Five experts from the fields of real estate development, architecture, and urban planning discuss the role of cities in an urbanizing world and offer insights into how cities are—and should be—shaping future development as the recession ends.
Contributing their expertise are Jin Choi, managing partner of the real estate development and investment firm Ikogest Asia in Seoul; Gayle Farris, a strategic consultant and former CEO and chair of Forest City’s Science and Technology Group in Cambridge, Massachusetts; Ray Gastil, former director of planning for Seattle; Bill Hellmuth, president of HOK (formerly Hellmuth, Obata, and Kassabaum) in Washington, D.C.; and Christopher Leinberger, a partner with the development firm Arcadia Land Company, a visiting fellow at the Brookings Institution, and a professor at the University of Michigan, who lives in Washington, D.C.
Which cities look well-positioned to grow and thrive in the coming decades?
Leinberger: In the United States, cities on the East and West coasts, and Chicago. The cities in the Northeast have the advantage of legacy rail transit systems, and they’ve seen their center cities begin to turn around as they’ve created more walkable development in and adjacent to their downtowns. The same can be said for cities on the West Coast— Portland, San Francisco, Seattle. They are far healthier than they were at any time in the last 50 years.
A second category is the Sunbelt cities that in the last eight to ten years have recognized the importance of their downtowns and the importance of investing in rail transit to make their downtowns successful. The leader in this regard is Denver, followed closely by Dallas, Houston, Phoenix, and, finally, Atlanta, which is beginning to take advantage of its MARTA [Metropolitan Atlanta Rapid Transit Authority] stations. Even Los Angeles is putting its rail system back in place, and walkable urban development is starting to follow.
Choi: In the United States, it’s coastal cities. They are 24-hour cities, and they have the best brainpower. San Francisco, Los Angeles and its surrounding regions, New York, Washington, D.C., Boston—these are the cities that will rebound the quickest. Around the globe, it’s London, Sydney, Paris. What’s so exciting about London is that the entire world comes there—investors from the Middle East, from North America, from Australia, from Asia, from other parts of Europe.
Sydney has always been dominated by local players, but this economic downturn has given a small window of opportunity for foreigners to come in and share that growth. Australia is a commodities market like Canada, but Canada’s major market is the United States, whereas Australia’s is Asia, particularly China. So Sydney is going to benefit from the corresponding growth in Asia.
Hellmuth: Of the places where HOK is working, the two biggest areas for growth right now are India and China—by far. In China, in addition to areas around Beijing and Shanghai, there are cities like Chongqing, which are experiencing tremendous growth, and the Guangzhou districts. That has as much to do with people leaving the farms and going to the cities as anything else. In India, one of the growth areas is in a triangle between Mumbai, Nashik, and Pune; it’s like the Dallas/Austin/Houston triangle in scale. That is a huge economic growth area as well as a population growth area. We are also seeing growth in Abu Dhabi—and antigrowth in Dubai.
Which cities provide exemplary models for handling growth?
Choi: It’s all about layout. Downtown Paris is fantastically laid out, with a central core and buildings that live in harmony one next to another and that often are connected to each other. Paris has stood the test of time. New York has very good bones with its one-way street system, which is a brilliant idea. That’s good urban planning. Infrastructure and planning should come before buildings. Particularly in Asia, there’s much more of a rush to modernize; the challenge is to balance providing for a growing population with keeping a city livable. Hong Kong has come up with its own way of handling large populations: it has been incredibly good at making very tall buildings. Tokyo does a very good job of trying to control urban density and sprawl by having a fantastic train infrastructure.
Leinberger: One of the best examples is Washington, D.C., where 15 years ago the central business district [CBD] was a disaster. Today, it’s the most healthy downtown in the country. The city has the highest rents and the lowest vacancies in the country for a CBD. It also has places such as the Capitol Riverfront, Capitol Hill, NoMa [North of Massachusetts], Dupont Circle, the West End, Georgetown—downtown-adjacent places that have either been revitalized or re-created after the riots back in the 1960s. The city that’s trying to make the biggest leap forward is Denver, which has put in dozens of new light-rail stations, and around each of those stations is creating overlay zoning districts with a lot of neighborhood involvement to craft a vision for where they might be going.
What should cities be doing to prepare for the next economic upturn?
Gastil: Before I became planning director in 2008, Seattle worked very hard to reconceptualize what downtown meant, to look at it as a center city, including not only the traditional urban center, but also areas such as South Lake Union, Pioneer Square, First Hill, Chinatown, the International District—to think of it as a cluster of significant neighborhoods, to think about how everything is connected, whether by streetcars or the light-rail system. Some of these areas have required major planning initiatives to facilitate transformation, like South Lake Union to the north. On the south side where the stadiums are and where Pioneer Square is, the city council will be reviewing the Livable South Downtown Planning Study, which recommends zoning changes that will allow more mixed-use development, a better jobs-to-residential balance, and increased amenities and quality of life at the street level.
Farris: Those cities that have done best are those that understand the important role of the public sector to prime the pump, to provide infrastructure funding, whether it’s for mass transit or for other infrastructure. To do major transformative development, particularly in urban areas where you want to foster urban rather than suburban development, it’s not realistic to think that major developments can happen without public support, given the enormous upfront costs. Very few projects have enough economic value. Cities need to create a critical mass and a sense of place before they can get the private sector to come in.
Leinberger: This is the time to be identifying where walkable urban places should go. If cities have rail transit, they should encourage building around rail transit by doing the planning, getting zoning in place, and engaging in land assemblage. Recognize that the trend toward walkable urban development is not just related to the revitalization of center cities; it’s also going to be part of the transformation of the suburbs. Cities don’t have the walkable urban market cornered.
Hellmuth: The cities that are more successful tend to have very clearly defined zoning principles in place—principles that can’t be wildly adjusted—and a very clear process for getting approvals. So when owners buy a piece of property, they know where they stand. That clarity and simplicity goes a long way toward encouraging development. What’s being encouraged, and what people seem to want, is mixed-use living and working communities. We are seeing more and more multimillion-square-foot development planning projects with a residential component, an office component, a retail component, and a leisure component. Even in the Middle East or China there are two-income families, the husband and wife are both working, and that makes the whole notion of living, working, and playing all in the same place attractive.
What kinds of innovations are cities experimenting with?
Farris: Digital Media City in Seoul, Korea, is part of the New Century Cities project in partnership with the Massachusetts Institute of Technology. Seoul took what was an old trash dump a kilometer [0.6 miles] in length and turned it into a regional park, captured methane emissions, and created a power plant that’s enough to sustain for 20 years a development that will ultimately house some 30,000 people. They built 4 million square feet [372,000 sq m] of digital media companies and 4,000 housing units, new roads, a new train station, and new schools, all in a five-year time period.
Gastil: The Seattle city council recently passed a living building pilot ordinance that will allow some innovative new projects to move forward—buildings that are made of sustainable materials and use only as much energy and resources as they generate on site. The ordinance lets the Department of Planning and Development give developers the flexibility they need to make innovative green solutions work within our building code. Codes take time to change, but we are going to work on that. We are working very hard to make sure the higher-density areas—both the ones that have been around for a while and the ones that are growing now— have strong street amenities and an active street life.
What are some of the challenges for U.S. cities in competing with other cities nationwide and internationally?
Hellmuth: One thing that is common to successful cities is a strong mass transit infrastructure. A hundred years ago, there was a certain swagger to countries, certainly to the United States, when it came time to put in civic infrastructure. Like the New York subway system: you could never build that today in the United States. In the United States and in Europe, our political processes make it difficult, for better and for worse, to do the kinds of infrastructure planning that really make a growing city become livable.
There’s a lot of good that goes with that. You don’t clear out whole neighborhoods, like Baron Haussmann did with the rebuilding of Paris in the 19th century. But the result a hundred years later is that Paris has an incredible civic infrastructure. There is a certain “bloodymindedness” that governments in these growing cities need to have now, before it’s too late, to get the proper mass transit and public infrastructure in place. A lot of emerging cities are not afraid of taking that approach of urban infrastructure now.
Farris: For Digital Media City, Seoul’s government took on the role of not only providing the infrastructure, but also acquiring land and selling it to developers or to individual users at a discount off market value as an incentive to draw those companies. Look how quickly that city has grown. Korea is not nearly as democratic as America, and obviously we as Americans are very pro-democracy, but I’m concerned, as an urbanist and as an American, about where the jobs are going and where the growth is occurring. There is competition with cities in countries that have strong centralized governments, such as in the Middle East, where the leaders are generally members of royal families. They’re more able to use the capital of government to stimulate growth and create job opportunities for their citizens.
Who will be the developers of the future? How might the development landscape be different as the recession ends?
Gastil: We’re seeing developers and investors with relatively deep pockets who are using the recession as an opportunity to assemble properties. We certainly hope that through the zoning and planning that we’ve been doing and are doing now, that when these people are ready to move forward, they will build projects that are sustainable. In places that could do well with multistory buildings and mixed use, we are trying to make sure that when a developer is ready to move on projects, the right zoning is in place, allowing for pedestrian-oriented districts with housing rather than one-story commercial projects or heavily car-oriented projects.
Farris: In the United States, especially now in the downturn, the anchors of cities are really universities and hospitals; they’ve become the important developers of our country. Those projects are driven by the marriage of science and technology and education and health care. That’s the model that we’ve created for successful development in the United States.
We’re going to have a lot more institutionalization of real estate, because in America the institutions have the capital. The ability for private developers to track the capital is going to be harder, and fewer projects are going to be economically viable. We’re going to see a lot more repositioning, a lot more redevelopment, a lot more making buildings more efficient and flexible and green.
Choi: What you’re going to see are developers who can specialize not just in residential or office or retail development, but developers who can combine those and take an integrated approach to development. I think that’s where the future is going to lie and where there are the greatest opportunities today.
Leinberger: There are certain forces at work in this downturn that are favoring large public and large private developers. Specialty developers like Forest City, large private developers like the Related Companies, the top 20 publicly traded homebuilders, the public REITs [real estate investment trusts], they’re going to come out of the recession much stronger than the bulk of the industry, which tends to be small private developers.
Having said that, walkable urban development favors smaller private developers. Great urbanism is created with small infill projects where you don’t need 30 acres [12 ha] assembled by a public entity. There will be a lot of very small projects, rehabbed projects, and infill projects. The marketplace loves those, particularly in center cities, where consumers like handmade, custom infill projects.