Accommodating the Rise in Urbanisation: Are New Towns a Good Solution?

This paper studies the performance of New Towns, i.e., planned large urban subcenters, as a central tool to accommodate the global rise in urbanisation. A spatial quantifiable general equilibrium framework suitable to study large-scale urban master plans is presented. The framework is then used to investigate the equilibrium effects of five New Towns developed in the 1970s in Paris’ metropolitan area. By 2015, the development of New Towns appears to have increased metropolitan population (+18%), metropolitan GDP (+11%), and reduced average commuting times (-6.9%). The results obtained for Paris’ metropolitan area are externally validated using a Difference-in-Differences approach on all 314 New Towns developed worldwide between 1992 and 2012.