Building the Skyline

The Birth & Growth of Manhattan's Skyscrapers

by Jason Barr 6 Comments

Gotham Needs a Master Plan for the 21st Century

Jason M. Barr       September 13, 2022

New York is a resilient city. In 1975, it was left for dead when President Gerald Ford failed to help stave off its Fiscal Crisis. But, the rise of high-tech and high-skilled industries has reinvigorated its economy, while the drop in crime has brought back consumers and tourists alike. Then, when the Covid-19 Pandemic hit, the commentariat was, once again, predicting the death of Gotham. Yet, the city endures.

New York’s problems today are, in some sense, crises of success rather than failure and abandonment, like in the 20th century. Housing is more unaffordable than ever. Too many people are chasing too few units, and prices have soared. On its streets, too many drivers are overwhelming roads never designed to handle such capacity. Decades of economic growth enabled by fossil fuels have put us on the brink of climate change catastrophes.

And what is New York City doing about these things? It’s playing Pin the Tail on the Donkey.

That is, Gotham is groping its way forward with half-baked policies that hardly address the problems at hand. The decentralized nature of its governance also means that agencies and authorities operate with little consideration that housing, transportation, and climate change are inextricably linked.

Thanks to its wealth and determination, New York may well muddle its way to the future. But this is wasteful, unnecessary, and will cause undo suffering.

Time for a New Master Planning Philosophy

It is time for a new master plan based on 21st-century thinking, not like the master plans of old that tried to tame the city or to micromanage what happens on every block. Rather, a city is a dynamic system of interrelated parts that feed back on each other and evolve based on changing forces both from within and outside the region. These forces create a type of order–a kind of controlled chaos, that should be embraced rather than squashed. A new master plan is needed that “listens” and adjust policies and investments as the times change in order to encourage improvements, adaptation, mobility, and growth without adding unintended harms.[1]

Housing Woes

Since New York’s renaissance began in the 1990s, there has been a pervasive sense that rising housing prices are the norm, and nothing can be done to change the tide. There is a deep mistrust of developers and the free market for housing since the thinking goes that if left unchecked, the market will exacerbate gentrification and cause prices to rise even higher.

As a result, the government has cobbled together a suite of policies that ignores the necessary solutions and worsen the problem. First has been the doubling down on rent stabilization. This policy only makes sense if you believe access to New York’s housing is a zero-sum game. Rent stabilization remains in effect if the citywide vacancy rate remains below 5%. But it remains below 5% in large part because of stabilization!

The other programs rely on subsidies to incentivize the development of affordable housing units. Sure, they have helped the lucky few who get access, but they have not addressed the fundamental problem–a demand-supply imbalance.

Over the decades, New York has erected many barriers to prevent the housing market from doing its job. Rent stabilization is only one problem; overly restrictive zoning is another. In Gotham, more than two out of every three residential properties are either above or very close to their allowable floor area caps. That is, it’s illegal or impractical to add more housing on these lots.

By law, the City prevents new housing and then blames developers for not providing it. When prices go up, it “punishes” “greedy” landlords by enacting price controls.

Stuck in Traffic

New York’s transportation situation is just as bad as its housing market. Regarding automobiles, no new roads have been constructed since the 1960s when Robert Moses was in power. But the system was never designed to handle the traffic of a metropolitan region with 19 million people and their truck-based freight. Too many cars are “chasing” too few roads, resulting in massive congestion, frustration, waste, and harm. Meanwhile, the MTA is struggling to get its straphangers back.

More broadly, the larger transportation network is run by a hodgepodge of agencies. The Port Authority oversees bridges and tunnels from New Jersey, and the Department of Transportation oversees bridges, tunnels, and roads within Gotham. Then there’s the MTA, which oversees subways, buses, and commuter rail. There is practically no coordination between them, even though they all provide the same product—mobility.

Climate Change Catastrophes

On September 1, 2022, Crain’s New York Business ran the headline, “One year after Ida, New York leans into nature-based climate strategies.” The article discusses how the City is increasing the number of “bluebelts”—natural wetlands that can absorb water from surges or torrential downpours.

This is certainly a promising program, but when you think about it, it’s just another example of how New York is groping its way to climate change resiliency. Bluebelts  can only be one minor fix in very specific neighborhoods. The broader resiliency strategy thus far has been piecemeal and ad hoc: add to the bluebelt here, beef up a shoreline there, build a seawall here, etc. There is no larger framework, nor any consideration of how its actions will affect the cost and access to housing.

Yes, learning by experience and tweaking policies on the ground are important parts of the equation. But when you look at what’s being done, it’s clear that New York is taking the path of least political resistance—it “sneaks in” its resiliency projects where residents are not likely to complain. Hardly a rational plan.

Constrained New York. This graph shows that two out of three residential properties are at or above their allowable floor area ratio limits. Source: NYC PLUTO.

The VEAM Principle

It’s high time that the City updates its thinking about how cities work, how policies should be enacted, and how governance should be structured. It’s high time that Gotham creates a new master plan for the 21st century.  The plan should be based on economic realities and not on visions of utopia or catering to narrow special interests. Such a plan should adhere to what I call the VEAM Principle.

V: The Value of Land

First is the value of the land. Land values represent the value of geography. Central places are more valuable than suburban ones. Blocks near train lines or parks are more valuable than those further away. And where land values are highest, more housing should be allowed and encouraged.

Because the zoning framers feared density, they set up a city where most of its land is forced to remain low density. As a result, there is hardly any flexibility for high-amenity neighborhoods to increase the amount of housing. In many places, the zoning codes are the same whether a property is one block or one mile from a rail line or large park. It makes no economic sense.

E: Externalities

However, the main problem of dense development is that it creates a host of negative externalities or harms that affect residents and visitors. Tall buildings can create shadows, and density can create congestion on the streets. City planning needs to minimize the damage without hurting residents.

Historically, in the name of limiting shadows and congestion, the City has resorted to building bulk limits. But this is a very blunt instrument because it creates housing scarcity and simultaneously curbs the negative and positive externalities.

If shadows from new construction are a problem, tax shadows or tax bulk or height above some “reasonable” level that gives back resources to the community to improve the quality of life.

A: Affordability

In New York City, rent stabilization remains in effect if the citywide rental vacancy is less than 5%. But rather than saying, “vacancy is too low, we need to implement price controls,” how about we imagine a world where citywide vacancy is always say 10% naturally—a world where there is so much housing and so many choices that rents are inherently affordable without unnecessary restrictions. The government needs to have more faith in the invisible hand. That’s not to say it can’t use a velvet glove to help adjust things from time to time.

M: Mobility

The goal of transportation policies should be to move the most amount of people with the least amount of congestion. This means rail, subways, roads, and the prices of using each should be coordinated to give people several choices and limit congestion. The more options people have, the more naturally they will eschew their cars. The key: all elements of the transportation system are linked—cars, buses, subways, commuter rail, walking, cycling, and scootering are all different forms of mobility and should be treated as such within a larger mobility framework.

Just as importantly, transportation goes hand in hand with housing—rail lines and subway stops should have more housing because not only is the land more valuable, but it also makes life easier for thousands of people. The City can’t just build a route to connect Queens and Brooklyn and say that it solved a problem. The new line will drive up the cost of housing and land. Without upzoning along the corridor and beyond, the affordability problem will worsen.

Pandemic Effects. Since the pandemic started in early 2020, mass transit ridership has been down, while driving has surpassed its pre-pandemic levels. Source: Newmark Research.

Elements of A Master Plan

A master plan, of course, is a detailed document. But here, I offer some key elements that adhere to the VEAM Principle.[2]

Rethink Zoning

The current zoning system, enacted in 1961, was based on the belief that density was bad. Today, cities embrace density for all its benefits. Thus, Gotham needs a zoning plan that reflects this. This could be done in, say, one of two ways. The first would be to upzone all neighborhoods initially and then provide local “bump ups” in the allowable floor area ratio (FAR) based on land values. Let demand dictate density.

The second possible strategy is to eliminate floor area ratios altogether and have developers pay impact fees or externalities charges that are a function of land values and current density. In suburban neighborhoods, the fees would rise dramatically, say after the fourth floor, whereas in Manhattan, fees would rise after, say. 30 stories. This way, the externalities are paid for without stifling needed housing construction.

Zoning regulations have also prevented the City from enacting transit-oriented design (TOD) policies. In many neighborhoods along the subway lines, it’s impossible to densify. A genuinely forward-thinking plan would encourage densification along the subway and commuter rail (which would also naturally increase ridership).

Congestion Pricing Everywhere

New York is on the brink of establishing “congestion pricing” for cars and trucks entering lower Manhattan (though parochialism may kill it yet). However, it’s not really a congestion charge since the fee will not move up or down based on how many cars want to enter (that’s a toll). Again, this plan illustrates the lack of systematic thinking. It charges only one price and is very localized, applying only to those entering Manhattan south of 59th Street (and does not consider that parking or traffic just outside the zone will likely become that much worse).

I have written on this subject before, so I will only say that a proper congestion pricing system goes citywide. It charges tolls on all the highways, bridges, and tunnels based on actual usage during the day. And fees for highways are linked to mass transit—if roads become crowded, the costs of using buses or subways fall simultaneously. Integrate the entire system.

Climate Change Impact Maps

New York should produce climate change impact maps that show the likely damages from surges, flooding, and other shocks.[3] The maps will give property owners the information they require, and will also suggest needed government investments for resiliency.  The maps would work alongside the zoning maps and transportation plans so that a master resiliency plan does not backfire by harming other aspects of city living and affordability.

Tie Services Upgrades to Density

Upzoning and TOD mean higher-density neighborhoods. The master plan needs to outline the process by which local services, such as schools and parks, automatically get upgraded as the local population increases. This way, the government agencies are prepared ahead of time, and residents can rest assured that population increases will not reduce their quality of life.

Transition Requires Compensation

Rethinking and reorienting policies means change. However, people naturally resist it because they fear the new outcome will be worse than the status quo.[4] Thus, Nimbyism is a tremendous barrier to moving New York to a better place.

As I have argued elsewhere, a new master plan needs to spell out how transitions will proceed in a manner that makes people better off. One way to do this is to compensate those who will be harmed, such as offering land value insurance for homeowners and subsidies to renters who need to move when their building is redeveloped.

Housing Vacancy. This graph shows NYC rental housing vacancy rates since 1960. It has never risen above the 5% threshold needed to end rent stabilization. Source: NYC Rent Guidelines Board.

The Steps to a Better New York

What are the steps needed to create and enact such a master plan? The first thing is leadership—perhaps the scarcest commodity of all.  The process would begin with the mayor and with a paradigmatic shift in thinking—that the metropolis is a complex system that, if guided properly, can generate order without design.

Reforming Governance

The mayor needs to assemble all the relevant agencies, authorities, and local, state, and federal leaders and have them map out the elements of governmental coordination. New York needs to build the capacity for systematic thinking and action.

A Blue Ribbon Panel of 100

The next step would be for the mayor to convene a Blue Ribbon Panel of 100 respected leaders and accomplished community members to create the master plan. A diverse panel, chaired by a seasoned but impartial public servant, would give its output legitimacy, as the plan must be fair and not favor one group or industry over another.

Having the panel issue the plan makes an essential statement that change is a community effort. It says, “Let’s collectively imagine a world where housing is more affordable, where traffic and transportation woes are not a constant part of daily living, and where we don’t need to live in constant fear of flooding.” Imagine that!

Its members could come together to engage in systematic thinking. Parks representatives will hash things out with housing advocates. Climate change experts will hash things out with transportation representatives, real estate developers will hash things out with social service providers, and so on.

Selling it to the Public

With a plan in hand comes the hardest part of all: selling it to the public. The pervasiveness of Nimbyism and the widespread cynicism about government effectiveness make any significant policy change nearly impossible. The Blue Ribbon Panel and city and state leaders must demonstrate how the plan will improve New Yorkers’ lives—that housing will be more affordable, transportation will be faster, and climate change damage will be minimized. The Panel can sell the plan without succumbing to parochialism.

The Future Today

We have, unfortunately, created a crisis of creative thinking—a kind of a prisoner’s dilemma world where protecting our self-interest seems preferable to working towards the common good.

As as the nation grew wealthier, its citizens asked its leaders to help preserve their gains. Governments thus have erected barriers to slow down or prevent dramatic urban changes. This, however, has cemented the notion that the expensive and congested status quo is preferable to any and all possible changes, even those that have the potential to create great good.

Despite what we tend to think, the status quo is not inevitable. But moving to a better world involves leadership and a deeper understanding of how cities function and succeed. I believe it can be done.

 

Read my Skynomics Blog posts about New York City housing here.

 

—

[1] I’m grateful for Alain Bertaud’s masterful book, Order Without Design: How Markets Shape Cities, which has inspired the ideas in this post. I do not, however, profess to speak for him or am I attempting to directly represent his views.

[2] For the sake of brevity, in this post, I avoid the discussion of real estate taxation, but any new master plan should consider a land value tax program.

[3] This is a tall order, given that the city government can’t even update its FEMA insurance flood maps since Hurricane Sandy hit in 2012.

[4] It’s not clear to me how eliminating bumper-to-bumper traffic, for example, is worse than the status quo.

by Jason Barr 4 Comments

Supertall: A Q&A Interview with Stefan Al

Jason M. Barr          August 8, 2022

Stefan Al is the author of Supertall: How the World’s Tallest Buildings Are Reshaping Our Cities and Our Lives (Norton, 2022). Al earned a Ph.D. in City and Regional Planning from the University of California, Berkeley. He is a practicing architect and has taught at Virginia Tech, Columbia University, Pratt Institute, the University of Hong Kong, and the University of Pennsylvania.

About Supertall

JB: Regarding your new book, Supertall, what is your main argument, and what are the key ideas that you want readers to come away with?

SA: By 2050, 2.5 billion more urbanites are projected to be living in cities. In addition to new housing, this urban drive will require a massive increase in city infrastructure, including roads, sidewalks, parks, and transit, as well as city sewage, water, and power lines. This is like building a new New York City every single month for the next thirty years. If we were to build sprawling Phoenixes, we would waste a lot more energy related to transportation and twenty times more environmental land. We don’t need to tread so hard across the earth if we can rise into the sky.

While high-rise living may not be for everyone, many people actually prefer being in central cities, close to offices, restaurants, and transportation hubs. High-rises can be built in these locations. The more viable urban centers we have, the less our cities have to sprawl.

Skyscraper Innovations

JB: What do you see as the key technological innovations that have allowed buildings to go taller and taller in the 21st century?

SA: With new manufacturing technology and the widespread availability of software simulations for wind and structural loads, it is becoming easier to make structures more material efficient. Structural members, like steel bars and concrete columns, used to be predominantly straight. Now, 3D printing can print materials in any shape and make custom molds for more elaborate concrete forms. Machine-aided manufacturing enables designers to bypass blueprints and communicate directly with machines, allowing more complex forms, such as curvilinear shapes optimized to reduce wind vortexes that the very tall buildings would create. With a wider palette of shapes at their disposal, engineers can also devise structures that more naturally and efficiently transfer horizontal forces to the ground. With less weight dedicated to structures, the building itself can become taller.

The Manhattan Skyline from Central Park.

Rise of Skyscraper Heights

JB: What is driving or propelling this movement toward taller and taller skyscrapers?

SA: Rapid urbanization has proved to be a major tailwind for skyscrapers, particularly in Asia. The twenty-first century is the first urban century. Never before has more than half of the world’s population lived in cities, attracted by the many and diverse opportunities of urban life. Some countries have even decided to base their national policy on the positive relationship between urbanization and economic growth. China has added roughly half a billion people to its cities. Not surprisingly, it has the world’s most skyscrapers.

JB: Relatedly, why do you think there has been a massive growth spurt in the number of skyscrapers (say buildings 150 meters or taller) around the world in the 21st century?

SA: What is surprising is that skyscrapers are even altering historic cities previously inhospitable to urban growth. For three centuries, the skyline of London was defined by St Paul’s Cathedral, with its silhouette of a dome and spires. Then, in the 2000s and 2010s, more unusual and often taller skyscrapers came in, crowding the skyline with ingenious shapes that earned them their nicknames, including the Gherkin, the Walkie-Talkie, and the Cheesegrater. In the case of London, new social preferences and the desire for economic growth helped loosen planning restrictions that new skyscrapers faced.

Skyscrapers and Cities

JB: How do you see this growth spurt as affecting cities (either for good or for bad)?

SA: Skyscrapers can have negative impacts on cities, such as increased traffic congestion, a lack of human scale, and restricted views. But with good planning, these problems can be minimized. Even more, when done well, cities can use high-rise development as an opportunity to improve the quality of life for residents. For instance, a thoughtful approach to high-rise development makes it possible to increase green areas, improve public transit, and enhance a city’s vibrancy. Singapore’s LUSH incentives, or “Landscaping for Urban Spaces and High-rises,” illustrate how policy can help promote a new generation of “green” skyscrapers, with tall buildings integrated with greenery. Hong Kong shows how to integrate subway stations in high-rise complexes, making it perhaps the world’s best example of Transit Oriented Development. And Vancouver’s “tower and townhouse” model — slim residential towers on a mixed-use podium often containing townhouses — illustrates how to minimize the impact of tall buildings on views while offering pedestrians a human-scale pedestrian experience.

Supertalls around the World. From left: Petronas Towers, Taipei 101, Burj Khalifa, Shanghai Tower.

Skyscraper Controversies

JB: Why do you think skyscrapers, especially very tall ones, have become so controversial over the last decade or so? And what might be some ways that cities can address these controversies?

SA: One of the reasons is a reaction to novelty. Very tall towers can be considered “too tall” in proportion to their surroundings. Even the Eiffel Tower, during construction in 1887, was despised by the city’s elite as “a dizzily ridiculous tower dominating Paris like a gigantic black smokestack.” The city seriously considered demolishing it and selling it as scrap metal. Gustav Eiffel himself erected an antenna and financed wireless telegraphy experiments to prove the hollow tower’s utility. With the French military recognizing the tower’s newfound usefulness, a Parisian committee with authority for the structure’s fate only reluctantly let it stand. “One would wish it were more beautiful,” the committee stated.

“Quid pro quo” is one of the lessons here. The Rockefeller Center offered New Yorkers more than a collection of tall buildings to look at but also a remarkable public plaza to enjoy. The Midtown East rezoning in Manhattan offers developers more buildable floor area if they contribute to the public good through transit improvements, such as in the case of the One Vanderbilt tower, which contributed a pedestrian plaza and transit hall.

The Future of the Skyscraper

JB: What is the future of the skyscraper?

SA: For environmental reasons alone, the way in which we design our tallest buildings has to change. Architects are bound by a kind of “Hippocratic Oath” for the public realm and environmental stewardship. Instead of just think­ing of about how to get taller-appearing structures, they should also aim to create buildings with smaller environmental footprints.

We need to recalibrate the race for the tallest building. We should aim for buildings to be the greenest, with the most landscaping, and the fewest carbon emissions. We need skyscrapers to generate the most renewable energy, produce the most food, and promote the healthiest environments for residents with the most biophilic benefits. We need tall buildings created with their entire life cycle in mind and to be disassembled in the end. We need the most resilient buildings able to withstand the ravages of climate change with not only practical design but also nods to aesthetics and beauty.

The good news is that many energy-efficient technologies and renewable-energy solutions are commercially available today and are already being applied. Renewable-energy supplies, cross-laminated timber, prefabricated modules, and super insulation are making a positive impact. Now we need a lot more. Despite advances in artificial intelligence and robotics, the built environment is still mostly a brick-and-mortar industry, capital-intensive, and locally fragmented. It tends to lag behind. The vast majority of buildings will become greener only if regulations both force and incentivize them to do so.

The Future of Cities

JB: You have a Ph.D. in City and Regional Planning and you also practice as an architect. Given your background, what do you see as the main challenges that cities face in the 21st century?

SA: Climate change, urban population growth, and housing unaffordability are already impacting city life. The challenge is how to build up our cities to house more people, how to build more sustainably and equitably, and how to build to absorb the shocks that will come from the increasing occurrence of extreme weather events such as flooding and heat waves.

Rotterdam, The Netherlands: The Dakpark (roofpark) and the shopping mall underneath were built on an obsolete railway yard.

Climate Change Adaptation

JB: You also have a book Adapting Cities to Sea Level Rise: Green and Gray Strategies. What are the key ideas in this book? Do you see cities employing the strategies in your book? If not, why not?

SA: Growing up in the Netherlands, a country that for centuries has fought the ocean, I have long admired its holistic solutions to flood protection. However, after several flooding events elsewhere, such as Hurricane Katrina in New Orleans, I witnessed the building of new sea walls that obstruct people’s views and access to the waterfront. Instead, in my book, I argue for flood protection approaches that are nature-based, integrated with the public realm, and sensitive to local conditions and the community. This way, flood protection can also benefit communities and environments in other ways.

For instance, building flood management infrastructure in urban areas can be particularly difficult in dense cities where land is scarce. Fortunately, recently several innovative solutions have addressed these problems by integrating flood solutions into the public realm and with urban uses. These include the multi-functional flood defenses in Rotterdam. The Dakpark, Dutch for “roof park,” is a dike that also includes a retail and parking structure and a park.

New York is considering several such strategies for the south of Manhattan.

♣

Continue reading other Q&A blog posts in the series here.

by Jason Barr 1 Comment

Skyscrapers and Global Connectivity: Which Causes Which?

Jason M. Barr      March 28, 2022

Today, metropolises like New York, Vancouver, and London, get a lot of flak for constructing ultra-luxury high-rise condos for international jet-setters. They seemingly have become “safe deposit boxes” for billionaires. Whether these structures are good or bad for cities is worthy of debate, but it does raise the question about skyscrapers more broadly and their role in urban growth. Why are these cities such magnets for real estate investment in the first place? Ultimately, I would argue, it’s because of the strength of their economies and their broad offerings to residents and visitors alike.

New York and Chicago’s historical skylines emerged “spontaneously” as their land values hit thresholds, incentivizing the construction of tall buildings, each of which is “merely a machine that makes the land pay.” London, which rejected skyscrapers for many decades, has recently been pulled into going tall and is now awash in Gherkins, Cheesegraters, Walkie Talkies, and Shards.

Field of Dreams

On the other hand, some cities, especially in Asia, have seemingly used skyscrapers as a so-called Field of Dreams strategy—if you build it, they will come. Arguably, this began in Kuala Lumpur, which constructed the world’s tall buildings, the Petronas Towers, in 1998, at 88 stories each (1483 ft, 452 m). The city used these record-breakers as a part of a three-prong strategy: Provide office space for Petronas, the state-owned oil company; redevelop an abandoned racetrack into a bustling neighborhood; and announce that Kuala Lumpur is “open for business.” Thus, the Petronas Towers was a direct attempt by Kuala Lumpur to join in, and benefit from, the global economy.

Dubai

Perhaps no other city has so fully embraced the skyscraper as an economic development strategy as that of Dubai. The conventional wisdom is that Dubai is an instant city and that its towers emerged overnight like mushrooms after a rainstorm. But this is not entirely true. Dubai, which came relatively late to the oil game, had invested in trade and its port since the 1950s.

Despite the perception that the Burj Khalifa is a pure “ego play,” Dubai has been building skyscrapers since the late 1970s. Its first skyscraper was the Dubai World Trade Center, modeled, in large part, after New York’s World Trade Center. Though quite diminutive compared to its New York cousin, it was the Middle East’s tallest building for many years.

In 2002, when the city allowed property ownership by non-nationals, it generated a flood of investment because of its global and urban status. The demand for luxury high-rise towers emerged from Dubai’s strong economic position and tourist and leisure opportunities.

China

Then there’s China. Since it initiated economic reforms in 1978, mainland China has embraced skyscrapers like no other country. Today, it has more tall buildings than any other nation and is home to nine of the world’s 20 tallest skyscrapers. And tall buildings do not just appear in big metropolises but in small and medium cities as well. The country’s building spree is due to its rapid urbanization and its unique governance structure, where local officials are charged with planning and building out cities in anticipation of future growth.

The development of the Pudong area in Shanghai is an example of using skyscrapers to enhance a city’s global position. By building some of the world’s tallest structures, including the Shanghai Tower (2015, 2073 ft, 632 m), the city aims to increase foreign direct investment (FDI), provide office space for international firms, and get that much closer to becoming the “Wall Street of the East.”

So, when we look at skylines around the world, we seemingly have two different models: “spontaneous eruption” versus “Field of Dreams.” Which is the actual nexus between skyscrapers and city importance? Here we focus on one key measure of urban importance: global connectivity—the degree to which each city is connected to other cities worldwide. Does global connectivity drive skyscraper construction, or does skyscraper construction drive global connectivity? And can a city leapfrog its way to the top by building a supertall skyscraper?

Skyscrapers and FDI: These four building are examples of cities using supertall skyscrapers to enhance their global positions. From Left to Right: Petronas Towers (1998), Taipei 101 (2004), Burj Khalifa (2010), Shanghai Tower (2015).

Global Cities

We can look at the Global Network Connectivity (GNC) index from the Global and World Cities (GaWC) Network to measure global connectivity. The index, which measures urban interconnectedness, was first created in 1998 and has been updated regularly.

Thus, the data measures the “centrality” or connectedness of several hundred cities to get a sense of the degree to which they linked to each other or not (see here for more details). The basic idea is to measure the importance of a city’s office-based sector by looking at the number of international business services and financial offices. The top-tier global cities will have local headquarters for international firms, while lower-tier cities will have smaller representations of foreign firms. By counting the size and importance of these business, the index measures how economically connected each city is to the rest of the world.

One key finding is that London is the global champion and has held the top position since the index was created. In 2000, the top five were London, New York, Paris, Tokyo, and Singapore. In 2020, the top five were London, New York, Hong Kong, Singapore, and Shanghai.

A Look at the Data

The first question to investigate: Are skyscraper construction and global connectivity linked? If there is little relationship between the two, it would suggest that skyscraper construction is not directly related to the economic fundamentals of a city or rather is only loosely connected. Then we might need to look for other reasons for their construction. To investigate this question, I have obtained two types of data. One is on skyscraper construction for cities worldwide, and the other is city scores from the GNC Index. (Information about data sources and preparation is here.)

Do globally connected cities tend to have more or taller skyscrapers than their less global counterparts? The answer is a definite “yes.” We see a strong positive relationship between the height of a city’s tallest building and its GNC score (see figures below). While the correlation is not perfect (ρ=0.53), it does provide evidence that, on average, more connected cities have taller buildings. Going from a city with a median GNC score to one in the top 75th percentile means, on average, a jump in its tallest building by about 37 meters (about ten floors).

What about the number of skyscrapers, where here a “skyscraper” is a building that is 90 meters or taller (295 feet, about 30 floors)? Again, we see a similar pattern: on average, around the world, skyscraper construction and global connectivity are strongly related (ρ=0.49). The data show that going from the median GNC score to the 75th percentile (about 10 GNC points) is associated, on average, with an increase of about 80% more skyscrapers.

Outliers

The graph, however, shows some interesting outliers. London, the most globally connected city, is way below the trend line for skyscraper growth and has somehow managed to get to its number one position without having a history of tall buildings like New York or Hong Kong. Two other cities stand out as interesting: Dublin and Washington DC.

However, before discussing outliers, they should be considered after “detrending”; that is, how far away from the pack they are after comparing what one expects given their global connectivity scores (see the figures below). Here we see that Dublin and Washington are, indeed, the furthest below the trend line. That is to say, the heights of their tallest building are much shorter than what would be expected. This makes sense for Washington DC since it has a height cap, where not building can be taller than the Capitol Building. Dublin refuses all tall buildings and limits its building heights to 60 meters (197 feet) in most of the city.

London

How can we explain London’s high GNC score but low skyscraper score? This question requires a fuller treatment, but the answer, I would suggest, lies in its long history regarding capitalism and the Industrial Revolution. London began its global ascent as the UK simultaneously pursued imperialization and industrialization. These two created positive feedback loops that gave London a central position in the global economy, even before skyscrapers were technologically feasible. As a result, it seems to have developed an ability to run its affairs and accommodate global investment without going tall. In addition, the City of London is less land constrained than other central business districts like Manhattan or Central in Hong Kong. Evidently, it was able to expand outward in place of building upward.

Dubai

Looking at the outside of the trend line, we see that Dubai’s “outlierness” is not as extreme as it might seem. Even though it currently holds the record for the world’s tallest building, its rank in the GNC Index is relatively high; in 2020, it was at #7 (out of 707 cities). In fact, Shenzhen and St. Petersburg have even taller buildings than their GNC index values would suggest. And the city with the highest deviation from the trend is Busan, in South Korea, which, though not highly globalized, is still an important city in that country.

Skyscraper Construction and Global Connectivity. Top Left: Scatter plot of ln(Height of Tallest Building) versus its GNC Score. Top Right: Detrended scatter plot of ln(Height) versus GNC score. Bottom Left: Scatter plot of ln(1+#Skyscrapers) versus GNC score. Bottom Right: Detrended scatter plot of  Ln(1+#Skyscrapers) versus GNC score. Sources: here.

Leapfrogging?

Returning the “Field of Dreams” theory, the question is whether constructing the world’s tallest building can leapfrog a city into global prominence. Cities jump into the world record game, in large part, to advertise and demonstrate they are open to FDI and tourism. Despite what seems an unyielding quest to have the world’s tallest building, since 1998, the record has only been beaten three times: the Petronas Towers in 1998, the Taipei 101 in 2004, and Burj Khalifa in Dubai in 2010.

The data in the GNC data set that I have goes back to 2010, making it a bit difficult to draw conclusions about the first two and whether they saw dramatic leaps in their rankings just after opening. Nonetheless, we can look at the changes in the GNC rankings since 2010 to see if there are dramatic changes. In this example, I looked at five cities. The first three are Kuala Lumpur, Dubai, and Taipei, which each have or had the world’s tallest buildings. I then added Shanghai, with East Asia’s tallest skyscraper, the Shanghai Tower (2015), and St. Petersburg, with Europe’s tallest skyscraper, the Lakhta Center (2019, 1516 ft, 462 meters).

This exercise shows that, on average, these five cities moved up in the global cities rankings between 2010 and 2020, but there were no major jumps, and each remained roughly in the same tier that it had been before. It suggests that cities can use tall buildings to make relative improvements, but in no case do any of them see massive leapfrogging.

Supertalls and GaWC/GNC Rankings. This table shows the global connectivity rankings for five cities that each have a supertall building. There is little evidence for “leapfrogging.” Sources: here.

Another statistical test is to see if a broader set of cities with very skyscrapers have witnessed dramatic leaps in their global rankings. To this end, I compared average changes in GNC scores between 2010 and 2020 for cities with the tallest building in their respective country in 2010 versus those that don’t. The statistical results suggest that countries with the tallest buildings improved global connectivity scores faster, on average by about one GNC point (results here). At a minimum, it indicates that leapfrogging is not supported, and that more subtle mechanisms are at work. A further test for GNC growth in the last three years for buildings with and without the country’s tallest shows that the non-tall group outperformed the tall group, suggesting that other factors besides tall buildings are at work.

Causality?

We still need to drill down to the causal link, however. Just because there is a correlation between global connectivity and skyscraper construction does not mean there is a causal relationship. We don’t know if, on average, global connectivity leads to more skyscrapers, more skyscrapers lead to greater global connectivity, or if the relationship is just a coincidence and driven by their connection to some other variable, such as a city’s gross domestic product.

To this end, I dug deeper into the data to see if there was evidence for a causal connection. Here, I performed a series of statistical (regression) tests to see if the two might be linked, controlling for other variables that are likely to drive each of these variables. (The data sources and regression results can be found here.)

Does Higher GNC Lead to More or Taller Skyscrapers?

In my statistical analysis, I first looked at how the height of a city’s tallest building was impacted by its global connectivity score and other control variables, including a city’s population and its gross domestic product (and other variables). The takeaway: I found that an increase in GNC score by 15 points (one standard deviation) increases the height of the tallest building by about 7%, on average. Not a large number, but, still meaningful.

A similar result was found for the number of skyscrapers. On average, after controlling for a host of other variables, including each city’s population or urban GDP, there remained a positive and statistically significant relation between the GNC score and the number of skyscrapers a city had. On average, a 15-point rise in GNC score was associated with 75% more skyscrapers, a substantial impact.

Does Skyscraper Construction Lead to More Global Connectivity?

Flipping the question: Does skyscraper construction lead to more global connectivity? Again, the answer is “yes.” Controlling for GDB and other city variables, a 10% increase in skyscraper counts, on average, increase the GNC index score by about half a point. Seemingly not a large number, but one that does suggest a connection. While estimates of the impact of a city’s tallest building vary across different regressions, the results suggest that cities with taller buildings also have higher connectivity scores.

Linkages

Based on the results of the statistical tests, what can we conclude? First, the Field of Dreams theory is not supported. Instead, emerging cities with a global presence can use skyscrapers to improve their relative global position. But they cannot turn a small, isolated village into an urban juggernaut overnight. Instead, supertalls are used to aid and abet the quest for global status, but this cannot be done without the other economic and institutional factors.

While the degree of “spontaneous eruption” across cities requires more research, we can see a positive feedback loop between skyscraper growth and economic interconnectedness. As cities become desirable places to live in work, they need to have the kinds of buildings that facilitate these activities. Tall buildings play a role in allowing providing spaces for this activity. And they also help advertise cities and build confidence in the place.

Thus the results suggest a bi-directional relationship between economic growth and the nature of its building stock. If city leaders want to increase their global competitiveness, they must aim to create policies that attract FDI and high-skilled workers and allow their real estate stocks to expand accordingly. More investment leads to taller buildings, which generates more investment, and so on.

While skyscraper construction has its share of controversy and doubters, the evidence strongly suggests that cities are better off when they allow for needed tall buildings.

by Jason Barr 2 Comments

Skyscrapers and Housing Affordability: Debunking Misconceptions

Jason M. Barr (@JasonBarrRU)            March 23, 2021

Erin go Tweet

On March 9, 2021, Professor Ronan Lyons, an economist at Trinity College Dublin, tweeted about one of my research papers on global tall building construction.[1] Dr. Lyons has 24,000 followers (two orders of magnitude more than me, but you can follow me on Twitter here). His tweet mentioned the paper’s findings for Ireland. This set off a tweetstorm, with no shortage of opinions—mostly against—about skyscrapers in ancient Dublin town. This post is my response to that tweetstorm.

The Paper

Before I get to Ireland, let us turn to the research that started the whole kerfuffle. The paper is “Cities without Skylines: Worldwide Building-height Gaps, their Determinants, and their Implications” (by Remi Jedwab, Jan Brueckner, and me). The study attempts to understand the causes and consequences of building height restrictions around the world. It is the first to measure global differences and attitudes towards tall buildings.

We estimate the degree to which skyscrapers are “missing” from every country due to stringent building height regulations. To do this, we come up with a prediction of how much building height a nation “should have” if its real estate market was relatively open, and then compare this to the actual total building height. We call the difference the “building-height gap.” Higher gaps mean more “missing” buildings, given the income levels.

No Free Lunch from the Fear of Heights

The paper shows that the building-height gap is highest for richer countries and is driven mainly by stringency in the housing sector. The evidence also suggests that wealthier countries with higher gaps have older cities and are more interested in preserving their national heritage. Just as importantly, we also find that the gaps are positively related to sprawl, air pollution, and higher housing prices. In short, we see that countries with more restrictive building height regulations are imposing a degree of economic harm on their residents. One might say that there is no free lunch from the fear of heights.

Irish Developer Johnny Ronan Seeks to Building Ireland’s First Skyscraper. The 45-storey residential tower in the Dublin docklands would be the tallest building in the country Source: The Times.

The Tweebate

When we crunched the numbers and came up with the country that had the largest height gap per million urban residents, it turned out to be Ireland, which has no skyscrapers (100 meters or taller), though one is seemingly in the works. Across the world, there is a strong correlation between national income and building heights. Richer countries build taller, on average, because they are more urbanized. However, Ireland—and Dublin, in particular—is both relatively wealthy and has robust business services and financial sectors, which tend to promote tall building construction for both office and residential purposes.[2]

Professor Ronan argued that Dublin should not be so afraid of heights if it is genuinely concerned with housing affordability. Building upper-class high-rises can help, albeit in a small way, to reduce housing prices more broadly. This comment set off a flurry of responses about tall buildings’ impacts on affordability and urban form. Common among them were the typical tropes about skyscrapers and cities. I want to take this chance to rebut some common misconceptions. It is better to do it in long-form than on Twitter with endless 280-character back-and-forth jabs—peppered with personal attacks—which I find emotionally stressful and ultimately a poor vehicle for fruitful discussion.

 

Heights versus GDP. This graphs shows a country’s total tall-building height per thousand urban residents versus its gross domestic product (on log scales). Given Ireland’s relatively large GDP, it has fewer tall buildings than expected. The line gives the average tall-building height intensity for each GDP level. Source: Jedwab, Barr and Brueckner (2020).

Revisiting the Myths

Myth #1: “Building up is pricing up”

Because skyscrapers are expensive to build and operate, people believe that, by their very nature, they increase the price of housing, or as one Tweeter put it, “building up is pricing up.” But the opposite is true. The idea that building up is pricing up confuses correlation with causation.

Skyscrapers are a response to high land values. When land is expensive, it signals that the demand for that location is high and that people are willing to pay more to be there. As a result, developers respond to the demand by building tall. A high-rise building in a low-density suburb makes no economic sense. The prices of land do not justify the expense of going tall. This is why the vast majority of tall buildings around the world are in central metropolitan areas.

Anytime a building comes online, it slightly increases the supply, which reduces prices. This impact is often hidden in large cities with relatively little new construction because the demand side–which pumps prices up–swamps the supply side. However, if you dumped many high-price units on the market at the same time, it would push prices downward. Would it reduce prices all around the city? No, but it would certainly help in, say, a one-kilometer radius around the new construction.

Myth #2: “Skyscrapers cause gentrification” 

Gentrification is caused by high demand relative to low supply. When a new high-rise goes up, it has two effects. First is the supply-side effect, which reduces neighborhood prices, ever so slightly. However, because the tall building now allows for a denser neighborhood, it increases the demand for neighborhood services, such as coffee shops and pubs, which can draw more people in, further raising real estate prices.

But in a smooth-functioning market, rising prices due to increased amenities will be met with more housing, which would reduce the number of people who feel pushed out by the neighborhood’s increased attractiveness. Gentrification is caused by frictions or barriers to new construction, including tight building regulations and high construction costs. These barriers generate “fixed-pie” neighborhoods: those who can afford it can get a slice of the pie. The rest need to go elsewhere. More housing increases the size of the pie.

Myth #3: “Hong Kong has lots of skyscrapers. Hong Kong is expensive. Therefore, skyscrapers must make Hong Kong expensive.” 

While I will have more to say about Hong Kong in a future post, the opposite of this idea is true. Hong Kong is expensive not because of its skyscrapers, but despite them. Hong Kong’s problem is due to its unique land and housing markets.

The first is land scarcity. A large swath of the city has mountainous, steep terrain and is unsuitable for building. More importantly, the government owns all the land and doles it out in varying amounts. While the precise nexus between land supply and housing supply remains debatable, developers’ ability to quickly adjust the housing stock based on demand is highly constrained.

Additionally, Hong Kong has a dual housing market, which tends to lower affordability. 45% of housing units are owned by the government. The rest is free market. This two-tiered system encourages high-prices in the free one because no one leaves the cheap public housing (once you apply, the average waiting time is 5.7 years to get a public housing apartment), forcing the rest to seek out scarce market-rate shelter.

When big cities have two-tiered systems, the lower and middle-class residents who cannot get into the subsidized units are the ones who invariably suffer. Because new construction in the unregulated sector is limited, it will mostly be dedicated to high-priced housing accessible to the upper classes, leaving the rest to bear the brunt of the shortages.

Myth # 4: “Developers want to build skyscrapers everywhere.” 

Skyscraper construction is only profitable in locations where land values and real estate prices are high enough to incentivize construction. Because of their size and their occupants—upper-income folks—they tend to be viewed as agents of income inequality and gentrification.

But in any city with many building restrictions, developers find a way to provide new housing where there are the greatest profits—in the city center. There are many low-rise, middle-income neighborhoods throughout a city where new construction at slightly higher densities—for example, replacing one-family homes with four-story apartment buildings—could be profitable. But residents do not want new construction in their neighborhoods.

They shout, “Not in my backyard!” and then complain when skyscraper developers build high-rises in other people’s backyards. If you limit construction throughout the city, skyscrapers appear in the central pockets where developers can “squeeze” them in and make money satisfying the demand. They cannot satisfy the demand elsewhere because restrictive zoning or building regulations prohibit them from doing so.

Myth #5: “Goldilocks density should be imposed throughout the city” 

Jane Jacob’s 1961 classic book, The Death and Life of Great American Cities, sparked a debate about the ideal urban neighborhood. Jacobs wrote about her Greenwich Village street in virtually utopian terms. Recent research has confirmed that dense, low-rise mixed-use neighborhoods have all sorts of desirable characteristics: They have a diversity of people and amenities, their carbon footprints are lower, and they “feel” warm and cozy. These historic, pre-automobile neighborhoods represent in the minds of many a Goldilocks neighborhood—not too hot, not too cold, but just right.

The Goldilocks supporters rail against the “plutocrat” developers destroying neighborhoods with their elitist skyscrapers. The policy implication of this view boils down to “Not in my backyard!”—preserve the historical communities in amber to keep them precisely as Jane Jacobs described them six decades ago and ban tall buildings in urban centers. In essence, take the Paris route to urban land use policy: Forbid anything that does not conform to their notion of the perfect city.

In the Balance

Do not get me wrong: I love Greenwich Village and old New York, and historical preservation is vital! But we must also recognize the costs of these positions—historic preservation limits new construction, which raises prices. Additionally, the notion that there is one ideal density that should be mandated by law is absurd.

Skyscrapers in the center represent the demand to live in dense central areas, and if people demand more density, then tall buildings fulfill a need.[3]  Areas farther out from the center should be leafier and less dense—that is the benefit of living farther away. True Goldilocks density is a moving target, and land-use policies should reflect this by being flexible.

Having said this, if New Yorkers, like Parisians, want to “vote” to preserve their city as it existed a century ago, they should be clear that they prioritize aesthetics and historic preservation over affordability and that the closed city is to be only for the rich who can buy million-dollar studio apartments in low-rise Greenwich Village and let everyone else fend for themselves.

 Myth #6: “Skyscrapers destroy the ‘human scale‘” 

The perception is that tall buildings next to low-rise buildings or tall tower-in-the-park style high-rises destroy the “feel” of the city. This is an issue, aside from the economics of housing supply, that merits serious discussion. The fundamental question we face in the 21st century is how to create cities that are both affordable and enhance life satisfaction.

Detractors of tall buildings say that towers make the city “feel cold” and dampen the vitality of the streets. True, not all tall buildings fit within the urban fabric, and glass boxes can be alienating to passersby, but two important points need to be made.

First is that human scale and quality of life are more directly harmed by dependency on automobiles. Dense urban neighborhoods are inherently more vibrant than those with, say, sprawling suburban tracts and strip malls, or big cities that build six-lane highways directly through the center. If the aim is to create more livable cities, we should focus on creating critical densities that promote diverse populations, various uses, and more mobility.

Automobiles are a bad way to move people. They take up a lot of urban land for roads, parking and storage, and they are too easily subject to congestion. Four automobiles will, optimistically, carry eight commuters during rush hour. For the same length, a bus or streetcar can carry perhaps 50 or more people. Cars also promote sprawled-out, low-rise living.

If cities are really concerned about the quality of life, the focus should be on improving non-car-based mobility among urban residents first and then allowing neighborhoods to densify up based on where people want to be. Increasing density along subway lines and commuter rails is a great way to start.

Urban Umami

Secondly, as I have argued elsewhere, if we want to improve the feel of cities, we have at our disposal new methods and technologies that allow us to better understand human preferences and the psychology of streetscapes. Once we know this, municipal regulations can incentivize good urban design—to make new construction feel less oppressive in people’s minds, and blend better with the historical urban fabric.

Imposing low-rise density in the city center is inherently exclusionary since it generates housing shortages in the name of “human scale.” We all want to live in a city that feels nice, but only the rich can build cities that uphold their notions of ideal beauty but ignore economic realities.

The Manhattan Skyline from Central Park. Photo by Jason M. Barr.

Guiding Principles

While I will have more to say in future posts about urban policies that get us to cities that are both affordable and high-quality, we need to begin by clearing away the misconceptions about tall buildings. So, at the risk of repeating myself, let me summarize.

Supply and Demand

First, real estate markets operate like all markets—according to the laws of supply and demand. The more these laws are subverted, the more they wind up harming residents, usually in the form of unaffordable housing due to excessive building regulations and other frictions. All cities need to find the right balance between regulation and growth, and the current global affordability problem is driven, in large part, by the desire to guard and preserve the present and past city against fears of the future city.

Tall Buildings are Efficient

Second, skyscrapers are built in central areas where demand for housing is high. As such, they represent an efficient use of land. The fact that skyscrapers are more visible and tend to be for upper-income residents should not distract us from the fact that more housing is needed at all income brackets and at locations where cities experience an extreme “shortage” of housing.

A look at New York, for example, shows that about 50% of the entire residential land area is currently used for one- and two-family homes. This is inefficient. We should spend less time worrying about Manhattan skyscrapers and more time getting neighborhoods with four houses per acre (10 houses per hectare) to add more units.

Skyscrapers do not Belong Everywhere

Third, skyscrapers do not belong everywhere. They are not economically rational or practical outside central areas. In suburban districts, densification should entail converting smaller buildings to those that are a bit denser. People should have the right to convert one-family housing to two- or three-family housing or convert garages to rentable apartments, for example.[4]

More housing, regardless of the occupants’ income, can help reduce the price of housing. The key is that for a city to remain affordable, it must increase its supply faster than prices rise. When this happens, housing prices moderate. Tall buildings can help, though by themselves, they are not sufficient.

Missing the Forest for the Trees

Fourth, getting angry about one high-profile project each time it crops up is missing the forest for the trees. Focusing on one building or neighborhood at a time is not only inefficient but harmful for residents more broadly. Policies need to be citywide, and they must ensure that every neighborhood gets its fair share of housing based on the demand for those neighborhoods.

Livable Cities

Fifth, livable cities must begin with sound economics. If we want livable cities, we should abide by three principles.

  • Let density naturally arise where people want to be and let mixed-uses and diversity emerge along with it. High-rises should go where high-rises should go, and low-rises should go where low-rises should go.
  • Excessive automobile dependency subverts quality of life more than tall buildings. Simply creating central-city congestion pricing is not the answer. Any transportation system needs to maximize mobility and access, including pedestrian routes and bicycle usage.
  • Modern social science methods can now be used to better understand what kinds of building and street designs make people feel more at ease and encourage people to come out onto the streets. But implementing good design practices while ignoring the economic and transportation issues is insufficient to produce better cities. If we limit new construction, we wind up getting better-designed cities for rich people.

The Future City

All cities—ancient and new alike—must find the right balance between preserving the past and promoting the future. New York is New York and Dublin is Dublin because, historically speaking, these cities had the flexibility to add housing as the demand arose. Of course, the process was messy and led to a whole suite of building regulations to slow down cities’ ability to change. That is where we are today; the result is an affordability problem. We forget that the historical city was a much more dynamic place, and this dynamism created the magical metropolises we have today. We have nothing to fear but the fear of heights.

 

Thanks to Maria Thompson for her help with proofreading editing.

—

[1] In the interest of full disclosure, Professor Lyons and I are research collaborators, though he did not work on the research paper discussed in this post. His Tweet was not discussed with me before he posted it. Professor Ronan has no relationship with Johnny Ronan, the developer proposing to build a 45-story tower in Dublin.

[2] Ireland has 4.9 million people, and the Dublin metro area has 1.23 million—nearly 20% of the population. Relative to other European nations, its urbanization rate of 63.41% is relatively low. But given its high income and Dublin’s successful economy, it under-produces tall buildings relative to similar countries.

[3] I also want to be clear that luxury high-rises should not be used by shell corporations to hide or launder money. I have written on this debate here and some policies that can address the negative externalities that might arise from billionaire condo skyscrapers.

[4] When I was in college, my friends and I rented the bottom floor of a large Victorian house near campus. Legend had it that was occupied by Vladimir Nabokov when he was teaching at Cornell. The top floor was converted to a separate two-bedroom apartment. All told, that house was able to comfortably accommodate at least six college students (and their dating partners). Today, such a conversion would be illegal in many cities and would mean that a small household living there would need to keep otherwise usable space unoccupied because the law requires it.

 

Buy the Book

Building the Skyline can be purchased through Amazon or Oxford University Press.

Credits

The New Amsterdam map on this page was sourced here, and the atlas image is from the 1891 Atlas of City of New York by GW Bromley & Co.

Website by
SQUAREWATER

Social media & sharing icons powered by UltimatelySocial