Can flexibility and phasing improve the success rate of large-scale development?.

By Hannah Aronshtein

Reading ‘The Atlantic Cities’ website[1], I came across an article about the International City in Dubai, and thought it was an interesting case of large-scale city development. Amongst the principles discussed in class for dos and don’ts of city development, success of projects, particularly large-scale, depends on design, financing, timing, and phasing, but also on market demand. Two issues that are highlighted in this article, include phasing of infrastructure and intentions/goals. The intention and goal of a project is of particular importance and informs all other decisions.

International City is an 800 hectare real estate project started approximately a decade ago by Nakheel, intended to provide inexpensive housing for middle class expatriates, including both residential and commercial buildings. The plan has a kitschy Disney-style design with districts architecturally modelled after a variety of nations. The project has however stalled at this point with an unfinished master plan and an isolated feeling. A lack of infrastructure in the city is a part of undermining the project’s success. Since Dubai lacks a sewage system, trucks must carry the waste to a dump site. The city happens to be located in proximity to one of these sites. Additionally, there are issues related to traffic, flooding, and crime.

Since foreign laborers make up a large portion of the population in Dubai, there is high demand for affordable housing for this segment of the population, who live in overcrowded labor camps on the city’s outskirts. With rental prices dropping following the real estate bubble collapse, many of these workers moved to apartments closer to the International City’s downtown, leading to rampant overcrowding. While the city’s middle class residents complained about the rowdy activities and littering of the laborers, the living conditions were much better than in the labor camps. Real estate prices increased by 40% in the past year, pricing the laborers out of their new housing option.

This case reveals an underlying unmet demand for affordable and decent housing for foreign laborers are the ones actually building these new cities. So while the city was planned to meet a housing need of middle class individuals, its limited intent undermines its success in filling the need of housing for laborers. The large scale of the project, intended to house approximately 60,000 people, coupled with cost cutting methods and presumably quick phasing, all played a role in the projects failure. In addition to the poor construction and infrastructural issues that plague the project and jeopardize attracting the middle class residents its initial plan, an important question is whether city plans should remain married to their initial grand vision or be flexible and respond to the market and current needs. If the city were more organic, following the financial crisis and the popularity of the area with foreign laborers, the developer could have adapted the plan to accommodate this new resident. Because a city is constantly changing and responding to social and economic factors, phasing of large projects becomes a crucial consideration.

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One thought on “Can flexibility and phasing improve the success rate of large-scale development?.

  1. I agree with Hannah, phasing and flexibility are key success factors in the development of large scale projects such as new cities.

    In an unconstrained financial environment providing infinite resources to the project, we could imagine that all infrastructures and housing can be built simultaneously and seamlessly. However, in real life, resources are constrained and phasing the project allows to allocate resources progressively and mitigate risks. The example of Phu My Hung city in Vietnam illustrates how the developers tackled power generation and transportation before moving on to other parts of the city’s development because these infrastructures were vital to the following steps and the economic success of Export Processing Zone that would bring revenues to the city.

    Phasing is also crucial because it allows flexibility. The large scale city projects involve multiple years of development and the economic and political contexts can change dramatically over the span of the project. Envisioning a project in multiple phases with flexible options at each step. The flexibility can help mitigate the risks created by a moving environment, but also allow the developer to take advantage of new opportunities created by the new environment.

    It is theoretically easy to envision a carefully thought out development vision with logical phases building of each other, but the flexibility element and the related uncertainty creates more complexity in the project. In order to fight this complexity and take advantage of the flexibility, it is important to create beforehand a simple and flexible decision tool allowing to financially assess the different options at every step of the project. The success of flexibility also relies on an efficient project committee meeting regularly, involving all the stakeholders and not afraid to make decisions.

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