Thank you, again Alicia. Your writing and insights are “of course, so why not”. I’ve chewed on these exact issues my whole career. One rationale (or excuse, depending on where you sit in the deal) has been that large aggregated developments are simply a result of “economies of scale” surrounding the transaction costs - entitlement, financing,… two things: 1.) the development frameworks you describe have been rejected by developers and financial institutions in defense if the higher margins larger scale development enables, it’s a matter of disciplined governance; and 2.) is this an opportunity for AI to squash these (prohibitive) transaction costs to remove that market obstacle from the math?
Thanks for your comment, Paul. Yes, absolutely, economies of scale often push toward consolidation, but there’s also fragility and weakness, too. It limits development to large, institutional developers capable of large projects, and excludes small developers. And large assets then have the continued burden of having to be recapitalized at the scale over their life.
Yes, I think AI will reduce the complexity of coordination, making it easier to do proformas and development work. But I think the main thing is that financing needs to be restructured to reward banks for lending to developments that are subdivided into multiple parcels. That is something that we can do now, and that would do tremendous good.
Legalizing point access and normalizing zero lot line conditions also key here.
Very interesting. I've been to Wisconsin Dells and I'm a little obsessed with European-style urbanism, but I had never noticed the similarity. So many people love the water parks at the Dells even when they're too old or too stodgy to want to go on the rides, and yeah I think this is part of why. Good stuff, thanks!
My kids LOVE Mt. Olympus, and I always crack up at the Greco-Roman mixed-use urbanism themes at Hotel Rome and in the the waterpark. It’s super cute, but funny.
Fascinating, Disney doing traditional urbanism in France. I heard they are also doing communities in the US but more suburban style.
Since you are probing more into the conditions that lead to Hausmann style buildings, I highly recommend Gevorg Yeghigyan's post on substack, The Capital Stack That Built The City. First time I've seen anyone include how different inheritance customs/laws play a role in whether row houses or apartments are the dominant form in a city. He is attempting a "theory of everything" so I'm sure people can find holes and exceptions but it's worth a read.
“we cannot infer genuine preference from a market in which the alternatives are largely unavailable” - very true, and an argument we make in the UK and Ireland, too. Holiday destinations are valid statements of preference, too: people flocking in their millions to inspiring, walkable historic cities.
Very well done, Alicia. I especially enjoy learning about the financing and parcelization system from Paris.
Occurs to me another interesting example for you to look at is how Warsaw, Poland rebuilt the Stare Miasto (Old town) post - WWII. It’s the one section of the city that retains the historic pattern and grandeur. But something like 95% of the city had been destroyed in the war.
Thank you, again Alicia. Your writing and insights are “of course, so why not”. I’ve chewed on these exact issues my whole career. One rationale (or excuse, depending on where you sit in the deal) has been that large aggregated developments are simply a result of “economies of scale” surrounding the transaction costs - entitlement, financing,… two things: 1.) the development frameworks you describe have been rejected by developers and financial institutions in defense if the higher margins larger scale development enables, it’s a matter of disciplined governance; and 2.) is this an opportunity for AI to squash these (prohibitive) transaction costs to remove that market obstacle from the math?
Thanks for your comment, Paul. Yes, absolutely, economies of scale often push toward consolidation, but there’s also fragility and weakness, too. It limits development to large, institutional developers capable of large projects, and excludes small developers. And large assets then have the continued burden of having to be recapitalized at the scale over their life.
Yes, I think AI will reduce the complexity of coordination, making it easier to do proformas and development work. But I think the main thing is that financing needs to be restructured to reward banks for lending to developments that are subdivided into multiple parcels. That is something that we can do now, and that would do tremendous good.
Legalizing point access and normalizing zero lot line conditions also key here.
Very interesting. I've been to Wisconsin Dells and I'm a little obsessed with European-style urbanism, but I had never noticed the similarity. So many people love the water parks at the Dells even when they're too old or too stodgy to want to go on the rides, and yeah I think this is part of why. Good stuff, thanks!
My kids LOVE Mt. Olympus, and I always crack up at the Greco-Roman mixed-use urbanism themes at Hotel Rome and in the the waterpark. It’s super cute, but funny.
Fascinating, Disney doing traditional urbanism in France. I heard they are also doing communities in the US but more suburban style.
Since you are probing more into the conditions that lead to Hausmann style buildings, I highly recommend Gevorg Yeghigyan's post on substack, The Capital Stack That Built The City. First time I've seen anyone include how different inheritance customs/laws play a role in whether row houses or apartments are the dominant form in a city. He is attempting a "theory of everything" so I'm sure people can find holes and exceptions but it's worth a read.
I KNOW — it’s wild. I would love to see a municipality contract with them to do an urban development.
Thanks for the recommendation. Sounds super interesting and I will check out. Theories of everything are fun even when they’re full of holes.
“we cannot infer genuine preference from a market in which the alternatives are largely unavailable” - very true, and an argument we make in the UK and Ireland, too. Holiday destinations are valid statements of preference, too: people flocking in their millions to inspiring, walkable historic cities.
Very well done, Alicia. I especially enjoy learning about the financing and parcelization system from Paris.
Occurs to me another interesting example for you to look at is how Warsaw, Poland rebuilt the Stare Miasto (Old town) post - WWII. It’s the one section of the city that retains the historic pattern and grandeur. But something like 95% of the city had been destroyed in the war.