Decision Rules: New city vs. Retrofit/Expansion

By Bryan Mezue

An important debate in our class has centered on the relative benefits of building new cities up from the ground up versus retrofitting old cities for growth. It is clear that we have no choice but to do one of the above to accommodate for the great urbanization trend, especially in the developing world. I do not think one model is always right. Instead, this blog post seeks to propose a theory of decision-making to support a choice between the models. I believe the choice should come down to an assessment of three key factors.

Capacity. Fundamentally, cities are built (or rebuilt) to house people. One of the main considerations should be the expected population increase, and thus the required living capacity increase. Many existing cities have capacity constraints and simply cannot grow fast enough to match immigration. However, in other cases, there is plenty of space for an organically growing city to absorb an immigration influx. This is especially true in many developed countries where the rate of rural-urban immigration is stabilized. In the case of King Abdullah Economic City (KAEC), it is arguable that existing Saudi Arabian cities probably had enough capacity to absorb new growth, and thus capacity should not have been a justification for the construction of the new city.

Integrability. Cities do not exist in isolation. One of the most important drivers for a city’s success is how integrated it is with other cities, transport and communications infrastructure and with natural resources. Most ancient world cities – and many of today’s largest cities – were initially built around these features and grew organically to absorb other features. When choosing to build a new city (versus expanding an existing successful city), an important consideration is whether the proposed site is integrable with existing features (and predicted features). The type of integration is often also a strong influencer on the culture of the new city – as an illustration, a new city integrated primarily around a natural resource (e.g. coal) will likely become a ‘resource city’ (e.g. a coal-mining city). This factor is often one of the least understood when building out a new city. If the decision maker cannot ascertain that there is enough integrability (from the perspective of the expected demand capacity), then the default should be to fall back on an expansion project. In the KAEC project there is some integration around resources (e.g. port), but the level of integration with infrastructure and existing cities is questionable.

Innovation. A final consideration is a city’s ability to absorb new technology. In some cases, the technology shift requirements may be too high for an existing city, and it is rational to build a brand new city. This can be adequate rationale for choosing a new city, assuming that the capacity demand and integrability issues are also addressed. In such an event, a new city is likely to succeed, especially if this new technology can foster new employment.

Decision-makers should put on a customer-focused mindset and consider competition from other cities when they consider a build vs. expand choice. Incoming dwellers ultimately choose a city that is well-integrated, has affordable capacity and satisfies employment needs.

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3 thoughts on “Decision Rules: New city vs. Retrofit/Expansion

  1. Bryan’s post brings a valuable framework which would traditionally be used in an environment of growth. I would argue that this framework will be equally useful in planning for sustainable cities that have experienced prolonged population declines. Detroit is not the exception – merely the most famous example; one study puts the number of large cities with a shrinking population in the last 50 years at 370 (1). Fixing these cities can allay the pressures of growth that face more successful cities (NYC, SF etc) by capturing some of their expected population increases.

    Capacity: the metric should not be expected capacity if nothing changes (which for declining cities, is probably a vicious down-sizing cycle), but target / potential capacity.

    Integrability: declining cities often have infrastructure vestiges dating from an area of growth and higher population. Lille, in France, had an excellent rail and road network from its time as a manufacturing hub. Detroit has the world’s 24th busiest airport (Delta’s 2nd hub), Michigan’s largest port, and ample (too much) healthcare infrastructure.

    Innovation: necessity is the mother of invention. Detroit’s dramatic decline has led to a Private-Public Partnership that includes foundations (Ford), universities (Wayne State University), corporations (Quicken Loans), local, state and federal government. Innovations include creating a multi-block city “core” to rejuvenate the center; rental rebates from employers and tax credits from the government to encourage of renovation projects in downtown and midtown Detroit, such as the $82 million David Whitney building (2).

    Entrepreneurs have also been catalysed around the low rents, large labour pool (many recently laid off by auto companies), a desire to help rejuvenate the city to create dozens of startups, and a Detroit Venture Fund (3)

    Detroit’s $1 homes (4) underscore how much still has to be done. Bryan’s framework can help us assess which declining cities should be saved. Those that should be saved can learn a lot from Motown’s innovative approach.

    (1) http://www2.metrotimes.com/editorial/story.asp?id=5718
    (2) http://www.nytimes.com/2012/12/12/realestate/commercial/new-thirst-for-urban-living-in-detroit-leaves-few-rentals.html?_r=0&adxnnl=1&pagewanted=2&adxnnlx=1362869290-B9pjwo2HWuosbbCN7HCQJQ
    (3) http://detroitventurepartners.com/
    (4) http://dailycaller.com/2012/11/01/detroit-homes-still-selling-for-1/

  2. I agree with Bryan that there is no one-decision-fits-all cities, and it is important to remember that countries and cities have physical, economic, political, and social circumstances that influence which option to follow. While the three factors identified by Bryan and the two identified by the commenter above are interesting to consider, I believe that the reality is more nuanced than they explain.

    Two specific concerns that were mentioned is density and governance and their interrelationship with sustainability. These are then further augmented by the relative wealth of the city and what the current infrastructure conditions are. In some cases, rebuilding parts of cities, particularly slums, become too complicated, and in the end it is cheaper and quick to create a new town with integrated infrastructure.

    On the issue of density, when deciding to build a new city or expand an existing one, there must be a vision of what physical shape the city should take. In addition to impacting sustainability, this is also a cultural issue, as some societies may not be accustomed to living in high rises, or they may be detrimental to local economic and social activities.

    The question of local governance capacity impacts whether an existing municipality has the capacity, willingness, and transparency, to deal with increased population and stress on existing city resources. So while you may retrofit the city to physically handle the increase, the intrinsic governance structure may be too weak or broken and incapable of successfully handling it.

    So, to illustrate with an example, in the case of already overcrowded cities, where the municipal budget is strained, the local government (or private sector) can not handle relocating people temporarily to rebuild low density developments, what tends to happen is people build on the outskirts. Building on the outskirts of town increases sprawl which is not sustainable. So in some cases building a new cities will provide housing for new populations and possibly make it easier to rehouse people temporarily, but in a permanent structure, while old cities are being rebuilt.

  3. By Anonymous

    This post outlines general considerations about whether to accommodate new growth through building a new city or retrofitting and expanding an existing one. However, the decision making process also relies on identifying two important goals in terms of sustainability and financial returns.

    Sustainability. The decision whether to expand or build from scratch should be made only after identifying sustainability goals and assessing the techniques to realize them. To achieve sustainability goals regarding carbon emissions and climate change at a global scale, a multi-pronged approach is required such that new developments achieve the lowest possible energy usage and wasteful existing infrastructure is improved. On the one hand, in specific instances sustainability measures may require a holistic and integrated approach, difficult to implement post-facto. Yet, others contend that the greenest building or city is one already in existence because no additional resources are consumed to create it.[1]

    Financial Returns. What are the financial goals of whoever is investing in the project? For vendors, new cities present reduced risks because they do not have to rely on existing, aging, and likely customized systems; they may optimize the system, rather than compromise it to fit existing conditions. In general, retrofits are more costly and may be less effective in achieving sustainability goals than a well-designed new city. Additionally, new cities may present the opportunity for higher financial returns because greater resource efficiency may be achieved using a holistic approach rather than doing piecemeal improvements in an existing city.

    [1] http://www.theatlanticcities.com/housing/2012/01/why-most-environmental-building-building-weve-already-built/1016/#

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