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The Rhythm of Urban Redevelopment

The Rhythm of Urban Redevelopment

(p.15) 1 The Rhythm of Urban Redevelopment
From Boom To Bubble
Rachel Weber
University of Chicago Press

This chapter lays out the problem of overbuilding and its causes. It introduces debates about the magnitude and pace of physical change in cities: just how flexible or obdurate are they, and what factors drive their transformation? The dominant paradigm in urban economics describes building booms as cyclical and explains new construction primarily in terms of its demand by space users. Why, then, is real estate development prone to bursts of hyperactivity and dormancy, the motivations for which appear divorced from the business cycle? Integrating critical urban theory and economic sociology, the chapter lays out a novel framework for understanding construction booms and bubbles. New financial instruments channel capital to the built environment helped along by professional actors that help construct both occupant and investor demand for new buildings. In contrast to both supply- and demand-side perspectives, however, the approach adopted in the book is robustly agent-centered and draws from emerging theories of the performativity of markets. The professionals responsible for making investment decisions are identified as are the institutional incentives that encourage them to position new construction above renovated older buildings.

Keywords:   overbuilding, real estate cycle, economic sociology, building boom

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