Urban Planning Replicability – a case for Kaizen

By Henry Motte-Munoz

In the past few classes, we have focused on fascinating attempts to create cities where none existed before — be they tens of kilometers away (KAEC) or a present/future suburb (Phung My Hung in Vietnam). The idea is that existing cities cannot cope with the waves of rural emigration in Emerging Markets. I would argue that renewal of existing Tier 2 cities across these nations would be a more cost-effective, natural way of absorbing the influx. And for these cities, there is no need to rely on “new eco-city” findings — examples abound of successful transformations, including Medellin in Colombia and Curitiba in Brazil. To take a leaf from the Toyota Production Method, Kaizen, or continuous improvement, can radically improve the quality of life and population absorption capacity of a city.

Medellin has just been named the world’s most innovative city by the Urban Land Institute. It beat Tel Aviv and New York, on the account of its social mobility, efficient public transport system and investment in civic spaces, art galleries and libraries. Instead of spending billions trying to replan its poor neighborhouds or clear them, it built a giant escalator and a cable car for its residents to commute to the city centre to their jobs. The transformation did not happen overnight, nor is it complete, but it has allowed the city, once a byword for drug cartels, to cope with a doubling of its population since 1985 to ~3m.

Exhibit 1: Giant Escalator through low-income neighborhoods of Medellin, Colombia

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Markets build bad cities

By JW

The cases of Paredes and Dharavi are examples of a centralized approach to urban development. Both were led by private consortiums and supported by public-private partnerships. Both aimed to create a safer, more sustainable living and working environment for the people who would live there.  And, as we discussed, both seemed destined to fail. However, I would argue that we should draw markedly different conclusions from these failures about the role of central planning in the growth of cities.

There are two kinds of cities in the world – those home to over 50% of the world’s population today, and those that will absorb nearly 100% of future growth for the next four decades (with a considerable degree of overlap). Cities like Bombay are adding over a thousand people per day – new neighborhoods springing up overnight. Governments are able to direct this growth to an extent through regulation (e.g., zoning) and the provision public services (e.g., mass transit). Markets do the rest.

In the case of Dharavi, markets may be enough, provided slum dwellers gain legal ownership over their homes. Offering land rights to families who have lived in the same home for generations is a complex process, but one with a relatively clear outcome – organic, continuous real estate improvement. When managing a built environment, the government has far greater constraint on sweeping public works projects. The process of razing thousands of homes and relocating thousands of families in Dharavi was virtually guaranteed to be corrupt and unpopular.

At the same time, markets seem to be bad at developing sustainable cities. As most industries have become more efficient, real estate development by some measures has become less so. Living PlanIt proposed to eliminate the massive waste endemic in traditional construction and urban design by building a ‘city’ from scratch. While they ran up against massive coordination and complexity problems, the idea was cogent. Centralized planning and development can ensure that the design and spacing of every building makes sense from an efficiency standpoint, and capture huge savings in reduced energy use and CO2 emissions. While there is a risk of building a ghost town (e.g., in China), there are ways to mitigate this risk (e.g., using large businesses as anchor tenants).

As governments look to create room for new urban populations, they would do well to review examples such as Living PlanIt and New Songdo City for inspiration. Greenfielding a city center is no easy task, but getting it right may be the best way to create a sustainable path for urbanization. For existing urban centers, government should focus on installing the right regulations and public services, rather than rebuilding from scratch.

Broader solution to slum redevelopment

By Candy Tang

With respect to slum redevelopment, it would be more effective to grant residents title to the plots of land the currently occupy and then let market forces work, rather than looking to large scale redevelopment via professional real estate firms.

If we could all agree that one major goal of slum redevelopment is to improve the welfare of its residents, there is no better way than to grant residents the property right as a solution. A great majority of the world’s largest slums such as Orangi Town, Neza-Chalco-Itza and Dharavi are near the heart of the city. They constantly provide low-cost labor to the city but they don’t share in the growth of the city in the form of land appreciation. Assuming liquidity is high in these real estate markets, which is always the case in rapidly developed cities, slum dwellers could monetize the benefits and they are in the best position to decide when to sell and how to distribute the proceeds accordingly.

Large scale redevelopment rarely works because it is a matter of housing, job and freewill. None of this could be compromised. Take Dharavi as an example, with 80% of people self-employed in the slum’s core businesses in leather, recycling, garments and pottery, residents declared they will not agree to any development plan unless they are allotted the same amount of workspace they currently occupy. This ‘city within a city’ is a model of economic efficiency and productivity, a place where most things appear to be broken but everything seems to be working rather nicely.

It is not only economic considerations that lead people to oppose the redevelopment, but cultural considerations as well. The redevelopment proposals may erode the slum dwellers’ traditional ways of life and disrupt communities with rich histories. Its residents have a very clear sense of their own identity; they have hopes and aspirations, and a genuine belief that these are achievable. Real estate developers’ financial models only take into consideration of the cost of rebuilding the house, but not rebuilding the neighborhood. Redevelopers will not and cannot build the social and commercial networks of the self-sufficient economy of the slum.

If a broader goal is to build a slum-free city to increase the competitiveness or appearance of a city, isn’t the idea of “slum-free” a bit self-contradictory? The central problem is not slum, but a missing middle class in the context of extreme inequality and the increasing number of migrants that the city couldn’t properly accommodate anymore.  It therefore requires a broader solution, the key of which is to increase the equal opportunity and social mobility. Besides entitling people with proper rights, it requires constant investment in public goods such as education and a more rigorous champion to root out corruption.

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Providing Affordable Housing in Cities

By Atulya Mittal

With respect to housing for the poor, what are should be the objectives of government? What are the apparent of objectives of government? If there is a gap, how will it be reconciled?

Housing for the poor is an acute problem that we will face in the upcoming decades due to urbanization. The problem consists of providing affordable housing for people in cities, where huge demand combined with supply constraints usually results in high land prices and consequently high home prices. Lacking affordable housing, poor people live in poor conditions within cities in favelas and slums. These slums lack sanitation facilities and utilities and are run by slum lords who run a parallel government creating compounding problems related to health as well as law and order. Thus, the objective for government seems simple – provide low cost housing in integrated in existing cities with proper sanitation facilities and utilities.

This simple objective is complicated by a two major factors. Firstly, “government” implies a homogenous machine operating at all levels of the countries systems with aligned objectives. However, in reality the government’s objectives change depending on which part of the political machine is being assessed. The national government, for example, may have an objective of inclusive growth. On the ground, however, local politicians may want to avoid inclusive growth in order to keep their vote banks permanently under their thumb. This is a common problem in redeveloping slums in India that might result in the displacement of people out of particular constituencies and leading to the loss of a local politicians vote bank. Leaders who want to make cities more inclusive have to realize this problem and find a workaround, otherwise their best intentions and objectives will be fouled by people who have a shorter term view but a enough clout to stop them.

Market forces create a second complication. In a free market economy, it seems incongruous to provide an area of land for low cost housing surrounded by multi-million dollar houses and apartment buildings. The land could be better used to provide housing aligned with the market with increases in taxes and collections for the government without disrupting free market forces.

These two complications can be resolved if the government’s shifts its objective and views the problem from a different perspective. The problem of a lack of low cost housing is a symptom of a greater problem of inadequate supply of connectivity and infrastructure. Slums shoot up because cities are not expanding fast enough to accommodate all members of society. The lack of low cost housing is a problem of high cost land. Improved connectivity through roads, rail and other urban transport solutions would unlock larger parcels of land, which could be incorporated into the city. The result would be falling land prices, falling home prices and the availability of affordable homes. To an urban dweller, the actual distance in miles is irrelevant. What is relevant is how long it takes him to get to his place of work, his customers or his friends. By adopting the objective of growing cities faster, the government will automatically provide enough space for market-driven affordable housing.

Charter Cities: A Tool to Address the Failures of Government?

By Anonymous

When public resources are limited, governments can use public-private partnerships (PPP) to solve their largest problems, while minimizing the use of public assets. However, what if the government and its policies are the problem? In places like the Dharavi slum of Mumbai, the government has failed for decades to enforce property rights and laws, provide basic sanitation or foster prosperous economic conditions. Solutions that do not address the failures of such governments are tantamount to treating the symptoms of a chronic medical condition instead of curing the disease; they are wasteful and only prolong the underlying issue. An optimal solution needs to address root problems with such a government; posing the question, can a PPP provide safety, security, sanitation and pro-growth economic conditions? In other words, can a PPP be leveraged to provide even the most basic public goods traditionally provided by the government?

Professor Paul Romer of NYU’s Stern School of business believes that PPPs can accomplish such goals in through the charter city concept. A charter city would create a special economic zone (SEZ) that would be administered by a semi-independent government, unrestricted by economic policies of the sovereign nation and funded by external investors. Residents could choose to live or work in the SEZ or to remain in their current conditions. Under such a system, the SEZ’s government could develop its own laws and electoral practices, provide its own services and create conditions amenable to economic growth. The sovereign state would receive tax revenue from the charter city for use of the land. In order to succeed, the SEZ would have to earn the trust of the residents by providing services superior to those of the sovereign nation. If successful, the practice could be scaled or better yet emulated by the sovereign government. Such a solution would address the root causes that lead to slums in Dharavi and provide the investment and incentives to both the residents and government to redevelop these areas.

Of course, Romer’s concept can be criticized due to the additional implementation challenges it faces. First, convincing a government to fire itself and outsource its sovereignty is a hurdle beyond the traditional challenges of development projects. In fact, political gridlock ultimately blocked Romer’s attempt to execute this model in Honduras. Furthermore, the concept can be interpreted as a privatized regression to colonialism, a model that would be met with deep suspicion in a country like India, which recently gained independence from its colonizers. However, with adequate protection of rights and enough transparency to demonstrate the fairness of system to all stakeholders, such challenges could be overcome.

However, as demonstrated by previous redevelopment efforts in Dharavi, PPP solutions are not effective if they do not address the problem underlying the need for development. In extreme cases like Dharavi, where the government is the problem, if implemented correctly, charter cities can provide the requisite change to provide sanitation, safety and opportunity to those whom have not received it from their governments.

On Density, Desirability, and Happiness

By MRP

High density is often praised in relationship to sustainability because of the efficiencies in managing resources and benefits regarding shared transportation. Economists have also concluded that workers in denser places earn higher wages and are more productive. Studies show that doubling the density increases productivity by 6% or more. And there is an interesting 25% correlation between population density and gross metropolitan product per capita. (1) (2)

However, density is not a magic elixir. Many developing cities are struggling with overcrowding, traffic congestion, providing adequate infrastructure for water access and sanitation. In the case of Dharavi, we were looking at a slum redevelopment that would result in a population density of about 313,900 ppl/km2. The final image visualizing the massing of the proposed design, based on the 7 story’s maximum height policy, offered a terrifying view of the future – not that different from the Soviet housing projects developed during the 60s, many of which are now abandoned or soon to be demolished.

So, I wanted to explore if there is such thing as an “ideal” density. In other words, is there a correlation between the density and the perceived desirability of the city? How does it change with economical and growth differences?

If we look at the rankings of the “most livable cities” (3) and their density we can observe the following correlation:

Roure density

Cities that systematically appear on the rankings of “livability” are: Zurich, Helsinki, Copenhagen, Vienna, Munich, Melbourne, Sydney, Auckland, Paris… In this study I included the 20 most acclaimed cities amongst the 3 most important rankings: Monocle, Mercer, and EIU. The average density of these 20 cities is of 3800 ppl/km2 and the deviation can be disregarded.

Although there is much debate about the criteria behind these reports, they have to do with very high ratings on safety/crime, quality of architecture, public transportation, urban design, business conditions, environmental issues and pro-active policy developments.

On the other hand, all of the cities in this list are in stable, democratic countries, have gone through a diligent constant improvement over the last, not only decades, but also centuries, and stand today with some of the highest gross metropolitan product per capita of the world. These could be thought as the most desirable cities for the top 5% of the population.

The challenge arises when addressing emerging citites such as Mumbai, Bangalore, Beijing, Shanghai, Chongqing, New Delhi or Bogota (4), with densities from 3 to 10 times higher than the “ideal” 3800ppl/km2. Slums in these cities have a key socioeconomic role, they are often used as a gate for immigrants coming from rural areas to find a temporary settlement and to eventually be able to find a job and thus enter the formal market. The precarious living conditions, sanitation deficiencies and corrupted informal economies are a source of anxiety.

If we think back on the history of some of the chosen “most livable cities,” we find a recurrent pattern of explosion of growth with subsequent stabilization. Yet the scale of these new metropolis and building capabilities are unprecedented. Even if we can greatly learn from existing urban models, new challenges will need to be addressed – for which testing and a great degree of political will be needed.

(1) http://economix.blogs.nytimes.com/2010/04/13/why-humanity-loves-and-needs-cities/

(2) http://www.nytimes.com/2011/09/04/opinion/sunday/one-path-to-better-jobs-more-density-in-cities.html?pagewanted=all

(3) http://en.wikipedia.org/wiki/World’s_most_livable_cities links to Monocle, Mercer and EIU

(4) http://www.atkearney.com/documents/10192/dfedfc4c-8a62-4162-90e5-2a3f14f0da3a  Global Cities Index and Emerging Cities Outlook

 

What should we strive to achieve in housing the poor?

By Landon Dickey

In developing countries, the aspirational objectives of housing seem clear. As in the case of Dharavi, individuals trapped in cramped living conditions with scarce clean water and hygienic facilities need their basic needs met first and foremost. But what should be the objectives of housing for the poor in a developed country like the United States? Since the 1930s there have been many efforts to house the poor—from public housing, to Section 8 vouchers, to relocation of low-income residents to more affluent areas[1]—and these efforts have done just that; they have housed the poor. That, however, should not be the final objective of low-income housing.

Government should view the objectives of housing the poor as threefold (ranked in order of importance):

  1. Enhancing the economic opportunities of lower-income individuals
  2. Creating more cohesive and responsible communities
  3. Furthering the social and economic integration of lower-income individuals with higher-income individuals

This contrasts with what I see as the main objectives of low-income housing in the United States now, specifically providing a safety net that keeps individuals off the streets and maintaining a degree of order in communities with economically disadvantaged citizens. Really, housing should be viewed as the first rung on a ladder of opportunity for citizens. In particular, ownership of property provides individuals collateral with which to secure loans for entrepreneurial endeavors, an asset to sell or lease, or simply a source of intergenerational wealth.

Several steps would need to be taken to realize the view of housing as a platform to wealth. A committee would need to be formed consisting of housing and economic development experts. As a starting point, this committee’s scope should first be limited to a single city and it should stand separate from a single politician’s office. This committee should be tasked with the dual mission of 1) transitioning tenants to owners of public housing units and  2) enhancing property values by stimulating economic activity in low-income neighborhoods.

Tactically, in order to achieve the first goal, the committee should solicit applications from current tenants interested in owning their unit. If selected, the objective of the committee would be to help quantify tenants’ earnings and counsel them in saving money towards purchasing a unit at a heavily subsidized price.[2] It is important that tenants pay some price for the unit in order to encourage them to personally value the property and incent them to serve as leaders in maintaining the public housing building as a whole (which affects the financial value of their individual unit). The committee could turn the first class of applicants  into a taskforce for the public housing building, encouraging them to create a housing oversight board with responsibility for recruiting more tenants as candidates for ownership and maintaining the building and surrounding land.

Simultaneously, the committee should work to identify the skills of community members and create opportunities for economic activity. The “Art Murmur” event in Oakland, California provides a model for local economic activity. At this monthly event, local artists and vendors come together to share their art and cuisine to Oakland and San Francisco residents in a developing neighborhood in Oakland. Nationally, other low-income neighborhoods could hold similar events or low-income entrepreneurs could pool income with their neighbors to create permanent and unique staples of economic activity (i.e. food trucks, performance theaters, museums). Unique cultural institutions have the potential to promote patronage from a broader economic class and incrementally increase land values.


[1] Hoffman, Alexander. “High Ambitions: The Past and Future of American Low-Income Housing Policy.” Housing Policy Debate, Volume 7, Issue 3.

[2] Harlem Children’s Zone. “Community Pride: Community Pride is a Meeting Place.” A Look Inside, Volume 2, Number 1, available at <http://www.hcz.org/images/stories/pdfs/ali_spring2003.pdf&gt;