The future of cities: don’t write off New York just yet
“New York skyscrapers sit empty as Manhattan reels from rise of home working”, says the Telegraph: “staff in their twenties and thirties are driving an exodus of white-collar workers”. Does this indicate a permanent shift in human behaviour?
Professor Carlos Moreno of Pantheon Sorbonne University in Paris has won €100,000 for his development of the 15-minute city framework, an “outstanding architectural contribution to human development”. This urban planning concept aims to create communities in which people have access to the services they need to live, learn and thrive, all within a 15-minute walk or cycle ride from their home.
Are these two news items compatible or contradictory? Are staff in their twenties and thirties exiting the city in search of a 15 minute neighbourhood? And will they be satisfied?
Land economics suggests not. The shape of cities is constantly evolving, but the world continues to urbanise — 50% by 2008, 53% today, 64% by 2050. Land economics explains this by accessibility and proximity to the market.
Proximity to the market has always been regarded as a powerful determinant of land value. Victorian cities in the UK were typically composed of a central marketplace, surrounded by industrial and storage space which could service retailing and be serviced by the office occupiers, in turn surrounded by housing, which was encircled by agricultural land. This setup allowed physical agglomeration of retailing, office users and (most importantly) industrial activities, which needed physical proximity to reduce transport costs and to allow the vertical integration of manufacturing activity.
By the early 21st century industrial production came to rely less on physical agglomeration (thanks largely to advances in communication technology) and transport links to the central business district (CBD) became much less important. Thanks to specialisation, manufacturing businesses now need to supply goods to national and international marketplaces via motorways/highways and airports situated outside the city core. Distribution space was also required to service these markets, but was now also increasingly required for last mile delivery to residential areas.
Meanwhile, residential occupiers expressed a change in choice. Giving up the pleasant garden and long commute associated with suburban living, knowledge workers were pulled closer to the centre by an appreciation of the value of agglomeration and a high value placed on their own travelling time. Knowledge agglomeration economies are observable in technology, finance, media, health and other industries (even real estate): human beings working in these fields know that they can become more valuable by exchanging knowledge at breakfast, lunch and dinner, as well as throughout the working day. Hence areas like Brooklyn in New York and Shoreditch in London have seen the gradual conversion of warehouse space located next to the CBD into chic apartments and offices for knowledge workers, while industrial and distribution activity has been pushed out to the suburbs.
Knowledge agglomeration can be used to explain increasing density in cities and high rise structures in the CBD. The agglomeration effect decays much faster with distance in financial services than in manufacturing. Ask any office worker in a large city how long is a reasonable time to travel between meetings, and I would guess that the shorter is that time the more successful is that city. 20–30 minutes is a typical response in London; it is very different in Jakarta. Generally, knowledge workers will minimise travel times to and from work and between meetings in order to maximise knowledge agglomeration effects. Minimising travel time is then achieved either by large single-company campuses, such as we find in Silicon Valley; through the physical agglomeration of similar activities, such as the City of London; identifying highly efficient public transport systems and locating next to a station; or by travelling vertically, which (subject to elevator quality) is generally quicker than lateral travel. Hence we can expect to see centralised high rise structures in knowledge economies, usually located at or close to public transport facilities.
Now, technology — driving online retailing and working from home — is challenging the value of accessibility and proximity to work and shopping. But land economics hasn’t suddenly lost its relevance. Accessibility to work and shopping remains important, especially for knowledge workers; and cities are for far more than work and shopping. A wide choice of restaurants, bars, concert halls, museums, theatres, sports arenas, health and education and people is maximised by the city, and large cities in particular. Technology (Google Maps, Foursquare etc) makes them more accessible. Good luck finding these all within 15 minutes, and don’t write off New York just yet.
Andrew Baum is Research and Strategy Partner at Pi Labs and Emeritus Professor at the University of Oxford. Andrew and the Pi Labs research team are currently completing research on technology’s role in the liveability of our cities. Subscribe to our mailing list to receive it to your inbox upon public release.
