The Slow Build
The Slow Build
Is overbuilding really so bad? Are overbuilt cities more or less interesting, more or less economically and environmentally sustainable? Who benefits from these whirlwinds of construction, and who gets stuck with the costs of uncoordinated physical growth? The last chapter lays out the costs and benefits presented by fast and excessive physical growth. Concluding that the potential for environmental degradation, macroeconomic instability, and public expense are high enough to warrant regulation, it proposes policy solutions that could slow the circuits of capital and alter the professional practices described in earlier chapters. The public sector can administer incentives or apply regulatory friction to (1) increase the cost of new construction; (2) lower the expected return from new construction; or (3) extend the time horizons of developer-investors. Such growth controls target both the symptom (overbuilding) as well as two of its causes (the financial instruments that lead to excessive leverage and the professional practices that privilege new construction). Efforts in the area of monetary policy (raising interest rates), tax policy (rescheduling depreciation allowances), or historic preservation (requiring developers to submit reuse plans) would force the industry to better calibrate spatial expansions to underlying demand and could inhibit future waves of speculative overbuilding.
Keywords: overbuilding, growth controls, historic preservation, monetary policy, tax policy, depreciation