Building better cities

Start by designing the vibrant community, and then reverse-engineer a development business model to support it

EDMONTON, AB, Jun 16, 2014/ Troy Media/ – Have you ever wondered why all our cities look the same, why the suburbs are just sterile accumulations of box-like houses and roads?

The short answer is the present property-development business model aligns all the financial and administrative incentives behind roads and boxes, positively discriminating against the development of vibrant communities.

The bitter truth is, the system itself is flawed.

Although there have been suburbs since humanity’s earliest cities, the modern suburb was designed in the United States about a century ago. Its fundamental structure was made possible by Henry Ford’s ability to manufacture affordable cars for the masses.

The arrival of the automobile in modern culture allowed suburbs to be designed as ‘bedroom’ districts. Suburbs were places where the dream of a privately-owned home with white picket fences dwelled. They weren’t supposed to be communities; suburbs were designed to be peaceful living quarters adjacent to cities where – in theory – the real business of living took place.

Regrettably, what was a reasonable idea has become a nightmare. Modern cities are not lively cultural centres ringed by quiet suburbs, they’re soulless commercial ‘downtowns’ ringed by endless agglomerations of identical houses, roads and big box stores. North American cities have become ‘community-free’ zones, where ‘real’ life takes place at the shopping mall or comes into our houses through cable TV.

Not surprisingly there was a backlash against suburbia right from the beginning. Lewis Mumford famously described the suburbanization of New York’s outer boroughs as the creation of a ‘No Man’s Land’. The famous urbanist Jane Jacobs described them as “The Great Blight of Dullness”.

Nevertheless, there is little doubt that suburbs are popular and, despite the re-population of urban cores, the growth of suburbs will continue. The question isn’t how to stop the growth of suburbs; it is how do we make suburbs better and encourage the growth of vibrant communities.

We know from the science of wellbeing that individual happiness is enhanced by community life, by easy access to parks, by the availability of walk-able local shopping and entertainment and the simple complexity of being in the company of other people. Not surprisingly there have been movements to try and create more village-like suburbs, new neighborhood designs that encourage more direct human interaction.

Ironically, everyone seems to agree with this idea, and yet nothing changes.

And it won’t change until we radically change the property-development business model and align the financial incentives behind the development of vibrant communities.

Despite armies of urban planners with big dreams, suburbs are designed and built by private property developers. Property development is a high-risk business with a simple logic: developers put their money down and then race to the finishing line. They design and construct their housing developments to minimize their costs and then sell the newly-constructed units as fast as they can. They’re at financial risk until they’ve sold out and once that happens they move on to the next development – never looking back.

This is the point where the city or community (reluctantly) comes in, because the rest of the package – the schools, public transport, recreational facilities and supporting infrastructure – are not part of the developer’s job. The community funds all of this (usually with borrowed money) as an unbudgeted afterthought.

There’s no point complaining to property developers; as private businesses they have every right to reduce risk and try and increase their profits. So they’re not going to solve this ‘problem’ on their own.

Perhaps it’s time we thought about urban development differently, not just from the design perspective, but from the business point of view. If we want suburbs that are vibrant communities of wellbeing, that allow residents to walk, shop, work and gather together with ease, we’ll have to change the system. That probably means getting the community more fully invested right from the beginning.

By coordinating and integrating the various investments (community and developer) and devising new financing models for construction, it should be possible to reduce the risk for developers. With many more types of buildings needed, we could perhaps provide developers new options and enough incentives to stay involved with the neighborhood over the long haul.

This means starting from the other end of the process – designing the vibrant community – and then reverse-engineering a development business model to support it.

The result would be well worth the effort, for it would change the face of our cities while vastly increasing our individual and community wellbeing.

Robert McGarvey is an economic historian and co-founder of the Genuine Wealth Institute, an Alberta-based think tank dedicated to helping businesses, communities and nations built communities of wellbeing. Robert is the author of The Creative Revolution, an historical guide to the future of capitalism.

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