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Futures Cut

Sign up for a personal view of the evolving role of real estate in a world of technological, social and business change, by Richard Pickering, Head of Innovation, EMEA.

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A Vision for Cities in 2040


Welcome to this week’s blog. If you’d prefer to listen to an audio version, click here for the podcast.

The city of the future has captured the imagination of millions of storytellers, film directors and economists the world over. Unlike narrower verticals of technology and business, the city of the future is a subject which is accessible and relatable to each of us. You can’t tell a story about the future, without putting it into the context of a city of the future. Perhaps for this reason, films are littered with visions of future cities.

What do they have in common? Many axioms and truisms pervade popular media. Future cities are dense and vast beyond human proportion (Blade Runner, Fifth Element). Many follow utilitarian and brutalist forms (Dread, Equilibrium).  Nature has often disappeared or been put into a corner (12 Monkeys, Akira). And technology, both virtual and automated, tends to have taken over (Ready Player One, Minority Report).

Underlying each of these elements, cities of the future tend to be gloomy places. Dystopia prevails in the form of resource shortages, spatial constraints, environmental collapse, inequality and inhumanity. Why is this? Perhaps most explicably, these kinds of images and thematics make for better movies. How many cinematic utopian cities of the future can you name? However, there is also a logic to this. Writers and futurists tend to project forward the worst elements of current day trends and ignore the possibility of course correction. They also tend to have a blind spot to the many great things that cities offer their inhabitants.

At Cushman & Wakefield we hold an exciting vision for cities in 2040; one which offers a better quality of life to urbanites. However, the path to get there is not straightforward, nor indeed is it the end of the journey – far from it.  In today’s Futures /Cut, I unpack why we hold this view, and provide a link at the bottom to our Future of Cities Lab, where a virtual version of me narrates our 2040 vision!

First up; how did we create this vision? If you missed the last edition of Futures /Cut, you can watch a summary here. You can also read up a bit about futurology techniques and pitfalls here. Done that? So, in essence, we picked the trends that are shaping the world, projected these forwards based on what we know about technology, society and the economy, and then graded each trend on an axis of certainty vs potential impact. Finally, we formed four scenarios for the future (more on these to follow in future editions) using the high-impact, low-certainty trends of virtualisation and urbanisation, and then interpolated these to form our vision. Phew! Now let’s talk about the key features of the vision.

Why a 2040 vision? There is plenty going on in 2022. Interest rates, the economy, the legacy of COVID, the war in Ukraine, political turmoil. All of these things feel very important today, but none of them is likely to have an enduring bearing on the city of the future. We wanted to look beyond economic cycles and events that would fade and be replaced, and 18 years felt long enough to do this. Secondly, this positions us at a mid-way point between ‘the future’ and the turn of the Millennium, which was also a time of big visions about the future.  Why not 2100? Anything that far out is essentially a licence for guesswork and speculation that has limited bearing on decisions made today. The shape of cities in 2100 will also likely be influenced by as yet unforetold future events and inventions, which it is difficult to imagine today.

What’s driving change? There are a couple of immediate and significant catalysts for change, both of which are highly material to the horizon and to cities. The first is the increasing raft of commitments being made on climate change; which are going to reshape the economy and the global real estate industry over the next 20 years. The second is the shift in the clerical work model (itself part of the digitalisation / virtualisation trend). This will be much more expansively felt than the direct impacts on the office market. In fact I would go as far as to say that this will be the biggest driver of change for cities to 2040. Being honest, in the Year 2000, would you have described these two trends as being the big forces for change? Global warming was being discussed but largely ignored, and in the job I was working in, fax machines prevailed and my boss had bought ‘an email computer’ to put in the corner of the office. Amazon meanwhile was still a niche bookseller, the internet was dial-up, and a smartphone was one on which you could play Snake. And so, if in the Year 2000 you were making a film about the future (e.g. Battlefield Earth – a truly terrible film), you might have missed them. I wonder what else might we be missing today?

Imperfection is fuel for change. What I mean by that is that the incentive for change is less material if people are happy with how things are. In 2022, largely they aren’t. Our big global cities are becoming challenged. Mainly they have become unaffordable, but they are also failing to deliver against other propositions. Urban economics amplifies inequalities, and in some cities whole segments of society have become forgotten. Infrastructure has been underinvested, and so travelling time is wasted. Cities built to serve cars have created pollution, congestion, fragmented public realm, and mind-numbing suburbia. These are major challenges for cities today, and opportunities to shape a new course by 2040.

Why is the new work model so important for cities? For the past century, our cities have been designed around the daily migration of workers from residential suburbs to CBDs. If people work less often in central offices, then the impacts on the office market feel relatively transparent. However, this misses the bigger picture. In the CBD, prosperous cities are reliant on the daily footfall of high value workers – exactly those kinds of people that now have hybrid or virtual work opportunities. Their diminished presence will be felt in local economies. It feels to me inescapable that the new model will double down on the ‘mid-week peak’, where workers chose to come in on Wednesday and perhaps Tuesday and Thursday. In the same way that it wouldn’t work if we each chose a different weekend, it also creates significant compromises if we don’t choose the same work from office days. Monday and Friday therefore are likely to become a new category of day somewhere in between weekday and weekend. Don’t misunderstand me: these are still very much working days, but not ones that you travel to a city centre to deliver. Think that through. If today you work in an office-dominated CBD, which currently suffers from being a ghost town at weekends – that ghost town will now be in play for the majority of the week. The long-term impact of this will be phenomenally impactful on the urban fabric. The only solution appears to be the ‘mixed-use-ification’ of city centres. I wonder how many will successfully make this transition by 2040?

What does the city centre need to be in the future? Successful city centres will be ones where people choose to be. In the UK, other than for a younger population, the suburban trend has not been substantially reversed by the urban living initiatives of the past 20 years. The typical product of 2-bed flats with limited external amenity has not satisfied the housing needs of the majority; and hence there is an opportunity to refocus city-centre housing to serve the needs of a broader segment of society; young and old. On the commercial side, the city centre will remain the dominant destination for entertainment, collaboration, fun and experience. This cuts across the purpose, quantum and activities associated with all asset types. Offices will move from housing rows of desks to facilitating collaboration. Retail will move from housing racks of clothes to being brand pavilions. And leisure will pervade everywhere. These needs will likely require less space, but add more value. They will also be more interconnected than before. The city core will hence be tighter, but more vibrant; and the drop off to other areas will be sharper.

This change then ripples outwards. If you’re not working in the central HQ, then you’ll likely be at home. Some point to the emergence of decentralised drop-in offices – I’m not convinced. If the cost of these is to be borne by the individual (which it typically will), then they will remain the domain of the affluent few. People will however invest in their own homes. If people commute less often, then their housing options are greater.  Particularly, people will be willing to travel for longer on fewer days to access cheaper and better amenities. This could take three forms. Firstly, some may choose a simpler rural life, and good commutable villages are likely to experience upwards pressures. Secondly, some may choose to move to a different city altogether, whilst retaining their existing roles. In the journey to 2040, this will support the levelling up agenda, provide a pressure valve for big cities, and at the fringes will support a rise in internationally transient workers. However, thirdly, for most, I suspect that the change will be to move from one suburb / commuter town to a better, but less well connected one, which now feels more in reach. This will start to shift the location of value in our cities.

What does the new suburbia look like? Once the solution to many urban ills, suburbia has now become a toxic mix of everything a city should not be. Homogenous, dominated by cars, low density, lacking in community and history and where public amenity is sacrificed for private amenity. The worst examples of this are in North America; the cookie-cutter saccharine-soaked versions of which are portrayed in dystopic future visions, as much as their gritty urban equivalents. In short, a good suburb or commuter town needs a strong cultural locus. Some of these have grown up around previously absorbed market towns and have a strong mix of heritage, architecture and a core that isn’t car-centric (e.g. Richmond, London). Others have a strong cultural or community anchor, such as a university, a park or leisure venue. Those with ready-made attributes will be in a strong position to capture changing housing needs. Those built as purpose made suburbs in the latter half of the last century will struggle to reinvent themselves by 2040. The prospect of a 15-minute city solution for these areas is tantalising, but largely elusive.

Is it inevitable that cities will become bigger and denser? In a word, no. The levelling out opportunities provided by virtualisation of activities will take some of the strain off big cities, which have been under relentless pressure over the past 30 years. However, more than that, in developed economies there may not be a need for them to grow anyway. Urban growth is largely predicated on population growth; however, we should not assume that that will continue indefinitely. Major economies such as Japan, Italy, Portugal and Greece are already population negative.  Without immigration pretty much all of Europe is also already population negative. Meanwhile (in the UK) urbanisation has largely topped out at ~85%. Setting aside political change on immigration, or large-scale climate migration, our population in Europe is likely to grow less quickly, if at all, moving forwards. The dire need for new housing in cities (an axiom of today) therefore might show signs of tempering, and (against the sci-fi vision of towering megalopolises) could stop altogether in developed economies by 2040. Already countries such as Japan are offering financial incentives for people to relocate to cities flagging due to population decline.

Will cities become more sustainable? In a word, yes. The longer answer requires an understanding of what it means to be ‘sustainable’. The historic level of disproportionate growth in big cities is not sustainable. It has been delivered quicker than the infrastructure can keep up with; meanwhile other areas have been left to fester under accelerated obsolescence. Similarly, the way that we have accommodated change is unsustainable – carbon heavy structures, inadequate green space, and reliance on external supply chains, food and energy resources. We must take heed of these lessons. New development is likely to focus on reuse of existing buildings – that is becoming clear. We will also likely see a shift to localised production. However, the biggest sustainability challenge is to create inclusive growth, where all of society benefits and where that growth can be delivered continuously without reaching a breaking point. Of course if we fail to hit broader climate targets, by 2040 some cities might find themselves literally underwater. Quite how we would manage this is frankly frightening.

Will cities become more technologically integrated? You can bet on it. Everything will become more technologically integrated. You yourself will become more technologically integrated.  This is an area in which I believe that the sci-fi stereotype will play out. The wave of technological progress over the next 20 years is likely to be greater and more impactful than seen for generations. Beyond its vicarious impacts through disruption in the workplace, in retail and in mobility, digital technologies will be directly responsible for changes to our cities. A digital infrastructure to our cities will become the operating system for our lives; the basis for mobility and the delivery of public services. There is a real prospect that our cities will become less congested and more efficiently run by 2040. Tech will also sit at the heart of experience. Particularly, virtual overlays on the real world will become pervasive, and literally provide a new lens through which to see and interact with our cities. Not tapping into AR will be as limiting as having cataracts. Who will invest and manage this infrastructure is still up for grabs.

This is potentially a lot of change. If it all sounds very difficult, that’s because it is. Looking back over history, we haven’t done a great job of managing this kind of change. In historic periods of significant urban change, we have largely let the market decide. People moved and adapted or they starved; and developers could build and demolish with impunity. We now have much greater controls in place, through a planning system and a welfare state; however neither of these have been tested under strain. A permissive approach to change won’t work – the market won’t be able to make the calls needed to safeguard the future. The public sector will need to be more hands on in the years to come; in assembling and promoting sites, and in direct development where this is needed. Facing into the resource constraints, and economic challenges of the early 2020s, this is going to require ingenuity and sacrifice. The economic scars of the next few years will be marked on the physical and societal fabric for decades to come, and it is perhaps more important than ever that we don’t lose sight of what will drive value in the longer term.

The real estate industry sits in the centre of this storm of change. Fortunes will be made and lost on the route to 2040. On this journey however, there is ample scope for the industry as a whole to be both a winner and to reposition its importance in delivering positive urban change, and improving the lives of those in our great cities.

Well – that’s the background! You can find a 5-minute virtual version of our 2040 vision here in our Future of Cities Lab. Whilst you’re there feel free to explore other articles and videos that support the vision; we’ll be adding more each week.  Let me know how your own vision for cities in 2040 compares.

Future of Cities - A Vision for Cities in 2040

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