E

Density: drivers, dividends

and debates

Greg Clark

ULI Trends Conference

June 2015

Thank YouSteering 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?

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.

“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

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

Why are businesses

moving back to the

city?

Demographics and lifestyle

Transport and safety and education

Improvements

Changing Working Practices

Sustainability Concerns

Policy-driven and market incentives

(eg trade)

Technological Advances

Opportunities to collaborate

Businesses are (Re)Urbanising

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

Unlocks sites and enlarged

scale of development.

Increases connectivity and

access.

Enables mixed income and

mixed use, services multiple

functions.

Density Finances

Infrastructure.

Provides critical mass and

value creation.

Value can be captured and

reinvested.

Needs smart financial and

planning

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

What do we mean by Density? Different Definitions

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

What do we mean by Density? Net or Gross

Types of Density? All cities are different.

Source: LSE Urban Age

Medium High High

Low Medium High

Low Medium Medium

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

Doomed Density: memories, myths, and mixed feelings

“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.”

Density Myths and Memories

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

London38%

Barcelona9%Paris

13%

Copenhagen7%

Berlin5%

Amsterdam4%

Frankfurt4%

Other20%

Which City in Europe Has Dealt Best With Density?

‘Good’ vs ‘Bad’ Density

Hong Kong11%

New York20%

Singapore31%

Tokyo7%

Vancouver6%

Boston3%

Chicago4%

Other18%

Which City Elsewhere in the World Has Best Dealt With Density?

The Evidence

-15

-10

-5

0

5

10

15

Atlanta Barcelona Hamburg Mexico City Oslo Paris Seoul Singapore Toronto ViennaRan

k

Environment and Natural Hazards Innovation Liveability

Productivity Public Services Crime

Congestion Pollution Density

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

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.”

Michael Spies, Senior

Managing Director, Tishman

Speyer.

“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.”

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 ondemonstration projects, public education and the trainingof development professionals associated with density. Itis clear that density is, in most cases, the best way toaccommodate economic change and population growthproviding the optimal returns for society and environmentwhilst also creating value that can be captured andshared, and making our cities more flexible. But theworld does not yet know how important densification is orhow it can best be achieved. Therefore we must commitourselves to meeting this gap in knowledge and skillsand to a new generation of advocacy, education, andinspiration about density.

Lisette van Doorn, Chief Executive, ULI Europe

Thank you!

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