Their analysis rests on the classic economic view that planning’s role is to enable agglomeration economies while managing the downside of negative spillover effects generated by urban intensity (such as congestion and poor urban design). But overlaid with that approach is the neoliberal criticism of planning being unable to effectively manage the growing complexity of cities. Only free markets can mediate between the needs of many diverse consumers and producers. There is no one vision that can prevail. Finding consensus is an illusion. A planned allocation of resources is impossible.
In the town hall of Sienna, Italy, there is the fresco: Allegory of Good and Bad Government. The good government fresco shows that if government is virtuous and rules justly, then the city thrives and prospers. Bad government, and the city suffers. The 'bad city' fresco has a decaying, cramped appearance, while street crime is clearly visible. Outside the city, the 'bad countryside is marked by burning farms, disease and widespread drought.. The fresco was painted in the 1300s.
In the fresco, the virtues of Good Government are represented by six figures: Peace, Fortitude and Prudence on the left, Magnanimity, Temperance and Justice on the right.
Are cities and their effective management that different today from the 1300s? Interesting how the virtues of good governance require a mix of actions - fortitude and prudence, for example. Those values are probably timeless, but what does change are the tools of trade.
You could say that the last 20 years has seen the ‘market’ as the primary means of determining resource allocation - the market has been used to mediate between competing visions, values and outcomes and the market has determined the winners and the losers. But the number of losers has started to mount. As a result, there is a shift underway back to a bigger role for the state and more of a planned allocation of resources. This is to address issues like education and inequality, but also to address long run, entrenched problems like climate change and obesogenic environments - things that the market approach cannot tackle well. Overlain with this is a growing concern that current means of economic management are no longer up to the tasks of dealing with technological change. As Adair Turner puts it in his great analysis: Capitalism in the age of robots: work, income and wealth in the 21st-century:
It is likely that we are in the early stages of a technological revolution which will eventually result in the automation of almost all economic activity, almost all work activities. When considering automation potential, the question is when, not if.
The implications of this revolution is a split between a few involved in the on-going development of technology and the many involved in delivering a range of non-technology based social and consumption led services to the few technological elite, as well as to each other. This may be the world of a few high skill / high pay jobs and many low skill/low pay jobs. In Turner's view, increased productivity that can lift all incomes is unlikely - improved productivity from technology gets swamped by the growth of low paid service orientated jobs.
Whats more, in this new economy, land becomes an important means of storing wealth and generating income:
In a world where all goods and services can be produced at ever collapsing prices, the relative value of desriable things which are inherently uncreated, such as land in desirable locations, will almost inevitably increase.
Interestingly, Turner sees urban planning as one means to address the resulting consequences of highly uneven patterns of income and activity:
High quality urban development. Macro and micro economists often pay little attention to
the physical realities of spatial development, city design, architecture and transport
systems. But in a world where land located in desired locations is likely to account for a
rising share of all wealth, and where, as Tyler Cowen has stressed, the cost of housing and of
commuting is a crucial driver of adequate living standards, the geography of economic
development plays a vital role. The more that we can make multiple cities attractive places
to live, and multiple areas within each city attractive, via good public transport, attractive
public spaces, and the provision of high quality cultural and sporting amenities, the more we
can mitigate, at least to some degree, the intensity of competition for the positional good of
locationally specific real estate.
The function of urban planning and management is likely to grow more complex in this context. It is not just about separation of incompatible land uses and reducing negative spill over effects (which may become significantly reduced as a goal as technology gets better); rather will urban planning increasingly become focused on ensuring a diversity of land uses and activities within each area of the city and across regions (inclusion, not exclusion)?
Rather than government's reaching for the cheque book to promote inclusion (which may prove difficult in an environment of limited income growth), I think the forthcoming period will see the government try to harness private capital to achieve social ends. This means the state providing some certainty over land uses and development timing to deliver a return to private capital, with part of that return ‘taxed’ for pubic benefit. But in providing that certainty it will be important that the essential qualities of an inclusive, adaptive and resilient city are not lost. Planning will have to keep both the public and private sectors ‘honest’ in their dealings with the city.
So, are we about to enter the city of the early phase of the sixth kondratieff wave or the fourth industrial revolution? As with previous waves and revolutions, change is likely to be fast and hectic in the first phase. This will be the city of artificial intelligence, automation and bio technology. What may be some of the drivers of urban development and urban management?
Improved mobility
The two great drivers of urban form over the past 50 years have been the car and the lift. The car allowed cities to spread outwards, while lifts allowed cities to grow vertically. Technology will advance both. As electric, driverless cars take hold and driverless public transport becomes more common (and therefore cheaper and more frequent); couple both with mobile technology and it may well be that the next new workplace is the car, bus or train. Replace the one hour commute with the one hour work session and maybe the city will disperse and expand some more. Equally much freight and heavy vehicle movements could occur at night, out of peak periods, lessening the need for expensive projects like the ill fated East-West Link in Auckland.
Lifts are likely to get cheaper and may be able to better serve both vertical and horizontal arrangements of apartments and workplaces. Bring down the cost of lifts and 4 to 6 storey apartment developments with only a few units on each floor may become more affordable and desirable (no need for a large block of apartments ). This building height retains liveable streets and provides for a sense of connection between a living area and the street and gardens that people like, but suffered in the past as it involved either too many stairs to climb or an expensive lift only justified by long corridors of units served by one lift core. Link that apartment with a horizontal 'lift' to a centralised car parking building and more space comes free.
Governments strapped for cash.
As demands on public spending rise while the ability to raise taxes stalls, it is inevitable that governments will look for means of spreading the load. This can already be seen in housing and urban infrastructure. In both spheres governments have been looking at how the private sector and or the third sector can take on more of a role in the provision of social and affordable housing. Urban infrastructure will shift to a user pays approach. The outcome is likely to be a good supply of housing and infrastructure is some areas - areas that can support the cash flow required to fund the houses, pipes and roads, but limited provision in other areas, where cashflow will be more restricted. How can we cross subsidise?
International labour markets and automation.
The gig economy is kind of here already with the growth of the professional, scientific technical services sector. Automation and technology may strip out many stable, middle income jobs in the banking, insurance, finance and administrative sectors - the mainstay of urban economies. An important question will be the extent to which uncertainty over long term income generation potential for people and households will translates into different forms of housing and ownership tenures, especially given the need for the market to have certainty over income streams if it is to take on a bigger role in housing and infrastructure. The short term is likely to ever more dominate decision making.
Asset inflation.
Price inflation seems to have taken a long holiday after the inflationary periods of the 1970s. Some say it is permanently on holiday. Wage growth also seems to have stalled and many households have run out of options to increase incomes - most households now involve multiple full time workers while debt has built up, when back in the 1950s, households only needed one income and not too much debt to afford a house. There are now no other options for households to generate more income (except perhaps sending the kids out to work).
What seems to have replaced price inflation is asset inflation. Low interest rates and monetary easing has created strong pressure for investment in assets like property and shares. Housing (or at least the land on which housing sits) has become a commodity, traded often. Quick turn around suggests cheap and cheerful design. There will be some demand from the likes of Iwi, community-based organisations and some wealth funds for long term holdings of land and buildings, which suggest a demand for quality, but that may be the minority.
It used to be that land was one of the three factors of production - land, labour and capital. At some point land seems to have reduced in importance and perhaps will become totally redundant as a factor of production in a knowledge economy. Land seems to have switched from an input into a bigger process that generated wealth to being a repository for the wealth generated by a bit of labour and some capital. The more rapidly information and communication technology progresses, the more that wealth and income derive from inherently physical and subjective assets, such as land, brands, or beauty.
Environmental hazards.
Quite a bit of rejigging of cities will be needed as climate change strengthens - low lying coastal areas will see disinvestment and gradual retreat. Flood plains will get more frequently inundated. Steeper hillsides may be more prone to slips. In all cases development - existing and future - will get displaced. As insurance gets more expensive and harder to obtain, dis- investment will be more common in some areas
City as a social exchange
Above all, cities are increasingly about social interaction and exchange, rather than just economic exchange. Mobile technology seems to accentuate the ability of people to interact, to meet and converse. Add in the growing number of retirees and workers in the gig economy between assignments and the demand on freely accessible urban public spaces is likely to grow strongly. Every neighbourhood will need to its local ‘hub’.
So what are the implications?
Cities need to refresh themselves constantly, nevermore so at a time of rapid technological change. They need some ‘slop’ in the system to enable decline and redevelopment in a way that does not result in abrupt and substantial disruption and displacement of existing communities. Part of the problem Auckland has is that its buffer of ‘redevelopable’ areas is limited.
But cities also need diversity and equity of opportunity so as to respond to social and economic pressures. They need safe and vibrant public realms to support social interaction, an urban fabric that lowers the entry costs for new businesses and enterprises, but also positive assistance to build in diversity into each neighbourhood.
Left to themselves city growth and development can quickly become uneven and unaffordable, and the above trends could speed up that process of uneven, expensive (or often ultimately dead end) development. Market-led urbanism will not deliver choice and diversity:
- Too many shopping malls and not enough local shops
- Too much gentrification in some areas and too much decline and disinvestment in others
- Too many big office buildings and business parks and not enough small, flexible and cheap work places
- Too much cheap and cheerful design.
Above all, cities need diversity and choice and that diversity and choice needs to be built into the urban fabric. ‘Public private partnerships’ will be the common call to achieve this. To enable these partnerships, precinct and area based plans will take over from city-wide plans, with these place-based plans based on and building in a series of transactions over use and delivery of space and resources. As big data takes hold, there will be the ability to develop finely calibrated local area plans that speak more of volume, form and interfaces, than zones and activities. Deal making between public and private capital will be more prevalent, but within a framework of checks and balances. Some form of arms length, independent planning commission will be in place, but with oversight from an audit body, as trade offs and transfers from one area to another become more common.
And could those planning functions be administered by a machine? Quite possibly.
Note 1:
http://cms.ineteconomics.org/uploads/papers/Paper-Turner-Capitalism-in-the-Age-of-Robots.pdf
