Revisiting Two Forces of Modern Urban Transformation


Few factors have had a greater impact on recent urban growth than communications technology (ICT) and property investment strategies. The evolution of both is transforming space and social interaction at an unprecedented pace and depth, with mixed results. As these maturing forces are increasingly taken for granted, the next generation of urban growth should accommodate them in ways that preserve urban vitality and citizen livelihoods.

The jetpack that wasn’t

The impacts of ICT on urban life have been examined primarily in two realms: government operations and citizen-user lifestyles. With several decades of modern technology absorbed into urban life, it is now possible to longitudinally examine the impacts of ICT in both its functional and social dimensions.

In the mid-20th century, simple technologies supported the minutiae of city operations in ways that now seem mundane: stoplight sequencing, emergency response, utilities management, etc. After decades of innovation, technology is now a broader and more integral part of urban governance, from design to operations. For example, ICT’s value in aiding growth projection continues to be explored through highly sophisticated systems such as UrbanSim, which is being used by several cities around the world. What was once the concern only of technocrats – and the muse of Popular Science magazine – is now the recipient of large budget appropriations and a common topic for discussions about inter-urban competitiveness.   

Beyond operations, ICT has also restructured urban social interaction in both planned and unexpected ways; these are expressed in particular through changes in the physical environment. One example is the book retail industry, for which virtual markets have caused catastrophic impacts. For example, Barnes and Noble provided proxy community gathering spaces where people of varying ages and interests interacted. Aimless and leisurely perusing created a shared atmosphere of curiosity and exploration. However, many such stores are now bankrupt, replaced by an online shopping medium that eliminates the need for face-to-face interaction. A vestige of community life may have perished as a result.

Urban planners should be concerned about the socio-physical impacts of these transformations. As society withdraws into virtual realms, ICT exerts both convergent and divergent effects. The former allows people in dispersed locations to rally around a common interest, political cause, or commercial pursuit. It bridges cultures and geographies, and “flattens” the world in ways already amply studied. At the same time, ICT can splinter interests and fragment shared identities. There is little consensus about this matter, with some studies arguing that online media diminishes social skills and increases isolation, and others arguing that it has a positive correlation with “civic engagement” and tightens familial ties. Regardless, as social and commercial activity is virtualized there remains the chance that that place-based affinities – expressed, for example, by patronage of local enterprises – will gradually erode. Despite their virtues, “online communities” are still fundamentally a-spatial constructs. What is begun there often must be executed in person, underscoring the continued relevance of public space.

The long-term transformative effects of ICT cannot yet be fully appraised in part because technology uptake is rapid and unpredictable. Nevertheless, in one aspect – urban design – a synergy has emerged between bricks-and-mortar merchants and planners, in reaction to virtualization. Their complementary efforts, when successful, imbue commercial space with interaction-based vitality. The human instinct for sociability further supports these efforts, evidence that there is no substitute for many of the benefits cities offer. Lives are arguably better in proximity, a point supported by decades of agglomeration and anthropological research. The challenge for planners, therefore, is to create space for meaningful experiences inimitable in the virtual realm.

The masters of the neighborhood

Modernized property investment models predate ICT, but have imposed similarly transformative impacts on urban growth. 20th century efforts to generate vibrant commercial and residential spaces have a chequered history: suburban malls of the 1960s, festival marketplaces of the 1980s, and live-work-play new urbanist developments of the pre-recession 2000s. These development strategies exhibit the prevailing commercial and social trends of the time: white-flight suburbanization, urban core revitalization, and densified brownfield redevelopment.

More importantly, property development in its various forms is a product of the global investment climate. Susan Fainstein argues that emotion, shoddy research, and availability of (other people’s) money have fuelled unsuccessful investments that ultimately destabilised property markets. Development capital – particularly for large projects that can redefine an entire urban core – is increasingly sourced from institutional investors who arguably have little stake beyond financial returns. For example, Turkey has recently announced plans to facilitate international investment in its domestic property markets, and investment in Indian property by private equity firms has risen sharply in 2015. These types of developments range from business and technology parks to vast urban retail and residential complexes.

Additionally, the behavior of investors can influence the nature of such development. Stock investment strategies increasingly favor the short-run – “in and out quickly” – over the long-run (“blue-chips”). Translated into property investment, this strategy attracts capital to projects with quick returns but poor long-run viability. The immediacy of funding is commercially alluring, but rapid flight of capital can be devastating for neighborhoods. For example, the mortgage crisis illustrated the risk of designing property investment models like those for intangible (and liquid) assets such as stocks. Rapid divestment of investment shares and properties – in panicked response to market signals – elevates natural cycles into manic booms and catastrophic busts.

Cases like this illustrate how urban growth is impacted not only by the characteristics of financial institutions, but also by the eminently human irrationalities that distort their function. The city becomes less a product of local market demand than of the financial ambitions and risk preferences of absentee investors. These global prospectors often have little contextual knowledge of projects and even less interest in their social impacts. This investment approach may work for stocks, but not for property developments – particularly those that support urban growth and generate economically sustainable neighborhoods.

Citizens as social investors

Both technology and investment patterns have been enablers of growth strategies that serve interests beyond local livelihoods. This tension tests the power and will of urban governments to interpret global trends – including those of ICT and capital markets – in ways that enhance local livability and equity. It is therefore incumbent on planners to reconcile the vicissitudes of technological and financial change with the exigencies of authentic and inclusive urban growth. Moreover, a city is not merely a product of planning; it is the embodiment of resident priorities.

Authentic urban transformation relies more on citizen initiative than the influence of global capital, and may be facilitated by ICT but not defined by it; this can be seen in the quiet regeneration of urban neighborhoods. Global capital may underwrite loans for acquiring properties and developing land, decisions in such neighborhoods are often made locally and in the type of fragmented manner that generates a bricolage of uses and styles. Examples in the United States include East Nashville, Kansas City’s Crossroads district, and Oakland’s foodie Temescal and KoNo districts. None displays the architectural shock-and-awe of emerging global mega-cities, but each embodies a citizen-level developmental determinism that shapes their design and atmosphere. They are literal incarnations of the unique priorities of citizens at that time and place, independent of global trends that often result in regression to an aesthetic mean.

If cities balance opportunism with judiciousness in absorbing these forces, citizens ultimately should be the ones to demand it. Examples of facilitative policies are inclusive zoning, public space requirements, mixed-use zoning that reserves space for local enterprises. From the current vantage point, ICT and global investment appear poised to maintain their role in development; however, this no defeat for citizen livelihoods. Among their many responsibilities, planners should embrace their role as public-private intermediaries, creatively channelling external forces to de-commodify space and preserve vernacular authenticity. This is only possible by balancing stakeholder influence.

Kris Hartley is a visiting researcher at the Center for Government Competitiveness at Seoul National University, and a PhD Candidate at the National University of Singapore, Lee Kuan Yew School of Public Policy.