The Hidden Cost of Cheap Land

There was a nice column in last month's Governing Magazine about amenities in suburban office parks.  Busy workers can be more productive, after all, if their personal errands are close to where they work: things like dry cleaning and fitness centers and coffee shops.  The author made a good point that while it's smart for big companies to work these amenities into their facilities, it's even smarter for them to locate in urban areas where those amenities are already in place.  Why should a research institute or a software firm also be in the business of running a sandwich shop or providing auto maintenance when there are already plenty of places that already exist to take care of those things?

These extras constitute a hidden cost to cheap land.  Suburban office parks near highway off-ramps may be convenient to get to for America's suburban workforce and offer cheap and plentiful land for their developers.  But there are still some advantages to locating in dense urban areas.  We knew about agglomeration economies and proximity to academic institutions and financial centers.  Who knew that freeing companies from playing the role of bank, café, and dry cleaners was another reason?