Metro miserablists

Two new top-level reports only seem to see the downsides to life in a big city.

What future for the world’s cities? Society’s pessimists have long regarded urbanisation as a source of environmental problems, and, in the third world, of overpopulation. But now that projections of future world population have been reduced, there are new sources of worry.

After 11 September 2001, the terrorist’s preference for bringing death and destruction to built-up areas made many governments pause. There was talk of central governments relocating major national facilities – civil service headquarters, power stations, military bases – away from urban population centres. As a University of North Texas professor told the American Real Estate Society last year: ‘The concept that real estate is a long-term investment with a sense of permanence and safety has been altered.’ (1)

State of the World’s Cities, a new report from the UN Human Settlements Programme, is also gloomy about the future of cities. And while the UN is concerned about third world cities in particular, the International Monetary Fund’s (IMF) September 2004 edition of its World Economic Outlook bulletin issues a special alarm about what it calls ‘the global house price boom’ in the world’s industrialised countries. Given the predominantly urban location of dwellings in those countries, the IMF’s warning effectively stigmatises Western housing and cities with it.

The UN’s three complaints about cities

Cities are where most of the world’s transport infrastructure is concentrated; cities are still the places where the world holds its ever more massive Olympic Games. State of the World’s Cities notes that between 2000 and 2030 the world’s urban population will grow from 2.86billion to 4.98billion (2). But that makes the UN worried on three fronts.

First, globalisation and the spread of IT apparently mean that we have moved into a more decentralised world – one of ‘metropolitanisation’, in which we face the ‘abolition of distance’ (3). In this framework, cities expand along major transport arteries, polycentric urban areas develop, and ‘related management problems’ accumulate (4).

Ever since the Spanish urban expert Manuel Castells first pioneered the idea of the new city as a space structured by flows of information, the feeling has grown that globalisation and IT have subverted the traditional city (5). At a September 2004 seminar on the future of UK and Japanese cities held at the Daiwa Foundation, London, a packed audience heard that the modern city has become both too large and too small for today’s political administrations to govern – whether at local or at national level (6). Similarly, the UN seems to see the city as one elongated reservoir of poverty, drugs, illegal weapons, crimes by 10 year-olds, evictions preceded by rapes, and corruption (7). It regards the running of such an unwieldy, unwholesome enterprise as deeply problematical.

The second bad rap handed out by State of the World’s Cities surrounds the spread of migrant workers and asylum seekers. Of course, the UN also feels the need to put a touchy-feely gloss on international migration and follow the trendy conventional wisdom of the US professor Richard Florida – that multi-ethnic ‘cultural industries’ can benefit urban development (8). UN secretary general Kofi Annan argues: ‘we need to plan for cities of difference, and capitalise on the benefits of multicultural existence.’ (9)

However, the UN’s multicultural hopes are thwarted by its basic political economy. For it, the global diffusion of IT leads to a ‘common outcome: fear/suspicion of “other cultures”’ (10). Even more sheepishly, it admits: ‘Although immigrants and ethnic minorities achieve recognition for infusing new music and foods [sic] within urban culture, employers, the police and the broader public are often all too ready to turn against them.’ (11)

Because the UN knows that ethnic rhythms and ethnic dishes don’t always endear migrants to locals, State of the World’s Cities is interested not so much in the pressing need to fight poverty by creating wealth, but rather in something else: ‘the need for an urban culture of inclusion.’ (12)

The UN is insouciant, if not downright ignorant, about the contribution that factory, transport and architectural engineering, and indeed IT, could make to improving urban development. Rather, it wants more social engineering on behalf of minorities, which it sees as predicated on the fight against corruption, the fight for ‘transparency’, and what it calls the ‘globalisation of norms of good urban governance’ (13).

Third world cities are not just held to stink of racism and corruption, but also of disease. In sub-Saharan Africa, the UN report laments, ‘slum women are less likely to practice abstinence, stick to one partner or use condoms’ (14). If cities aren’t being associated with promiscuity here, they are certainly being associated with infection.

That is the stark, disdainful prejudice behind all the hip hopefulness about urban regeneration through cultural industries.

The UN also notes that cities are destinations for the rural poor of South Asia, the Middle East and Africa. But the UN concedes that cities, especially in the Asia-Pacific region, remain sites for the creation of wealth.

Of course, we do not need to be sentimental about the future of cities. In an era of renewed globalisation and spreading broadband telecommunications based on Internet Protocols, there is no long-term guarantee that the city will be the onlypreferred destination of the world’s blueprints for products and buildings, just as there is no special reason why it will be the eternal location for the development of new services, software, or call centres.

It is, however, quite another thing to see third world cities as cesspits relieved only by the occasional ethnic tune or spicy flavour. Anti-Westernism seems to know no bounds among enlightened policymakers. That is why the IMF believes that cities in the industrialised West have caught another kind of international virus – house price inflation.

The IMF isolates a new world virus: house price inflation

One merit of the IMF’s World Economic Outlook, published in September, is the way it highlights how money has moved into housing as a result of a much wider and deeper sclerosis in Western capitalism. The IMF writes: ‘despite the bursting of the information technology bubble and subsequent global downturn, the momentum of the housing boom has continued almost unabated. This boom has been associated with a very dynamic housing market and record-high levels of mortgage debt. The strength of the housing market has played an important role in supporting [general economic] activity during and after the downturn.’ (15)

In a similarly sober moment, the IMF notes: ‘Housing activities account for a large fraction of GDP and households’ expenditures in industrial countries. Housing is the main asset and mortgage debt, the main liability held by households in these countries, and therefore large house price movements, by affecting households’ net wealth and their capacity to borrow and spend, have important economic implications.’ (16)

Apparently these ‘important economic implications’ of house price movements are greatest in Australia, Ireland, Spain and the UK – countries in which the price of housing has gone up by 50 per cent or more since 1997 (17). In Japan, too, mortgage loans as a fraction of GDP have moved from 5.6 per cent in 1970 to 36.5 per cent in 2003 (18). Across the whole industrialised world, in fact, prices have continued to rise since the mid-1990s. Yet as the IMF notes, that inflation has occurred while Western economic activity – in terms of both output per head and in terms of consumption – has weakened by comparison (19).

The IMF believes that the boom in house prices is now an internationally synchronised phenomenon (20). Indeed, the Fund has discovered what it calls ‘the global housing factor’, which, it says, captures ‘global shocks’ to housing markets, explains no less than 25 per cent of the industrialised world’s house price movements, and accounts for no less than 70 per cent of UK and US house price inflation (21). For IMF beancounters, Britain’s backward housebuilding techniques and outdated planning restrictions have nothing to do with the difficulty of affording a home today. The mysterious global housing factor is the origin of our plight.

Most ominously of all, the IMF warns: ‘just as the upswing in house prices has been mostly a global phenomenon, it is likely that any downturn would also be highly synchronised, with corresponding implications for global economic activity.’ (22)

At times the IMF seems intent on creating a panic about houses before a genuine crash is in sight. However the city is not just a site for nervous homeowners and tenants, or for the nightmares of anxious international institutions. Nor, we might add, is the city just a playground for marketing experts and graphic designers: people who hope to revive Manchester, for instance, not so much with landmark buildings as with the ‘core brand values’ of…‘original and modern’ (23).

No. This city is also the main place where a major industry – construction – does its work.

A real cultural need: capital-intensive construction

For the present, at least, Foreign Direct Investment (FDI) and Research & Development (R&D) still tend to cluster around cities. Yet the striking thing about the firms that build the world’s cities is that they are weak in both FDI and R&D (24). The international construction industry is not very international, and not really an industry. With the exception of some Japanese factories, nearly all the world’s homes and workplaces are built in the mud and the rain – built on-site, by local firms.

Organised with the help of the new telecommunications, China’s factories could change all that (25). Indeed, while Western politicians now try to cover their backs by attacking local housebuilders for their high costs and backward techniques, they have already begun to look abroad for suppliers of homes (26). They coquette, too, with the idea of constructing houses with mass-production technology (27).

The pace with which the new possibilities are being recognised is still grindingly slow. Yet Asian costs, and Asian abilities to turn Western computer-aided designs into finished mass-manufactured homes, promise a radical improvement in how we go about building cities.

Uniquely, we may now be able to master the massive challenge of twenty-first century urbanisation with the help of a new kind of construction industry: global, capital-intensive, and based on robots, flexible manufacturing systems, Internet Protocols, and the most advanced kinds of machinery.

That’s the kind of ‘culture’ the world desperately requires. It’s also one of which both the UN and the IMF seem startlingly unaware.

Footnotes and references

(1) John Baen, ‘The implications of September 11, 2001 and terrorism on international urban form and various classes of real estate’, paper presented for the American Real Estate Society, Monterey, California, April 2003
(2) UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004. Feature articles and a slide show based on this report are available on the UN-HABITAT website
(3) Slide 12, on UN-HABITAT website
(4) Anna Kajumulo Tibaijuka, Executive Director, UN-Habitat, ‘Introduction’, UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004, available on the UN-HABITAT website
(5) See Manuel Castells, ‘High technology, economic restructuring, and the urban regional process in the United States’, in Manuel Castells, ed, High technology, space and society, Sage, 1985
(6) Seminar on Urban Renaissance, Daiwa Anglo-Japanese Foundation, London, 22 September 2004
(7) Slide 16, on UN-HABITAT website; ‘Crimes of the Child’ and Rasna Warah, ‘Ticking time-bombs: low-income settlements’, both in UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004, available on the UN-HABITAT website
(8) Richard Florida, The rise of the creative class – and how it’s transforming work, leisure, community and everyday life, Basic Books, 2002
(9) Kofi Annan, ‘Foreword’, UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004, available on the UN-HABITAT website
(10) Slide 5, UN-HABITAT website
(11) ‘General overview’, UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004, available on the UN-HABITAT website
(12) Anna Kajumulo Tibaijuka, Executive Director, UN-Habitat, ‘Introduction’, UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004, available on the UN-HABITAT website
(13) Anna Kajumulo Tibaijuka, Executive Director, UN-Habitat, ‘Introduction’, UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004, available on the UN-HABITAT website 

(14) ‘Women hurting more than men’, UN-Habitat (UN Human Settlements Programme), State of the World’s Cities 2004/2005: Globalization and Urban Culture, September 2004, available on the UN-HABITAT website
(15) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, p79
(16) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, p88
(17) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, p72
(18) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, p72
(19) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, Table 2.1, p73
(20) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, p78 and Table 2.3, p79
(21) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, pp79 and 84
(22) World Economic Outlook: The Global Demographic Transition, International Monetary Fund, September 2004, Chapter 2, pp84-5
(23) Manchester city creative director Peter Saville, quoted in William Hall, ‘Aiming to unlock Manchester’s “big idea”’, Financial Times, 5 October 2004
(24) On the construction industry’s weak performance in globalisation, see James Woudhuysen and Ian Abley, Why is construction so backward?, Wiley, 2004. For its poor performance in R&D, see David Pearce, The Social and Economic Value of Construction, May 2004, Table 7.2, ‘Construction R&D as a proportion of construction output 1999’, p52, available on nCRISP news
(25) James Woudhuysen and Ian Abley, ‘Homes 2016’, special Broadside pamphlet published with Blueprint magazine, September 2004
(26) For the timely exasperation felt by UK Deputy Prime Minister John Prescott, see Roger Blitz and Maija Pesola, ‘Prescott lambasts housebuilders over cost of “affordable” homes’, Financial Times, 23 September 2004, and Roger Blitz, ‘Continental builders to bid for contracts’, Financial Times, 29 September 2004
(27) For John Prescott’s dalliance with off-site manufacture, see Why is construction so backward?, by James Woudhuysen