The world is in the midst of a city-building boom

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The world is in the midst of a city-building boom

The Economist | March 7, 2024

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Firms and governments are planning more settlements than at any time in the post-war period, with many already under construction. Ninety-one cities have been announced in the past decade, with 15 in the past year alone.  And it is not just emerging economies that are building.

Since companies move closer to their customers and people closer to their jobs, growing cities beget economic growth. Economists think that doubling a city’s population provides a boost to productivity of 2-5%. Given both the pressing need for new urban areas and the constraints on physical growth in existing ones, starting afresh is sometimes a shrewd decision.

In much of the poor world, land disputes, shantytowns and poor infrastructure choke development. The problem will worsen as urban areas swell by an extra 2.5bn inhabitants by 2050, according to projections by the United Nations, with the new urbanites appearing in regions where cities are already under extreme stress. Builders hope that new metropolises will help relieve the pressure. 

The developer is promoting high-density neighbourhoods in which residents can reach schools, jobs and shops without a car. Today’s city-builders have decided that walkability—or what is sometimes called a “15-minute city”—is a crucial selling point.

In addition to private, governments also want to experiment. Abundant capital and low interest rates in the 2010s allowed politicians to borrow cheaply. Although rates are now higher, enthusiasm for building remains, as countries copy one another. Leaders are keen on using state finances to reshape domestic economies—and believe that new cities will help.

How many of these cities will prosper? Some infrastructure, such as electricity, internet and roads, must be in place before the first resident arrives, which means that upfront costs can be staggeringly large.  But enthusiasm, and money, can run out; grandiose projects can become white elephants.

History points to characteristics shared by successful projects. State institutions can help anchor cities, as Brasília (in Brazil) and Chandigarh (in India) showed in the 20th century. Although both have had problems, people in Brazil and India are voting with their feet. Brasília’s population is growing at 1.2% a year, more than double the national average. Chandigarh, a state capital, is now India’s fourth-richest region on a per-person basis.

The future is less certain for cities that cannot rely on taxpayers to provide jobs and pay the bills.

3 kety takeaways from the article

1. Firms and governments are planning more settlements than at any time in the post-war period, with many already under construction. Ninety-one cities have been announced in the past decade, with 15 in the past year alone. And it is not just emerging economies that are building.
2. The developer is promoting high-density neighbourhoods in which residents can reach schools, jobs and shops without a car. Today’s city-builders have decided that walkability—or what is sometimes called a “15-minute city”—is a crucial selling point.  In addition to private, governments also want to experiment.
3. How many of these cities will prosper? Some infrastructure, such as electricity, internet and roads, must be in place before the first resident arrives, which means that upfront costs can be staggeringly large.  But enthusiasm, and money, can run out; grandiose projects can become white elephants.  The future is less certain for cities that cannot rely on taxpayers to provide jobs and pay the bills.

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Topics:  Cities, Development, Economies