Density: drivers, dividends and debates Greg Clark ULI Trends Conference June 2015

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Thank You Steering Committee Interviewees Survey respondents ULI Team ULI Charitable Trust

“The efficient, effective and responsible use of land is a goal that would be a win-win for all cities, their businesses and their citizens: the key question though is how cities can achieve this while quickly absorbing the significant increases in population that are flowing from the world’s continuing rapid urbanisation. Densification may be an obvious answer, but how to deliver successful densification is not so obvious and is one of the most important topics of this urban decade. Good density will mark out the next generation of winning cities.” Rosemary Feenan, Director of Global Research, JLL, and Chair, ULI Europe Policy & Practice

The Issue: Accommodating Population Growth and Economic Change. The main options. Allow Cities to Sprawl The world has turned against sprawl in theory.

It is too expensive in social , environmental, and public finance terms. But many cities continue to sprawl. People no longer want to do long commutes.

Build New Cities / Districts This is part of what is needed. In Middle East and China New Cities are emerging. But existing cities are key to accommodating most growth. Contain sunk investments and least mobile populations

Densify Existing Cities

Densifying existing cities appears to offer the best economic, social, and environmental returns for the least cost. Compact and polycentric cities can accommodate growth more quickly and flexibly. They also had greater long term flexibility.

The Density Diagram

The competitive advantage of density? “Most people do not understand that in certain situations density can be a wonderful thing. The concepts of density meaning proximity and convenience are not understood at all. Most people identify density with cramped spaces, a lack of greenery, and inconvenience. Education would be very helpful.” Dr Karima Nigmatulina, Executive Director, Master Planning Institute, Moscow

As the world get more urban and more dense human societies learn how to change and adapt. The societies that adapt to density fastest and most effectively will have an advantage. People in China have quickly become used to less personal space and to bumping into each other, they have adjusted quickly to density’. Sir Terry Farrell, Urbanist.

Drivers of Density “Sustainability is an important driver of density. Densification and more intense use of land produces buildings and infrastructure that are more energy efficient. Ultimately sustainable and denser buildings will provide a premium return and more affordable energy” Patrick Kanters, Managing Director Global Real Estate & Infrastructure, APG Asset Management “The densified city will produce a more liveable and sustainable reality that addresses the polarisation of income by providing shared amenities and spaces between people. Densification is the physical manifestation of the sharing economy.” Michael Spies, Senior Managing Director, Europe and India, Chair of Investment Committee London “It is not just urban population growth, but also smaller family units that is driving the need for denser cities and urban districts” Paul Lecroart, Senior Urban Planner, Paris Region “Employers who are looking to hire will always follow the talent. An out of town business park isn’t going to attract the best talent today. People want to be in lively and vibrant places, both at work and after work. This drives an intensification of urban centres.” Benjamin Lesser, Derwent plc

Businesses are (Re)Urbanising

Opportunities to collaborate Demographics and lifestyle

Technological Advances

Transport and safety and education Improvements

Why are businesses moving back to the city?

Policy-driven and market incentives (eg trade)

Sustainability Concerns

Changing Working Practices

The term ‘density’ is related to many other terms that have distinctive meanings.

Density and Capital There is no doubt that the increasing importance of global flows of capital, people and information, and the nature of the city as a hub of investment of relatively few global players, has created an imperative in favour of densification. On the whole global capital investment opportunities flow to places which are accessible and visible – dense cities are these type of places. Prof Ricky Burdett, Professor of Urban Studies, Director, LSE Cities and Urban Age, London School of Economics and Political Science

“Capital facilitates ambition and aspiration in cities, it does not drive density but enables it. In the past capital sometimes got it wrong and invested in dense projects that failed before they came good due to poor planning, lack of infrastructure and facilities. Today, capital is not so stupid.” Andy Martin, Senior Partner, Strutt & Parker “Capital markets reward density with large scale investments. They like the scale and the pace of dense projects. They can exit sooner. The availability of large pools of capital that seek large, unified, and faster investment projects incentivises and stimulates density.” Chris Frampton, Managing Partner, East West Partners

Density and Infrastructure

Infrastructure Drives Densification

Density Finances Infrastructure.

Unlocks sites and enlarged scale of development.

Provides critical mass and value creation.

Increases connectivity and access.

Value can be captured and reinvested.

Enables mixed income and mixed use, services multiple functions.

Needs smart financial and planning

What do we mean by Density? Different Definitions

Figure 1: Variation in population density statistics (number of people / Km2)

What do we mean by Density? Net or Gross

Figure 2: Graph showing net vs gross residential development calculations for seven cities

Types of Density? All cities are different.

Low Medium High

Medium High High

Low Medium Medium

Source: LSE Urban Age

Defining density: Toronto – A “Low-Low-High” city

Doomed Density: memories, myths, and mixed feelings

Density Myths and Memories “Density is always about crowding poor people together.” “High density buildings attract crime.”

“Cities that become more dense lose individuality.” “People don’t want to live in high density buildings.” “You cannot combine low density and high density areas successfully within one city.” “Density always involves loss of privacy.”

“High density means high rise.”

Good or Bad Density? What have we learned? Bad Density

 Mono use  Mono income, age, ethnic  Fast and unplanned  Lacks infrastructure  No adaptability  No space  Inappropriate to context  Low design / ugly

Good density        

Mixed Use Mixed income, age, ethnicity Incremental pace Infrastructure Flexible Open Space Between the buildings Amenities

‘Good’

vs ‘Bad’ Density Which City in Europe Has Dealt Best With Density? Other 20%

London 38% Frankfurt 4% Amsterdam 4%

Berlin 5%

Copenhagen 7%

Paris 13%

Barcelona 9%

‘Good’ vs ‘Bad’ Density Which City Elsewhere in the World Has Best Dealt With Density? Other 18%

Hong Kong 11%

Chicago 4%

New York 20%

Boston 3%

Vancouver 6%

Tokyo 7%

Singapore 31%

The Evidence

‘Good’ vs ‘Bad’ Density: 10 case study cities 15

10

Rank

5

0 Atlanta

Barcelona

Hamburg

Mexico City

Oslo

Paris

Seoul

-5

-10

-15 Environment and Natural Hazards

Innovation

Liveability

Productivity

Public Services

Crime

Congestion

Pollution

Density

Singapore

Toronto

Vienna

Density and Liveability

Density: dividends for the economy, society and the environment

“By the late 70s and early 80s the world seemed convinced of the merits of high density development, and Hong Kong made an important contribution to this debate – showing that high density urban development could be successful with proper planning and efficient urban management. I am surprised that the density debate is still continuing!” - KK Ling, Director of Planning, Hong Kong Government

Density: dividends for the economy, society and the environment

Relationship between petrol use and density

Density Dividends

Why are European cities becoming more dense?

Density Dividends

Which of the following do you think is the strongest argument for increasing urban density?

Density Dividends

ULI members’ responses to the survey question “Which of the following do you think is the most important reason for people resisting density?

Who needs to lead the Density debate?

Three big challenges Despite the changing the attitudes to density, sprawl is still the dominant model of urbanisation. • Density and affordability. • Density and segregation. • Density and democracy.

“It is difficult to plan effectively for growth in a democracy which prioritises current preferences over future needs. Political process is always more attuned to those who have been here, versus those who would like to be, or those who have not yet arrived.”

“When given a choice, people make trade-offs between higher density and access to jobs and services like schools, hospitals and leisure facilities. Overcrowding within residential units affects attitudes towards neighbourhood density.”

Michael Spies, Senior Managing Director, Tishman Speyer.

Prof Ricky Burdett, Professor of Urban Studies, Director, LSE Cities

An agenda for advocacy, demonstration, and public education. i. Increase evaluation of city densities across the world and catalogue the ingredients of success. ii. Identify whether a global density benchmark can be developed to protect land from urban sprawl. iii. The training of planners, urbanists, to be bolder and more effective in planning for density. iv. Support for city leaders to learn how to promote density. v. Mount and disseminate demonstration initiatives that reveal how density works for liveability. vi. Support for long term planning that delivers for the future citizens and not just for the present preferences.

The Quest for Density

More than anything we need a renewed focus on demonstration projects, public education and the training of development professionals associated with density. It is clear that density is, in most cases, the best way to accommodate economic change and population growth providing the optimal returns for society and environment whilst also creating value that can be captured and shared, and making our cities more flexible. But the world does not yet know how important densification is or how it can best be achieved. Therefore we must commit ourselves to meeting this gap in knowledge and skills and to a new generation of advocacy, education, and inspiration about density. Lisette van Doorn, Chief Executive, ULI Europe

Thank you!

http://europe.uli.org/research/density/