What is the best approach for successful urban development?

On a 600-hectare plot of land 50km southwest of South Korea’s capital city, Seoul, lies the largest private real-estate development in history. Songdo is tipped to be the smart city of the future and is setting a benchmark for urban planning and development. Songdo is a fully connected city: it has a network of sensors to monitor traffic flow and energy usage, a fully automated waste disposal system that makes rubbish trucks redundant, and several ‘green’ spaces to reduce the city’s impact on the environment. Its canals have been modelled on Venice, there is a central park just like New York, and a centre for performing arts sits overlooking a bay area replicating the iconic Sydney Opera house. Songdo demonstrates the product of good urban planning and management by providing a comprehensive framework for growth and further development.

Urban areas are vital for increasing productivity and growth. They offer a dense concentration of collaboration and innovation. As the global population increases, more people will find themselves living in dense metropolitan areas. But as some cities thrive others decline – leading to high crime rates, high unemployment and low standards of living. We will look at a number of factors affecting urban development: deindustrialisation, congestion and the best approach to infrastructure and housing, and subsequently uncover the best approach for successful urban development.

Songdo, in just 30 years, has transformed from wasteland to megacity

Deindustrialisation: dealing with the effects of globalisation

The city of Detroit, situated on the east side of Michigan State used to be a prosperous industrial centre. In the early 20th century it was home to Ford Motors’ largest manufacturing plant which attracted thousands of workers to the area. Local businesses grew in response to the influx of people and the city became one of the fastest growing in the US. However, during the 1950s the car industry in Detroit faced competition from overseas. Ford Motors decentralised its manufacturing facilities to take advantage of cheaper labour elsewhere and Detroit’s main industry started to decline - manufacturing infrastructure was left unused and local businesses failed to generate enough revenue to continue operating due to the mass migration out of the city. Since 1950, Detroit’s population has dropped from 1.8 million to 680,000. The city’s fundamental failure to weather the effects of globalisation has been a consequence of its heavy reliance on vehicle manufacturing and an inability to shift to other industries.

Deindustrialisation was a process leading to the decline of many manufacturing based cities in the north east of the US from the 1950s onwards. New York is a notable exception to this trend. Like Detroit, New York battled with the effects of the economic decline in the early 1930s and its manufacturing industries deteriorated with the effects of globalisation in the 1970s. In contrast to Detroit, New York managed to prosper as a result of developments in entrepreneurship and a continued strengthening of its financial services, centred on Wall Street. New York is fortunate not to have experienced the same decline as Detroit, but there were fundamental differences in how the two cities faced the effects of deindustrialisation. Whilst New York encouraged a growth in innovation – attracting highly skilled and well-educated entrepreneurs from over the globe, Detroit invested in refining its unused manufacturing facilities which led to further decline.

Across the Atlantic UK industrial cities have faced the same effects as Detroit and New York. Between 1970 and 1983, average income in Birmingham fell from the highest in the UK to the lowest of any region. The city faced the consequences of a series of global events during this time. Most notably the oil crisis in 1973 which led to a drastic increase in the cost of manufacturing. Birmingham’s traditional industries had already been declining due to high oil prices and large companies moving production abroad to take advantage of lower costs. But they were further weakened by worker’s unions and frequent strikes - making Birmingham unattractive for investment. However, recent regeneration has led to significant improvements in employment and income. Transport investments have led to the expansion of the International Airport and a £700 million redevelopment of the city’s main railway station. These have provided jobs and made Birmingham a more attractive location for foreign investors. But it’s the city’s investment in education that has been the most vital part of its regeneration. Birmingham’s three universities have a combined student population of over 50,000, resulting in jobs for the local people and increased spending in the local area. Students graduating from the universities can then contribute to the local economy through higher earning jobs, further increasing average incomes and employment.

Detroit has faced decline and decay due to the effects of deindustrialisation

Cities such as Detroit exemplify a failure in urban management and an inability to shift focus from manufacturing to the services economy. For New York, success came in the form of financial innovation and a growth in the financial services industry. For Birmingham, it has been about promoting the city on a global scale through significant transport redevelopments and raising average income through higher level education. It is important to learn from the successes of New York and Birmingham as more cities transition from industrial to services economies.

How do you reduce congestion?

Congestion is common in densely populated areas. In Mumbai for example, 18 million people live in an area three times smaller than London and the number of cars exceeds 3 million. The lack of space means Mumbai has some of the worst traffic of any urban area. Increasing congestion means slower commute times, which has disastrous consequences for productivity. It also means that traffic accidents and pollution are rising. There is no definitive solution to congestion, and the methods to reduce it are wide-ranging, and can often be ineffective or further worsen the problem.

In 2003, London imposed a £5 charge on vehicles driving within the central London area. It was brought in to reduce congestion, reduce pollution, and overall make London’s streets more attractive places to live in. Transport for London claim the charge led to a 15% decrease in traffic and a 30% decrease in journey time. However, there are several adverse effects to congestion charges, which is arguably why they are not more widely implemented. They lead to potential loss of business by discouraging people to venture into the city centre. They also encourage illegal activities in order to evade the charge which lead to increased administrative costs. Perhaps most alarmingly, the charge increases income inequality by affecting those with the lowest incomes the most.

In Denmark, buying a car can cost up to three times as much as the UK. Registration duties of up to 180% encourage citizens to find alternatives to cars. Denmark has well-developed bicycle infrastructure, especially within its cities. For most people in Copenhagen, the daily commute involves a combination of cycling and walking meaning it is no surprise to see bikes outnumbering cars on the city’s streets. The Danish government is able to collect vast tax revenues, using them to reinvest in transport infrastructure and further improve public transport. The city also benefits from having some of the lowest pollution levels in Europe. But no city has a better approach to reducing congestion than Singapore. Like Denmark, Singapore puts high taxes on the purchase of cars, factoring in external costs such as gas emissions and wear on the road. If you wish to purchase an average family sized car, it will set you back at least £50,000. The government heavily subsidises public transport, with over £10 billion being invested to increase efficiency and ensure fares stay low.

However, attention is turning to what the future of transport within cities might entail. An article by Roland Busch raises an important point with regard to taxation on cars, suggesting it “does not support the development of cities”, and points to an integrated system of cars, trains, trams and buses connected by technology. In his view, all modes of transport will be able to communicate using sensors, providing information on the quickest routes to travel at a particular time. Governments can also ensure that no form of transport is overused. Smart technology in cities has the potential to make public transport safer, more reliable and more flexible. But as Busch points out, the effective implementation of such technology requires a major “shift of perspective” away from cars.

Congestion is a major issue in cities around the world. Charges and taxation only go so far in improving the situation and can have detrimental side effects. However, an integrated transport system using technology offers the most promising solution to the problem, making cities more attractive, safer places to live.

Evidence of Copenhagen's extensive bike infrastructure

What is the best approach to infrastructure and housing?

$11 Billion was invested in developing Rio De Janeiro for the 2016 Olympic Games. Facilities were spread out across four districts in the city; Barra de Tijuva, Copacabana, Deodoro and Maracana, in an attempt to leave a lasting legacy and increase incomes for millions living in the city’s Favelas. In the 16 months since the games, stadiums and arenas in the Olympic Park have been left abandoned, the swimming and diving pools are full of stagnant water, and less than 10% of the ‘luxury’ apartments in the athletes’ village have been sold. The only ‘legacy’ for Rio 2016 has been decline and decay. It is no surprise that the government has not been able to maintain the sites - estimates suggest the games set Brazil back $20 billion which is a hefty sum for an economy with feeble growth rates and rapidly increasing debt.

The deterioration of Rio’s Olympic infrastructure highlights a flaw in the use of ‘flagship developments’ as a means of regenerating or redeveloping a poor area of a city. Flagship infrastructure projects are commonplace in cities around the world. They are significant property developments used as a means of inciting urban regeneration, and reflect a ‘top-down’ approach to infrastructure development – where project planning and execution are handled by a small group or business. This is exactly where Rio went wrong. Whilst construction work would have provided jobs for local people in deprived areas of the city, the developments would never be sustained beyond their sole purpose without investment from the government – something which could not be afforded. The city needs a far more dynamic approach to urban infrastructure development if it is to see any social change in the next decade.

Rio's abandoned Olympic Park just six months after the games

Tokyo succeeded where Rio de Janeiro failed. Tokyo’s infrastructure was decimated during the Second World War due to heavy bombing. Despite the devastation, the city was able to rebuild from scratch and instilled a novel approach to urban development. Instead of applying strict, conventional planning regulations, Tokyo’s government built basic infrastructure and left the rest to be constructed by its citizens. This led to dense, mixed use areas where residents became heavily reliant on each other, especially in the provision of housing. Urbanologist Matias Echanove explains how “local construction practices, family-owned businesses and flexibility of land uses created a shadow, homegrown economy”. Tokyo challenged the widely accepted notion that large-scale, heavily funded projects are key to inciting social and economic change within an urban area. Rio de Janeiro needs to embrace this more incremental approach. The local government should no longer set aside land for private developments that only a fraction of the city’s population can afford and use. Instead, it should provide a basic structure such as roads, electricity and water and let residents build around it – creating an environment where people are reliant on each other for resources and work. This way, Rio can experience the same organic growth witnessed by post-war Tokyo.

The best approach for successful urban development

How do you deal with deindustrialisation? Develop the city’s services economy and make it an attractive place for foreign investment. How do you reduce congestion? Perhaps a charge, a vehicle tax or increased public transport. Or perhaps the solution lies in future technologies to make an overall smarter transport system. What is the best approach to infrastructure and housing? Incremental, citizen driven change rather than large-scale flagship developments that are not sustainable in the future. These are just some of the questions, and some of the answers concerning urban development. 70% of the world’s population will be living in dense, urban areas by 2050. This is why it is of paramount importance to have cities that are designed well and built to act as a catalyst for economic and social change. As development economist Edward Glaeser describes it: “our culture, our prosperity, and our freedom are all ultimately gifts of people living, working, and thinking together – the ultimate triumph of the city”.