Blogging on my side interest in macro and growth theory has been crowded out by my day job, which has me in Colombia this week. This translation of a Q&A explains why I’m here.
Your academic contributions to the economy are recognized globally, but when did you start your interest in working on urbanization issues?
I started thinking about urbanization in the mid-1990s when I shifted from thinking about growth for countries at the technological frontier and toward thinking about the process of catch-up growth in the developing world. The evidence shows that it takes action by some government entity to create the conditions for successful urbanization, and that successful urbanization is essential for rapid catch-up growth. Many countries have been told that to speed up the process of catch-up growth, they need an active “industrial policy.” I am convinced that an active “urban policy” is much more important.
How are economics and planning and development of cities related each other?
Urban Expansion is an exception to the usual rule that an economy does not need a plan. Creating new built urban area requires a plan for the public space that will be used for mobility (sidewalks, bus lanes, bike lanes, auto lanes …) and for parks. At a minimum, this plan should provide for a network of arteries big enough to allow bus travel and dense enough that no location is more than 0.5 km from such an artery. This is the only thing that needs to be planned up front for land that is not yet developed. Everything else can wait. But if informal development comes first, it is too late. The area will never have enough public space to allow successful urban development.
What do you think are the items that a “quality city” should have?
In the beginning, all you can do is make an allocation of public space. But a quality city needs a substantial amount of public space if it is eventually to support high density. For example, in mid-town Manhattan, the roads and the sidewalks alone take up about 30% of the surface area of the land. This was the allocation that was specified in the plan that drawn up in 1811, when what is now mid-town was rural farm area. Informal development will typically devote far less land than this for mobility. And remember, in 1811, when this plan was drawn up, people had no idea how we would be using this land today. They did not know what a bicycle was, much less what a bus or car was. But they knew that in the future, this generous allocation of public space would give the city the flexibility to take advantage of new opportunities.
Among the cities that you have known, what is the one you like? Why?
Paris used to be my favorite city, but since moving here in 2011, I have fallen in love with New York. Its history shows what is possible. A city can make big plans for expansion and then welcome large numbers of immigrants. The only other city that is like this is Shenzhen, which is also an immigrant city that drew in people from all over China. It is the one part of Southern China where people speak Mandarin.
How should the cities confront the fast urban population growth and the continuous industrial and business development?
There is great wisdom in the general advice that economists give: let the market guide most decisions. The important exception is that only a government can establish the division between urban public space and urban private land. The difficulty arises because the only affordable way to get this allocation right is to do it before urban development takes place. It is economically expensive to try to do what Haussmann did in Paris under Napoleon III, destroy many buildings and create new public space. Politically, I suspect that this kind of reallocation will never again be feasible. If a city gets the allocation of public and private space right, then the market can guide the development of urban floor-space for housing, industrial, and commercial use. In the beginning the process may look messy. Manhattan had shantytowns and informal development as it grew. But over time, the buildings can change. What won’t change is the quantity of public space.
What is the Urbanization Project proposal for developing cities with quality and long-term outlook?
We tell officials in rapidly growing cities that they have to set aside now the public space in the area where the city is likely to expand. To stay ahead of rapid growth, the city needs to look far into the future. We encourage cities today to plan for the expansion that will take place between now and 2050 under a fast growth scenario. If the city is growing rapidly, this can require a plan that could accommodate a 10-fold increase in the city’s built area. The land can continue to be farmed until the expansion comes. If there is less growth and the city does not need all this land for urban expansion, there is virtually no cost to having planned for too much. In contrast, if a city does not plan for enough and it suffers from disorganized informal development, the cost is very high.
By the way, the 1811 plan for Manhattan called for a 7-fold increase in the built area of the city. It took many decades for the land covered by this plan (roughly the area from Houston St. to 155th St.) to be fully developed. So we are not trying to invent anything new. Planning of this type is something that people have done before. We are just reminding people about demonstrated successes from the past.
In Colombia, the planning horizon of cities is about 12 years, do you think it’s enough to plan a city at the long term? what is your recommendation?
A planning horizon of 12 years is much too short. With such a horizon, the reality is that a city will always be behind what is happening on the ground. It will then be stuck in the mode of responding to unplanned development after the fact. This is very wasteful. Fixing a mess is much harder than preventing one.
Could you briefly explain what are the initiatives “urban expansion” and “charter cities”?
Urban expansion is a strategy for an existing city to guide its growth toward a successful outcome. A charter city is like urban expansion but some aspects of how the city will be run can be specified before anyone arrives. This gives the organizer of a charter city the opportunity to implement reforms that are difficult to implement after people are already in place. The name charter refers to the charter that William Penn wrote for Pennsylvania. This charter said that this new place would implement a separation between church and state and would always respect freedom of religion. With this charter in place, he could recruit people who wanted to live in such a place.
What cities are examples and results of these initiatives?
New York, Barcelona, and New Town in Edinburgh are some of the best-known examples of successful plans for urban expansion.
As a precedent for the idea of a charter city, Pennsylvania (and its main city, Philadelphia) was a success that demonstrated the feasibility of a reform that separates church from state at a time when people in Europe still killed each other in battles about religion and when settlers in Massachusetts sentenced Quakers to death by hanging.
Shenzhen demonstrated the feasibility and value of a reform that let foreign firms employ Chinese workers. Its success was pivotal when the reformers had to defend opening up from the reactionaries.
Keeping in mind the urbanization intensive process, what policies or actions must undertake the local governments to transform the cities?
The key is to set priorities. What has to be done first?
The highest priority for a rapidly growing city is to make the division between public space and private space for land that has not yet been developed but that is likely to be developed in coming decades. It is extremely expensive to fix this allocation after informal development gets it wrong. A city can get this division right in hundreds, maybe even thousands, of square kilometers of undeveloped land with the same funds that it might spend to try to fix this division in a single square kilometer of land that has already developed informally. The 1811 plan for Manhattan required part time work by three people and a single surveyor plus his crew, who went out and put stone markers in the farmland that marked where all the intersections would be.
To implement this division, it is essential that the city put stakes in the ground. If all it does is draw up maps or write reports, it will not succeed. We tell people that our center, the Urbanization Project, does not write reports. Our only measure of output is “stakes in the ground.”
How these actions should be prioritized in Colombian cities, and which of these are fundamental for planning and the development in the long term?
Monteria and Valledupar are already showing how cities can implement a plan for the public space in their expansion areas.
What is your opinion about the discussion between densification and expansion of cities, and what do you think are the effects of each one?
This is not an “either-or” choice. As a city grows, it increases its built area at the same time that already developed areas become denser. Cities in the developing world can meet the rapidly growing demand for urban floorspace only if they pursue both strategies. People who say that cities can meet this demand purely through densification have simply not done the math. (If you don’t believe me, ask one of them for their calculations about growth in demand and supply of urban floor space.) People who say that you can meet the demand through densification and who then resist increases in the allowed floor-area ratio are being dishonest about what their real intensions are.
It is very likely that the government can increase the quality of life in a city and the value of all its land by encouraging efficient forms of public transit, and this is likely to increase density. One of the reasons why public space for a system of arterial roads is important is that it makes possible surface transport systems like dedicated bus lanes. But public transit can come later, after urban growth has given city government the resources to invest. New York City developed its subway system almost 100 years after it laid out the plan for Manhattan. In fact, the subways were developed as the city planned for yet another 7 expansion of its built area as it expanded into what were to become its other boroughs.
If a city tries to limit the growth of the expansion area, you can be certain that this will make land artificially scarce and artificially expensive. If the government wants to provide urban opportunity for people who are poor, an artificially high price for land, which translates into artificially expensive housing, is a terrible mistake.
Of course, a restriction on the supply of land is precisely what existing landowners in an urban area want. They want their land to have an artificially high value. Some citizens may also want poor people to live in other cities. So there will always be strong pressures for “containment” that can fly under the false-flag of support for densification.
In short, what will your reflections be in the Colombian Congress of Construction?
I will talk about talk the path that Monteria and Valledupar are demonstrating to other cities. It is a feasible path toward inclusive, affordable, efficient urban growth. And I will emphasize that they are showing this path not just to other cities in Colombia, but also to cities throughout the world.