarchical relationship among the four
classes in terms of employment and population size as well as density. Employment
within second-tier centers such as downtown Oakland and Berkeley is, on average,
around one-eighth the size and half as dense as in the primary center, downtown San
Francisco. However, compared with third-tier centers (such as Pleasanton and Palo
Alto), second-tier centers are around twice as large and 40% more dense. A similar
pattern is seen for residential population, with the notable exception that average
residential densities are roughly the same among third-tier and fourth-tier centers.
As a share of the Bay Area's nine-county regional work force, the primary center,
downtown San Francisco, made up 15.0% of the 1990 total (figure 4). The next largest
center, Silicon Valley, contained 8.6% of the region's workers. Each of the remaining
second-tier centers (downtown Oakland, San Jose, and Berkeley), although much
denser than Silicon Valley, constituted a much smaller share of the employment
total—1.5%-3.2%. Most remaining centers accounted for 1% or less of regional
employment.
872 R Cervero, K-L Wu

Table 2. Average employment and population characteristics of employment center classes, 1990.
Center Employment Population Ratio of the
type ( 1.(a)
number of jobs to
*(») density ' size density' (b)
the number of
employed residents
Primary 462 731 64.5 261046 34.4 1.78
Second-tier 121251 (97122) 23.1 (8.4) 54097 (12964) 15.2 (8.6) 1.54 (0.25)
Third-tier 44028 (2 749) 15.4(2.7) 18 609 (3 748) 6.9 (3.1) 1.04 (0.44)
Fourth-tier 17476 (7417) 10.7(2.4) 12892 (3915) 7.1 (3.0) 0.83 (0.42)
a
Number of persons.
b
Number of persons per acre.
Note: standard deviations are given in parentheses.

Also presented in table 2 is an index of 'balance' among the four classes of ECs—
the ratio of jobs to employed residents. The actual ratio presented is the number of
workers in a center divided by the number of employed residents in the same center
plus a surrounding buffer zone of approximately 3-miles radius. A larger geographical
area was used for enumerating employed residents in order to reflect the general level
of housing supply within the subregion of an EC. On average, ECs had reasonable
balance in jobs and subregional employed residents. Most balanced were the third-
tier centers (though there was considerable variation within this class). The least
balanced centers were the two largest (downtown San Francisco and the second-tier
centers). (3)
In terms of occupational profiles and worker earnings, the four classes of centers
were found to be quite similar (table 3). On average, upwards of 40% of employees
in each class of centers were employed in professional, executive, or managerial
occupations. Average worker earnings were highest in the smallest ECs, averaging
around 30% more than the average worker earnings over the region as a whole.

16.0-
i
•
14.0

12.0

_ 10.0

S 8.0 i

" 6.0-

4.0 -

2.0 -

c\n - — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i —

2 4 6 10 12 14 16 18 20 22
Rank
Figure 4. Plot of regional work-force share against rank of economic center.

(3)
Among the twenty-two individual centers, the highest ratios of jobs to employed residents
were in Silicon Valley (1.57) and Redwood City (1.50). The lowest ratios were in the fourth-tier
centers of Fremont and South San Jose (0.53). The most balanced centers were Concord (1.01),
San Ramon (1.02), and San Rafael (1.03).
Polycentrism, commuting, and residential location 873

Table 3. Occupational and earnings characteristics of employment-center classes, 1990.

Center Occupational group a Average annual

type earnings per
professional, executive, sales administrative, others worker ($)
technician managerial clerical

Primary 22 18 11 18 30 32 504
Second-tier 23 (3.3) 16 (1.2) 9 (0.5) 19 (0.5) 32 (3.2) 31 127 (40)
Third-tier 20 (3.9) 19 (1.3) 13 (3.5) 20 (6.7) 29 (7.7) 29 925 (1666)
Fourth-tier 19 (11.8) 18 (5.4) 13 (0.3) 16 (2.7) 34(14.2) 34654(6072)
''Figures given are the percentage of workforce employed in the given occupational group.
Note: Standard deviations are given in parentheses.

Commuting characteristics of centers

Are there significant differences in employee commuting characteristics among the
four classes of ECs? Table 4 indicates there are. In this section we explore these
differences.
Table 4. Average commuting characteristics of employment-center classes, 1990.
Center One-way Mode a Independence
type commute index
time (min) d
™Q car
P°o1 public walk or other
alone transit bicycle

Primary 32.5 42 15 28 6 0.228

Second-tier 26.9 (3.4) 68 (15) 13 (1) 8(7) 8(10) 3 (2) 0.065 (0.015)
Third-tier 25.5 (1.0) 78 (3) 13 (2) 4(2) 4(3) 3 (1) 0.052 (0.035)
Fourth-tier 24.9 (3.3) 80 (5) 13 (3) 2(1) 2(2) 2(1) 0.043 (0.029)
a
Figures given are the percentage of commutes made by the given mode of transport.
Note: standard deviations are given in parentheses.

Commute times
Mean commute times were highest for workers in the largest, innermost centers, and
lowest for those working in the smallest, generally outermost centers. The region's
preeminent center, San Francisco, averaged the longest commutes among its work
force. This reflects a combination of generally longer distance travel on slower moving
highways and more often on slower moving modes (for example, mass transit). The
second longest average commutes were made by the workers of second-tier centers.
Workers at the remaining subcenters averaged commutes that were around 7 \ min less
than their downtown San Francisco counterparts, and 1 - 2 min less than their down-
town Oakland, San Jose, Berkeley, and Silicon Valley counterparts. Differences in
commute durations are further underscored in figure 5—there were relatively low
shares of short ( < 15 min) commutes to primary and secondary centers and a relatively
high share of long ( > 45 min) commutes to the largest center. Overall, these findings
suggest that a hierarchical, polycentric structure is conducive to less commuting, at
least in terms of duration. Workers heading to downtown San Francisco, representing
the locus of employment under a monocentric model of urban form, average apprecia-
bly longer commutes than do their counterparts in smaller, more outlying subcenters.
Mean commute times for the two largest classes of ECs exceeded the 1990 Bay
Area average of 25.5 min. (4) Only in the case of the fourth-tier, more peripheral,
(4)
This is the mean 1990 travel for intraregional work trips made by employed residents of the
nine-county San Francisco Bay Area (MTC, 1993).
874 R Cervero, K-L Wu

0-14. 15-29 30-44 45-59 60-74 75-89

Time (min)
Figure 5. One-way commute times among classes of economic centers, 1990, by 15-minute
intervals.
ECs was the mean commute time of workers less than the regional average. Nine of
the twenty-two ECs averaged employee commute times that fell below the regional
average.
Mean commuting times were strongly correlated with the 'balance' index of jobs
to employed residents. For the twenty-two individual ECs (listed in table 1), the
simple correlation between mean employee commute time and the ratio of jobs to
employed residents was 0.60. This simply reflects the fact that ECs with relatively
limited supplies of housing within the centers or in surrounding areas require most
workers to reside outside the subregion, thus incurring relatively long commutes.

Modal splits
Table 4 shows there was even greater variation in commute modal splits among
EC classes. The share of drive-alone automobile trips was inversely related to primacy.
Denser, larger ECs averaged relatively low shares of solo commutes and higher rates
of transit, ride-sharing, and nonmotorized (that is, walking and bicycling) commutes. (5)
These modal splits are likely explained, at least in part, by the higher levels of transit
services, more expensive parking, and greater traffic congestion typically found in and
around denser employment settings. The region's three densest ECs, downtown San
Francisco, Oakland, and Berkeley, are all served by the BART rail transit system; fewer
of the third-tier and fourth-tier ECs, on the other hand, receive BART services (the
exceptions being San Leandro, Hay ward, Fremont, Concord, and Walnut Creek). (6)
The strong bearing that employment densities have on the commute choices of
workers at the twenty-two Bay Area ECs is revealed by equation (1):
fDA = 9 3 . 6 e x p ( - 0.023 W) , (1)
DA
where f is the estimated percentage of commute trips by drive-alone mode, and Wis
the number of workers per acre. Estimated by using data from each of the twenty-two

(5)
Among individual ECs, centers with high rates of transit commuting among workers, besides
downtown San Francisco, are downtown Berkeley (15%) and downtown Oakland (13%). The
next highest share of transit commuting is in Emeryville (7%), a city that is not directly served
by BART. By far the highest share of pedestrian and bicycle commuting among workers was
in downtown Berkeley, where 23%) of the work force commuted by a nonmotorized mode. This
high nonmotorized share is likely explained in part by the large student population in Berkeley,
home of the University of California.
(6)
Some of the other ECs are served by alternative rail modes. The CalTrain commuter rail
line serves the San Mateo, San Carlos, Redwood City, and Palo Alto ECs, in addition to down-
town San Francisco and downtown San Jose. The Santa Clara County Light Rail system,
moreover, serves the ECs of Silicon Valley, downtown San Jose, and south San Jose.
Polycentrism, commuting, and residential location 875

ECs and ordinary least squares techniques, the exponential-decay equation fits the data
fairly well (R2 = 0.751, ^-statistic = 60.1, and probability of F= 0.000). This equation
must be interpreted with caution, however, because other explanatory factors, such as
higher parking rates and better quality transit services in downtowns, are not included;
these omitted variables are likely correlated with employment density, meaning that
the coefficient on the density variable absorbed some of the influences of the omitted
variables. A host of complex, interrelated factors bear on the modal choices of work-
ers in contemporary urban America (Kanafani, 1983); however, as suggested by equa-
tion (1), employment density itself remains a strong predictor.
Much of the debate on the commute impacts of employment decentralization in
the USA has focused on travel times and distances, but less had been said about
the effects on modal splits. It has been argued that the more serious implication of
decentralization and polycentric growth is less spatial and more modal, based on
the finding that increases in vehicle-miles traveled (38% rise from 1980-90 for the
entire USA) are attributable more to increased solo commuting than to changes in
travel distances (Cervero, 1995). As regional traffic congestion, tailpipe emissions,
and other externalities of motorized travel are associated with vehicle-miles travelled,
the modal implications of decentralization should not be taken too lightly. These
empirical results from the Bay Area's ECs further support this.
Internal commuting
A final indicator of commute characteristics of Bay Area ECs shown in table 4 is
the independence index. Created by Thomas (1969), the independence index is the
number of internal (within-EC) work trips divided by the sum of in and out (external)
work trips. The higher the index, the higher the share of work-trip ends that are
internal to the EC. Thomas first used the index to gauge the degree to which British
new towns are self-contained, an implicit objective of the British new-town move-
ment.
Table 4 reveals that the Bay Area ECs, as might be expected, are not very self-
contained—the vast majority of workers commute in from elsewhere. The most
self-contained is the primary center, downtown San Francisco—in 1990, there were
73562 internal commutes, versus 385594 inflows (workers living elsewhere) and
94798 outflows (employed residents of the EC working elsewhere). Among the
twenty-two ECs, the second most self-contained was downtown Berkeley, whose inde-
pendence index was 0.171. The least self-contained EC was the third-tier center of
Concord (an index of 0.017). Below the primary center (San Francisco), there was
little difference in the independence indices of the three remaining EC classes. On
average, second-tier, third-tier, and fourth-tier centers had 15-20 times more external
commutes than internal commutes.
Compared with other Bay Area communities, ECs have extremely low rates of
internal commuting. The independence index for the downtown San Francisco EC
of 0.228, for instance, is well below the 1990 value of 1.230 computed for the entire
city of San Francisco. Even the city of Palo Alto, one of the least self-contained
communities in the Bay Area, with a 1990 value of 0.321, averaged far higher rates of
internal commuting than its high-technology-based EC, whose index was only 0.026.

Residential locations by type of center and occupational group

The traditional monocentric model maintains that blue-collar and lower salaried
workers will cluster in inner-city zones and live at higher densities, close to down-
towns, in order to economize on commuting, trading off less housing consumption at
higher unit prices (Alonso, 1964; Muth, 1969; Scott, 1988). Less is known about the
876 R Cervero, K-L Wu

residential locational choices of occupation classes in a polycentric world. Using

1980 commuting data for greater Baltimore, Dubin (1991) found that those with
greater job mobility, notably service and sales workers, averaged shorter commutes
as a result of firm decentralization. Others point to the growing numbers of low-
income, inner-city residents who reverse commute to suburban and exurban jobs as
evidence of a highly spatially differentiated labor market (Hartshorn and Muller,
1992; Hughes, 1992). Discrimination and exclusionary practices partly explain why
many minorities and low-wage-earners remain in central cities even when there are
far more job opportunities in the suburbs (Kain, 1993; Zax, 1990).
In this section, factors influencing the commute patterns, and thus the residential
locational choices, of two classes of EC workers are studied: professionals, repre-
senting higher-salaried, often college educated, white-collar workers (for example,
those in engineering, law, financial consultancy); and nonprofessionals, representing
lower-income and middle-income, pink-collar and blue-collar workers (for example,
clerical, retail sales, and construction workers). For each of the two occupational
groups, journey-to-work patterns are further distinguished by whether individuals were
employed in fast-growing ECs or mature ECs. We define fast-growing ECs as those
whose employment rose by over 40% between 1980 and 1990; mature centers, on the
other hand, had an employment growth rate below 25%. This distinction is made
primarily because of assumed differences in local real-estate markets of these two
EC types. Fast-growing employment areas usually experience increased real-estate
speculation and land-use conversions, in addition to increased demands for housing
and household services. Because of their proximity advantages and development pres-
sures, fast-growing ECs can be more selective in the types of land uses they allow
in. This is often motivated by fiscal considerations, wherein governments zone land
to lure high-tax-yielding land uses (for example, office parks, large-lot residential
estates) and to discourage high-services-demanding uses (for example, apartments for
families) (Landis, 1986; Rolleston, 1987). Proposition 13, the 1978 state law that lim-
ited the ability of California municipalities to raise property taxes, passed in response
to a tax revolt, is partly blamed for encouraging local governments to zone land on
fiscal grounds (Fulton, 1991). For fast-growing, well-to-do communities, this often
means limiting housing additions to large-lot, more expensive units. Restrictions on
housing production invariably drive up the price of the existing housing stock, thus
potentially pricing out nonprofessional, lower-salaried workers.(7) In all, under the
growth-rate criteria mentioned above, there were ten mature and twelve fast-growing
ECs in the Bay Area in 1990.
We hypothesize that housing prices have opposite effects on the locational choice
of the two occupational groups. High prices, research suggests (Cervero, 1989a;
Humphrey, 1990), often displace lower income workers, limiting their residential
choices to locations outside of their subregion of employment, regardless of whether
they work in a fast-growing or mature EC. For higher salaried professional workers,
the effects of higher housing prices, we hypothesize, differ among the two types of
ECs, all else being equal. We hypothesize that higher priced housing in and around
fast-growing ECs, induced in part through exclusionary practices such as fiscal
zoning, attracts professionals and high-wage-earners in search of high-quality housing
(7)
Ideally, data on household income of employees would be used for studying how housing-
market characteristics influence the residential locational choices of EC workers. Unfortunately,
there are no readily available data sources on household incomes of workers or worker earn-
ings for ECs or any other place of employment, including from the census. Accordingly, worker
occupation is used as an admittedly less-than-perfect proxy for relative economic standing of
workers.
Polycentrism, commuting, and residential location 877

within reasonable proximity of their workplaces. Professional workers might also be

attracted by the potential to build homeownership equity in healthy real-estate
markets more quickly. Fast-growing ECs and any nearby housing markets they spin off,
moreover, are likely best able to deliver a housing product (for example, in terms of
size, style, and amenities) that is geared to the lifestyle and taste preferences of higher
salaried professional workers and their families. In more mature ECs, especially
traditional downtowns such as San Francisco and Oakland, which are largely built out
and have an older stock of housing as well as real or perceived social problems (for
example, poor schools, concentrated poverty), we hypothesize that professional workers
are less likely to take up residence in the vicinity of their workplaces. Controlling for
housing availability, we believe housing prices become significant explainers of the
residential locational choices of professional workers in the Bay Area—in and around
fast-growing ECs, housing prices reflect the presence of higher quality housing
products and more selective patterns of land development that appeal to professional
work forces; for mature and more urbanized ECs, on the other hand, we believe the
higher prices of typically older housing units compel many professional workers to
look elsewhere for housing. Thus, controlling for supply, we postulate that housing
prices become a significant differentiating factor in influencing the residential loca-
tional choices of professionals working in fast-growing, suburban ECs compared with
mature, urbanized ECs.(8)
In summary, we hypothesize that the residential locational choices of EC workers
can be segmented by worker occupational classes and the rate of employment growth
of ECs, ceteris paribus. The biggest distinction, we believe, is that in fast-growing
ECs, selective zoning and real-estate development practices produce housing choices
that appeal to professional wage-earners and that drive up housing prices so as to
displace nonprofessional workers to residences elsewhere. In older, urbanized ECs
and their environs, on the other hand, high housing prices are thought to have a
displacing effect on residential location among all occupational classes.
Model specification
An expanded gravity model structure was used to predict the residential locational
choices of EC workers and to test the hypotheses posited above. By fixing ECs as
destinations, one can use a singly-constrained gravity model structure to predict the
distribution of workers among residential zones (origins), with the distribution being
proportional to the residential population or number of housing units in competing
zones and inversely related to the distance or commute time between ECs and resi-
dential zones. In our expanded gravity model analysis, we included variables related
to the relative supply and prices of housing in and around ECs as well as competing
residential zones, and we further stratified the models by occupational classes of

(8)
Of course, the dynamics of residential locational choice are more complex than what is out-
lined here. Besides housing prices and proximity to workplaces, the locational choices of resi-
dents are influenced by factors such as quality of schools, neighborhood amenities, mixes of
community services, and familial ties and attachments to neighborhoods (Clark and Burt,
1980; Ley, 1985; Quigley and Weinberg, 1977). Moreover, housing tenure, preferences for home-
ownership versus renting, and race are known to affect residential locations. Zax (1990), for
instance, found that segregation and housing discrimination in the USA prevented black house-
holds from moving to neighborhoods near suburban employment centers. Lower income and
nonprofessional workers are also more likely to be renters than homeowners, often limiting
their housing choices to higher density, often central-city, neighborhoods. In the residential
location models that follow, attempts to segment workers by race and to account for the effects
of median housing rents failed to improve model performance, so the effects of these factors
are not explicitly modelled.
878 R Cervero, K-L Wu

workers and types of EC (that is, mature versus fast-growing). The estimated models
therefore took the following form:
Tu = kRfHfEfrJHJ- exp ( - Ot^, Vi * j , (2)
where Tu is the number of journeys to work from the residential zone / to the
employment center y; R, is the number of employed residents in residential zone z; Hi
is a vector of housing attributes in residential zone / (the housing price index); Ej is
the number of employees in employment center y; Vj is the ratio of employees to
employed residents for subregiony; Hj is a vector of housing attributes of subregiony
(the housing price index and housing availability index); ttj is an impedance measure
(the travel time from residential zone / to employment center y); uif is a random
disturbance term; k is a constant; and a, /?, y, 3, X, and 9 are empirically estimated
coefficients.
This model structure characterizes residential locational choices of workers in
employment centers as an outcome of push and pull factors, reflected by housing
price and availability attributes, with the directionality of effects (that is, whether
high housing prices push employees to reside away from or attract employees to live
near an EC and its surroundings) dependent upon occupational class and EC type,
controlling for the effects of spatial impedance. Similar multiplicative push-pull
gravity model structures have been used to investigate the influence of housing prices
on residential location choices, although these earlier analyses did not stratify models
by occupational class or type of EC (Cervero, 1989b; Deka, 1990; Guest and Cluett,
1976).
Employing the 1990 CTPP data base, we estimated push-pull gravity models,
with use of census tracts as the spatial unit of analysis. (As noted, ECs themselves
consisted of amalgams of census tracts.) One observation consisted of a work-trip
interchange from origin census tract / to EC destination j ; attributes, as defined, of
census tract / and EC j serve as predictors of Tu, controlling for spatial impedance.
In estimating the models we omitted observations (origin - destination pairs) with
journey-to-work interchanges which began and ended in the same ECs (that is, intra-
zonal trips), because in these cases the push and pull characteristics of interchanges
would be identical. Accordingly, the model structure provides a basis for predicting
the factors which contributed most toward EC workers residing outside their area
of employment. The elimination of intrazonal interchanges is consistent with the
modeling approaches used by others (Cervero, 1989b; Guest and Cluett, 1976).
Housing attributes in residential zone / that were used as predictors of work-trip
interchanges were: (1) the housing price index (median housing values divided by
mean earnings of workers in zone /); and (2) the housing availability index (number
of housing units divided by work-force size in zone /). The housing price index
gauges the price of housing relative to earnings of workers; among competing
residential zones, a high index is assumed to repel EC workers from residing in the
zone, regardless of occupational class or EC type (controlling for housing supply
and proximity to workplace).(9) A high housing availability index, on the other hand,
is a pull factor that attracts EC workers to a particular residential zone.
Similar housing attributes are postulated to have a bearing on residential location
in those zones in or near an EC; however, here the effects are thought to be differ-
entiated by occupational class and EC type. Housing attributes for EC destination y,
(9)
Recall that occupational class and EC type is postulated to have a bearing only on whether
employees will reside in or near their ECy. Relatively high housing prices are thought to exert
a repelling influence on residential location outside their subregion of employment (that is,
among competing residential zones /), regardless of occupational class.
Polycentrism, commuting, and residential location 879

moreover, are measured not only for the census tracts corresponding to the EC itself
but also for surrounding census tracts—what we call, as noted earlier, a 'subregion'.
A subregion is defined as an EC and a surrounding buffer zone of approximately a
3-mile radius. Subregions were used as spatial units for measuring housing-market
attributes in and near ECs, to reflect the housing availability and price characteristics
within a labor-shed that corresponds approximately to the size of medium-sized Bay
Area communities. That is, they reflect housing attributes in the 'vicinity' of, not
necessarily directly within, ECs. Attributes that are postulated to affect whether EC
workers reside in the subregion are: (1) 'balance', or job-surplus, ratios (the ratio of
the number of jobs to employed residents in zone j); and (2) housing price index. A
high job surplus within a subregion, almost by definition, is postulated to displace
workers to reside outside of their EC and its environs, regardless of occupational
class or EC type. As hypothesized, a high housing price index is thought to displace
nonprofessional workers as well as professional workers in mature (slow-growth) EC
settings; the opposite, we believe, holds for professionals in fast-growing ECs.
In all, over 5000 trip interchange observations were available for estimating each
push-pull gravity model.(10) Models were estimated by using log-linear transforma-
tions and ordinary least squares techniques. Impedance effects of travel time were
expressed in negative exponential or entropy-maximizing (Wilson, 1967) form.
Model results
In table 5 we present the results of basic gravity models01} estimated for the mature
versus the fast-growing ECs in the San Francisco Bay Area. These models provide a
benchmark for measuring the incremental explanatory power gained by adding
housing attributes into the expanded gravity model. From the basic gravity model,
we see that existing allocations of employed residents and travel-time impedance
were stronger predictors of residential locations for employees of fast-growing ECs
than for employees of mature ECs. From the size of the coefficients we can also see
from table 5 that the basic gravity model was a stronger predictor of residential
locational choices among nonprofessionals than professionals.
In table 6 we summarize the model results of the expanded push-pull gravity
models. These models outperformed the basic gravity models, explaining 0.80%-1.5%
more of the variation in work-trip interchanges. Although these were not dramatic
increases in model explanatory power, for such large sample sizes (over 5000 obser-
vations in each model) even a 1% increase in explained variation is meaningful.
Clearly, the best improvements came from the expanded model estimated for
fast-growing ECs. All variables shown in table 6 were statistically significant at the
0.05 probability level and met a priori expectations both for professional and for
nonprofessional occupational classes. The only hypothesized variable that was highly
insignificant and was thus eliminated from the analysis was the housing price index
in subregion j for nonprofessional workers. This could reflect the tendency for many
lower skilled and lower salaried workers to be priced out of housing markets in and
around their area of employment, regardless of price variations.
Controlling for size of EC, the number of employed residents in competing resi-
dential zones, and travel time, one can see from table 6 that both housing availability
and affordability are generally stronger determinants of residential locations among
employees of fast-growing regional ECs than for those employed downtown or in
(10)
Trip interchanges with fewer than ten work trips were omitted from the analysis. This typi-
cally meant that large census tracts on the fringes of the San Francisco Bay Area were
excluded.
(ll)
The basic gravity model takes the form: Tv = kR*Efexp(- Ot^u^,, Vi ^j.
 R Cervero, K-L Wu

Table 5. Basic gravity model results, for 1990 journeys-to-work to employment centers in the
San Francisco Bay Area.

Independent variable Coefficient

mature employment fast-growing suburban
centers employment centers

Number of workers in j a
professional workers 0.2207** 0.3745**
nonprofessional workers 0.2461** 0.4550**
Number of employed residents in / a
professional workers 0.0799** 0.2607**
nonprofessional workers 0.1123** 0.2773**
Average commute time to work from i toy
professional workers -0.0096** -0.0183**
nonprofessional workers -0.0093** -0.0188**
Summary statistics
( TV = 8348 TV = 5100
professional workers I R2 = 0.2088 R2 = 0.3070
( F = 734 F = 752
{ TV = 8348 TV = 5100
nonprofessional workers I R2 = 0.2011 R2 = 0.3075
F = 700 F = 754
** Statistically significant at the 0.01 level.
a
The natural log transformation of variation was used for estimating the model.
Note: TV, sample size; R2, proportion of variation explained; F, F-statistic;^, trip destination
census tract; /, trip origin census tract.

other mature ECs. For a residential zone outside of a worker's employment area,
housing prices (relative to earnings) have around six times the influence on whether
workers will reside in that zone as it does on whether a downtown worker will reside
there. Residential zones away from ECs are particularly attractive to nonprofessional
workers when there are relatively large supplies of housing (that is, relative to the
number of workers in those zones).
It is the set of housing-market conditions in and around ECs that most strongly
differentiates residential locational choices among occupational classes and EC types.
As expected, large labor surpluses in and around ECs have a large and statistically
significant effect on 'pushing' EC workers to reside outside their subregion of employ-
ment. Nonprofessional workers in mature ECs such as downtown San Francisco
and Oakland were particularly sensitive to the displacing effects of subregional hous-
ing deficits. And, as postulated, relatively high housing prices 'pushed' professional
workers away from residing in mature, largely urbanized employment subregions and
'pulled' them toward fast-growing employment subregions, such as Silicon Valley
and Pleasanton. (The negative sign on the housing price index j variable, for instance,
indicates that places of residence outside of ECs and their surroundings decline
as relative housing prices rise, ceteris paribus.) The pull effects of fast-growing sub-
regions, moreover, were substantially stronger than the push effects of more mature
urban centers.
From these findings, we conclude that housing prices in and around ECs strongly
differentiate the residential choices of EC workers, defined in terms of occupational
class and EC type. Fast-growing ECs appear to induce housing additions that are
suited to the earnings and taste preferences of professional workers, suggesting these
are well-functioning housing markets for the upper income strata. Whether this finding
Polycentrism, commuting, and residential location 881

Table 6. Expanded push-pull gravity model results, for 1990 journeys -to-work to employment
centers in the San Francisco Bay Area.

Independent variable Coefficient

mature employment fast-growing suburban
centers employment centers

Number of workers in j
professional workers 0.2150** 0.3708**
nonprofessional workers 0.2297** 0.4433**
Number of employed residents in za
professional workers 0.1332** 0.3840**
nonprofessional workers 0.1305** 0.3690**
Jobs/employed ratio iny a ' b
professional workers 0.1858** 0.1098**
nonprofessional workers 0.3193** 0.1328**
Housing price index iny a ' c
professional workers 0.0411** -0.1827**
nonprofessional workers ns ns
Housing availability index in ia-d
professional workers 0.0927** 0.2236**
nonprofessional workers 0.0413** 0.2537**
Housing price index in /a-c
professional workers -0.0762* -0.4044**
nonprofessional workers -0.0574* -0.3343**
Average commute time to work from i to j
professional workers -0.0099** -0.0192**
nonprofessional workers -0.0095** -0.0192**
Summary statistics
( N = 8348 N = 5100
professional workers \ R2 = 0.2165 R2 = 0.3307
{ F = 325 F= 358
( N = 8348 TV = 5100
nonprofessional workers { R2 = 0.2090 R2 = 0.3229
\ F = 367 F = 404
ns Not statistically significant at the 0.20 level.
* Statistically significant at 0.05 level, ** statistically significant at 0.01 level.
a
The natural log transformation of variable was used for estimating the model.
b
Total number of jobs in j divided by the number of employed residents inj.
c
Median home value in tract divided by the mean worker earnings in that tract.
d
Total number of housing units in / divided by the number of workers in i.
Note: N, sample size; R2, proportion of variation explained; F, F-statistic; j , trip destination
census tract; /, trip origin census tract.

reflects the effects of fiscal and exclusionary zoning among often well-to-do commun-
ities with job surpluses (for example, Palo Alto, Cupertino) cannot be determined
from this analysis; however, this interpretation would be consistent with previous
findings (Cervero, 1989b; Pollakowski and Wachter, 1990; Rolleston, 1987). In addition,
this analysis suggests that residential locational choices are less distinguishable by
housing availability or price differentials outside EC workers' subregion of employ-
ment. Housing availability in more outlying areas appears to influence most strongly
the residential locational choices of those working in fast-growing ECs, most of which
are also in more peripheral locations.
882 R Cervero, K-L Wu

Conclusions
This analysis reveals that the San Francisco Bay Area has evolved into a polycentric
metropolis, with four distinct hierarchies of ECs. The largest and densest centers tend
to be in the metropolitan core, although one of the fastest-growing second-tier centers,
Silicon Valley, lies toward the southern end of the region. Smaller third-tier and
fourth-tier centers generally occupy positions along suburban freeway corridors and
on the metropolitan periphery. Other researchers have measured similar levels of
polycentrism in other US metropolitan areas, though inconsistencies in measurement
make comparisons across metropoles difficult. The San Francisco Bay Area appears
to have comparable numbers of ECs as similar-sized metropolitan areas, such as
Washington, DC, Houston - Galveston, and Detroit, as measured by other researchers
(Garreau, 1991; Rice Center, 1987; Speare, 1994), though much fewer than its much
larger counterpart to the south, metropolitan Los Angeles - Orange County (Giuliano
and Small, 1991). Few earlier studies on subcentering contained comments on the
degree of hierarchy among ECs. A fairly distinct four-tier hierarchy characterizes
subcentering in the San Francisco Bay Area.
Polycentric growth appears to have induced shorter commutes in the San
Francisco Bay Area, when defined in terms of travel times. Average commute times
of workers in the primary center, downtown San Francisco, were 30% longer than
those of workers with jobs in more peripheral, fourth-tier, centers. This could reflect
the tendency of decentralized employment growth to put more jobs closer to resi-
dences; however, it also likely reflects the tendency for commutes to outlying work
centers to be made along less-congested highways in faster moving modes, such as
private automobiles. Equally important are differentials in commute modal splits
among ECs. Consistent with theory, higher shares of workers in large and dense ECs
get to work by mass transit and ride-sharing, whereas solo commuting is most
dominant in third-tier and fourth-tier centers. This suggests that, all things being equal,
polycentric growth reduces vehicle occupancy levels and induces more automobile
commuting. Whether these shifts impose significant environmental costs (for example,
more tailpipe emissions and fuel consumption per worker) depends on the degree to
which the effects of lower vehicle occupancy levels are offset by shorter commute
distances and durations. An important area for future research will be to study the
effects of decentralized and polycentric development on changes in vehicle-miles trav-
eled per worker, the performance indicator that is probably most strongly associated
with transportation externalities. It should also be said that polycentric growth does
not necessarily have to mean the demise of mass transit systems. Some Canadian cities,
notably Edmonton and Ottawa, have configured regional transit services to serve and
interlink outlying job centers effectively, by synchronizing bus schedules, creating sub-
urban timed-transfer centers, and building exclusive busways (Cervero, 1986; Pucher,
1994). ECs and edge cities are ideal building blocks for designing integrated networks
of transit centers in the suburbs.
In this paper we have also found that the residential locational choices of EC
workers are segmented by occupational class and EC type. Limited supplies and
relatively high prices for housing in and around ECs appear to have the greatest
displacing effect on the residential locations of nonprofessional, often lower salaried,
workers. Among professional workers, the effects of housing price differentials appear
partly dependent on the type of EC environment. In newer, fast-growth areas, such as
Silicon Valley and more other peripheral parts of the Bay Area, higher subregional
housing prices appear to segment residential location by occupation or earnings
classes—professional workers are attracted to these environs whereas nonprofessionals
are repelled. For older, slow-growth ECs in highly urbanized areas, higher priced
Polycentrism, commuting, and residential location 883

housing tends to deter workers of all occupational classes from taking up residence
nearby, controlling for factors such as housing availability.
This finding supports the assumption that the fastest growing ECs in the San
Francisco Bay Area have been the region's 'hottest' real-estate markets, spawning
speculative and exclusionary development practices as well as fiscally based local
zoning. The resulting housing products have been most attractive and affordable to
professional workers, thus producing highly segmented housing markets in and around
fast-growing ECs. Anecdotally, this is supported by statistics on the median single-
family-home values for some of the fast-growing employment subregions. From the
1990 census, the median single-family house sold for $388 000 in the Silicon Valley EC,
and for $296100 in the Pleasanton EC (including their surrounding buffers, or
subregions), the region's two fastest-growing ECs during the 1980s. For the Palo Alto
EC, just west of the Silicon Valley, the median single-family house was valued at
$435 000. These averages are considerably above the median 1990 value of $250100 for
the entire San Francisco - Oakland - San Jose Consolidated Metropolitan Statistical
Area.
Whether this housing-market segmentation is the product of exclusionary or
discriminatory practices that produce frictions to residential mobility, and if so
whether this produces significant social costs, cannot be directly answered from this
research. If one views the consequences of communities zoning out affordable
housing as a negative externality—such as displacing workers who end up commut-
ing longer distances than they would have preferred, or, perhaps more seriously,
widening the separation of people by race and class—various public policy remedies
might be considered. One remedy would be stronger enforcement of federal laws
prohibiting housing discrimination and exclusionary zoning. Proving charges of overt
discrimination in a court of law, however, is always difficult, and for this reason state
and federal housing authorities have not been particularly vigilent in going after
alleged offenders. Another suggestion for reducing exclusionary zoning is tax-base
sharing, wherein job-surplus cities share their local tax receipts with bedroom com-
munities which end up housing their workers (Downs, 1994; Reschovsky and Knaff,
1977). In theory, this would remove the incentive to zone out apartments and other
low-tax-yielding, high-service-demanding land uses. The only US metropolitan area
practicing tax sharing is Minneapolis - St Paul, where local jurisdictions share about
28% of the region's property tax base. Under this program, jurisdictions share tax
bases, not tax dollars. Each community in the Twin Cities area must contribute 40%
of the increase in its commercial and industrial property tax base to the metropolitan
pool, which is then redistributed according to population and tax base. There is
some evidence that tax sharing has helped spread the distribution of small houses
and apartments throughout the region, including in more affluent communities that
might otherwise have zoned out low tax generators (Fulton, 1987).
Tax relief might be another way of balancing job and housing growth. The state
of Oregon recently signed into law a local property tax bill that seeks to "stimulate
the construction of multiple-unit housing in the core areas of Oregon's urban centers
to improve the balance between the residential and commercial nature of those areas,
and to ensure full-time use of the areas as places where citizens of the community
have an opportunity to live as well as work" (House Bill 3133, section 1, part 1,
page 1). Initiatives such as extraterritorial tax sharing and tax abatements generally
require the passage of state-enabling legislation, something which few states, other
than Minnesota and Oregon, seem willing to do. Other policy prescriptions such as
fair-share housing programs and regional control of land uses have garnered even
less political support. In a study of New Jersey's affordable housing mandates
884 R Cervero, K-L Wu

(passed in response to the Mount Laurel II court decision that found that most
municipal zoning ordinances discriminated against low-income families de facto),
Olenik and Cheng (1994) found various legal loopholes allowed some affluent com-
munities with large employment concentrations to avoid having to fill affordable
housing quotas. Getting municipalities to set aside parochial interests in favor of
what is good for the region has never met with much success. Downs (1992,
page 106) remains skeptical:
"Experience proves that 'natural' forces will not appropriately match local housing
prices to the wage levels of locally employed workers within each subregion
because local government policies raise housing prices in many communities. The
policies necessary to overcome such regulatory barriers to affordable housing are
complex and difficult to get adopted and to implement."
Although political and institutional barriers seem daunting, an important public
policy challenge in years to come will be to find ways of reducing frictions to resi-
dential mobility and the flow of housing capital so that reasonably well-functioning
regional housing markets can prevail.
Acknowledgements. This paper was developed based on Kang-Li Wu's 1994 thesis at the
Department of City and Regional Planning, University of California at Berkeley and is also
based on the research project on polycentric development and commuting funded by the
University of California at Berkeley. Figures 1, 2, 3, 5 and tables 1-6 previously appeared in
the thesis. The authors also with to thank Adib Kanafani and Professor Michael Teitz for their
comments on the thesis and research.
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