Investment wind of change. New values ​​of the new age

Let's try to figure out what today forces corporations, billionaires and cities to give up "quick money" in liquid square meters and invest astronomical sums in social architectural and urban projects. And also why the conflict and the cargo-cult of new urbanism can block the development of Ukrainian cities. The minimum task is to go "between the drops" without slipping into cynicism or moralizing.

 

R-Factor is responsibility

Today, not only the size of assets is important for large companies. Their progressiveness is demonstrated by the R-Factor, where R stands for responsibility. This is an environmental, social and governance performance rating system index developed in 2020 by analysts at State Street Global Advisors. SSGA one of the whales of the financial world, a company that manages investments and assets worth $ 3,1 trillion.

It's easy to part with money when you get something tangible in return, and real estate has historically been one of the most popular investments. In countries where construction costs represent a significant percentage of GDP, the activity of the industry directly affects the economy. There are many ways to measure building "temperature". Search "invest in real estate" on Google one of the applied indicators of construction activity, which is often used in the compilation of ratings of cities and countries that are most suitable for profitable investments.

Despite the pandemic, in January 2021 interest in investment in commercial and residential square meters was almost as high as in May 2005, reaching 67%, although by June 2021 it had already fallen to 43%. Interest in flipping houses rose and fell just as synchronously. This surge demonstrated that investors have free money and are ready to invest it. But the emphasis has shifted: the eternal "material" qualities of architecture today are complemented by such non-obvious, ephemeral values ​​as intelligence, flexibility, environmental friendliness, accessibility, equality.

The trend was formed long before the pandemic, but now new values ​​are decisively coming to the fore. Compliance of a company or project with ESG (Environmental, Social, and Governance) criteria and a high R-Factor become decisive factors for Wall Street traders when they decide on the direction of investment flows.

In the first months of the pandemic, many experts made a false prediction that the games in the democratization of spaces are over. There were serious fears that, just as countries closed their national borders, people would isolate themselves in apartments and private houses behind fences, and parks, squares and other places of social interaction would empty and fall into disrepair. But already in six months, it turned out that the role of public spaces in our lives has only increased.

Now we are trying to make up for the weeks of lockdown, actively seeking communication on the street and in the office. The need has not disappeared - our requirements for the design of spaces, their area and safety measures have changed: streets must become wider, greener, offices - more spacious, air in open spaces - disinfected and purified, etc.

Investments in science

MIT. nano

The American Institute of Architects (AIA) recognized the MIT.nano research campus, built in 2018 by the architectural company HGA, as the most ecological and green building of the last quarter of a century.

The search for cures for cancer, the development of sustainable energy technologies, water purification, combating climate change — behind the transparent walls of laboratories, the most important research for the planet and humanity is conducted. The building's LEED Platinum-certified design and architecture, as well as courtyard landscaping by Pressley Associates, are designed to emphasize the essence of this grand mission.

Just $291 million was invested in the construction of the building and engineering networks, not counting the furnishing and equipping of the truly priceless equipment. This is an internal investment by the Massachusetts Institute of Technology, which the board is confident will pay off, because now students and scientists have the opportunity to conduct experiments and work over developments in non-engaged laboratories.

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If back in 2019, investments in apartments of a small area were considered mega-profitable, then the pandemic forced people to reconsider their views on the comfort and convenience of small apartments. It turned out that cramped conditions and extreme minimalism can lead a person who finds himself in isolation to a nervous breakdown. And since it's already clear that public health challenges and economic uncertainty will be part of our reality for years to come, it's time for more thoughtful and informed investment — the old order is no longer working.

A mature businessman, in particular an experienced developer, is bored of investing in concrete. Money can make not only money - today they invest in ideas, fresh concepts and new meanings. Even projects with zero profitability bring benefits: feedback and valuable experience. What should the project be in order for it to be noticed and appreciated by many people?

Public. Bright One that opens up new opportunities. Accessible. Let's face it: a private luxury villa on tropical islands does not meet these parameters. "If a new bridge is to be built, it cannot be a transport corridor made of concrete! Where are the bike lanes, landscaping and public function?" — this is what the townspeople think today and rightly demand "something more" from the city authorities and private investors.

 

The Battle of Values: Jacobs vs. Moses

"The power of money is limited," Jane Jacobs wrote, "it cannot buy internal success for cities if there are no conditions for such success." <... > Not only that, money can cause even more damage by destroying these conditions. <...> Money is such a powerful tool that where it goes, our cities go there too."

American cities of the middle of the XNUMXth century, which Jacobs wrote about in her bestseller "The Life and Death of Great American Cities", were built and renovated at the expense of loans from commercial banks, public funds, as well as investments from the shadow economy.

The latter appeared as if from nowhere and were used in equally opaque ways to obtain excess profits: bankruptcy of neighborhoods, buying up real estate for nothing, and then rapid and ruthless reconstruction. Native residents became victims of speculation and were forced to move out, and albeit imperfect, but formerly lively quarters turned into a center of absentee property - apartments for rent.

The power of money is limited, it cannot buy internal success for cities if there are no conditions for such success

However, completely legal money from banks and the municipality often caused cataclysms that destroyed the usual system when they poured in concentratedly and rapidly, as it was in the post-war decade. Lack of money—a financial drought—also had a detrimental effect. Jacobs believed that the best investments were those that came at the request of local residents.

For example, the neighbors consolidated their efforts to create a pocket park and took the missing funds on loan from the bank, and the municipal authorities took part in the project, creating the conditions for its implementation. Or the owner of a small restaurant decided to expand the business, took out a loan and hired several people from the same block.

The urban planner considered only such progressive, point infusions, as well as state investments in the construction of social housing, to be creative and was a categorical opponent of intensive reconstruction. Her romantic attachment to the image of a low-rise, quiet street with a variety of architecture, inhabited by friendly and creative neighbors, was so sincere and strong that Jacobs managed to make millions of people fall in love with this ideal.

And even Robert Moses - "Bob with the Ax", as the newspapermen called him, despite his power, fury and money, could not break the resistance organized by Jacobs to the plans to build the Lower Manhattan Expressway (LOMEX).

A paradox, but in the war between the urbanist-builder who reshaped New York, built Lincoln Center, the Central Zoo, 13 bridges, 10 large swimming pools, 670 km of park roads, 28,4 thousand apartments in high-rises, and also designed 2,5, 658 million acres of parks and XNUMX playgrounds, and as an urban theorist who built nothing but prevented construction, public opinion and support were on Jacobs' side.

Why? The surface answer: Jane was appealing to intangibles. And they turned out to be more important than material ones at that time - in the 60s of the XNUMXth century. In the era of hippies, flared pants, street protests and student revolutions. It would seem that after the overthrow of Moses, ideas triumphed over mercantilism, New York was supposed to flourish and be reborn according to Jacobs' wills. However, no: the sixties were followed by several decades of suburbanization, urban population decline, and economic decline.

 

The eternal pendulum of the city of contrasts

The period of Moses' construction megaprojects was replaced by a financial drought. Among the activists, the need to oppose global constructions disappeared — they stopped themselves. The social obligations that city politicians undertook during the active struggle of citizens for civil rights bled the treasury, and the well-to-do middle class followed the rich and moved to the green suburbs, no longer wanting to sponsor the slum dwellers, who are always dissatisfied with everything.

Washington has made it clear that there will be no help from the federal budget. And only private business money could save New York from bankruptcy. As New York teetered on the brink of default, officials encouraged millionaires to invest in the city and, to spur construction, lifted some of the strict urban planning restrictions. This triggered a boom in the construction of skyscrapers in Manhattan and a boom in Wall Street.

New York met the beginning of the XNUMXst century with frankly luxury. Under Michael Bloomberg, the gentrification process reached its peak (read more about it in the article "No Gentry? Gentrification: pros and cons» in the 18th volume of PRAGMATIKA.MEDIA). The city became so rich that life in it turned out to be unaffordable for many - in Central Harlem, the value of real estate increased by 222% during Bloomberg's tenure alone, and the share of income of the richest one percent of the city's residents more than tripled, as reported by NYT journalists.

Investments in well-being

Paramount 60 Wall Street

60 Wall Street, a skyscraper in New York's financial district, would seem to need no improvement. The 47-story postmodern office building, designed by Kevin Roche John Dinkeloo and Associates, belongs to Class-A and meets the LEED Gold sustainability standard. But in mid-May, global real estate investment trust Paramount Group announced it was investing in a global renovation of the already successful and popular property.

Designed by Kohn Pedersen Fox (KPF), the project includes a transformation of the facade, new glazing for the tower, the addition of a skylight to bring natural light to the atrium, and the installation of a green wall that will be the largest in North America. "The goal of renovating 60 Wall Street, especially during COVID-19, is to create an environment that brings a sense of well-being to this vibrant urban community," said Hugh Trumbull, AIA, Principal Designer at KPF.

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Governor Andrew Cuomo has been trying to overcome the chasm of social inequality in recent years. He succeeded in reducing the unemployment rate and doubling the minimum wage. But as real estate prices continued to rise, so did townspeople's opposition to the developers' plans. Amazon's forced rejection of business development plans in Long Island City after mass rallies and protests became symbolic.

Today, private developers of New York are trying to oppose non-profit land trusts - public organizations that use community money, loans and state loans to buy real estate with the help of municipal officials and the mayor, who are forced to confirm their words about the desire to fight against social inequality in practice. The purchased real estate is rebuilt into low-cost housing, where the most vulnerable families move. But these examples are still isolated.

From financial drought to financial flood, from Gotham to Metropolis, New York lives in the rhythm of the pendulum. And it is never completely good and convenient for everyone

In the spring of 2021, New York was once again tempted: $123 billion in aid from the Biden administration, sent to the state to help recover from the pandemic, allowed the city's annual budget to increase to a record $98,6 billion! After the news, Manhattan's residential real estate market experienced its biggest monthly boom in 14 years, and investors opened their wallets in anticipation of extra profits.

From financial drought to financial flood, from Gotham to Metropolis, New York lives in the rhythm of the pendulum. And it is never quite good and comfortable for everyone, because there are two New Yorks: the city of homeowners and the city of renters, and their interests are opposite. But it is the search for a model of the urban environment that is generally favorable for these two categories that is the focus of the world's best architects today. There is a version that part of the recipes for the "Big Apple" are universal for most "contrast" cities.

Investment in accessible landscape

Little Island Park

A new location for spectacular selfies and a unique park for $260 million the project of designer Thomas Heatherwick, implemented thanks to patrons: fashion designer Diana von Furstenberg and her husband, media mogul Barry Diller.

The Little Island structure originated on the site of Pier 54 on the Hudson River. Snow-white lily-like supports with containers for trees, bushes and flowers, which appeared instead of the old pier, are spectacularly reflected in the waters of the Hudson, and the first visitors are already enjoying new views. The park is accessible via two pedestrian bridges leading from the Hudson River embankment.

For visitors there are lawns where you can lie on the grass and even have a small picnic with food brought with you. There is a small cafe here, and the heart of Little Island is the 700-seat amphitheater The Amph, where musical, choreographic and theatrical productions will be presented from June. Bicycles are not allowed in the park, fishing from the pier, smoking, vaping, and the use of electronic cigarettes are also prohibited. You won't be able to walk your dog here either: only guide dogs are allowed in the park. By the way, all park locations fully comply with ADA (Americans with Disabilities Act) accessibility standards.

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Construction and hatred in Kyiv

The Ukrainian capital can also be called "contrast". Despite the fact that the country's economy in general suffers from the war, and now also from the pandemic, Kyiv demonstrates simply crazy activity of cranes on the horizon. Judging by the documents approved by the Kyiv City Council in recent months and detailed territorial plans (DTP), this activity will only increase in the near future. Although the negative aspects of gentrification in Kyiv have not yet appeared, it would be naive to deny the fact of social stratification.

"The seat determines the thought" - this aphorism, the authorship of which is attributed to Lech Valensi, very accurately defines the difference in the worldview of Kyivans. For residents of Pechersk with property in old "elitist" houses, the problems of small-scale tenants in Poznyaki are foreign. For the former, the activity of the construction market is a threat of merciless destruction of the quiet, cool parks in the center, natural areas in the coastal area of ​​the Dnieper and the green ring around Kyiv.

Others expect that the real estate market will become saturated and prices will decline. This is a chance to buy your own home, and if you're lucky, a few more investment apartments, and then live off the absentee property. At the same time, it is ideal if the construction will be carried out somewhere in another area - away from the place of residence.

The construction topic is very hot, and information about the plans of developers for the development of new plots is sure to cause a public outcry. One of the latest examples is the approval by the deputies of the Kyiv City Council in mid-June of a detailed plan of the territory in the Obolon district. On 95 ha between st. Yuriy Kondratyuk and the forest massif, on the agricultural lands of the "Pushka-Vodytsia" agricultural complex behind the ring road, they plan to build 19 residential buildings with a height of up to 26 floors.

The developer reserved 32 hectares for the park. A plan for the construction of three kindergartens, a school and a multi-level parking lot in the new microdistrict is included in the DPT. Lobbyists of the project promise an indirect profit to the budget in the amount of half a billion hryvnias. The Department of Urban Planning and Architecture of the KMDA claims that the DPT passed all the necessary examinations, including environmental and environmental examinations, and was also submitted to public hearings.

The construction topic is very hot, and information about the plans of developers for the development of new plots is sure to cause a public outcry

It is expected that the capital's activists did not believe that the purpose of the development was "to create a comfortable environment on the territory of the project quarters and their harmonious integration into the structure of the existing residential neighborhood." According to the calculations of the DPT developers, 6 people will live in 11 apartments. At the same time, the project density of 465 people per hectare is twice as low as allowed for microdistricts with high-rise buildings (but more than 10 times higher than the average for Kyiv).

Project density is the most slippery area, because the figure of 11 assumes that a maximum of two people will live in the apartments. In fact, the families will be larger, opponents of the development are sure. And, accordingly, all calculations regarding the required number of places in kindergartens, schools and parking lots are wrong from the very beginning.

Kyiv activist Annabella Morina summarized on her Facebook page that the public protest against the building was defeated. Let's quote her message verbatim: "Last Thursday, the Kyiv City Council did not just vote for the DPT of the Minsk massif, no. Last Thursday, the Kyiv City Council opened a new milestone of corruption, which we, seemingly already all-knowing and well-worn, have not seen before. I confess, I remember Oleksandr Omelchenko's speech directly with emotion.

Exmer (who at one time sawed a lot himself) literally spread his hands on the podium. "Why build houses, the housing market is stagnant. There are criminal cases regarding the land, you are violating the procedure for developing the DPT. This has never happened before. You are digging a political grave for yourself." But the young deputy probably did not understand him. When they come to power, they feel eternal. It seems that the government will always be there and retribution will not come."

Categorically rejecting the 70-year experience of building socialism, young Ukrainians, however, appeal to socialist values ​​and do not hide their disappointment when they are reminded that the purpose of investments is to make a profit. Demanding renewal, development and restructuring of power relations, they tend to ignore the interests of resource owners a priori, thereby cutting off the possibilities of constructive partnership and any compromise.

Residents of Dnipro, Lviv, Odesa, Kyiv, in fact, want to literally follow the postulates of Henri Lefebvre, the author of the concept of "right to the city", forgetting that he was a neo-Marxist and considered capital exclusively the source of evil. Lefebvre's viral idea, later picked up by David Harvey and a host of followers, has turned a healthy desire for democracy into a burden that often blocks urban development. But blind indulgence to the owners of capital is just as harmful.

Promoting the idea of ​​the right to the city, are Ukrainians ready for responsible appropriation, for collecting donations from community members to take over the financing of large-scale projects following the example of the residents of Berlin or Barcelona? One often hears calls to wait until ordinary residents become rich enough to have free funds that can be directed to the implementation of social and public projects.

 

Design will keep people

"Thoughtful design creates connections between nature, technology and people," the founders of the largest architectural company Gensler are sure.

Andre Brumfield, member of the American Institute of Architects (AIA) and head of urban design at Gensler, focused on the need to rethink the way we invest in vital neighborhoods in order to create a fair and equal opportunity environment in a May article for the corporate blog.

"It is problematic to talk about creating balanced pedestrian streets with convenient routes to cafes when there are not enough places where you can buy healthy food. It is equally difficult to talk about increasing accessibility in the absence of public transport," writes Brumfield.

The three main reasons for staying true to the "stone jungle" are the good design of the area, employment opportunities and convenient transportation

The urbanist believes that the foundation for business investment is high-quality infrastructure and the social sphere. In this matter, the ball is always in the city's court. And only after the roads are built, the subway is laid, schools and hospitals are opened, it moves to the field of private business.

Investments in museums

Philadelphia Museum of Art

$233 million, 4 years of construction and two dozen years of design: the reconstruction of one of the largest fine arts museums in the United States, which was carried out under the leadership of Pritzker Laureate Frank Gehry, has been completed.

The historic Greek Revival building at the foot of Benjamin Franklin Boulevard in Philadelphia first opened its doors to the public in 1928. It was designed by the famous American architect Horace Trumbauer with African-American architect Julian Francis Abele as his lead designer. During its 93 years, it has been rebuilt several times, and the last update was made in 1986 by Robert Venturi and Denise Scott-Brown.

“The whole point of our work at the Philadelphia Museum of Art was to let him guide our hand. The brilliant architects who have worked before us have created strong and intelligent designs that we have tried to respect and, in some cases, accentuate. Our main focus was to create spaces for art and people,” said Gary.

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Gensler recently published a study with the results of a survey: what exactly keeps people in cities even during the pandemic. It turned out that the three main reasons for staying true to the "stone jungle" are the good design of the area, employment opportunities and convenient transportation. People who see their neighborhoods as beautiful, authentic, safe, clean, and walkable are more likely to want to stay in their current cities.

And if people feel that their cities are too big, noisy, crowded, that they are losing their cultural heritage, then they are more likely to consider moving. Those who live paycheck to paycheck and cannot afford to enjoy the benefits of city life in the cultural and entertainment spheres will also go. And more than a third of respondents from different countries of the world (mainly those who belong to the millennial generation) said that they would prefer to live in a small town rather than in a metropolis, work remotely and only occasionally come to a busy and dense business district, to recharge your batteries and overcome the lack of communication.

Such a trend will lead to the flourishing and increasing importance of "18-hour cities". This is what investment experts call cities with a population of less than a million, which, however, provide opportunities for self-realization not much smaller than megacities. The megacities "never sleep", and the conditional cities of Kharkiv, Odesa, Lviv "work 18 hours a day".

Invest in a retreat

22 Bishopsgate

22 Bishopsgate is the largest office building in London, a vertical town, as developers Lipton Rogers Developments and architects PLP Architecture call it. AXA IM — Real Assets became the investor.

Realizing that in the post-Covid world, managers will have to exert extra effort and be resourceful to lure people back to the office, investors agreed to the proposal of the project developers to pour funds into what a few years ago seemed like an oddity: a full-fledged zone of psychological and physical relief, to accommodate which was allocated a whole floor. The Retreat on the 41st floor offers employees relaxation, pilates and yoga, as well as medical services.

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In their guide "Urban Design 2021", Gensler analysts highlight four trends that investors should consider:

1) in order to improve the urban environment without sacrificing the density that feeds the economy, it is necessary to repurpose non-functional spaces into public and social facilities;

2) open spaces, parks and flexible streets should become a framework for the progressive renovation of cities, they should be relied upon when developing master plans;

3) the pandemic has triggered the growth and development of second-tier cities, “18-hour cities”, and this trend will increase;

4) to prevent a mass exodus of people from the city, investors should focus on the formation of "20-minute districts", in which all services and workplaces are within a 20-minute walk or public transport.

 

Cheap is more

The R-Factor, the responsibility factor, undoubtedly influenced the decision of the jury of the Pritzker Committee in 2021. The decision to award the main architectural award to the duo of French architects Anne Lakaton and Jean-Philippe Vassal could seem strange only to those who are far from the values ​​of the new world.

Spitting on the famous "Bilbao effect", not trying to achieve a wow effect, working with the cheapest materials - plywood, metal profile, transparent polycarbonate - Lacaton & Vassal create greenhouse buildings filled with light and air. Paraphrasing Ludwig Mies van der Rohe's famous motto "Less is more", the architects proclaimed "Cheaper is more" and dedicated their careers to renovating social housing.

This topic, completely ignored by the cohort of starchitects and rarely covered in the media, has become a mission, a challenge and a path to a more just world for Anne and Jean-Philippe. They took the courage to rethink social projects of modernists, correct their mistakes and prove that minimal investments can turn uncomfortable, gloomy high-rise buildings into housing worthy of a person of the XNUMXst century.

"We like to see luxury in simplicity. Our goal is to use savings to make the most, to increase freedom and life opportunities for families who don't necessarily have a lot of money," the architects explained their position in an interview with The Guardian in 2019.

The renovation of the Grand Parc residential complex of three high-rises in Bordeaux, built back in the 1960s, was awarded the Mies van der Rohe Award (European Union Award for Contemporary Architecture). The local authorities were going to demolish the morally outdated building and resettle the residents, but Lacaton & Vassal together with Frédéric Drewo and Christoph Huyten offered to turn the apartments into spacious and ecological housing for half the amount that the officials planned to spend.

They created glazed extensions-loggias on the facade with a depth of about 4 meters. These "winter gardens" increased the area of ​​the apartments, improved insolation and provided thermal insulation. Repair work did not even require temporary displacement of people: only 12-16 days were spent on the renovation of the apartment.

Today, the issue of housing has become a litmus test for liberals. In the USA, a young generation of progressive politicians emphasizes the need to build public housing. Republicans tried in every possible way to abstract from this decision after a series of systemic failures, including architectural and planning ones. An encyclopedic example is the history of the Pruitt-Igough housing complex.

Since President John F. Kennedy, conservatives in Congress have blocked funding for public housing, but the Homes for All Act, passed in 2019, provides $800 billion to finance the construction of 9,5 million new public apartments. Another 200 billion over 10 years will be allocated to the Federal Housing Trust Fund.

Minimal investments can turn uncomfortable, gloomy high-rise buildings into housing worthy of a person of the XXI century

In Ukraine, the topic of renovation and construction of public housing is in a blind spot. The issue of demolition or reconstruction of "Khrushchev" is from time to time brought up for discussion at interdepartmental meetings and round tables. But a typical summary sounds like this: "The state has no money. We hope that they will be found in a private business."

But how to interest a private business to invest in a social company? There are two ways: to create preferences, perhaps by removing restrictions on development, or to wait in the expectation that one day the desire to raise the R-Factor of large corporations will become stronger than the desire to make a quick buck. Today, the second way does not seem frankly fantastic, taking into account the global trend for justice.

You will be able to learn more about this trend in the context of architecture and urbanism on September 18 in Kyiv at the International Architecture Festival CANactions Festival 2021, dedicated to the theme "The House of Tomorrow".

Justice is a two-sided concept. When a community of owners opposes the construction of a new residential building on a nearby vacant lot and invokes the precepts of Jane Jacobs, they resemble the movement of American Protestants from the Not In My Back Yard organization. NIMBY activists block renovation and reconstruction projects in New York, without even analyzing what exactly is planned to be built and how it will affect the life of the district and the city in general.

Kyivans who invested in apartments in the Yaroslavov Grad residential complex on the site of the destroyed Hay Market are protesting against construction on the plots near Chkalov Square and do not notice anything contradictory in their actions. Nihilism, based on the principle "building is evil, the builder is a scoundrel", forms something similar to the cargo cult of new urbanism, which is actually its complete opposite. Defending their right to the city, activists deny other people the right to property.

Tired of maneuvering between drops, we in the editorial office stand on the fact that the refusal of construction is not an option, compromise and tolerance towards each other is a necessary condition, and the restart of the city cannot be a purely private or purely state project. This is a joint task of a team of urban planners, the state and investors. And all three parties are responsible for the result.

 

/The material is published on the pages #32 of volume PRAGMATIKA.MEDIA/