Success and the City

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Success and the city

Learning from international urban policies

Tim Leunig and James Swaffield edited by Oliver Marc Hartwich

Policy Exchange is an independent think tank whose mission is to develop and promote new policy ideas which will foster a free society based on strong communities, personal freedom, limited government, national self-confidence and an enterprise culture. Registered charity no: 1096300.

Policy Exchange is committed to an evidence-based approach to policy development. We work in partnership with academics and other experts and commission major studies involving thorough empirical research of alternative policy outcomes. We believe that the policy experience of other countries offers important lessons for government in the UK. We also believe that government has much to learn from business and the voluntary sector.

Trustees Charles Moore (Chairman of the Board), Theodore Agnew, Richard Briance, Camilla Cavendish, Richard Ehrman, Robin Edwards, Virginia Fraser, Lizzie Noel, George Robinson, Tim Steel, Alice Thomson, Rachel Whetstone.

Localis is an independent research organisation which was set up to develop new ideas for local governments and those who engage with them. It organises seminars and commissions research relating to all aspects of local government. Chapter 1 Vancouver.qxp:Layout 1 29/2/08 12:50 Page 2

About the authors

Dr Tim Leunig is lecturer in economic his- Dr Oliver Marc Hartwich is Chief tory at the London School of Economics. Economist at Policy Exchange with His research looks at Britain since 1870, responsibility for economic competitive- including a number of papers that look at ness. He was born in 1975 and studied different aspects of city life over the ages. Business Administration and Economics at His work has won a number of interna- Bochum University (Germany). After tional awards, and was recently judged to graduating with a Master’s Degree, he be “outstanding” by the Economic and completed a PhD in Law at the universities Social Research Council. He has advised of Bochum and Sydney (Australia) while Parliament, the Treasury and the working as a Researcher at the Institute of Department for Transport. Commercial Law of Bonn University (Germany). Having published his award James Swaffield is a Research Fellow at winning thesis with Herbert Utz Verlag Policy Exchange carrying out research on (Munich) in March 2004, he moved to cities and urban policy. He studied London to support Lord Matthew Geography at Oxford University. After Oakeshott of Seagrove Bay during the graduating in 2004 he spent a brief period process of the Pensions Bill. working in the public sector before com- pleting an MSc in Cities, Space, and The authors have previously worked together Society at the London School of for Policy Exchange on Cities limited, a Economics in September 2006. report on urban policy in the UK

Published by Policy Exchange, Clutha House, 10 Storey’s Gate, London SW1P 3AY www.policyexchange.org.uk

ISBN: 978-1-906097-17-2 Printed by Heron, Dawson and Sawyer on 100% recycled paper Designed by SoapBox, www.soapboxcommunications.co.uk Cover illustration: Pit 12, Zollverein Coal Mine Industrial Complex, Essen, North Rhine-Westphalia, UNESCO World Heritage Site and site of the regional design museum. Courtesy of Oliver Marc Hartwich

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Contents

Acknowledgements 4 Executive Summary 6 Introduction 10

1 Healthy City, Happy Citizens? Vancouver’s Regeneration Experience 12 2 Shall we go Dutch? A Local Partnership Approach to Regeneration 27 3 Reprogrammed for Growth: Regenerating the Ruhr 41 4 Picking up the Pieces: How Poland is Trying to Renew its Cities 52 5 Making Money or Preserving Memories? Urban Regeneration Lessons from Hong Kong 65 6 Conclusion 77

Appendix A: Key Figures 79 Appendix B: Additional Bibliography 80

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Acknowledgements

The authors wish to thank the following for Dr. Karien Dekker, Assistant Professor, their help and support: Department of Sociology/ICS, Utrecht University Canada David Evers, Netherlands Institute for Jessica Chen, Senior Planner for Down- Spatial Research town Eastside Neighbourhoods, Central Maaike Galle, Netherlands Institute Area Division of the Planning Depart- for Spatial Research ment, City of Vancouver Drs. Gerben Helleman, KEI Centrum Don Fairburn, Canada Mortgage and Professor Robert Kloosterman, Housing Corporation Professor of Economic Geography and Stephen Hall, Senior Advisor, Public/ Planning, Faculty of Social and Private Partnerships, Canada Mortgage Behavioral Sciences, University of and Housing Corporation Amsterdam Rhonda Howard, City of Vancouver Gerard Pouw, Bureau Parkstad Dr Thomas Hutton, School of Prof.dr.ir. Hugo Priemus, Professor Community and Regional Planning, Emeritus, Faculty of Technology, University of British Columbia Policy and Management, University of Professor David Ley, Department of Delft Geography, University of British Dr Pieter Terhorst, Faculty of Social Columbia and Behavioral Sciences, University of Dr Michael Mason, Department of Amsterdam Geography and the Environment, Lond- Gert Urhahn, Director, Urhahn Urban on School of Economics and Political Design Science Frank Wassenberg, Senior researcher Dr Kennedy Stewart, Institute of urban renewal and housing, Delft Governance Studies, Simon Fraser University of Technology University Koos van Zanen, City of Amserdam Cameron Gray, Director, Housing Centre, City of Vancouver The Ruhr Hans-Jürgen Best, Director of The Netherlands Planning, City of Essen Gozewijn Bergenhenegouwen, Professor Hans Blotevogel, Faculty of Netherlands Institute for Spatial Spatial Planning, University of Research Dortmund Like Bijlsma, Netherlands Institute for Professor Bernhard Butzin, Institute Spatial Research for Social and Economical Geography, Joris Bokhove, Economic Affairs Policy Ruhr-Universität Bochum Advisor, City of Amsterdam Karl Jasper, Ministry of Construction Dr Marco Bontje, Faculty of Social and and Transportation for the State of Behavioral Sciences, University of North Rhine-Westphalia Amsterdam drs. Margarethe Meyer, City of Essen Arjen van der Burg, Senior Expert, Dirk Otto, Managing Director, Triple Strategy and Conceptual Directorate, Z Ministry of Housing, Spatial Planning Elmar Stuckmann, Carl Humann and the Environment (VROM) Gymnasium, Essen-Steele

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Acknowledgements

Poland Billy Lam, Managing Director, Urban Grzegorz Buczek, Secretary, Main Renewal Authority Committee for Planning and Architecture Michael Ma, Director, Planning and Dr Ewa Korcelli-Olejniczak, Centre for Design, Urban Renewal Authority European Studies, Polish Academy of Dr Bo-sin Tang, Associate Professor, Sciences Department of Building and Real Professor Tadeusz Markowski, Dean, Estate, Hong Kong Polytechnic Management School, University of Lodz University Piotr Siłka, Regio Portal Alex White, Urbis Ltd Dr Maciej Turala, Department of City Dr Stanley Chi-wai Yeung, Associate and Regional Management, University Professor, Department of Building and of Lodz Real Estate, Hong Kong Polytechnic Professor Grzegorz Węcławowicz, Dep- University artment of Urban and Population geog- Paul Zimmerman, Executive Director, raphy, Polish Academy of Sciences MF Jebsen International Ltd Jacek Wesołowski, dr hab. inz. arch, Politechnika Łódzka Anna Wojnarowska, Architect, Praco- wnia Projektowa Policy Exchange would like to thank Phil Hong Kong Hulme and the Hadley Trust for their sup- Dr Peter Cookson Smith, Director, port. Urbis Ltd Special thanks to Liz Mott for her travel Adrienne La Grange, Associate Professor, support and Joost Beunderman, Rosemary Department of Public and Social Scanlon and Ivan Constantino for research Administration, City University of guidance. Steve and Mary Swaffield, Hong Kong Miranda Kimball, Mark Hobel and Ursula Kevin Ka-lun Lau, Research Assistant, and Horst Hartwich for their kind hospi- Department of Building and Real tality, and Philippa Ingram and Emily Estate, Hong Kong Polytechnic Dyer, whose editorial support was, as University always, invaluable. Dr Chan Wai Kwan, Senior Director The views expressed in the report are Business Policy, Hong Kong General those of the authors, and not necessarily of Chamber of Commerce the people we interviewed.

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Executive Summary

In our first report, Cities limited, we doc- ple respectively (albeit as part of a much umented the growing divergence larger city region). This range is roughly between those UK cities that have been equivalent to that between London and performing well and those that have not. Hull or Leicester. Greater Manchester and We found that over the last decade cities Glasgow are comparable in size to that received significant central govern- Vancouver, Birmingham to Amsterdam, ment regeneration funding failed to and Sheffield to Łódź. catch up with either the average national Some of our sample cities are gaining performance or a sample of well-per- population, some are losing, and this forming cities on measures of economic reflects the situation in the UK more and social well-being. widely. Vancouver’s population growth Three conclusions emerged from this between 2001 and 2006 was over seven study. First that current urban policy is per cent while in the same period proving ineffective at helping the worst Bochum, one of the main cities in the performing cities to improve and con- Ruhr, lost over three per cent, similar to verge to national changes. Secondly that of Merthyr Tydfil. some cities suffer disproportionately Equally some cities have high unem- from geography and are now too isolated ployment (Ruhr and Łódź) while others from the changing economic landscape have a strong local labour market of the UK. And finally size matters: larg- (Vancouver and Hong Kong). For some er urban areas appear to be doing better improvements in local incomes and than medium-sized ones, as they benefit health are central, for others the issue is from greater agglomeration and hub sustaining these. This very much reflects effects. the history and the stage of development Our search for better alternatives took each of these cities currently stand at. us to six city-regions in five countries. Density levels vary dramatically with We went to places that have had to Hong Kong standing out as being remark- address similar urban issues to UK cities, able for its crowdedness. By that standard in order to examine how they have all of the other places sprawl, but none are designed and delivered urban policy. sprawling places devoid of place or centre. Our findings from Vancouver, the Ruhr, We examine how urban policy has Amsterdam, Warsaw, Łódź, and Hong been structured, delivered and funded in Kong are reported in Success and the City: each of these cities and why some of Learning from international urban poli- these cities have been more successful at cies, the second in a series of three regeneration than others. reports on urban regeneration released by Policy Exchange and Localis. City Overview

Findings Healthy City, Happy Citizens?: Hong Kong was the largest city in our Vancouver’s Regeneration Experience study with close to seven million people, Although Vancouver has minimal Bochum and Gelsenkirchen in the Ruhr powers on paper, its ability to city-region among the smallest, with mobilise civic society and negotiate approximately 375,000 and 250,000 peo- political settlements has allowed the

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Executive Summary

Table 1

Ruhr Vancouver Amsterdam Essen Bochum Gelsenkirchen Łód ź Warsaw Hong Kong

Total Resident Population (000’s), 2006 2,117 743 581 377 267 768 1,702 6,910 Population Change (%), 2001 - 2006 7.6 1.1 -1.9 -3.3 -3.3 -2.4 1.8 2.8 Density (Population per Sq Mi), 2006 1,906 11,658 7,161 6,710 6,605 6,738 8,440 16,273 Life expectancy at birth (years) 81 77 75 75 75 72 76 82 Unemployment rate (%), 2006 4.4 8.7 16.8 15.0 21.6 7.4 4.3 3.4 GDP per capita (PPP) 2005 (£) 17,288 16,844 25,195 21,488 18,821 4,994 8,612 19,353

city to put in place radical renewal Strong local government within a high- and planning strategies, exemplified ly decentralised country has led to by the 2010 Winter Olympics. robust competencies at the city level. A good and stable working relation- This culture of policy formulation and ship between city leaders and the accountability from the bottom-up has planning department has led to prag- produced innovative and partnership- matic citywide responses to regenera- led regeneration, with cities working tion needs, which has permitted sys- closely with local people, housing asso- tematic incentives for inner city ciations and businesses. developments benefitting local com- Recent years have seen a two-fold munities and the wider city. change in policy with both a consoli- Vancouver prides itself on its high dation of initiatives and funding quality of life. The perception of streams and a shift in activity from Vancouver as a good place to live and physically updating cities to ensuring its function as a hub city for the west- social health, which has involved the ern seaboard of Canada has accelerat- incentivisation of the upwardly ed population growth levels. This rise mobile back in city areas by develop- in demand has not been met by an ing more attractive and diverse cities associative rise in housing supply. areas.

Shall we go Dutch?: A Local Partnership Reprogrammed for Growth: Regenerating Approach to Regeneration the Ruhr The Netherlands has a long tradition In a similar way to many other areas in of understanding the importance of Europe, urban policy has been focussed spatial aspects to policy. For a com- on ameliorating the effects of deindus- paratively small country it has keenly trialisation and population loss on disaggregated national spatial plan- cities in the Ruhr. The Ruhr does how- ning from city planning which has ever still have many locational and enabled policy at each level to focus skills advantages, which offers many on the appropriate scale of activity. opportunities for growth.

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Strong and responsive local govern- The Polish experience in Warsaw and ment have been able to produce tai- Łódź points to the importance of lored city-led regeneration strategies engaging civil society and generating which have sought to reinvigorate a culture of trust and innovative local economies and local communi- thinking when it comes to regenera- ties, and sits in a wider pro-growth tion. approach to city planning in the region. Making Money: Urban Regeneration Urban renewal funding is held at the Lessons from Hong Kong city–level and is allocated on popula- Reversing the classic assumption that tion and tax revenue levels. This regeneration is a short-term liability for incentivises local politicians to com- the public purse, Hong Kong, through pete to make their cities attractive the Urban Renewal Authority, has and productive, bringing in econom- engineered regeneration so that it is an ic activity, people and skills. asset to city finances and removed from State-led regeneration initiatives have the workings of government. proved far less successful than those Reflecting Hong Kong’s commitment led by cities as they are more prone to to high productivity and low govern- mis-appraising the needs of the local- ment intervention, regeneration has ity. been centred on developing city effi- ciencies and high mobility levels with Picking up the Pieces: How Poland is low levels of bureaucracy. Wholesale Trying to Renew its Cities redevelopment of large urban sites The country’s socialist legacy has left tied to transport infrastructure has Polish cities with large structural, been favoured in the short run as the economic and societal issues which most productive and economically urban policy as had to address. efficient use of scarce urban land. Urban regeneration did not exist In the public psyche regeneration has prior to 1989 and neither did an become closely associated with a per- empowered local government. ceived erosion of traditional Hong However, nowadays cities are respon- Kong. This has been amplified by the sible for their own affairs, with high perception that civil society’s views levels of autonomy. are ignored in the process of regener- Growing city freedoms were matched ation. with growing city responsibilities not least in restructuring local economies Conclusions and labour markets. However, a poor In Hong Kong, Amsterdam and the culture of accountability, unrespon- Ruhr region we find flexible, effective sive policy formulation and limited and accountable city-led regeneration funding mechanisms has not pro- characterised by strong local leadership duced the urban changes that many and innovative policy formulation. would have liked to see. This is made Vancouver shares many of these same all the more apparent given recent characteristics but due to its constrained accession to the European Union, autonomy its successes are harder won which has made available new fund- and longer in the making. Warsaw and ing for many cities, but has offered Łódź suffer from an imbalance between their populations new and attractive local powers and local abilities which has alternatives in the west. slowed necessary urban changes. In our

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Executive Summary

final report we will apply many of these tions which aim to give British cities – findings to the urban regeneration of the and the people who live in them – the UK and produce a set of policy sugges- chances they deserve.

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Introduction

Policy Exchange sent James Swaffield, one work closely with housing associations, for of the authors of its series of papers on example. But events such as the murders of urban policy, to investigate six different Pim Fortuyn and Theo van Gogh on the cities and city-regions in three different streets of Amsterdam have challenged continents – Vancouver, Amsterdam, the Dutch moderation and brought social Ruhr Area, Warsaw and Łódź, and Hong inclusion to the forefront of urban policy. Kong. His task was to interview policy Like many towns of Northern England, makers and local government officials, rep- Scotland and South Wales, those of the resentatives of civil society and academics, Ruhr Area are the product of the industri- as well as ordinary citizens, to find out al revolution and the demand for coal. which urban regeneration policies worked That era is over and it will not return. The in these places – and why. He looked for difficulties are familiar: declining popula- common themes that would inform the tions, blighted environments and high debate in Britain. unemployment. But what have often Vancouver is probably the most proved to be intractable conditions in “European” of North American cities. It is other countries have been met with imagi- the most densely populated city in North nation and determination on the Ruhr. America after New York and San The Zollverein, in is an outstanding exam- Francisco. This makes it more like many ple of how to adapt the architecture of British cities than, say, Detroit or Phoenix. heavy industry for the creative and service It also has a strong planning department industries of today. In Germany too, urban which might provide ideas for how the policy has worked best when led from the British system could be made more respon- local level. sive and effective. Vancouver is proud of its For 45 years, Polish cities were con- green reputation and has actively discour- trolled from the centre and the needs of aged suburbanisation and commuting by their populations were firmly subordinated car. But although it regularly tops the polls to the requirements of industry and the of places where people would like to live five-year plan. Since 1989 there has been a not all residents are content. Affordable chance to see what happens when respon- accommodation is scarce and the argu- sibility for urban policy is transferred from ment about high-density living versus sub- the centre to the level of the region and urban space has echoes in every developed municipality. The experience of cities such country with a housing shortage. as Warsaw and Łódź shows that the past The Netherlands, like Britain, industri- still weighs heavily: lack of regeneration alised early and its towns and cities have skills, expertise, continuing deference to long histories. More recently, cities such as higher levels of government and a deep dis- Amsterdam have also had to deal with the trust of private enterprise have not made it consequences of Sixties social housing and easy to tackle the urban legacy of commu- immigrant communities clustered together nism. Above all, local government has not in pockets of deprivation. In marked con- received the funding to match its new trast to Britain, however, the Netherlands responsibilities, something which those of has devolved many responsibilities for us in Britain who would like to see more social planning to local government. The power returned to local authorities should traditional pragmatism and consensual not forget. approach of national government is also Hong Kong is a city that never stands apparent at lower levels – local authorities still, never sleeps; a city whose raison d’être

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Introduction

is economic; an entrepôt and an entrepre- Many other towns and cities could neur’s dream. If any city can show the have been visited to examine the typical world how to change, and change dramat- problems of urban renewal. The United ically, surely it is Hong Kong. But it proves States has cities that are declining, such as not to be quite the free market ideal that Detroit, and growing, such as Las Vegas. many imagine. The Government owns the Rioting in the banlieues of Paris made freehold on 95 per cent of the land and headlines around the world. Even closer works closely with a few big private devel- to home, Dublin has been transformed in opers. In the process, many of the chaotic, the past 20 years. All of these would have atmospheric streets of traditional Hong made good case studies and clearly our Kong are being replaced and the public has five examples do not contain the sum little say in the redevelopments – although total of what policy makers can learn civil society is becoming more vocal. But about urban regeneration from other compensation for those who are uprooted countries. But we believe that they show is generous, there is enough social housing the benefits of looking outwards and and the metro system has expanded while observing familiar conundrums from for- remaining both cheap and profitable. eign perspectives.

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Healthy City, Happy Citizens? Vancouver’s Regeneration Experience

It is easy for a visitor to Vancouver to come cent (0 per cent indicates exceptional quali- away thinking: “Why don’t I move here?” ty of life), beat Melbourne and Vienna into The city centre is a tourist magnet, arran- second and third positions respectively. The ged around a magnificent waterfront with 2007 worldwide quality of living survey by views of the ocean and the Rockies. It is Mercer Human Resource Consulting compact enough to walk around (a real placed Vancouver joint third with Vienna boon for anyone who has visited an aver- (Zurich in Switzerland came first).3 age American city without a car). Stanley British Columbia, with Vancouver at its

1. OpenStreetMap, see Park, a 400-hectare green space with all the economic centre, has outpaced national www.openstreetmap.org/?lat=49 .26&lon=-123.167&zoom= quintessential Canadian accoutrements – social trends in Canada and the United 11&layers=B0FT racoons, beavers, totem poles and States. According to the Cascadia 2. “Where the grass is greener”, The Economist, 22 August 2007, Mounties – is on the doorstep of most cen- Scorecard for 2007, compiled by an envi- see www.economist.com/ markets/rankings/displaystory.cfm?s tral residents and easily accessible for oth- ronmental NGO, average life expectancy tory_id=8908454 ers thanks to a large network of cycle paths. for a resident of Vancouver was 81.1 years,4 3. The world’s best cities are still in Switzerland, City Mayors, 3 Nearby are mountain resorts and world- two years longer than any other north- April 2007, see www.citymayors. class skiing centres, such as Whistler, com/features /quality_survey.htm western state, beating both Washington which is jointly hosting the 2010 Winter and Oregon, and 3.5 years longer than 4. British Columbia 2007 – Cascadia Scorecard, Sightline Olympics with Vancouver. New York.5 If British Columbia was a sov- Institute, Seattle 2007, see www.sightline.org/research/bc/re The city regularly wins accolades for its ereign country, it would have the second s_pubs/bc_scorecard07 quality of life. In August 2007 the Econ- highest life expectancy after Japan. 5. Thompson C, “Why New Yorkers Last Longer”, New York omist Intelligence Unit released figures for Vancouver has low levels of gun crime Magazine, 20 August 2007 its annual liveability rankings, which assess and heart attacks and high levels of educa- 6. The Pan-Canadian 6 Assessment Program (PCAP) living conditions in more than 125 cities: tional attainment. It has the second high- and the School Achievement 2 Indicators Program (SCIP), Vancouver came top. Its score of 1.3 per est socio-economic index score in Canada, Council of Ministers of Education, Canada, Ottawa tied with Ontario and just below that of 2007, see 1 7 http://cmec.ca/pcap/indexe.stm Figure 1: Greater Vancouver Region oil-rich Alberta. Vancouver’s score of 0.52

7. Bussiere P, Knighton T and compares very favourably with the Can- Pennock D, Measuring Up: Canadian Results of the OECD adian average of 0.45. PISA Study, Statistics Canada, Ottawa 2007, see Its high quality of life, coupled with a www.pisa.gc.ca/81-590- xie2004001.pdf mature financial services sector that bridges

8. Worldwide Centers of East Asia, America and Canada, gave Vanc- Commerce, Index: 2007, Master Card Worldwide, 2007, see ouver top ranking for “ease of doing busi- www.mastercard.com/us/compa ny/en/wcoc/pdf/index_2007_us. ness” on the MasterCard Worldwide Centers pdf of Commerce Index in 2007.8 In terms of

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6.3 per cent for Canada as a whole (see Figure 2).11 In a national economy that has been prospering, Vancouver has led the way, although areas such as the Downtown Eastside stand as a reminder of the difficulty in bringing all areas up. As Table 1 shows, both Vancouver and its catchment area grew very fast between 2001 and 2006. Its annual growth rate of 2.6 per cent, comparable to Jakarta and Cairo, is unprecedented in a city in a developed country.12 In 2005 46 per cent of the population of the city were classed as immigrants. They are attracted by the prosperous local economy and liveability Plate 1: Stanley Park with Vancouver of the city, but rising population pressure 9 in the background can threaten the quality of life in the long term, as we shall see. the availability of competitive trade logis- tics, interconnectedness and ability to retain talent, the city was unbeatable. The role of government Overall, it ranked 28th as the best city to Vancouver’s enviable geographical advan- do business in, beaten primarily by cities tages cannot be underestimated. But, with- that were considerably larger - London, in its very limited powers, the city has tried New York and Tokyo ranked first, second to make the most of them. Dr Kennedy and third respectively, for example. The Stewart, an assistant professor in the attractiveness of Vancouver for businesses Graduate Public Policy Program at Simon has brought annual unemployment rates Fraser University in Vancouver, describes down from 7.3 per cent in 2003 to 4.4 Canada as “the most decentralised federal per cent in 2006,10 compared to 4.8 per country in the world”.14 Political and sov- cent for British Columbia in 2006 and ereign authority is constitutionally divided

Figure 2: Unemployment rates in Vancouver, British Columbia, 9. Parks – Stanley Park – Seawall, SqueakyMarmot, Flickr, Canada and the United Kingdom 18 April 2006, see www.flickr.com/photos/squeaky marmot/131044236/ 13 10. Labour Force Survey – 12 Labour Force Activity by BC Metropolitan Area (Annual 11 Averages), British Columbia Statistics, British Columbia 10 2007, see Canada www.bcstats.gov.bc.ca/DATA/dd 9 /handout/lfsmetro.pdf

11. Ibid 8 United Kingdom 7 12. Leo C and Anderson K, Being Realistic about Urban 6 British Growth, Canadian Centre for

Unemployment Rate % Columbia Policy Alternatives, Vancouver 5 2005. Vancouver 4 13. British Columbia Statistics 14. Dr Kennedy Stewart, Public 3 Policy Program, Simon Fraser 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 University, interviewed 29 March 2007.

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Table 1: Vancouver Vital Statistics 13

Population Population Growth % Occupied Km2 area 2006 2001 2001-6 Private Dwellings

Vancouver 578,041 545,671 5.9 253,212 114 Greater Vancouver 2,116,581 1,986,965 6.5 817,033 2,877

between the national and provincial gov- education, health, policing and other ernments, as outlined in sections 91 and social services, for its population of 92 of the Constitution Act, 1867, with approximately 4.3 million. The munici- the provinces having exclusive jurisdic- pality of Vancouver is responsible for tion over municipal matters. The federal maintaining the infrastructure of the city government has responsibility for the – basically to make sure that it keeps national issues – foreign policy, economic working. It has more powers than most and fiscal policy – and tries to avoid tin- Canadian cities, thanks to the Vancouver kering outside these areas; it is both too Charter that it was granted by the provin- expensive and too troublesome. In fact, cial government in 1886 (see Box A). federal government has no direct power in James Lightbody, Professor of Political city affairs and cannot directly intervene Science at the University of Alberta, clas- there. sifies the duties of Canadian city govern- Below the federal government are the ments under three headings: hard respon- ten provincial governments, and below sibilities (basic utilities and public trans- them are the municipalities (3,500 in port); soft responsibilities (policing, plan- total).15 Both levels have decision-making ning and zoning, parks, social services, responsibilities and tax-raising powers. housing and cultural programmes), and

15. Lightbody J, Politics, For this study, it is the relationship financial responsibilities (management of Canada, p. 29, Broadview Press, 2006. between province and municipality that is personnel, insurance, revenue collection 16 16. Adapted from Lightbody J, critical. The province, in this case British and debt management). The complexity Politics, Canada, p 17, Columbia, is responsible for providing of the whole system is shown in Figure 3. Broadview Press, 2006.

17. Smith P and Stewart K, “Local Whole-of -Government Policymaking in Vancouver: Beavers, Cats, and the Mushy Box 1: The Vancouver Charter, 1886 Middle Thesis”, in Young R and Leuprecht C (eds) Canada: The State of the Federation, 2004: Municipal-Federal-Provincial Vancouver was founded when the Canadian Pacific Railway company decided to extend the ter- Relations in Canada, p 13, McGill-Queen’s University Press, minus of its transcontinental railroad from Port Moody to the deeper port at Coal Harbour in 2006. 1886.17 Within a year population around this terminus was 8,000, by 1891, 15,000.18 The boom- 18. Ibid, p14. ing city needed powers to deliver essential services and the charter was the province’s response. 19. Vancouver Government Structure since 1886, City of Uniquely, it gave the city the power to borrow money and provide services. Vancouver was also Vancouver, Vancouver 2007, see http://city.vancouver.bc.ca/ctycler granted control over development and the ownership of public areas within its boundaries; in k/election_systems/chapter1.html other cities, the province owns public areas.19 The charter also permitted the municipal council to 20. The Relationship of Five Canadian Cities and their provide and pay for the promotion or opposition of federal or provincial legislation that might Provinces, 2000, City of Toronto, 20 Toronto 2001, see www.canadas affect the municipality. cities.ca/caoreport_092000.htm

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Some policy areas, however, overlap the government in their relationships with jurisdictional boundaries of province and other political levels.24 He suggested that municipality. As a result, in 1998 trans- Canadian city governments were beavers, port was devolved from provincial to while their American counterparts were regional political level – the Greater cats. Beavers had only one life and, when Vancouver Regional District (GVRD) – faced with danger, were prone to slap their and was made self-funding through levies tails and run back to the safety of their and user-fees.21 dams. Cats, on the other hand, had nine Canadian cities do not have a constitu- lives and could play games with people, tional right to operate independently but snuggling up to those with power in order are under the legislative control of provin- to be fed and then slinking round to the cial governments. For this reason munici- next-door neighbour for another meal. As palities are often called the “creatures of the you would expect, governments made up of province”.23 And to a large extent this is cats are bolder and win more local discre- true, but there is room for manoeuvre. tion than those of beavers. Kennedy Stewart describes the process, Canadian cities were more likely to be mysteriously, as a matter of “cats” and beavers than cats because of their origins. “beavers”. These were the terms applied by When its Constitution was drafted an academic in 1986 to explain the differ- Canada simply did not have cities the size ence between Canadian and American local of those in the United States, but the

Figure 3: Active Elements in the City Policy System 22

Regional Districts Politics, Media Circus The Province Policies

21. Metro Vancouver, 2008 Agencies Budget in Brief, Vancouver 2008, Boards, see www.gvrd.bc.ca/about Departments Agencies /pdfs/2008BudgetinBrief.pdf

22. Lightbody J, Politics, Bond Canada, p 79, Broadview Press, Raters 2006. Politi cal Gladiators 23. Section 92(8) of the Professional Constitution Act of 1867 gives Man ager Mayor Associatio ns provincial governments control Civil Society over all municipal affairs, for example. See Smith P and Council Stewart K, “Local Whole-of - Government Policymaking in Vancouver: Beavers, Cats, and the Mushy Middle Thesis”, in Standing City Young R and Leuprecht C (eds) Canada: The State of the Departments Committees Federation, 2004 : Municipal- Federal-Provincial Relations in Canada, p. 13, McGill-Queen’s University Press, 2006.

24. Jones V, “Beavers and Cats: Stakeholders, Boosters, Neighbourhood Federal-Local Relations in the Clients, Un ions Groups United States and Canada”, in Environmentalists Oberlander HP and Symonds H (eds) Meech Lake: From Centre to Periphery, University of British Columbia Press, 1986.

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Box 2: Vancouver Agreement

In March 2000 the governments of Canada, British Columbia and the city of Vancouver signed the Vancouver Agreement. It began as a five-year urban development compact that was later extended to 2010 to provide for the needs of the Winter Olympics. One of its main aims was to support the long- term economic and social development of the Downtown Eastside, a classic pocket of inner-city deprivation that had resisted all attempts to improve it. Ottowa naturally does not want it to stand out as a “black-mark on the city’s copybook”. As a result of the powers given it in its charter, Vancouver has more experience of urban development, and more interest in delivering it, than other cities and has often butted heads with the provincial government over this. In place of failed top-down policies, the city wanted a co-opera- tive approach involving all levels of government, with community participation at the heart of the strategy. The Vancouver Agreement has sent out a signal that collaboration and pragmatism are the order of the day. Under the agreement, the province allocates funds but allows the planning department, local people and the city to guide the process. Resources are pooled, which has helped to build trust and a sense of change. Inter-governmental financing has been made more flexible and private sector investment actively sought. In 2003, the federal and provincial government each contributed CAN$10 million, in addition to staffing, resources and financial assistance for projects run through different ministries. Later, the province provided a further CAN$5.75 million, while the city has contributed through heritage preservation incentives and increased local funding.

country was too big to be run from one economy to extract public money from the capital. This made the region the most provincial and federal levels, which lies at logical place in which to locate power; the heart of Vancouver’s success. It may not hence Canada is a federal nation with the have de jure power, but it has assumed de province at its institutional heart. facto responsibilities. But settlement patterns change and political structures are challenged and negotiated; Kennedy Stewart, and his col- Making the most of what you have league Patrick Smith, felt that the beaver- As with most local governments, Vancou- cat metaphor needed updating in light of ver’s biggest constraint is finance. The fed- changes in municipal powers, especially in eral government collects the majority of Vancouver. Stewart suggests that Van- taxation revenue, such as income tax. It couver has prospered over the past ten then allocates funds to the provincial gov- years because it has made itself an “eager ernments and the municipalities, more to beaver”.25 In that time the city has taken the former than the latter. The provinces action against drugs, held a plebiscite on also give money to their municipal author- the 2010 Winter Olympics and negotiated ities, which are allowed to generate further the Vancouver Agreement (see Box B). All revenue through local taxes – these account

25. Smith P and Stewart K, these activities fell well outside its constitu- for approximately a fifth of their annual “Local Whole-of -Government Policymaking in Vancouver: tional powers, and required the backing of budget. But they are not allowed to borrow Beavers, Cats, and the Mushy public opinion. It is this “eagerness” – the money, except Vancouver, or run a public Middle Thesis”, in Young R and Leuprecht C (eds) Canada: The ability to motivate and mobilise people – deficit. State of the Federation, 2004 : Municipal-Federal-Provincial coupled with its political and economic Forty per cent of a municipality’s annu- Relations in Canada, McGill- Queen’s University Press, 2006 muscle as the driver of the West Coast al revenue is conditional and comes with

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strings attached, for example, in the form Table 2). Of the items which make up of shared-cost programmes or grant-in- municipal funding for renewal around 6 aid.26 Cities cannot spend this money how per cent was spent on planning and devel- they want, but have to spend it how they opment (CAN$64 million or £30.5 mil- are told to by the province or federal gov- lion); 15 per cent on recreation and parks ernment. Their hands are tied. In many (CAN$160.3 million); and 9 per cent on ways their situation is remarkably similar community and cultural services (CAN$ to that of local authorities in the United 92.9 million). The Winter Olympics are Kingdom. providing a one-off opportunity to gain In general, Canadian cities have been substantial cross-governmental investment operating under the constraint of reduced for infrastructure projects such as the public spending: their share of GDP is at CAN$1.5 billion Canada Line metro to its lowest since the Depression of the the airport and the “sea-to-sky” highway 1930s.27 Cost-saving exercises have led fed- linking Vancouver and Whistler.28 eral and provincial government to transfer more responsibilities to the cities, which have had to fill gaps in services, by provid- History of Renewal ing some social housing and dealing with Since 1973, Vancouver has focused on homelessness, for example. being a liveable city.30 The Seventies were Revenue and expenditure generally bal- a time of suburban development across ance year on year because the city is unable North America. Greater car ownership, to run a deficit and unwilling to keep a new patterns of work, and continuing surplus. Total expenditure and revenue in racial discrimination led the affluent mid- 2006 was CAN$1.06 billion in 2006 (see dle classes to move out of city centres in

Table 2: City of Vancouver Financial Activities 2006-9

Revenue 2006 (CAN$ million) % Expenditures 2006 (CAN$ million) %

Property taxes, penalties and interest 508 48 General government 116 11 Water fees 69 6 Police protection 180 16 Solid waste fees 43 4 Fire protection 81 8 Sewer fees 33 3 Engineering 171 16 Other fees, rates and cost recoveries 313 29 Water utility 70 7 Revenue sharing, grants and contributions 19 2 Solid waste 45 4 Investment income 30 3 Sewer utility 80 8 Rental and lease income 43 4 Planning and development 64 6 26. Lightbody J, Politics, Canada, p 351, Broadview Sale of property 81Recreation and Parks 160 15 Press, 2006. Community and cultural 27. Yalnizyan A, Squandering Canada’s Surplus: opting for services 93 9 debt reduction and ‘scarcity by design’, Canadian Centre for Total 1,065 Total 1,060 Policy Alternatives, p 11, 2004.

28. Simon B, “Pleasant? Not in my backyard!”, Financial Times, 15 January 2006.

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droves. Vancouver failed to fall in line, the site for the 1986 World Expo.The old stopping freeways penetrating the old city buildings were demolished to make way and bringing in sweeping restrictive plan- for the international pavilions, but under ning controls to encourage people to stay a period of government austerity the downtown in high density neighbour- grants and funding was not available to hoods and to discourage suburbanisa- publically regenerate this area. Two years tion.31 later the province sold the land to a Hong The key to its non-conformity lies in the Kong developer, who built the high rise 1960s public protests, led by Jane Jacobs, business district on the north shore that the visionary urban planner, against the has more than a tinge of Hong Kong proposed demolition of Gastown and the about it, worlds away from the landscape Downtown Eastside. They were to make of its neighbour False Creek South. way for a major highway, ominously It was here that the city first started to named the East Downtown Penetrator. exploit public returns from private devel- According to Professor David Ley, a distin- opers – its so-called social bonus zoning. guished urban geographer and Director of The planning department had the power the Metropolis Project at the University of to alter zoning and adapt developments British Columbia, this successful rebellion and decided to allow taller buildings in against development set the tone for the return for provision of public services. By next four decades of urban change.32 (It is approving high-rise towers in the develop- probably not a coincidence that the cam- ment of False Creek North, it gained parks, paigning environmental organisation, schools and community facilities. This Greenpeace, was founded there in 1971.) mutually beneficial policy has continued. Further, in response to growing public Developers like the extra money they can concern about the disappearance of green accrue from higher densities and recognise space, the province stepped in to halt that the public facilities they are forced to urban development on valuable agricultur- provide attract people to their develop- al land. The Agricultural Land Reserve was ments. The city gains public amenities, established in 1972 and exists to this day in such as social housing, for minimal expen- much the same way as the greenbelts in diture by the taxpayer. England. According to Christopher Leo and Housing formed the core of renewal Kathryn Anderson, of the University of until the mid-Eighties, and all three levels Winnipeg, Vancouver is unorthodox in of government worked together and implementing such regulations, but it achieved substantial success. In Vancouver this period of renewal is best seen in False Plate 2: False Creek North 33 Creek South, a pleasant 50-acre area of medium density housing just over the river 29. Ibid. from downtown. As a new build develop- 30. Punter J, The Vancouver Achievement: urban planning ment it benefited from landscaping and and design, University of British Columbia Press, 2003 high quality housing. It was well connect- 31. Leo C and Anderson K, ed to the city – an attractive place to live, Being Realistic about Urban Growth, Canadian Centre for very much fitting with the environmental Policy Alternatives, Vancouver 2005 goals of the day. 32. Professor David Ley, Director On the opposite bank, False Creek of the Metropolis Project at the University of British Columbia, North has had a very different experience interviewed 31 March 2007 of development. An old industrial area, 33. Glitter, SqueakyMarmot, Flickr, 8 January 2007 prime for redevelopment, it was chosen as

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“takes care to keep its exactions economi- A virtuous cycle has been manufactured cally viable, and its regulations although – restrictive planning, compact city, low car strict are clear and transparent. As a result, use, more walking, healthier population, developers complain, but comply never- safer city, booming economy, growing pop- theless, because Vancouver is a good place ulation. The big question is whether this to do business.”34 But a system like this can cycle can be maintained. The city govern- work only in a high growth city. If it were ment wants to preserve the quality of life by static or declining, returns would not be its density initiatives. Residents want high enough for the private sector to take affordable housing in a red-hot market. Are part. This is why it could be applied suc- these two desires compatible? cessfully in Bristol or the East End of London, but not Merthyr Tydfil. The basic rules of supply and demand must never be In mixed neighbourhoods such as in Vancouver, all forgotten. “ groups enjoy safer streets, cleaner environments and Because ribbon development has been discouraged Greater Vancouver residents better, more varied food stores ” tend to live in compact communities, making it is possible to get around by walking and cycling. Much like Manhattan, Amsterdam or central Paris, Upwards and Onwards Vancouver almost forces you to walk. In Congestion, pollution and the quality of the words of Larry Beasley, former director the city environment are consistently of planning for Vancouver, the city govern- claimed to be the main civic concerns of ment’s philosophy was to restrict commut- people living in Vancouver. Yet a recent ing into the centre and “to let congestion article in Vancouver Magazine, “The be an ally”.35 The direct result is one of the Density Game”, expressed the concerns of highest density downtown area in North many when it declared that “the single- America, where over 90 per cent of the family house is an endangered species in 34. Leo C and Anderson K, Being Realistic about Urban buildings are residential, but with a mixed this city. What’s a guy who’s always wanted Growth, Canadian Centre for Policy Alternatives, Vancouver income and private-public profile, and a house to do?”37 2005. only 10 per cent are available for commer- As Table 3 illustrates, the gap between 35. Beasley L, Living First in Downtown Vancouver, City of cial or other non-residential space. earnings and house prices may well prove Vancouver, 2000, see www.city.vancouver.bc.ca/comm This is not a story just about those rich unsustainable. Demand for housing is ris- svcs/currentplanning/living.htm

enough to benefit from more choice. In ing in the booming city, but supply is 36. Wen M, Browning CR, and Cagney KA, “Poverty, affluence mixed neighbourhoods such as in restricted by planning regulations. The and income inequality: neighbourhood economic structure Vancouver, all groups enjoy safer streets, wealthy can buy themselves out of the and its implications for health”, Social Science and Medicine, vol cleaner environments and better, more var- impasse – one penthouse on the harbour 57, pp 843-54, 2003. 36 ied food stores. More people using the front with views to the mountains sold for 37. Bridge T, Glave J and Harris M, “The Density Game”, streets means more passing trade for shops. CAN$7.75 million (£3.7 million) two Vancouver Magazine, April 2007. 38 CCTV cameras – the eyes of a community years ago, and between the third quar- 38. Leo, C and Anderson, K, Being Realistic about Urban lost – are not necessary on every corner ters of 2005 and 2006 the number of Growth, p 9, Canadian Centre for Policy Alternatives, and building, thanks to the real eyes of the homes sold worth in excess of $1 million Vancouver 200538. Simon B, “Pleasant? Not in my back- street. A dense population, as in Hong in Greater Vancouver rose by over 57 per yard!”, Financial Times, 15 Kong, has brought well-maintained roads, cent.38 Low-paid workers are either forced January 2006. sidewalks, parks and transit systems. There into long commutes (in a city designed to 39. Kerensky L, “Canada’s Most Expensive Homes”, Forbe.com, is no underground transport yet, but a line stop commuting) or into sub-standard 31 January 2007, see www.forbes.com/2007/01/30/mo from the centre to the airport is under con- housing or, worse still, into working st-expensive-canada-forbeslife- cx_lk_0131canadasmostexpensi struction. homelessness, being in employment but vehomes.html

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Table 3: Cost of living and housing: comparison of Vancouver and Winnipeg, 2001 (CAN$)40

Vancouver CM Winnipeg CMA Vancouver > Winnipeg

Median household income $ 49,940 $44,562 12% Average home value $294,487 $104,331 183% Rent $/month $814 (20% income) $540 (14.5% income) 51%

without a permanent place of residence. But Professor Ley believes the city can This is only half the story. Vancouver has make it work. He reasons that Vancouver a strong financial and service sector but, never industrialised to the extent of cities in a downtown where 90 per cent of the such as Baltimore or Buffalo and thus floor space is residential, office space is never went through deindustrialisation as being squeezed – a disincentive for new they did. Apart from the Downtown businesses and a worrying trend for the Eastside, the city is not faced with intra- municipality. ctable distressed districts requiring huge Because it has relied on property taxes investment. EcoDensity may sound ideal- to fund public spending, city hall has istic but the province and central govern- always had a close relationship with the ment appear to be lining up behind it, as planning department. This is more than they did with social housing in the 1970s. ever the case since the arrival of a new “It is as if all of a sudden all the lights had mayor, Sam Sullivan, in December 2005 turned green,” one resident told me. and a new planning director, Brent When such an alignment occurs the Toderian the following year. For them the power to change should not be underesti- future of Vancouver lies explicitly with mated. their proposed EcoDensity policies, Yet these policymakers may face a sub- which are supposed to promote sustain- urban revolt. The Financial Times report- ability and a sound environmental legacy. ed in January 2006: “Getting to work on They want to shift the emphasis of regen- time is, for now, a higher priority than eration from liveability to environmental- cleaner air for many Vancouverites.”44 To ism – or what Toderian calls “resilient meet the increasing demand for afford- 41 40. Leo, C and Anderson, K, liveability”. New patterns of develop- able housing without the environmental Being Realistic about Urban Growth, p 9, Canadian Centre ment in the city would include a shift to disadvantages of ribbon development res- for Policy Alternatives, 42 Vancouver 2005. greener amenities, services and systems. idential densities have to be increased,

41. Bridge T, Glave J and Harris The question is whether the EcoDensity and this is causing conflict, especially in M, “The Density Game”, Vancouver Magazine, p 46, 2007. policies are compatible with economic the suburbs. Protests about increases in

42. EcoDensity: The EcoDensity health and affordable living. Table 4 out- density are nothing new, but one of the Charter – Draft, 2007, City of Vancouver, Vancouver 2007, see lines their proposals. most dramatic took place in the suburb of www.vancouver-ecodensi- The authors of “The Density Game” are Dunbar West just last year. ty.ca/webupload/File/EcoDensity _Charter5.pdf sceptical: “The EcoDensity plan, with its The traditional plot size for a house in 43. Bridge T, Glave J and Harris long list of please everyone goals – afford- this area is 50 ft by 50 ft, or 2,500 sq ft – M, “The Density Game”, Vancouver Magazine, p 46, 2007. ability, sustainability, economic growth – not particularly large, particularly by 44. Simon B, “Pleasant? Not in could easily be laughed at as green-hued North American standards. Under the my backyard!”, Financial Times, 15 January 2006. political fluff.”43 densification drive, especially in the

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Table 4: Suggested EcoDensity Tools and Actions

Neighbourhood Planning

Re-zoning for higher density housing Green rapid transit lines Encourage a more home-centred working structure

Green Systems

Improve the energy efficiency of the built environment Use City infrastructure and Parks to generate energy More green space On-site food production facilities for new homes [gardens]

Affordability and Housing Need

20 per cent affordable housing in all new developments Incentives for affordable housing growth

Transportation

Develop a rapid transit network Encourage use of public-rights of way Car-free neighbourhoods Limit parking supply

Amenities and Social Infrastructure

Invest in parks and public spaces through density bonussing Access for all

Heritage

Transfer of density area outside of downtown to support conservation

City Business

Use of levies and tax shifting can create incentives to a greener, denser pattern of development

Knight, Kingsway and Arbutus neigh- ing public services. One night in February bourhoods, the plan is to divide these into 2007, unknown assailants torched these two separate plots of 25 ft each. The fam- new townhouse “double-dense” proper- ilies of Dunbar clearly see this as a shot ties, causing substantial damage. The across their bows, an attempt to try to message was clear: hands off our living erode their quality of life without increas- space.

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Table 5: A brief history of density 45

1973 Agricultural Land Reserve is created to limit urban sprawl. Prior to the 1970s some 6,000 hectares of land was urbanised per annum 1988 Shaughnessy residents fight a proposal to covert 3.2 hectares of neighbourhood parkland into multi-family housing 1991 City council approves the re-zoning of 8 million sq ft of downtown commercial space to res idential, Yaletown soon follows 1992 Arbutus residents protest the development of the Molson Brewery site. The condominiums go ahead, but with fewer units than planned 1995 City council adopts CityPlan to help define future growth, create or expand neighbourhood centres, and add density and variety in “neighbourhoods that have little variety now”. 1996 GVRD adopts Liveable Region Strategic Plan 2002 Over 500 residents from Dundarave and Ambleside protest a proposed density increase. 2004 Mackenzie Heights goes to war with former MLA Art Cowie over his application to build a three-unit rowhouse. Public protests. Council rejects application. 2006 A Vancouver City report reveals the growing scarcity of affordable housing in the Downtown Eastside. 2007 GVRD tables a report for residential “intensification”. Suspicious fires damage newly built Dunbar townhouses. These two units had been opposed by neighbours because they were built on two 25-ft-wide subdivided parcels

Figures clearly show, however, that Vancouver still grew faster than the more housing is needed. Homelessness in provincial average growth rate. This the Greater Vancouver Regional District would suggest that the density gamble has has doubled from 1,121 people in 2002 not yet adversely affected the city. to 2,174 in 2005, and this is overwhelm- For a large part this is because Vancou- ingly concentrated in the central city.46 ver is so important to Canada. Fourteen But the city is not going to relax its strict per cent of British Columbia’s population planning regulations, especially under its lives in the city and the majority of the new EcoDensity drive. For the less well- businesses operating in the province are off, this could reduce the attractiveness of based there. If the province as a whole is Vancouver and speed up the growth of gaining population, Vancouver is likely to the surrounding satellite towns of be at the forefront. Burnaby, Surrey and Richmond. If subur- To meet the growing demands on the

45. Poole R, “A Brief History of ban in-filling is rejected by local residents city for housing, especially affordable Density”, Vancouver Magazine, pp 46-53, 2007. these cities will benefit, especially as housing, without expanding the city

46. Social Planning and Research transport improves. boundaries has meant that policy has had Council of British Columbia, “On our Streets and in our Shelters”, The population of Surrey, for example, to focus on building up density levels in Results of the 2005 Greater grew by over 13 per cent between 2001 areas where this has not been the norm. Vancouver Homeless Count, 2005, www.gvrd.bc.ca/homel and 2006 (Figure 4) and over 118 per Moving the city onwards it seems is now a essness/pdfs/Homeless Count2005Final.pdf cent since 1986. Other areas such as matter of making it move upwards. 47. Cameron Gray, Director of Richmond and Burnaby have grown at Pointing to the city plan of Vancouver that the Housing Centre for the City of Vancouver, and Rhonda lower, but still significant, rates, since covers the full span of the wall, Cameron Howard, Senior Planner at the Department of Planning at the 1986 (61 per cent and 40 per cent). Gray, the director of housing for the City City of Vancouver, interviewed on the 27th March 2007. Despite rising housing prices, the city of of Vancouver, highlights the areas that are

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Figure 4: Population growth in the Greater Vancouver Area 48

16% Pop. change 2001 to 5 2006 (%) 14% Pop. levels in 2006 4 (million) 4 12% 3 10% 3 8% 2 6% 2 4%

Population change 2001 to 2006 % 1

2% 1

0% Vancouver Burnaby Richmond Surrey Greater British Columbia Vancouver

being considered for development or high- funds through many small housing co- er density levels.48 The large blue areas of operatives. This highly fragmented system industry and manufacturing are the most has little incentive for large developments visible, such as the Olympic Village devel- and economies of scale and cannot supply opment in South East False Creek, but enough affordable housing to accommo- other areas are dotted along key transport date the city’s 25,000 homeless or those in arteries in the suburbs. substandard units. Don Fairburn is a senior strategist at The Canada Mortgage and Housing the Canada Mortgage and Housing Corporation’s proposed solution is a col- Corporation, a government body that laborative, public-private system of deliv- ensures that low-cost mortgages are avail- ery, which would offer the economies of able and carries out research into the scale, consistency and skills base for social housing sector. He believes that afford- housing that developers have brought to able housing is not so much about max- private housing for years. It would take imising the impact of events such as the the form of a social housing charitable Olympics, as getting rid of the “just trust with private, municipal, provincial enough money to fail” mentality that per- and not-for-profit funding, and would vades the policy community.49 The best have the financial leverage, efficiency and policies in the world will not be achieved co-ordinated delivery mechanisms needed without qualified people to implement to make a real impact. In Fairburn’s words them and predictable revenue. In Van- this would allow the “city to finally look couver’s case, he believes that substandard after its citizens”. housing is due to a public sector that cannot compete with the cost-effective systems and innovation of a buoyant private Falling through the net: 48. British Columbia Statistics. developer market. The provincial govern- the Eastside Story 49. Don Fairburn, Senior Strategist at the Canada ment has normally controlled the devel- The area with most citizens in need of help Mortgage and Housing Corporation, interviewed on the opment of social housing by channelling is the Downtown Eastside (DTES), where 29 March 2007.

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average life expectancy is not the second highest in the world but, at 66 years, lower than that of North Korea.50 Although Aids, drug-related crime and mental illness are not typical of life in Vancouver, they are all too common in the DTES. Visitor guides are littered with warnings about this small area sandwiched between Chinatown and Gastown: “The worst skid row in North America. Don’t wander into this part of town” warns the Vancouver City Guide.51 There is even a walking tour entitled “From Commercial hub to Hard Time”.52 This is the hidden secret of the city – the poorest tract of land in urban Canada and a problem that refuses to disappear. Some 16,000 people live in the DTES, Plate 4: “Be Bold or Move to 57 about 3 per cent of Vancouver’s popula- Suburbia” tion.53 It is responsible for over 20 per cent of all mental health cases and has an aver- The Downtown Eastside was an area age income of CAN$12,084, a quarter of of poverty from the beginning. Vancouver’s average income of CAN$ Lumberjacks rented single rooms in 47,309.54 Conservative estimates suggest hotels there during the extreme cold of that there are more than 4,700 injection the winter months when they could not 50. World Population Prospects: drug users in the area, the death rate due to work. The men would spend their so- The 2006 Revision, United Nations, New York 2006, see alcohol is seven times that of the province called lucky-strike money on prostitutes www.un.org/esa/population/publi cations/wpp2006/WPP2006_Hig as a whole, drug related mortalities are 13 and alcohol and vice moved in to supply hlights_rev.pdf times the provincial level and Aids-related the demand. 51. Vancouver City Guide, Virtual Tourist, 2007, see www.virtualt deaths, 38 times.55 Things changed with the world wars, ourist.com/travel/North_America/ Canada/Province_of_British_Col when many of the residents went off to umbia/Vancouver-903183/ Warnings_or_Dangers- fight. After the Second World War, they Vancouver-Downtown_Eastside- BR-1.html Plate 3: The redevelopment of returned, often with disabilities and 52. Downtown Eastside Walking 56 mental health problems and there devel- Tour: Vancouver’s Oldest Historic Woodward’s Districts, City of Vancouver, oped a sub-culture of elderly men with Vancouver 2007, see www.city.vancouver.bc.ca/comm high levels of addiction. At the end of svcs/wuf/7DTES.pdf the Sixties, when the city tried to build 53. Housing Plan for the Downtown Eastside, City of the freeway into the centre of town, right Vancouver, p 14, Vancouver 2005, see www.city.vancouver through the DTES, many of them joined .bc.ca/commsvcs/housing/pdf/d teshousingplan.pdf forces with younger protesters. Together,

54. Ibid. their community activism managed to

55. Ibid. preserve the area as it was and persuaded

56. Kootenayvolcano, the city to invest in more social housing Woodwards Vancouver, Flickr, units. 14 June 2007, see http:// farm2.static.flickr.com/1390/549 But this was not enough to prevent its 403257_81c8650875.jpg?v=0 relentless decline. Since then the DTES 57. Dan Feeney, woodwards, Flickr, 17 June 2006, see has become the West Coast gateway for www.flickr.com/photos/darkthirty /169214811/ drug trafficking; HIV-Aids, TB and

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Hepatitis B have taken their toll, as has the approved for rehabilitation through the corollary of drug dependency – crime. So programme since its inception in 2003. while the rest of Vancouver has been However, with the proposed redevelop- booming, the individuals displaced by the ment of the Woodward’s, (Plates 3 and 4) gentrifying tide have been washed up in a turn-of-the-century department store the Downtown Eastside – “a node of and now a designated heritage building for poverty gravitation”, Professor Ley calls it. residential and commercial units, it looks The containment of the DTES has as if the area will finally be gentrified. been a good thing for the majority of Stephen Hall, of the Canada Mortgage people in Vancouver, whether of liberal and Housing Corporation, thinks it is (they should not be displaced) or conser- inevitable: “Trying to stop the DTES gen- vative (they are easier to control if they trifying is like Russia trying to prevent the are in one area) persuasion. It has market economy,” he says.59 The city, localised the effects of drug addiction albeit presenting a reluctant face to gentri- and poverty. (This was the city that fication in public, looks as though it has caused an international stir by setting up found a way to renew the DTES. Its task North America’s first legal, supervised now is to extract maximum public benefit heroin injection site in 2003.) from this market process, something it has Under the Vancouver Agreement (Box become adept at over the past three B) the province and the federal govern- decades. If it manages to achieve revitalisa- ment agreed to invest in the Downtown tion without displacement, the DTES Eastside, which has been the focus of a may prove to be its proudest legacy. Once lot of public money over the years. It is a again, this is a government strategy that politically sensitive issue both because of could only work in a growth city. its history of poverty and because the majority of Vancouver’s citizens are liber- Lessons learnt ally inclined and don’t want to be seen to Vancouver has tailored a development be discriminating against the less fortu- and renewal model which is perfect for nate. Jessica Chen, of the planning its current conditions. High quality of department, says: “The DTES is a life, a strong employment base and a microcosm for local and national politi- growing population have permitted the cal issues.” The city’s approach is “revi- city to be adventurous, even radical. A talisation without displacement”. policy such as the proposed EcoDensity Without new funding this has not plans would not work in a declining city, proved so easy, though a special heritage the initial costs are too high both to gov- programme for the DTES has helped. ernment and people, yet it could work in This incentive programme helps to offset Vancouver. the costs of rehabilitating heritage build- It is not only its willingness to take ings in the area, through façade grants, risks in renewal that sets Vancouver tax exemptions, and bonus density. The apart; it is also its ability to be an “eager bonus density award is sold by the devel- beaver” and to play the political system oper of a heritage building in the DTES skilfully in a period of relative austerity.

to a developer with a site elsewhere in Given that the city enjoys an active 58. Jessica Chen-Adams, the city where the additional density can civil society, a competent civil service Planner, Central Area Planning at the City of Vancouver, inter- be accommodated, thereby enabling the and strong leadership, its devolved fiscal viewed on 28 March 2007. DTES developer to recoup costs associ- and decision-making powers allow it to 59. Stephen Hall, Senior Adviser on Public/Private Partnerships at ated with rehabilitation of the heritage take risks and design its own vision. The the Canada Mortgage and Housing Corporation, inter- building. Twenty buildings have been safe-injection site, for example, was viewed on 29 March 2007.

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frowned upon by central and provincial demand. Allowing accountable city offi- government, but the city had the power cials to decide the trade-offs for growth lies to implement it; and the measure has at the heart of success, as Germany will significantly reduced the worst conse- also demonstrate. quences of drug abuse. The future danger lies in the afford- The ability of the city to enter into ability gap in Vancouver’s housing mar- agreements with private developers so that ket. If Vancouver retains its crown in the many of the disadvantages of new develop- next Economist Intelligence Unit live- ments are offset by improvements that ability survey this could be at the cost of benefit the population as a whole also gentrification and driving the low stands out, although this is made easier in income residents of mixed neighbour- the context of high land values and high hoods into the surrounding urban areas.

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In 1977 The Economist coined the term Historically urban home ownership “the Dutch disease” to describe the whole- rates in the Netherlands have been lower sale decline of the manufacturing industry than those of its neighbours, such as in the Netherlands, coupled with high France, Belgium or Germany.3 On average unemployment, a generous social security owner-occupiers make up only 25 per cent system and growing public debt caused by of the market in Dutch cities and in a commodity driven overvalued exchange Amsterdam only 14 per cent owned their rate.1 Dutch cities in the 1970s were wel- own home in 2001.4 Twenty-five per cent fare cities par excellence: for every 100 full of the entire Dutch housing stock was time employed people, 86 were dependent located in the 15 per cent of municipal on benefits. By 1983, 18 per cent of the areas designated as vulnerable or problem- workforce was unemployed.2 Other coun- atic. Government policy had inadvertently tries, Britain among them, suffered similar contributed to this situation because its symptoms particularly in the 1980s. What grants for regeneration were assessed and is unusual about the Dutch disease is that distributed on the basis of “need”, and thus urban policy played a part in the cure. cities naturally played up to the status of In the Netherlands, as in Poland, being “needy”. There was also a redistribu- Germany and the UK, the period after tive factor at work: to counter any income 1945 had been a time of massive house inequality between and within cities, the

building to meet new levels of demand. vast majority of funding was being spent 1. “The Dutch Disease”, The Under the prevailing modernist vogue in on those perceived as most in need. The Economist, pp 82-83, 26 November, 1977 architecture new public housing often system led local governments to favour 2. Terhorst P and van der Ven J, came in the form of high-density homoge- social housing development, concentrated “Urban Policies and the ‘Polder nous apartment blocks, dwellings which at on poorer areas, rather than a balanced Model’: Two sides of the same coin”, Tijdschrift voor 5 the time offered higher levels of floor space housing system. In effect they were push- Economische en Sociale Geografie, vol 89(4), pp 467-473, and good sanitary facilities, but which ing the most socially mobile people away 1998

became shunned and isolated over the pre- from the city. 3. Ministry of Housing, Spatial vailing decades. As the housing stock aged This fact underlies the Government’s Planning and Environment, What People Want, Where People and people looked towards making a step plan for renewal in the 1990s: to boost Live, p 19, The Hague 2001

forward on their housing-career, these home ownership to 65 per cent of the 4. Ibid

areas experienced significant population Dutch housing stock by 2010, meaning 5 Dielmen F and Wallet C, loss. This in turn led to the deterioration of that 700,000 mostly inner-city rented “Income differences between central cities and suburbs in the neighbourhood cultivating a general dwellings would have to be transferred to Dutch urban regions”, Tijdschrift voor Economische en Sociale air of neglect over time, compounding the private ownership; changing neighbour- Geografie, vol 94(2), pp 265-275, migration towards the suburbs. hood composition; to get neglected hous- 2003

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ing stock back on to the market and are in a good location for commuting into improving and rebuild unpopular neigh- and out of the regional labour market. bourhoods. You could say that encourag- Some areas in cities are very cut off and do ing gentrification had unconsciously not allow for this currently,” says Professor become part of government policy, albeit Hugo Priemus, professor emeritus in with a social conscience. “Housing”, Delft University of The Government’s intention was to Technology.7 reduce the stock of social housing either by In 1994, these targets were enshrined in demolition or sale, so that the proportion national policy, the Groestedenbeleid of privately rented and owner-occupied (GBS), or big cities policy, which replaced dwellings increased. Because greater choice 42 previous central subsidy schemes for of housing would be available, it was regeneration (much as the Single Regen- hoped that as people became more affluent eration Budget did in the UK in 1993).8 they would move within a neighbourhood, The Government decided that its role not out of it. (Its 2001 report, What People would be limited to setting the policy Want, Where People Live, was clear about guidelines and transferring funds to local the disadvantage of suburban develop- governments. The GSB subsidies were ment: the Government estimated that if divided into three “pillars”: economic, everyone was to live in his or her preferred social and physical development (Figure 1). environment, 35 per cent more housing Thirty-one cities receive three-quarters space would have to be made available over of the GSB budget of approximately €1 and above the levels proposed for 2010.6 billion per annum. All other places can To reach its own targets, another 85,000ha apply for access to the remaining quarter of across the country would have to be the budget through one of the 12 provinces released for development by 2030.) who manage the budget for the “non- Turning declining post-war neighbour- direct” municipalities. hoods into places that attract and, more Of the 32 cities, Amsterdam, Rott- importantly, keep middle-class families is erdam, The Hague, and Utrecht receive difficult because the majority prefer life in half the budget of the order of €375 mil- low density, green areas. “Most people have lion and this is scaled so that Amsterdam , a preference for the suburbs because they the largest, gets the most.

Figure 1: Urban regeneration

Ministry of Housing, Spatial Planning and the Environment (VROM)

GSB (Grotestedenbeleid) Impulsteams Major City Policy Inner City Action Group 6. Ibid, p 15

7. Professor Hugo Priemus, Professor Emeritus in Housing, University of Delft, interviewed 6 Physical Economic Social March 2007, Delft

8. Major City Policy, Netherlands Ministry of Housing, Spatial 3 Big Cities 56 Priority Neighbourhoods Planning and the Environment, The Hague, 2007, see www.sharedspaces.nl/pagina.ht ml?id=10969

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Figure 2: Composition of municipal revenues in the Netherlands (per cent)

100

90 Local charges and taxes 80 70 60 General grants 50 40 30

20 Speciﬁc grants 10 Composition of municipal revenues (per cent) 0 1932 1953 1960 1970 1980 1990 2000 2003

Although housing has been the corner- zens – within the bounds of national guide- stone, investment was also concentrated on lines (the so-called “performance fields”). transport: airports, rail, road and ports Most importantly, cities are assumed to were considered critical to the future. know best how much they can raise in local According to Dr Pieter Terhorst, of the taxes for regeneration and are also allowed University of Amsterdam, urban policies to borrow money from the BNG national have improved the links between cities and bank on secure long-term loans.10 other countries, and in getting investment Since 1929, local government has had and people to move to the cities.9 This three sources of finance: the general became known as the mainport approach Municipal Fund, specific grants and to development. Increasing the accessibili- income from taxes and land management. ty of the Netherlands was used as a trigger Figure 2 illustrates how the composition of for economic growth, and Schiphol is tes- funds has varied over the years.11 tament to the success of this strategy. As Cities have a high degree of financial improvements in this sector have materi- flexibility. Even in the case of yearly grants, alised, policy has started to shift towards cities are under no obligation to spend all brainport – strengthening education and the monies within a year; they can use quality of life to harness returns from a them to build up reserves and borrow well-educated workforce. against them to deliver long-term change. Willem Korthals Altes, Professor of Land Development at Delft University, says this 9. Dr Pieter Terhorst, Faculty of Social and Behavioural Capacity of local government is helpful because investment in the urban Sciences, University of Amsterdam, interviewed on 5 Regeneration is primarily a task for the environment does not neatly accommo- March 2007

municipalities, which have been auton- date a yearly budgeting system. 10. Altes Korthals W, “Local omous bodies since 1848. Cities are “Financial conditions are set up to give government and the decentralisation of urban regeneration required to produce five to ten-year devel- local government the capacity to follow policies in the Netherlands”, opment programmes and after this they are through the decentralised policies of the Urban Studies, vol 39(8), pp 1439-1452, 2002 allowed to allocate and spend their budget, national government. Dutch municipali- 11. Terhorst P, “Amsterdam’s which they receive in advance, as they ties participate directly in urban regenera- path dependence: still tightly interwoven with a national accu- choose. It is taken for granted that cities tion projects by buying brownfield sites, mulation regime”, in Harding A must have the opportunity to find their redesigning and servicing them, and selling (ed) Territorial Advantage? States, Cities and Regions in the own trajectory for development and the sites on to private developers and hous- Global Age, Blackwell, forthcom- improving the quality of life for their citi- ing associations. Dutch municipalities are ing

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Britain. In the Netherlands, this is the responsibility of the housing associations (woningcorporaties) and the two work closely together, particularly in Amsterdam where 15 housing associations own 54 per cent of the city housing stock (another 22 per cent are privately rented leaving only 24 per cent owner-occupied). The public and government may tend to view the housing associations as quasi-public agents, but in reality they are businesses; Figure 3: Map of Randstad not for divident private developers with a social edge. Some associations prefer to willing to take the market risks associated emphasise their market role and others with such a policy.”12 In this sense they their social role, but both are taking on share greater similarities with the Urban regeneration because they know there is Renewal Authority in Hong Kong than money to be made through neighbour- local authorities in the UK. hood improvement and more owner-occu- Dr Karien Dekker, of the University of pied dwellings, as well as social gains. Utrecht, explains that although national Housing associations and local govern- steering is very strong, cities are given space ment are closely aligned because one has to tackle their own urban problems – of the money and the other has the skills. course, they would always prefer more “Some councillors and housing association autonomy. Cities run social programmes directors work together, some don’t. A lot for citizenship, homelessness and drug of the time it depends on personalities,” addiction, for example. says Dr Dekker. “The Hague has been Their powers are considerable, but good at developing large-scale business municipalities do not own or administer developments Rotterdam has not been so social housing as local councils do in good.” 13

Figure 4: The population of major urban areas in the Netherlands, 2001

734,594

595,255

442,356

256,420 203,397 195,819 174,250 150,449 139,329 195,149

12. Altes Korthals W, opcit, 2002

13. Dr Karien Dekker, Urban and e de n Regional Research Centre, gu cht e dam e University of Utrecht, inter- ngen nhem erl ter Utr dhoven Tilburg e ot in roni Ar H The Ha Ensche viewed on 8 March 2007, Amsterdam R E G Utrecht

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Table 1: Amsterdam statistics, 2006

Municipality of Amsterdam Metropolitan Amsterdam

Area (km²) 16 Population 4, 1,, People per km² (density) 4,5 2. Number of houses , 64, Average number of people per household 1.6 2.1

The Case of Amsterdam tion increases to close to 1.4 million.15 Its Amsterdam is the largest city in the density of 4,500 people per sq km is simi- Netherlands. Together with Rotterdam, lar to central London; 34 per cent of Utrecht and The Hague, it makes up what is Amsterdam’s total population lives in the known as the Randstad, the economic heart centre (also similar to London). of the country (Figures 3 and 4).14 The city In the 1960s and 1970s the city fol- has been afflicted more than most by poor lowed the national strategy of building housing and inner-city decline and so pro- new dwellings that were almost exclusive- vides an ideal window through which to view ly social housing. This prompted the the evolution of national policy, local govern- departure of the majority of middle and ment responses and the radical changes that upper class households from the town cen- urban areas in the Netherlands have experi- tre to the suburbs, causing the population enced over the past thirty years or so. loss observable in Figure 5. Population in More than three-quarters of a million the city is rising again, but is still well people live in the municipality of below the levels of the 1970s because Amsterdam, which covers an area of 167 sq many people have moved out to the sub- kms (Table 2). If the larger Metropolitan urbs and households in general have been Amsterdam area is included, the popula- thinning.16

Figure 5: Municipality of Amsterdam population, 1970 to 2006

900,000

837,500

14. Urban Audit, European 775,000 Union 2007

15. Metropolitan Amsterdam is Population composed of Amsterdam, 712,500 Diemen, Ouder-Amstel, Amstelveen, Zaanstad, Almere, Haarlemmermeer, Aalsmeer, 650,000 Uithoorn, and Weesp en Muiden

1970 1980 1990 2000 2006 16. Kazenpov Y, Visual Paths through Urban Europe, Blackwell, 2004; Gemeente Amsterdam, Stadsdelen in cijfers 2006, 2006

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Box 1: Bijlmermeer, Amsterdam – 30 years of renewal

Bijlmermeer is an area of high-rise apart- ments in South East Amsterdam. Built in the mid-1960s as a response to the housing shortages across the country, it was intended to attract middle-class families by being “a modern city where the people of today can find the residential environment of tomorrow”.17 Between 1968 and 1975, 13,000 dwellings were built in 31, ten-storey, 300m-long blocks to a Le Corbusier construction manual.18 The liveability of the dwellings did not match their idealistic design and supply soon outstripped demand: in 1985, 25 per cent were vacant.19 The citadel of modernism had become just another problem estate with high Figure 6: Bijlmermeer, Amsterdam levels of crime and unemployment. Renewal efforts began in earnest in 1983, and were targeted at improving the built environment through upgrading existing stock with some success – the Ajax football club had built a new stadi- um nearby, and the large Amsterdam ArenA office complex had emerged opposite the station. Nevertheless, nearly 20 years later development has not been completed. The problem for the municipality and housing associations has been what to do with the high-rise buildings, but the local people were in no doubt – 70 per cent of people in the area, and 60 per cent of tenants actually living in the blocks, favoured demolition and the construction of a better space.20 In 2002, a final plan was approved, setting forth a wholesale demolition and rebuild programme for the area. Total investment by 2010 will be €1.6 billion, €450 million of which will produce no return; a figure of €35,000 per household.21 The city of Amsterdam and the housing associations each provided 50 per cent of the total.

Perversely, in their attempts to counter in Amsterdam was still social housing. growing income inequalities, central and Koos van Zanen, of the Amsterdam city local government increased them: moving planning department, says: “It acted as a out was the only choice for those who want- barrier to development and growth. There ed to own their own home. They left behind was not enough tenancy turnover; people an inner city where almost all the housing were unwilling to move out and unable to was social housing, a disadvantaged popula- move in; illegal sub-letting was common. 17. Helleman G and Wassenberg tion with high rates of unemployment and a It was vital therefore that private owner- F, “The renewal of what was tomorrow’s idealistic city. private sector unwilling to engage in the ship levels started to rise.” To meet govern- Amsterdam’s Bijlmermeer high- area. Bijlmermeer district has followed the ment targets more than 50 per cent of rise”, Cities, vol 21(1), pp 3-17, 2004, typical trajectory from idealistic Sixties’ con- Amsterdam’s housing stock would need to

18. Ibid, p 5 struction, to piecemeal attempts at reform change tenure in less than a decade.

19. Ibid, p 7 and finally demolition (Box 1). The majority of Amsterdam’s funding is

20. Ibid, p 8 Even at the beginning of the 1990s, derived from the central tax system, in par- 21. Ibid, p 9 between 85 and 90 per cent of all housing ticular the Municipalities’ Fund and specif-

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Plate 1: Museum based regeneration – Vondelpark and the NEMO science museum

ic grant schemes, to which local taxes are to push for changes in housing tenure. added. The municipality could do very lit- Because the housing market in the city was tle, he says, without the 15 housing associ- so buoyant, these “sink” areas could be ations that own and manage the social made profitable and healthy as soon as housing, 86 per cent of the entire housing their infrastructure and society was recon- stock in Amsterdam. “They became critical nected to the city as a whole. to making the city work and getting it to As well as a shortage of domestic housing change and have now agreed to build in Amsterdam, there is also a shortage of 5,000 houses per year, 70 per cent of this office space. Businesses that have been un- to be owner-occupied.” able to move into the city because affordable Gert Urhahn, who runs an urban design offices were not available, have located inst- company based in Amsterdam, explains ead in large peripheral developments, such that the areas that needed help were also as at Lelylaan and the World Fashion Centre the liabilities on the housing associations’ between Amsterdam and Schiphol airport. balance sheets, neighbourhoods of little In the 1980s, the municipality focused on demand and over-supply.22 Thus it suited regenerating areas such as Westerpark and both the municipality and the associations De Pijp, both of which had suffered badly

Table 2: Foreigners/Ethnic minorities with more than 10,000 inhabitants in Amsterdam, 2002

Surina- Moroccan Turkish Indonesian German Antilleans Other mese & Aruban

Total population 1, 5,1 6,5 21,151 16,1 12,2 1,61

% of total population . . 4. 2. 2. 1. 1. 22. Gert Urhahn, Director, Urhahn Urban Design, interviewed 6 March 2007, Amsterdam

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Plate 2: New office centres outside of Plate 3: Inner City Amsterdam Amsterdam – World Fashion Centre

from industrial decline and loss of jobs. safety questions of national debate.24 The Now it turned to attracting new industry. Government is trying to address the per- “In terms of workplace, housing and ceived loss of Dutch identity and tolerance social networks, Amsterdam is far too inac- in the major cities. The Ministry of cessible,” says Van Zanen. “New economies Housing, Spatial Planning, and the need openness. This is why we have been Environment (VROM) has been given concentrating on bringing in cultural indus- responsibility for promoting social integra- tries and creative people.” The creative tion and an extra minister to oversee it. industries, as in London, generate signifi- The current Cabinet’s motto of “living cant employment in the city. He has esti- together, working together” is in essence an mated that over 31,000 jobs are part of the urban mission. creative industries, 7 per cent of total city Professor Priemus says that the ministry employment and that over half of those is moving away from its usual concentra- people are working from home. As the eco- tion on housing towards “a more social nomy changes, and work and non-work life understanding of regeneration”, which has merge into the same locations, cities have to involved lobbying, even pressing, the adapt and support such shifts, he says. housing associations to take on more responsibilities. In the 1990s, housing associations were seen as part of the prob- The social pillar of renewal lem, because they had inadvertantly built In the past few years, urban regeneration whole neighbourhoods of social housing has gained a new and pressing objective. and were resistant to change; now they are The Netherlands’ cities have always had to be part of the solution. The change is large ethnic minority groups, a legacy of its significant. As well as correcting the mis-

23. Kazenpov Y, Visual Paths colonial and trading history. Amsterdam is Figure 6: Amsterdam Nieuw West25 through Urban Europe, no different: 47 per cent of its population Blackwell, 2004 is classified as ethnic minorities (Table 2).23 24. Pim Fortuyn was murdered by a Dutch animal rights activist In the past, sectarian problems were and Theo van Gogh by a Moroccan-Dutchman, see mainly confined to conflict between Cath- Buruma I, Murder in Amsterdam, olic and Protestant. However, since the Atlantic Books, 2006 murders of the anti-immigration politician 25. Amsterdam, Westelijke Tuinsteden, Kei Centrum, Pim Fortuyn and the avant-garde film- Rotterdam 2006, see www.kei- maker Theo van Gogh on the streets of centrum.nl/view.cfm? page_id=1897&item_type=projec Amsterdam in 2002 and 2004 respectively, t&item_id=96 ethnic strife has made social cohesion and

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Table 3: Housing composition in Nieuw West, 2000 and projected 201526

Social Rent Market Rent Owner-occupied Total

2 41, 5, , 54, Demolition -1, -1, Renovation - + Sales -,5 +,5 New builds +5,6 +4,2 +14,5 +24, 215 2, 1, 26, 65,

takes of the past, the idea is to prevent demolished more than 13,300 houses and blighted areas from developing in the first built 24,300 new homes. place. At the same time action has been targeted at providing more and better space for businesses, as well as stimulating local eco- Amsterdam Nieuw West – nomic entrepreneurship, especially among Regeneration on the Ground local youth groups. As it is only 15 minutes Amsterdam Nieuw West is one of the 13 from both Schiphol and Amsterdam by special areas selected under the Govern- rail, on paper it should be a boom area for ment’s Groestedenbeleid (GSB) for urgent new office development. The municipality’s regeneration.27 In pockets, up to 80 per policy document on the area, Richting cent of its population is Turkish or ParkStad 2015, stresses that regeneration Moroccan and the area’s biggest social should be based on increasing the range of problem is high youth unemployment.28 workspaces as well dwellings.29 A sentiment The area lies to the West of the city cen- Gerard Pouw agrees with, especially when it tre (Figure 6), cut-off from the heart of come to business start up needs. “They are Amsterdam by the intercity railway linking old and of the wrong type. The dominance the city to Schiphol and beyond. Nieuw of poor quality housing also affects the West was built after the Second World War matter. The area’s image is bad.” to provide much needed homes, but its Although the number of jobs in the area high concentration of social housing has increased, unemployment rates have proved a couple of years later an insupera- remained stubbornly high. In 2006, a “New ble disadvantage. It developed into a “sink” Coalition for the Neighbourhood” scheme area, marked by poverty and unemploy- began, bringing together local councillors, ment. the director-general of a ministry and an In 1999, 70 per cent of dwellings were independent expert to tackle the problem. It social housing and the aim is to reduce this is too early yet to know if it will be effective, to 45 per cent (Table 3). According to but the early signs are good. Gerard Pouw, an urban sociologist in “Holland in general is very good at the 26. Gert Urhahn, Director, Urhahn Urban Design, inter- charge of renewal in Nieuw West, the sale hardware. It isn’t as good at the software viewed 6 March 2007, of social housing and the work they are side,” concludes Gerard Pouw. He means Amsterdam, see note 1. doing to improve public space is making it that changing the built environment – the 27. Ibid easier to attract people and investment into hardware – is a lot easier than changing the 28. Ibid the area. So far housing associations, in kinds of people – the software – who live 29. Bureau Parkstad, Richting Parkstad 2015, Gemeente collaboration with the municipality, have there. Governments often assume that a Amsterdam, Amsterdam, 2004

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Table 4: GSB 5-year budget, 2005-2009 (€ millions) for the four largest cities

City Amsterdam Rotterdam The Hague Utrecht

Per annum budget (€ millions) 11.5 6. . 2.6

change in the hardware by itself will bring The number of urban areas targeted changed around a natural change in society. in 2007, and now stands at 40 priority neigh- Sometimes it does, at others it simply dis- bourhoods. Gerard Pouw, suspects that the places the problem. For Nieuw Park change choice of the 56 is based more on political depends to a large extent on raising educa- expediency than absolute need, but is happy tion levels and aspirations among hard-to- to go along with the policy: “If they give us reach groups, such as ethnic minority youths, the money, we will dance with them,” he not only on improving the local environ- says. ment. There are no punitive mechanisms the The majority of the investment has been national Government can use to penalise financed through the central government municipalities that fail to pull their weight. grant to the municipality under the GSB pol- Instead, it uses local accountability mecha- icy and through the sale of new properties. nisms during and at the end of the initiative The total investment is estimated at between to ensure that change is occurring. During four and five billion Euros when infrastruc- the project the national government uses the ture is accounted for, though the real net cost Major Cities Monitoring unit to observe to the municipality was €104 million, how municipalities are doing from a nation- around 3 per cent, and to the ten housing al level. As Gerben Helleman of KEI, the corporations involved, €99 million. expert centre for urban regeneration in the Netherlands, suggests it acts as a “national thermometer” of change, explicitly not a tool Future Directions for testing how well individual municipalities The GSB is now in its third round (GSB III), are doing, but one to look how the country tagline – “co-operating for strong cities”. It as a whole is doing.30 spans 2005 to 2009 and has a central govern- At the end of the renewal period comes a ment subsidy of €3.7 billion (Table 4). The final evaluation of the local impact of the pol- social pillar is the one under the greatest icy. Unlike in the UK municipality evalua- scrutiny, especially since a new minister for tion is based not on performance or achieve- social cohesion was seconded to VROM. ment but instead on effort and commitment. Seven targets are now in place for social As Gerben Helleman explains, “local courts regeneration during GSB III, with even more of Audit are called in to check this effort. stress on social integration – participation, They investigate whether public funds are safety and citizenship, for example, as well as spent regularly and effectively. So there is no on improving education levels. After 2002, research about the outcomes, but only on implementation of the GSB in particular whether the money has been spent on the areas was accelerated, with 56 urban areas performance fields indicated by the National nominated to get special attention (Note 2); government. The Dutch call “single informa-

30. Gerben Helleman, KEI in addition 13 areas where special difficulties tion – single audit”, single information on (Urban Renewal Knowledge require the co-ordination of many agencies the regeneration programme, single audit by Network), interviewed 9 March 2007, Rotterdam have been identified and targeted (Note 1). the locality. “My personal observation,”

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Gerben continues, “is that we use local cannot meet national policies to increase accountability mechanisms and measure- home ownership levels by itself. “They are ments to ensure that the local goals are certainly doing interesting things. In reached, and the local courts are more capa- Rotterdam one has bought the SS Rotterdam ble to do these judgements. The national [an old cruise ship] and is converting it into government is too far away from the practical a restaurant, a hotel and training facilities for experience to decide which measurements socially vulnerable people.” should take place and if the money is spent well.”This switch from top-down to bottom- up evaluation both empowers local people “ The national government is too far away from the practi- and produces better results on the ground, cal experience to decide which measurements should take lessons which the UK might well learn from. place and if the money is spent well. “Under its motto of ‘living together, work- ” ing together’, the Government is making urban regeneration the mechanism to encourage social cohesion,” agrees Frank Arjen van der Burg, a spatial expert at the Wassenberg, senior researcher on urban ministry of housing, spatial planning and the renewal and housing at Delft University.31 environment (VROM), says: “Some would However he is uncertain whether mixed say urban renewal was finished business. It is communities increase integration. “I’m not not easy to detect why things should be sure if mixing income alone is sufficient. done… financial circles sometimes suggest Because people live in close proximity does that spending on urban regeneration should not mean that they will be integrated. For me be stopped in 2000.”33 the real question is getting a mix of lifestyles As far as the GSB is concerned, “the phys- in an area, not just groups of people. The ical pillar was the most successful”, he 31. Frank Wassenberg, OTB Research, University of Delft, government wants integration, not to make believes. It has also been very successful at interviewed March 6 2007, Delft

everyone ‘Dutch’ but to ensure that policy mobilising the internal capacities of urban 32. Vermeijden B, “Dutch urban makes all groups participate in a wider Dutch government. Connecting cities together has renewal, transformation of the policy discourse 1960-2000”, 32 society.” been central to developing growth and Journal of Housing and the Built “National government is fearful that some regenerating certain urban districts. Environment, vol 16, pp 203- 232, 2001

Dutch cities are heading towards growing Matching labour market access to public 33. Arjen van der Burg, spatial income inequalities,” confirms Gerben transport and infrastructure in particular has expert, Ministry of Housing Spatial Planning and the Helleman at KEI. “The physical renewal is been done very well. Even when it comes to Environment, interviewed on 8 partially about stopping this segregation. access to childcare and other life/work infra- March 2007, The Hague This means breaking up the rental stock and structure, the Netherlands and its cities, have 34. See Karsten L, “Housing as a way of life: Towards an under- 34 creating a more differentiated housing stock a reasonable record, says van der Burg. standing of middle-class fami- so that people who would of otherwise left Currently, VROM has started on a number lies’preferences for an urban residential location”, Housing can make a housing career in their own of initiatives to tie infrastructure and renew- Studies, vol 22(1), pp 83-98, 2007; Karsten L, “Family gentri- neighbourhood.” Like so many others, al together. For example, VROM and Dutch fiers: challenging the city as a Helleman stresses that housing associations Railways have joined forces to redevelop rail- place to simultaneously build a career and raise children”, Urban are central to the whole process. “The munic- way stations to increase both accessibility of Studies, vol 40(12), pp 2573- ipality depends on housing associations when areas and the mobility of the people who live 2584, 2003 it comes to housing stock matters. Some local or use them.35 35. “Minister Cramer and Dutch Railways join forces to redevelop governments have even started to hand over outdated railway station areas”, control of public space to them.”This may be Ministry of Housing, Spatial Planning and the Environment for the best, he thinks. Housing associations A Critical Overview press release, The Hague, October 2007, see have the skills and financing to change areas, In 2004, Professor Priemus wrote about http://international.vrom.nl/pagin and local government, despite its powers, “the disparity between dreaming and a.html?id=11070

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doing” in urban renewal.36 Although the and the potential for corruption. development of policies was in overdrive, Fourthly, many private investors were their implementation was in arrears. wary of committing themselves financially Thinking about cities, especially in policy because of the difficulty in securing long- terms, had become fashionable, and devel- term funding for urban areas. oped into a busy research arena, however, Fifthly, government policies should be the mechanisms that could make these better co-ordinated. They needed to con- changes happen on the ground were lack- centrate on building up neighbourhoods ing. Much the same could be said of urban so that they held on to upwardly mobile regeneration in Britain. residents, rather than concentrating invest- He singled out six failings. First, because ment on individuals who then moved out, resources had been allocated to urban areas leaving only the hardest-to-reach people. in need of renewal in the absence of compe- Finally, government needed to ensure tition or accountability, development in that at all times it was part of the solution, many Dutch cities was wasteful. To provide not part of the problem. In some circum- an incentive for efficiency, Priemus recom- stances this might mean exercising more mended awarding more money to areas that restraint, allowing local actors to create local deliver development the quickest. solutions, instead of directly intervening. To Secondly, he noted that training and pay set-up the conditions for local government levels were below that of equivalent jobs in to succeed, but accept that some will fail. the private sector: improving pay and Each of these six points should strike a career development would help to attract chord for those who have been involved higher calibre staff. with the regeneration process in Britain. Thirdly, the line between public tasks The Audit Commission’s evaluation of the and municipal participation was becoming New Deal for Communities, for example, blurred, so that it was difficult sometimes picked up on many of the same points.37 to distinguish between officials who performed public tasks, such as issuing building permits, and those that were charged Lessons with negotiating with private interests. Regenerating cities and city districts has This ambiguity led to conflicts of interest been a central part of the Dutch political

Table 5: Budgetary overview of investments in urban vitality, 1999-2002/2003-2010 (€ million)

1-22 2-21 TOTAL

Industrial parks 64 264 2 36. Priemus H, “Housing and Key projects 4 1 245 New Urban Renewal: Current policies in the Netherlands”, Monument preservation 55 22 26 European Journal of Housing Traditional urban renewal 1 25 1,2 Policy, vol 4(2), pp 229-246, 2004 Local environment nuisance 16 66 2 37. An Early Progress Report on Quality of life, Big Cities Fund 4 15 21 the New Deal for Communities Programme: English Regions, Total 42 1,5 2,12 National Audit Office, 2004, see Per annum spending 141 251 1 www.publications.parliament.uk/ pa/cm200304/cmselect/cmpuba cc/492/492.pdf

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Shall we go Dutch? A Local Partnership Approach to Regeneration

agenda since the 1950s, as it has been in equipped with the funds and decision- Britain. Most similarities end there, how- making powers required. The cake has ever. In the Netherlands, urban revitalisa- been divided out in fair and efficient man- tion has been a city-led exercise – central ner across different levels of government. government gave cities the flexibility to Hugo Priemus and Ronald van Kempen succeed, as well as equipping them with estimate that investments in urban regen- the fiscal abilities to meet their aspirations. eration between 1999 and 2010 will be In the UK, the reverse has been true. approximately €2,182 million (Table 5).39 Either local areas have been bypassed or Such an active land policy is far better for given just enough rope to hang themselves the cities, and the country as a whole, than – taking on too many responsibilities with- the reactive one that is found in the UK. The out the means or knowledge to see them gap, which Priemus identified, between pol- realised. icy thinking and action remains, but this is a The Netherlands is pragmatic and real- reason for devolving more power to cities; istic about urban change. Funding for they are more likely to know what is happen- regeneration is housed within one grant ing to their economies and residents, than system, which lowers the administrative civil servants in The Hague. There is also time for municipalities to access money. It more emphasis on making results measura- is also large enough for strategic changes to ble as well as increasing transparency and be enacted, especially for the biggest cities. decreasing bureaucracy. The funding has guidelines attached, but The GSB policy was very successful in these are flexible; an annual grant does not physically upgrading housing stock, but the necessarily have to be all spent within the Dutch have found that social issues and 38. Vink B and van der Burg A, “New Dutch spatial planning pol- financial year. “Decentralise if possible, conflicts remained even so. This is why icy creates space for develop- centralise if necessary”, this is the motto of much greater emphasis is now being placed ment”, disP, vol 164(1), pp 41- 49, 2006 Dutch regeneration.38 on social improvements centred around 39. Priemus H and van Kempen In general, although the Government education, employment and integration. R, “Restructuring urban neigh- does involve itself in spatial planning, Jane Jacobs, must have known the feeling bourhoods in the Netherlands: four birds with one stone”, building infrastructure and the environ- when she wrote, in the The Death and Life Netherlands Journal of Housing ment, it realises that it is not the most of Great American Cities: “It is fashionable and the Built Environment, vol 14(4) pp 403-412, 1999, figures appropriate political level to carry out to suppose that certain touchstones of the converted from Guilders at a 2.2 urban regeneration. To a large extent, good life will create good neighbourhoods – exchange rate 40. Jacobs J, The Death and thanks to Dutch history, it trusts munici- schools, parks, clean housing and the like. Life of Great American Cities, p palities to look after themselves if they are How easy life would be if this were so!” 40 122, Pimlico, 2000

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Note 1: 13 priority areas

Municipalities and neighbourhoods: Indication of special issue addressed

1 Amsterdam, Nieuw West Economic participation of youth 2 Amsterdam, Overtoomse Veld Elementary schools Rotterdam, Zuid ( Pendrecht, Bloemhof, Hillesluis) Private homeownership 4 Rotterdam, Zuid ( Pendrecht, Bloemhof, Hillesluis) Youth 5 The Hague, Zuidwest Strengthening of social ties 6 Utrecht, Overvecht Social and economic stimulus Zaanstad, Poelenburg Primary health care and integrated Youth care Den Helder, Nieuw Den Helder Antillian community Heerlen, MSP (Stad Oost) Major city problems 1 Hengelo, Berflo Es Public – Private Co-operation for Livability 11 Deventer, Rivierenwijk Infrastructure 12 Emmen, Revisited Future of youth with foreign back ground 1 Haarlem, Slachthuisbuurt Social, physical and economic stimulus

Note 2: 32 cities / 56 deprived neighbourhoods

Municipality Neighbourhoods

1 Alkmaar Overdie/Schmereiland 2 Almelo Almelo Zuidwest (Ossenkoppelerhoek/Kerkelanden) Amersfoort De Kruiskamp/de Koppel,Randenbroek/Schuilenburg 4 Amsterdam Westelijke Tuinsteden, ZuidOost, Noord (De Banne/Nieuwendam Noord) 5 Arnhem Presikhaaf, Malburgen 6 Breda Breda Noord-Oost (Hoge Vlucht/Doornbos-Linie), De Heuvel Den Bosch Boschveld, Barten/Eikendonk/Hostad The Hague Zuidwest, Transvaal, Duindorp, Laakkwartier/Spoorwijk, Rustenburg/Oostbroek Deventer Rivierenwijk, Keizersland 1 Dordrecht Dordrecht West (Oud Krispijn/Nieuw Krispijn/Wielwijk/Crabbehof) 11 Eindhoven Woensel Zuid (Barrier/Woensel-West/Oud-Woensel),Tongelre (Doornakkers (and partly) Lakerlopen) 12 Emmen Emmen Revisited (Angelslo, Bargenes, Emmerhout) 1 Enschede Wesselerbrink, De Velve Lindenhof 14 Groningen Vinkhuizen, Lewenborg 15 Haarlem Delftwijk, Europawijk Zuid 16 Heerlen Heerlen Stad Oost, Grasbroek/Musscemig/Schandelen 1 Helmond Binnenstad-Oost 1 Hengelo (Ov) Berflo EsLeeuwarden Achter de Hove – Vegelin, Vrijheidswijk 2 Leiden Leiden Noord (Groenoord/Noorderkwartier/De Kool), Leiden Zuid-West 21 Lelystad Zuiderzee/Atol 22 Maastricht Maastricht Noordwest (Malberg/Boschpoort) 2 Nijmegen Willemskwartier 24 Rotterdam Zuidelijke Tuinsteden (Pendrecht, Zuidwijk, Lombardijen), Oud Zuid (Katendrecht, Afrikaanderbuurt, Tarwewijk, Bloemhof). Crooswijk Noord, Rotterdam West, Hoogvliet 25 Schiedam Nieuwland/Groenoord 26 Sittard-Geleen Lindenheuvel 2 Tilburg Oud Zuid, Nieuw Noord 2 Utrecht Overvecht Zuid, Kanaleneiland Noord, Hoograven, Zuilen/Ondiep Venlo Q4 1 Zaanstad Zaandam Zuidoost

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Reprogrammed for Growth: Regenerating the Ruhr

Instead of a diamond, the first Roman dreds of thousands of people moved to the Catholic Bishop of the Ruhr, Franz area to fill jobs in the mines, coking plants, Hengsbach, had a piece of moulded coal set steel mills and factories associated with in his signet ring to symbolise his concern names such as Krupp and Thyssen. The for the miners of his diocese. His choice Ruhr became the biggest industrial region could not have been more apt: the “worker’s in Europe. City limits expanded to accom- bishop”, as he became known throughout modate the newcomers and new land uses; Germany, was inaugurated in 1958, just as rail and water networks increased mobility the mines and heavy industry, the backbone and accessibility, as well as trade. of the Ruhr economy, began to decline – In Essen, for example, the population bringing unemployment, depopulation and doubled from 10,000 in the early 1850s environmental blight in their wake. to more than 20,000 in 1861; it was Originally a rural backwater of small more than 118,000 in 1900 and at the towns and villages, the Ruhrgebiet, or Ruhr end of the First World War had skyrock- Area, owes its existence as a large conurba- eted to almost 440,000. Such rapid pop- tion to the Industrial Revolution, when coal ulation growth was experienced in all mining took off.1 As the regional economy cities of the region. At the outbreak of grew, the labour market boomed and hun- the Second World War the population for

Figure 1: The Ruhr Area

1. Unless otherwise stated, ref- erences to the Ruhr in this report refer to the Ruhrgebiet or Ruhr Area

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the Ruhr as a whole was close to 4.5 mil- built.”4 The Ruhr hardly had an identity lion people.2 apart from its industrial roots and was frag- Coal mining in the Ruhr peaked in the mented into a large number of political late 1950s, while population figures units. Even today, when commuting to reached close to six million in the early work, it is not impossible to drive through 1960s, and further expansion was expect- three, four or even five “separate” cities ed. However, when the price of German within half an hour. coal first became uncompetitive on inter- This fragmentation is one of the charac- national energy markets, what had seemed teristics that makes the Ruhr a special case only a temporary setback turned out to be for the study of urban regeneration poli- a lasting effect. To ensure its continued cies. The others are the sheer scale of the existence, mining had to be heavily sub- regeneration required – the population still sidised by state and federal governments. numbers over five million; the time it has This slowed its rate of decline, but did not taken – more than five decades; and the stop it. There were 590,000 people co-operation involved from many different employed in the Ruhr mines in 1956 com- levels of government – local, district and pared to about 30,000 today. Subsidies will state and federal. finally come to an end in 2018.3 Regeneration did not mean simply improving the conditions of a clearly defined part of a town, but developing a Patterns of growth new raison d’être for a whole region suf- In contrast to other conurbations of com- fering under changed economic circum- parable size, such as London, Paris or stances. Dramatic population loss had left Berlin, the Ruhr did not develop around the cities with an oversupply of housing an existing centre; rather many small cen- and infrastructure and an undersupply of tres grew in parallel and largely independ- jobs. Urban renewal had to rebuild the ently of each other. Structurally, it has cities, manage neighbourhood conflict more in common with the Lancashire mill and attract new economic activity. It need- towns that grew into the Greater ed to reprogram the region for growth and Manchester area, or the Flemish weaving stop people leaving at such a rate. It was a towns that grew into the Flanders urban massive task given that the Ruhr didn’t area, though on a larger scale. have a single university before 1965 and A report from the Institute for Town parts were so heavily polluted that during and Country Development of North his first campaign to be German Rhine-Westphalia summarises the conse- Chancellor, in 1961, Willy Brandt quences of this polycentricity: “The land- declared: “The sky above the Ruhr must scape was used and formed according to become blue again.” the rationality of industry with its big 2. Statistisches Reichsamt (Hrsg.): Statistisches Jahrbuch structures. For the newly arrived migrant für das Deutsche Reich, 1919- there were new settlement areas, which Political structures 1941/42

3. Faust H, “Das Ruhrgebiet – were not aligned to the – hardly existing – The development of the Ruhr is reflected Erneuerung einer europäischen cities, but to the factories and mines. Cities in the political structures of the region. Industrieregion”, Europa Regional, vol 7, p 11, 1999 like Oberhausen and Gelsenkirchen were The Ruhrgebiet did not exist before

4. Das Ruhrgebiet – ein beson- developed more or less from scratch. To be industrialisation. Some of its towns and derer Teil der Metropolregion attractive to the migrants from rural villages were part of the Rhineland, others Rhein-Ruhr, Institut für Landes und Stadtentwicklungsforschung Eastern Europe and to offer the workers part of Westphalia, and the two did not und Bauwesen des Landes the chance of a degree of subsistence, loose have much in common. After the Second Nordrhein-Westfalen, (Hrsg), p 4, Dortmund, 2003 settlements without a real centre were World War, the British military adminis-

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tration decided that Rhineland and with increased car use more motorways Westphalia should be combined to embed were built – for example, the A2 was the strategically and economically impor- extended to the Netherlands and the tant region into a larger political unit – Ruhrschnellweg (fast Ruhr road), connect- the state of North Rhine-Westphalia. ed the cities of the Ruhr from East to However, the government districts, an West. The region also got its first univer- administrative level below the state gov- sity in 1965 when the Ruhr University ernment, which were also set up by the opened in Bochum, a mass of concrete British, all had their capital cities architecture. New theatres and opera (Münster, Arnsberg and Düsseldorf) out- houses were opened. Everything old had side the Ruhr area itself. to go because nothing should stand in the Under Article 28 of the Basic Law – the way of modernity. Stadtsanierung, mean- German constitution – cities play an impor- ing a rehabilitation of the city with the tant role in the structure of the German aim of making it “healthy”, was the buzz- state as they are guaranteed the right to reg- word of the day.5 Unfortunately this rapid ulate their own affairs. They are responsible urban development coincided with the for town planning, social and cultural serv- beginning of the coal industry’s decline: a ices and other areas that are important in dangerous combination for urban poli- the context of urban regeneration. The cies. result of this structure of government for the Ruhr is a patchwork of decision-making. Many decisions that affect the social and “ Unemployment was so low that in 1962 there were economic development of a city are made at five vacancies for every job seeker city level, but often with support and fund- ” ing from government district or state government (Land) level. The federal government does not have much influence on the The modernising spirit of the 1960s detail of urban policies, which are largely produced what the economic historian, devolved. Tim Schanetzky, has called Endstation Grössenwahn or end-of-the-road megalomania, the title of his study of History of urban policy Stadtsanierung in the Essen suburb of For the first sixty years of the 20th centu- Steele.6 Situated on the banks of the Ruhr, ry, the Ruhrgebiet was programmed to Steele is one of the oldest parts of the grow. The population approached six mil- region: its history as an independent town lion in the early 1960s, and it was thought can be traced back to the year 840; it was a possible that the region could eventually prosperous centre of trade in the Middle reach seven or eight million. Unemploy- Ages. When the industrial development of ment was so low that in 1962 there were the Ruhr took off in the 19th century, five vacancies for every job seeker. Steele became a commercial centre for a Gastarbeiter (guestworkers) from Italy, large number of small shops and trades, Spain and Greece – and later many more serving the surrounding mines and facto- from Turkey – arrived to fill them, and ries. It was also a transport node for river often stayed. 5. Sanierung derives from the and rail networks. The city’s growing pros- Latin word sanus translated as The belief in progress and development perity was marked by newly built church- healthy seemed without bounds. The number of es, schools, law court and post office. Its 6. Schanetzky T, Endstation Größenwahn - Die Geschichte cars registered in the area increased more medieval framework houses were preserved der Stadtsanierung in Essen- than tenfold between 1949 and 1963, and and blended in with the Art Nouveau Steele, Essen, 1998

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houses built at the turn of the century. In tion between the planning bureaucracy 1929 Steele was incorporated into the city and Hertie.9 of Essen. In the end, Stadtsanierung in Steele Although the old Steele was fortunate to turned out to be disastrous on almost all escape heavy damage from Allied bomb counts. The expansion of retailing in Steele attacks in the Second World War, it was remained well below expectations, proba- not meant to survive the urban policies of bly because purchasing power in the dor- the 1960s and 1970s. The city council of mitory towns was rather low and the pop- Essen had expected the growth of the city ulation did not grow nearly as fast as pro- to continue and started to plan for high- jected. The plan to make Steele an attractive rise, high-density settlements on its eastern retail centre did not work: in 1965, there outskirts (Oststadt). These were typical had been 224 shops, in 1983 there were only dormitory towns, with just a few shops, 171 left. Hertie’s department store closed primary schools and a good transport con- down in 1979 after only seven years, with nection. Steele was meant to provide them losses of 45.6 million Deutschmarks. with a medium-size urban centre. But the effects on the suburb were even Elmar Stuckmann, a local historian who more dramatic: mature housing was grew up in Steele and has been the head- replaced by concrete apartment blocks, master of the Carl Humann Gymnasium, some of them 21 storeys high. The settle- its grammar school, since 1979, describes ment that had begun its life on the banks how the mood of the 1960s turned against of the Ruhr was now separated from the the old structures of Steele. “People thought river by four to seven lanes of highway. The they had to reinvent the suburb almost from modernisation of Steele’s transport links scratch. The old housing was thought to be did work, however, and the suburb is well inappropriate, roads and public transport served by dozens of rail, bus and tram were unable to cope with the increased traf- lines. Yet Steele’s main station, another fic any more, and so there was a mood to oversized block of concrete, clashes radically turn things around,” he says.7 In uncomfortably with the Baroque buildings practice, this meant the demolition of large of the Fürstin Franziska Christine Orph- parts of the old city of Steele. anage opposite. For the planners at Essen’s town hall, the Over the course of its urban renewal pro- traditional centre of Steele was a thorn in gramme, about one billion Deutschmark of their side. It threatened to hamper the public and private money was spent on the development of their Oststadt project, and suburb – with highly questionable results. its mix of residential and commercial uses Hattingen, 13 kilometres from Steele, did was in open conflict with contemporary not attract the same funding. There, too, planning philosophy as expressed, for the planners were keen to renew the old 7. Elmar Stuckmann, headmas- example, in Le Corbusier’s Athens town centre, but lack of resources, and per- ter of Carl Humann Gymnasium, interviewed 9 February, 2007 Charter.8 Business interests also backed a haps also lack of planning expertise, led to 8. Zimmermann M, “Rezension rigorous Stadtsanierung in Steele. Hertie, a much more cautious programmes primari- von Tim Schanetzkys Endstation Größenwahn”, Forum chain of department stores, was eager to ly aimed at preserving and renovating the Industriedenkmalpflege und build a new flagship store there to serve the existing fabric. Today Hattingen’s town Geschichtskultur, vol 2, p 54, 1999 extra 30,000 people who were expected to centre retains its medieval charm, with nar-

9. Schanetzky T, move to the Oststadt. The company start- row lanes, half-timbered houses and build- “Stadtsanierung und ed to buy land for it even before the Essen ings covered in regional slate; shops, restau- Strukturwandel im Einzelhandel: Das Beispiel der Hertie- planning committee first debated the case. rants and street cafés are thriving. Investition im Essen-Steele der sechziger Jahre”, Akkumulation, Schanetzky believes that this behaviour fed Hattingen is a reminder of how Steele used no 12, pp 12-17, 1998 the rumours that were rife about corrup- to look before Stadtsanierung.

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Box 1: Bismarck, Gelsenkirchen

Bismarck, a suburb of Gelsenkirchen, lost out heavily with the decline of steel and coal in the area. Unemployment became ingrained when the Graf Bismarck colliery shut in 1966. Population declined by over a quarter between 1970 and 2004 and currently hovers around the 17,000 mark, little more than half its 1950 level (Figure 2). Aspirational families did not want to live there, a situation that the local government was not willing to accept. Through new housing schemes and a new school, and the conversion of the old site of the coalmine into a public park, the area was gradually improved. In one of the new developments, 28 homeowners physically built their own houses, under the slogan “Einfach und selber bauen” (Building it simply yourself). An aptly-named “muscle mortgage” lowered their purchase costs and they bonded with their neighbours and the neighbourhood in the construction process. Although the state government of North Rhine-Westphalia supported the renewal of Bismarck, the planning and project management was the responsibility of local town planners. Importantly, local politicians were to be held accountable for delays or mistakes.

Figure 2: Bismarck, Gelsenkirchen population between 1800 and 200410

35000

30000

25000

20000

Population 15000

10000

5000

0 1843 1850 1857 1864 1871 1878 1885 1892 1899 1906 1913 1920 1927 1934 1941 1948 1955 1962 1969 1976 1983 1990 1997 2004

The Social City 1970s. Those years were shaped by a kind The lessons for German urban renewal of utopian modernism that rejected the old policies from Steele have been learned; a and swept all before it. The megalomania planning disaster of similar scale would of the times was increased by the fact that 10. Gelsenkirchen probably not be possible any more. For the Ruhr was still expected to grow, leading Bismarck/North Schalke, Soziale one thing, German planning law has planners and businesses alike to complete- Stadt NRW, 2006, see www.sozialestadt.nrw.de/stadttei changed to incorporate more citizens’ par- ly misunderstand the role Steele could play le/profil_gelsenkirchen.html&prev ticipation in the planning process. Just as in the region. Their non-consultative and =/search%3Fq%3Dbismarck,%2 Bgelsenkirchen%26hl%3Den%2 important, the public mood today is very non-participatory approach only made 6rlz%3D1B3RNFA_enGB230GB different from that of the 1960s and matters worse. 233

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Today’s urban regeneration policies third comes from the federal government, tend to be much more modest and closer and the rest has to be paid by local coun- to the people. Since 1993, the state of cils – so communities do not get some- North Rhine-Westphalia has followed a thing for nothing. However, there is a programme initially called the “action degree of flexibility in this, allowing the plan for districts with special renewal state to differentiate between rich and poor needs”, a euphemism for socially and eco- councils. Karl Jasper, at the State Ministry nomically disadvantaged parts of the for the Built Environment, explains that cities, and now known as Die Soziale Stadt whereas the affluent state capital of (the social city). The overall goal is to sup- Düsseldorf would probably have to pay for port the renewal of the built environment 40 per cent of the cost of its regeneration and the social stabilisation of declining projects, less well-off councils such as areas by a combination of small-scale Duisburg and Gelsenkirchen would be social programmes, infrastructure proj- required to pay only 20 per cent or less.13 ects, economic and environmental In a system of local government improvements and measures to improve finance in which budgets are heavily the image of an area. Such local initiatives dependent on the number of inhabitants are usually funded for five to ten years. In and local tax revenues, there is a clear 2006 there were 37 such projects in the incentive for local politicians to make state in 29 different cities.11 sure that urban regeneration funding To achieve lasting change, the social obtained from a higher tier of govern- city programme concentrates on investment helps to lay the foundations of ment, participation and local manage- future economic success. ment. Initial public investment in the Urban policymakers at the state level most problematic places is meant to also realised that it was impossible to renew encourage private investment to continue declining suburbs without involving their the development. For example, in Gelsen- inhabitants. To achieve this, the red tape kirchen, one of West Germany’s poorest involved in granting project funding to cit- cities, the suburb of Bismarck received izen groups has been reduced, so that now funding for environmentally-friendly they don’t have to fill in complicated housing, a comprehensive school and a forms. This measure is meant to stimulate park on the site of a former coalmine (Box competition between local groups for 1). What was intended, and eventually funding of their projects, generating new achieved, was to make the suburb more ideas in the process. 10. Städtenetz Soziale Stadt attractive to aspirant families – who would NRW, Kontinuität in der Sozialen Stadt – Welche Perspektiven hat have never considered bringing up their die integrierte Stadtteile children in Bismarck before.12 The inflow The Zollverein – industrial heritage ntwicklung nach der Förderung? – Tagungsdokumentation 2006, of such people helped to stabilise and and design Dortmund, 2006 improve the suburb and halt its depopula- State and city co-operation was essential 11. Evans AW and Hartwich OM, Bigger Better Faster More: why tion (Figure 2). for the preservation and renewal of the some countries plan better than All funding comes with a time limit: no Ruhr’s industrial heritage which is still others, p 25, Policy Exchange, 2005 permanent subsidies are given. A second underway. The Route-Industriekultur is a

13. Karl Jasper, Ministerium für aspect is equally important: funding does 400km circuit that guides visitors to indus- Bauen und Verkehr des Landes not come from the state government alone, trial monuments, museums and industrial Nordrhein-Westfalen, inter- 14 viewed on 2 February 2007 but always from a mix of sources. The state sites that are still in use. The Rheinelbe 14. Route Inustrielkultur, Das government oversees and co-ordinates the Tip in Gelsenkirchen, for example, is now Ruhrgenbeit, 2006, see www.route-industriekul- social city programme, but contributes an open space and outside art gallery, tur.de/en/map/ only about 40 per cent of the funding; a which was built on the site of an old col-

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liery which closed in 1928, similarly the Aquarius water tower in Styrum built by Thyssen in 1892, has been redeveloped into a multimedia museum. At the centre of this heritage programme is the site of the Zollverein industrial complex, which consisted of a coalmine, opened in 1932, and the gigan- tic coking plant, built in 1961 that pow- ered the German postwar economic mira- cle. The coalmine closed in 1986, and the Plate 1: Zollverein – Shaft XII coking plant in 1993, leaving behind Bauhaus-designed factory buildings, miners’ housing, a large immigrant popula- place of culture and design and it has tion and high rates of unemployment. become one of the top attractions of our The state of North Rhine-Westphalia city,” says Hans-Jürgen Best, Essen’s head bought the site, placed it under the mon- of planning.15 More than half a million ument protection and preservation act people visited Zollverein last year and not and restored it over the next 15 years. In only as day-trippers – the first B&B’s have December 2001, Unesco added the opened in Katernberg. Zollverein to its list of world heritage Katernberg is one of Essen’s poorer sites, describing it as an “extraordinary quarters. For decades it had depended industrial monument” and “icon of indus- heavily on Zollverein, by far its biggest trial culture”. Without doubt, Zollverein employer. After the mining complex closed had been a technical and architectural down, the social problems of the suburb masterpiece of its time, symbolising opti- became pressing. From the late 1980s, the mism and modernity. The question was city council pursued special regeneration what to do with it now. The answer given programmes for Katernberg, which by Essen’s council and planners was to became part of the social city initiative in transform it into a centre of design and 1993 and received funding from the state culture. government. The renewal work itself is Today the Zollverein is the home of the mainly carried out through a network of state’s design centre. For this project, the local planners, citizen’s initiatives, church award-winning British architect, Sir groups and charities. Norman Foster, modified the old boiler Within Zollverein is the business centre house. The coking plant houses spectacular called the ZukunftsZentrumZollverein studios for artists. There are permanent (the Future Centre Zollverein) – or Triple exhibitions, a museum on the history of Z, as it is usually known. Here former coalmining, a ceramics workshop and mining buildings have been adapted to events spaces that can be hired for func- meet the needs of small and medium-scale tions. The latest addition is the School of companies, many of which are start-ups. Management and Design, a non-profit- Unusually, Triple Z is a stock corporation. making company run as a public-private When it was founded, shares in the com- partnership, that occupies a futuristic pany could be bought by the local popula- cubic building and a museum of the Ruhr tion, and politicians and businesses also is about to open. showed their support by becoming co- 15. Hans-Jürgen Best, Head of “Zollverein is a true lighthouse for our owners. So far, more than 40,000 individ- Planning, Essen, interviewed city. It is internationally recognised as a uals have become shareholders. Triple Z February 2007

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also received some temporary support Spatial Planning, University of Dortmund, it from the council and the state government imposed a grand narrative of design, culmi- under the social city programme. nating in island after island of regeneration in Triple Z is intended to provide an envi- isolation, each cut-off from each other and ronment in which small companies can critically from the surrounding area. start and grow. By creating new jobs, the “It was an illusion to locate a science hope is that it will contribute to the struc- park in Gelsenkirchen,” Professor Blote- tural change that Essen and the Ruhrgebiet vogel said.16 “Science was not that area’s need. The centre management has the free- strength. It was like building a cathedral in dom to provide solutions tailor-made for a desert; impressive, but utterly useless. It small companies – offices and light indus- added little to the area, and it still followed trial space, conference rooms, a cafeteria a path of decline.” He considers scale is and some accounting services are all avail- critical: “Successful regeneration needs to able to Triple Z tenants. be working on a scale of 300,000 people if Although it is a profit-making enterprise, it is going to work. Sufficiently large to and has just started to be profitable, there is access economies of scale, competencies a social element to Triple Z as well. A schol- and fiscal thresholds, yet small enough to arship scheme offers artists from anywhere allow local decision-making.” in the world free accommodation in an old Professor Bernhard Butzin, of the signal tower that has been dedicated to the University of Bochum, is equally sceptical: arts, plus money and materials for a year. “Gelsenkirchen did not need a science Artists from Colombia, Japan and Poland park, what it needed was longer term, local have taken up this offer. growth…What you are left with is a perfo- Another huge project of industrial rene- rated city; a Swiss cheese construction with wal is taking place on the western edge of areas that have public funding and areas Essen’s city centre, the Krupp-Gürtel that do not; poles of innovation and poles (Krupp belt), where 230ha of land former- of deprivation.” ly used by Krupp had become derelict. The Although cities largely make the deci- area, almost four times the size of Essen’s sions about how they will develop and fund city centre, provided the perfect opportuni- these changes, there is one disadvantage to ty for Essen’s planners to expand the centre this otherwise desirable devolution: the and completely reshape the face of their region as a whole can end up losing from city. With ThyssenKrupp’s new corporate wasteful competition between cities for headquarters, now under construction, at finite resources. When ThyssenKrupp its core, the area will provide a mix of work- moves from Düsseldorf to Essen, for exam- ing, living and leisure facilities. ple, the latter will gain but the region will In contrast to the success of these locally controlled projects, the state-led IBA Plate2: Science Park in Emscher Park development, has had less Gelsenkirchen glowing results. A ten-year programme begun in 1989 by the state government of Nordrhein-Westfalen, it sought to build economic centres and then link them together to revitalise the regional economy in the Emscher Basin, a strip several kilometres

16. Prof. Hans Blotevogel, wide and stretching over 70kms from School of Spatial Planning, Duisberg to Dortmund. According to Dortmund University, interviewed on 11 February 2007 Professor Hans Blotevogel, of the School of

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not. There is no point shrinking cities bat- revenues fell and the needs of the remain- tling over a declining resource base. A com- ing residents rose. bination of competition and co-operation is the most sensible way forward; what is needed is more co-operation within the Pockets of Decay region and more competition between reg- Population loss is one of the key problems ions to attract external direct investment.17 for the Ruhr. “In shrinking cities we are see- ing both a graying and a deskilling of the population,” says Professor Butzin. Shrinking cities “Population levels are declining absolutely The phenomenon of shrinking cities may be and the socioeconomic profile of the popu- associated more with East than West lation is being recomposed. Globalisation Germany, but its impact upon the Ruhr and demographics are driving this process”. region is clear. Between 1961 and 2006, “The demand for regeneration has been Essen experienced a 20 per cent reduction in broken in the Ruhr,” Professor Butzin its population. Over 140,000 people left the explains.19 “Brownfield levels are building city, equivalent to the population of up, tied to growing suburbanisation of Blackburn. Gelsenkirchen over the same housing and economic activity. A new period lost 116,000 people, 30 per cent of its economy in the region, as well as in the population. In relative terms, it changed world, means that labour markets are far from being the size of Bristol to that of more flexible and changing rapidly.” Nottingham. Bochum, following a slightly “The Land has failed to understand the different trajectory, lost 7 per cent of its pop- growth of these issues in the Ruhr.” Policy ulation between 1976 and 2006. Figure 3 is lagging behind changes on the ground. illustrates the rapid growth of these cities “A twofold policy needs to be started; a until the 1960s and their more recent popu- pro-growth policy in growing areas and lation loss.18 one in shrinking areas.” In sum, these three cities lost well over a “Urban regeneration needs two interde- quarter of a million people over four pendent strategies; an economic competi- decades. As the population base shrank, tax tiveness policy and a place-making policy,”

Figure 3: Population levels for three Ruhr Cities – Essen, Bochum and Gelsenkirchen – 1800 to 2006

800

700

600 17. Cheshire P and Gordon I, Essen 500 “Territorial competition: Some Bochum lessons for policy”, The Annals 400 of Regional Science, vol 32(3), Gelsenkirchen pp 321-346, 1998

300 18. Jessen J, “Urban renewal – A look back to the future: The 200 importance of models in renew-

Population Levels (thousands) ing urban planning”, German 100 Journal of Urban Studies (DfK), vol 45(1), 2006

19. Professor Bernhard Butzin, 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 Institute of Geography, Ruhr- Time University Bochum, interviewed 10 February 2007

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he continues. “Because new economic hoods have sometimes chosen to remove structures are underpinned by the quality every other row of 19th-century town of the social capital and labour force avail- housing to opening up the area. Another able, it is critical that areas invest in retain- approach has been the “turning three into ing and enhancing skills. Economic activi- two” policy, in which neighbours acting ty will locate in skill rich areas. Skills will together to buy adjacent derelict or unoc- stay in economically active areas.” cupied buildings, and use the cleared space Development will naturally follow provid- for extensions or larger gardens.23 ed that the people with skills do not leave. Stimulating these virtuous cycles between economic productivity and embedding skills, lies at the heart of suc- It is critical that areas invest in retaining and enhancing cessful city regeneration. It is therefore not “ the gaps in the city that stand as the biggest skills. Economic activity will locate in skill rich areas. Skills challenges for these cities, but the gaps in will stay in economically active areas” the population. Skills have to come first; development will then naturally follow - provided the skills do not leave. However, he admits that the old industrial sites offer the opportunity to green the city. “They also give a certain flexibility to the Conclusion urban structure in the future.” Some com- Not all of the experiences of the Ruhr are mentators even celebrate the extra space aff- directly applicable in a British context, but orded by cities whose populations are shrink- there are lessons to be learned, especially for ing. Wolfgang Kil, who writes on architec- areas that have suffered severe loss of heavy ture, published an influential book on sub- industry, such as South Wales and the ject entitled The Luxury of Emptiness.20 North of England. Unlike these areas, the Others regard space, which was once at a pre- Ruhr has many locational and geographical mium “as a burden”.21 They believe there is advantages. With a common border with too much infrastructure and too much hous- Belgium and the Netherlands, Amsterdam ing, all of which cities have to maintain. and Brussels within a 100 mile radius, and Green spaces, in particular, are expen- excellent road and rail infrastructure, it is sive to keep up and are often one of the centrally-located in a strong European first areas to suffer funding cuts. German economy – a real asset for an area looking cities have been looking at developing low to transform itself. cost, but high impact, public spaces. Industrialisation brought great wealth to 20. Kil W, The Luxury of Forests, for example, are cheap to both the area and radically changed it. In its Emptiness,(Luxus der Leere), Taschenbuch, 2005 develop and maintain and have become a wake it left high unemployment, an

21. German Cities: Success favoured use of space in and around unfavourable demographic profile, and Beyond Growth?, Urban Age shrinking cities. Equally, empty or derelict derelict city areas. The cities must expect to German Symposium, City of Halle 2006, see www.urban- areas on the edge of cities have been con- shrink further in future years. This can be a age.net/03_conferences/conf_ha lle.html verted into semi-communal agricultural or painful process for those such as Essen that

22. Ibid horticultural land, which are both now once planned its infrastructure for a popu-

23. Ibid productive areas, environmentally benefi- lation of 750,000 and now finds itself just 22 24. Butzin B and Noll H-P, cial and an asset for communities. below 600,000 with the prospect of further “Sustainable Brownfield For housing, some neighbourhoods population losses. Regeneration in Europe: Improving the quality of derelict have embarked on lowering density levels Many of the inner urban areas are pock- land recycling”, Materialien Zur in areas of low demand. Instead of opting marked with derelict industrial sites. Over Raumordung, vol 66, Bochum, 2005 for outright demolition, local neighbour- 8,000ha of brownfield sites are document-

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ed within the region, and estimates suggest these new ambitions for the Ruhr. that over 300,000 inhabitants will move The cities and region as whole, have out of the inner cities to the outskirts of worked hard to rebuild success. Local gov- the Ruhr and the federal state in general by ernment has the power to make changes 2020.24 Finding a use for the old industrial and the incentives to see them through. areas such as Zollverein and Gels- The vital link between pride in an area and enkirchen-Bismarck has been central to the ability to build on it was strengthened. encouraging people to stay in the cities. Cities were not looking beseechingly out- Visitors are often surprised by how wards for help but inwards for opportuni- green the region is. Derelict brownfield ties. Local institutions had a genuinely sites, a burden on local budgets and a daily aspirational attitude. reminder of what once was, have been Unlike in Britain, they were helped by imaginatively developed by radical cultural a pro-growth planning system, a local investment, such as in Zollverein and in government that was both motivated and the other monuments of the Route- accountable and a civil society that was Industriekultur. Young and creative indus- vocal enough to hold local officials to tries have been attracted in by the architec- their many promises. When local urban tural projects that keep the exteriors of renewal decisions were taken at a nation- once great buildings and convert the inte- al level, failures were more likely. Both riors for modern offices. Steele and the science park in Gelsen- Cultural activities have also become an kirchen are testament to this. On paper important factor for the region with inter- they were good and sound projects, on nationally renowned museums, theatres the ground they proved inappropriate: and opera houses, such as the Aalto Opera instead of identifying and delivering on House and Folkwang Museum in Essen the advantages that these areas offered, and the Schauspielhaus theatre in they tried to invent new ones for them. Bochum. Essen has been named Europe’s There is an obvious lesson here for capital of culture in 2010 underlining Britain.

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Poland’s story since 1989 has been one of Although Poland’s population has grad- radical change: entrance into a free-market ually become more urban, it will still be economy, resurgent democracy and, in May dramatically under-urbanised in 2030 2004, accession to the European Union. compared to the rest of Europe. By this Regeneration in cities such as Warsaw and date, the Netherlands will be 88.6 per cent Łódź is centred on physically updating cities urban, Germany 80 per cent and France and regions, improving environments and 82.9 per cent.3 regional infrastructure to match the pace of Even in comparison to Eastern Europe economic development. as a whole, Poland is still lagging behind. In 1850 only 13.6 per cent of Poland’s Poland and the Czech Republic were com- population lived in towns and cities. By parable in terms of urban population in 1900 it had risen to 25 per cent.1 (In 1955, yet by 2015, 10 per cent more Britain, 75 per cent of the population was Czechs will be living in urban areas, three- urbanised at the turn of the century).2 In quarters of the population. Bulgaria, the race to develop cities, Poland started Belarus, Hungary and the Ukraine will all late, suffered vast destruction during the have more than 70 per cent of their popu- war and was further held back by 45 years lation living in cities by 2015, while only of socialist rule (Figure 1). Since 1989, it Hungary will be less urban than Poland has constantly been playing catch up. (Table 1).

Figure 1: Per cent of population living in urban areas in Poland and the UK4

1. Korcelli P, “Urbanization and the urban system”, in Degórski 90 - M (ed), Natural and Human Environment of Poland: A geo- 85 - Northern Europe graphical review, Stanislaw 80 - Leszczycki Institute of Geography and Spatial 75 - Czech Republic Organization, 2006 70 - Eastern Europe 2. Crafts N, British Growth dur- 65 - ing the Industrial Revolution, pp Poland 57-62, Oxford University Press, 60 - 1985 55 - 3. World Urbanization Prospects: 50 - The 2005 Revision, United Nations Department of 45 -

Economic and Social per cent of population living in urban areas 40 - Affairs/Population Division, New 1955 1965 1975 1985 1995 2005 2015 York, 2005

4. Ibid

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Table 1: Urban population levels in selected Eastern European Countries5

Per cent population at mid-year residing in urban areas, 19-01 (%)

Country 19 196 197 198 199 00 01 Change

Belarus 8.9 38.1 0.6 61.8 68 7. 76.7 47.8 Bulgaria 3. 4.8 7.6 64.6 67.8 70 7.8 40.6 Czech Republic 43.3 48.9 63.7 7. 74.6 73. 74 30.7 Hungary 4.4 8 6. 6.1 6. 66.3 70.3 1.9 Lithuania 34.1 44. .7 6 67.3 66.6 66.8 3.7 Poland 43. 0.1 .3 9.9 61. 6.1 64 0.8 Slovenia 3.8 3. 4.4 49.6 0.6 1 3.3 9. Slovakia 31.7 37 46.3 4. 6. 6. 8 6.3 Ukraine 41.4 0.6 8.4 64.7 67 67.8 70. 8.8 Eastern Europe 43.9 . 60.4 66.3 68. 68.4 69.4 . Europe 3.4 9.7 6.6 69.3 71. 7. 73.9 0.

The centrally planned economy, and city based on exploiting natural resources and development strategy which accompanied industry. How big they were to be, how it, meant that for over 40 years cities did they were to grow and how people were to not grow as they did in Western Europe, live in them had already been set in stone North America, Australia, or any other or, rather, concrete. country that was trading in the global econ- In 1945, Poland was half as urbanised as omy.6 Cities in socialist countries were the UK. This was well below the ideal level planned from the centre. There was no con- for industrialisation and effective utilisation sultation or sensitivity to local needs, and of the labour force. The first decade of they were supposed to grow according to socialism brought with it a sustained period set targets tied to five-year economic plans of city building and shift from a rural to an

Figure 2: Per cent urban population growth in Poland and the UK, 1950 to 20357

4.5

3.5

3 6. World Urbanization Prospects: 2.5 The 2005 Revision, UN Dept of 2 Economic and Social Affairs/Population Division, New 1.5 York, 2005 Per cent change (%) 1 5. Weclawowicz G, “Poland”, in 0.5 van Kempen R, Vermeulen M and Baan A (eds), Urban Issues 0 and Urban policies in the new 0 6 9 EU countries, Ashgate -1 1990 5 2005 5 Publishing, 2005 950-1955 9 60-1965 965-1970 95-2000 1 1 1 1970-1975 1975-1980 980-1985 1985- 990-1995 19 1 1 19 2000- 2005-2010 7. World Urbanization Prospects: UK annual urban growth rate Poland annual urban growth rate The 2005 Revision, United Nations, New York 2005

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urban country. The population of its cities but in practice this meant above all that grew at over 4 per cent, a rate of change last they were to be the means of promoting been seen in Britain in the Victorian era. By industrialisation. Resources were chan- the time of transition to a market-based nelled to industry rather than to housing economy in 1989, city building and migra- or infrastructure development. When tion to the cities had slowed down dramat- urban populations boomed in the early ically (Figure 2). This was not because 1950s, there were serious housing short- urbanisation had reached saturation point ages to which the Government responded but because the cities that existed were of by building massive housing estates around such a poor nature and structure that they the edge of the cities. These grim develop- found it remarkable difficult to grow even ments still provide much needed housing, though it was much needed. but are inaccessible, poorly provided with Jiří Musil, professor of sociology at basic amenities and very depressing. Charles University in Prague, has high- Jane Jacobs suggested that Soviet cities lighted four key effects socialism had on depended on what she called “transactions cities.8 First, it abolished private property of decline” for their survival.9 Whatever and the land market, in Poland’s case wealth was created by Soviet cities was through the Decree of Communalisation siphoned off to subsidise other parts of the in 1945. Complex pricing mechanisms country. This stunted city growth and were replaced with a uniform cost of land. made rural and less developed areas Services, industry and people were distrib- dependent on cities. A vicious circle of uted in a manner that in a market econo- dependency and economic marginalisation my would be labelled economically per- was initiated. verse. Factories were located in central The incentive to invest in and maintain business districts, where retail would have the city disappeared. This pattern was evi- been expected. Retail and business failed to dent in Poland too and presented a huge group together as there were no economic problem to people, firms and government advantages in doing so. Location in cities when the country entered the market econ- indicated nothing about the market value omy. While the Polish cities are slowly reor- of land. ganising to function effectively in the new Secondly, all businesses were nation- conditions – specialising in services in the alised. Expansion of large enterprise central districts, suburbanising, creating ceased, entrepreneurs disappeared and the economies of scale – this is a slow process. government consolidated smaller business- Like matching all the sides on a Rubik cube es, often forcing them to merge with larg- – it is slow and equally difficult. er ones. Big industrial complexes became the standard manufacturing unit, and Background 8. Musil J, “Changing urban sys- these still exist in many Polish cities, testa- tems in post-communist soci- ments to the socialist past. Poland’s cities are immature compared to eties in Central Europe: Analysis and prediction”, Urban Studies, The third effect was the redistribution those of its capitalist contemporaries. 1993, vol 30(6), pp 899-905 of all existing housing space and the Professor Grzegorz Węcławowicz believes 9. Jacobs J, Cities and the fourth, the regulation and planned alloca- that they are held back by a lack of many Wealth of Nations: Principles of 10 Economic Life, p 218, Vintage tion of housing. People could no longer of the expected elements of city living. Books, 1985 choose where they lived; communities “Urban places were merely additions to 10. Professor Grzegorz splintered, causing social cohesion to industrial plants and became subordinate Weclawowicz, Institute of Geography and Spatial decline. to their requirements in organisational Organization, Polish Academy of Science, Warsaw, interviewed 19 In socialist rhetoric cities were the vehi- terms. For the ruling communist clique, February 2007 cle for delivering an equal and just society, cities were viewed as loci of political sup-

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port on the part of the working class, and viewed as necessities for industry and little of industrial production, but not of com- else. Then in a complete reversal, the State mercial activity or the exchange of infor- withdrew from city governance, leaving mation.”11 So not only is Poland as a whole local government in charge, with massive under-urbanised, but the cities that they repercussions for regeneration and city do have are not cities as we understand growth. them; they are to a large extent “fake”. Local governments, which had existed For example, under socialist rule unem- more in name than practice, were brought ployment officially did not exist anywhere back to life. The Spatial Development Act in the country. Then in 1989, it suddenly 1994 gave local authorities powers to draw emerged for the first time since before the up local development plans and target Second World War. By 1994, unemploy- social ills such as unemployment, social ment was 16.4 per cent; by January 2006, exclusion, criminality, vandalism, home- it was 18 per cent. These figures are high lessness and pollution. Importantly, local but not surprising. Moving a workforce governments were also made responsible with skills concentrated on heavy industry for housing provision, previously a central into the new manufacturing and service- government responsibility. based European economy was always going Having powers and knowing how to use to be incredibly difficult. Simply, there was them are two different things, however. not enough economic activity to absorb After 45 years at the bottom of a highly the surplus labour. centralised chain of command, local offi- Unemployment has spurred the well- cials had to find out how to run a city and educated younger generation to seek their how to deal with previously unknown fortune in other EU countries. Just as actors such as entrepreneurs from the pri- Ireland suffered a brain drain in the 1980s, vate sector. Central government may have so Poland is now and this is taking a toll on given local government a blank slate to its cities. Even Warsaw, far and away the change their areas, but the blank cheque wealthiest area, cannot compete: GDP per did not follow. Their decision-making capita for Warsaw was €15,832 in 2001, powers were not matched by financial compared to €40,986 for London.12 When powers, nor could they look to the centre I spoke to people in Warsaw, the general for ideas for it, too, lacked expertise. consensus was that business growth – and Figure 3 illustrates that governance was therefore city change – was being ham- to be based on what is known in EU jargon pered by a shortage of skilled labour. as subsidiarity – the idea that central It is not easy for Poles to move from authority should have a subsidiary func- rural areas to city centres. Wages may be tion, performing only those tasks that can- higher, but a housing shortage has sent not be performed effectively at a more prices soaring relative to purchasing power, immediate or local level. Perhaps in a reac- especially around cities like Warsaw and tion to decades of central planning, all Krakow. Now that Poland is part of the EU urban decisions were to be taken at the

free labour market the monetary rewards urban level, though funding was still to 11. Weclawowicz G, “Urban of moving to another country are far come from the national level, and supra- Issues in Poland”, in Degórski M (ed) Natural and Human greater than relocating within Poland. national levels such as the EU. Environment of Poland: A geo- To fill the gap in knowledge and expert- graphical review, Stanislaw Leszczycki Institute of ise, a number of professional organisations Geography and Spatial Polish city renewal emerged, such as the Union of Organization, 2006 12. Urban Audit, Regional Policy Before 1989 no one ever spoke about the Metropolises (1990), the Union of Polish – Inforegio, 2007, see need for renewal. Cities were simply Towns (1990), and the Association of www.urbanaudit.org

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Figure 3: Governing Polish urban renewal13

European Union

Ministryof National Transport and Money Construction

Voivodship (Regional) 16

Powiat 379 (C ounty) (of which65arecities)

Gmina 2,478 (Municipality / Urban gmina: 307 Decisions Commune) Urban-rural gmina: 582 Rural gmina: 1,589

Polish Cities (1991). These helped to nomic life, “urban policy is still in disar- spread the word about methods for attract- ray”.15 ing business, building infrastructure and I looked for the truth of this in two assisting populations, and have grown in cities, Warsaw and Łódź, which are very importance since EU accession in 2004. different (Table 2). The capital, Warsaw, is The Spatial Planning and Spatial still the most successful city in Poland; it Management Act 2003 defined the scope has the highest GDP and the highest per- and procedures of appropriation of land centage of the population. Łódź is a medi- for specific uses, establishing the principles um-size city of over three-quarters of a mil- of development and regulating how con- lion people; its per capita GDP is only 42 flicts between citizens, cities and the State per cent that of Warsaw. should be resolved. Cities are recognised as the economic drivers of the country, the force for modernisation. They are also the Łódź tools for raking in EU structural funding – Łódź (pronounced “woodge”) is situated though critics complain that they are not on the wide plain of the central Polish doing their best to access the money that is lowland, where stock-herding and farming 13. Głównr wrz d statystyczny, ą 14 16 Powierzchnia i ludno w available or changing quickly enough. first began in Europe. The town started śċ przekroju tertorialnym w 2006 r, Grzegorz Węcławowicz says that, despite life as an agricultural and trading centre, 2006, see www.stat.gov.pl/cps /rde/xbcr/gus/PUBL_powierzchn the reorganisation of political and eco- and remained so until the end of the 18th ia_ludnosc_teryt_2006.pdf

14. Weclawowicz G, “Urban Issues in Poland”, p 191, in Degórski M (ed) Natural and Table 2: Łód and Warsaw Statistic Human Environment of Poland: A geographical review, Stanislaw ź Leszczycki Institute of 003 GDP (€ million) National % Population (thousand) National % GDP per capita (€) Geography and Spatial Organization, 2006

15. Ibid, p 185 Łódž ,808 . 779 7,4

16. Bogucki P, The Neolithic Warsaw 9,73 13 1,690 4. 17,93 Mosaic on the North European Plain, 1989, see www.princeton. edu/~bogucki/mosaic.html

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with a population of 2.5 million, of whom 65 per cent live in the 42 cities in the area.19 Łódź is by far the largest of these, although it is losing population – down from 786,000 in 2001 to 768,000 in 2006; representing 30 per cent of the voivodship.20 This is a little larger than Le- eds, which had 719,000 residents in 2004; Poland and representing 36 per cent of West Yorkshire’s population. Twenty-one per cent of Łódź’s popula- Figure 4: Łód and Warsaw tion lives in social housing,21 compared to ź 18 per cent in the UK, and 24 per cent in century when it was liberated from Leeds. Unemployment is about 22 per Prussian control by Napoleon. Łódź was cent; compare this to Tower Hamlets, the transformed in 1824 when the govern- worst performing area in the UK in 2006, ment chose it to be the centre of a new which had a 14 per cent unemployment textile-based economy. The city was rate, and the need for economic growth is redesigned, and much like New York, it obvious. GDP per head is £4,994. The was constructed on a grid pattern to allow city’s population has a tertiary education ease of movement for people and raw level of 13 per cent; compared to Newcastle materials. This regimented layout survives which has 15.5 per cent and Leeds with 19 to this day. per cent for example.22 Its university is one The population rose by over 600 per of the top three in Poland. Up to 42,000 cent in less than 25 years, from 49,500 to students are enrolled there at any one time, 314,000 people.17 It was even branded the injecting the city with a youthful edge. “Polish Manchester” in its heyday. Housing sprang up around factories and transport nodes. Those four and five-storey Renewal in Łódž tenement blocks built round a central With sustained local government activity

courtyard still account for the majority of following 1989, Łódź is transforming itself 17. Ibid

housing in the centre of the city. from an area of acute deindustrialisation to 18. Ibid, p 456 Unlike Warsaw, Łódź sustained only one with prospects. It has done this by con- 19. Łód : Economic Guide, ź Entrepreneurship & Jobs modest damage during the Nazi centrating manufacturing and retail Development Office, City of Occupation and the Second World War, so growth, rescuing its industrial heritage and Łód, 2006 20. Łód , Urban Audit, see the pre-1900 factories and tenements in the creating a new image for itself. It wants to ź www.urbanaudit.org/CityProfiles. centre, together with a surrounding ring of be seen as, first, a gateway for manufactur- aspx

large post-1960s housing estates, are the ter- ing into the new Europe and beyond and, 21. Ibid

rain for renewal today. “The most obvious secondly, as the retail centre of the new 22. Neighbourhood Statistics, impact of communism upon the Łódź cen- Poland. Some of these aims have been Office of National Statistics, London, 2005, see tral area was the sheer scale of the neglect of realised in the area known as Manufaktura http://neighbourhood.statistics.g ov.uk/dissemination/LeadHome. the urban fabric,” wrote Ray Riley, of the (Box 1). do?bhcp=1

University of Portsmouth, in 1997. “At the Radical change was urgently needed, 23. Professor Tadeusz end of the command economy in 1989 the says Professor Tadeusz Markowski, Markowski, President of the Polish Town Planners’ central area still bore the heavy imprint of President of the Polish Town Planners’ Association and Chair of the the earlier political period.”18 Association and Chair of the Department Department of City and Regional Management at the University of Łódź is in the centre of the voivodship of City and Regional Management at the Lodz, interviewed 20 February (or region) of Łódź, an area of 135 sq km University of Łódź .23 For over four decades, 2007

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Łódź’s economy was entirely devoted to ership. As we will see in Hong Kong the supplying textiles to the Soviet Union. Government owns all the land.) After 1989 this fixed and stable demand As soon as the economy was restruc- vanished. Recognising that it had a com- tured, large swathes of the city were left parative advantage in the textile and cloth- marked with derelict buildings, but of ing sector, it set about restructuring its skills great architectural interest (Plate 1). to a new market. Private textile enterprises Tourism and leisure activities are increas- have grown rapidly and developed links to ing, and vitally, manufacturing and logistic the West rather than the East. South East operations have entered the city. Asia does challenge the sustainability of this Manufacturing growth was achieved to sector but the importance of speed of pro- a large extent thanks to the special eco- duction and delivery in the fashion indus- nomic zone (SEZ) established in 1995. At try should not be underestimated. Professor the end of 2005, special zones had been Markowski estimates that between 1993 established in more than 130 towns.26 They and 1997 the private clothing sector direct- offer new foreign businesses exemption ly and indirectly generated more than from property tax for five years and com- 1,000 jobs; in 2005, the textile industry plete freedom from income tax. By 2005 employed 10,346 people.24 Łódź’s SEZ had attracted 130 new busi- Yet, while employment has grown, nesses including Bosch-Siemens.27 In improvements in housing and infrastruc- October 2007 five new firms gained per- ture have lagged behind. Poor living stan- mits, investing over €95 million and 24. Łód : Economic Guide, 28 ź dards are a consequence of the command employing 725 people. In general terms, Entrepreneurship & Jobs Development Office, City of economy that dictated how the city worked it is one of the more successful SEZs in Łód , 2006 ź for over 40 years. “All Polish cities except Poland, with total investment amounting 25. Professor Tadeusz Warsaw, have neglected the condition of to €400 million on a site of 900 ha.29 Markowski, Dean, Faculty of Management, University of Łód, their city centres,” admits Professor This has helped to relieve unemploy- interviewed 20 February 2007 Markowski. “This is very much linked to ment, which fell from 19.6 per cent in 26. Doma ski B, “Manufacturing, ń mining and energy supply”, p the process of socialist city building and the January 2004 to 16.8 per cent in June 238, in Degorski M (ed), Natural lack of a land market. In Łódź, the local 2005.30 Although this figure is still high, it and Human Environment of Poland: A geographical review, government still owns between 60 and 70 is below the national average of 17.7 per Stanislaw Leszczycki Institute of per cent of the land in the city, and this cent.31 However, the EU has ruled that Geography and Spatial 25 Organization, 2006 means change is very, very slow.” (This is SEZs are anti-competitive because of the

27. Ibid probably not only a question of land own- tax breaks that they offer in what should be

28. “More investment permits in the Lodz SEZ”, Polish Information and Foreign Plate 1: Łód factories and built environment Investment Agency, Warsaw 18 ź October 2007, see www.paiz.gov.pl/nowosci/?id_ne ws=1605&lang_id=1

29. “100 investors in Łód SEZ”, ź The Warsaw Voice, 26 September 2007

30. Łód : Economic Guide, ź Entrepreneurship & Jobs Development Office, City of Łód , 2006 ź 31. Poland: OECD Economic Outlook 82 – Preliminary Edition, Organisation for Economic Co- operation and Development, Paris 2006, see www.oecd.org/dataoecd/6/32/20 213254.pdf

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Box 1: Manufaktura

Izrael Poznanski’s textiles factories once dominated the West side of the city. Between 1872 and 1892 it was said that over 80,000 spindles were operational across 12 different sites.32 As in Bourneville in the Midlands or Port Sunlight on Merseyside, good housing was provided close to the production areas, accommodating 4,000 employees. This district was called Manufaktura, and colloquially known as “the city within the city”. At the turn of the ninetenth century it was the economic heart of Łódź. The communist government nationalised the factories and renamed the company Poltex. In 1997 it was closed, having lost its main customer, the Soviet Union and unable to compete efficiently on the open market. But now Manufaktura is on the rise once again. As you enter Łódź a billboard run- ning alongside the road reads: “Manufaktura Drives Łódź”. On another it proclaims: “Manufaktura: Brave Face of the New Łódź”. In 2000, three years after the last textiles were produced it was bought by the French property developers Apsys, who turned it into Poland’s largest shopping centre. It was the most ambitious regeneration project since the rebuilding of Warsaw’s old city in the 1950s. This is renewal though culture and consumption. As in the Zollverein in the Ruhr Area of Germany, many of the unique architectural structures that were the zenith of functional design a hundred years ago have been preserved and adapted: Manufaktura’s old turbine hall now the home of the city’s first super night club.

Plate 2: Manufaktura

a unified market. All existing exemptions other Polish cities, such as Krakow or from taxation must be removed by 2017 Warsaw.34 and no new zones may be started. Łódź is well placed in the heart of Interestingly, the companies that invest- Poland to trade with an expanded EU. For ed in the Łódź SEZ are starting to take on this reason the redevelopment of Fabrycka new functions. They are moving beyond station has been given a high priority.

simple manufacturing and investing in Apart from infrastructure, housing is the 32. Łód in your pocket, Your ź research and development. For example, biggest obstacle to change. The whole city Pocket Guides, 2006, see www.inyourpocket.com/poland/c Philips is building its new European head- is circled by large, modernist public estates ity/lodz.html 33 quarters there. Perhaps to encourage oth- which are isolated from places of work. 33. “Philips’ Lodz HQ”, The ers to follow, the city wants to develop a This stock has been neglected and now Warsaw Voice, Warsaw, 4 August 2004, see science park. So far wages and salaries in offers a poor quality of life. The scale of www.warsawvoice.pl/view/6185/ Łódź have remained well below those of physical neglect is massive, after years of 34. Ibid

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under-investment in housing. In the next funding if they submitted suitable plans. ten years, 300,000 new houses will be Łódź submitted its first city plan in needed in Łódź. Given that in 2001 Łódź December 2005: the work of 43 people had 331,668 dwellings, this is equal to a over 18 months. For the first time it saw near doubling of the housing stock.35 the city as a whole, recognising that renew- However, much of the housing stock in al depended on the built, social, and eco- the centre, especially along Piotrkowska nomic environment, as well as the local Street in the old Jewish quarter, has a very infrastructure. complicated legal status. It was, confiscat- There still exists a post-Soviet suspicion ed from the Jewish population during the that private enterprise in public matters is war and the legal title of 30 to 40 per cent de facto corrupt, an attitude that has limit- of this housing is unclear. But to deal with ed co-operation through public-private claims is a laborious process and compul- partnerships. Indeed partnerships in gener- sory purchase orders are slow and very sen- al are viewed with suspicion. This distrust sitive given the city’s turbulent history of and stasis is not confined to Łódź, of property confiscation, first by the Nazis course. In the words of Dr Maciej Turała, and then by the State. of the University of Łódź: “Poland is paral- Perhaps the biggest problem for renew- ysed by its constant need to get permission al in Łódź is lack of know-how. Although and to look to be told what to do by those Łódź has taken significant steps forward, above them.”36 this wasn’t really thanks to the local administration. “What policies are done, are done in a haphazard way,” comments Warsaw Professor Markowski. “We do not know Outside Warsaw’s central station stands how it should be organised; everyday the tallest building in Poland – the there seems to be a new answer. New and Joseph Stalin Palace of Culture and novel ideas are definitely needed, but Science. A gift of the Soviet Union in there is something to be said for a consis- 1955, it dominates the skyline. This tent approach. I think this has to start monument to socialist endeavour is now with the formulation of a national policy flanked on either side by consumer heav- stance. Strong decentralisation has really en – the Zlota Centrum Complex and encouraged the development of a self-gov- the Marszalkowska Galeria Centrum ernment system, but it is still not a com- where mass-market brands like Marks & plete market economy…You must not Spencer and H&M tempt the shoppers. underestimate how strong the state sector Whether this is playful coincidence or still is.” the rebuttal of the old by the new is not Without the impetus and incentives clear, what is critical is how the city man- that the European Union offered, many ages to advance the market economy and of the people that I spoke to felt that leave behind the rigidities of central con- change would have been much slower. In trol. a system traditionally based on hierar- Warsaw and its surrounding area gener- chies, devolving responsibility seems to ate 12.5 per cent of national GDP, attract a have sent local government into a spin. quarter of all foreign direct investment “Cities are all racing towards a line, but (FDI), and account for 80 per cent of the

35. See appendix A without the ideas to get there,” said Profe- country’s new office space. Between 1991

36. Dr Maciej Turała, Department ssor Markowski. and 2000 FDI increased from €11.75 mil- of City and Regional manage- After Poland joined the EU it became lion to €5.75 billion, a rise of over 7,000 per ment, University of Łód, interviewed on 20 February 2007 clear that its cities could access a lot of new cent. Over 20 per cent of the population

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have a university degree.37 Although Krakow They proved a useful legal and financial challenges it on cultural grounds and tool for transferring freeholds and public Poznan economically, Warsaw is undeniably properties from State to private ownership, the most important city in Poland and has an enormous task. From 1995 to 2002, the highest GDP per capita (Table 2). PPPs produced solid results for urban Yet only 4.4 per cent of the population areas, empowering the private sector and live in the capital: 1.6 million in the city encouraging the public sector to take an centre and more than 2.6 million in the interest in city change. However, the initial wider Warsaw area. The historic centre of gains were lost as the Government began the old city, destroyed during the war, was to regulate how the private and public sec- famously reconstructed in the 1950s and tors could interact, culminating in the officially recognised as a World Heritage rigid structures laid down in the Public- Site by Unesco in 1980. It is now undergo- Private Partnerships Act 2005. ing gentrification and rents there have been Over-regulation has dissuaded private rising rapidly. The new middle class is mov- companies from co-operating with local ing to in the growing suburban belt and government, and has also increased the areas such as Konstancin, known as the public sector’s distrust of “profit” in public Polish Beverly Hills, are especially popular. works. As a result long-term privately But the housing shortage and rising infla- financed infrastructure projects, so impor- tion mean that many of Warsaw’s citizens tant to the future success of Warsaw, are still depend on social housing, much of it in effectively outlawed. The Public Finance urgent need of regeneration. Forced segrega- Act limits the total indebtedness of local tion under the Nazis, and tight controls on government to not more than 60 per cent population movements under communism of its income in that financial year and all imposed rigid and unnatural systems of long-term commitments are included in social interaction on to all cities in Poland. the total indebtedness category. This In Warsaw this is especially true of the makes it almost impossible for local gov- doughnut ring of estate developments that ernment to take on long-term projects. circle the city centre, and which were built to Further, for the purposes of tax, PPPs are house population growth as the city recov- viewed as service agreements and therefore ered during the Fifties and Sixties. This is subject to VAT at 22 per cent – another where the majority of social housing is con- disincentive to development. centrated; and where 36 per cent of the city’s population lives. The Wrzeciono estate in Plate 3: Old tenement housing, Warsaw is a good example of the revitalisa- Warsaw tion issues that these large urban estates pose for Polish cities (Box 2). Renewal of social housing has been held back by a resistance to engage with the pri- 37. Weclawowicz G, “The Warsaw Metropolitan Area on vate sector. The experience with public-pri- the eve of Poland’s integration vate partnerships (PPPs) is a good example into the European Union” pp 223-247, in Hamilton I, Andrews of this tendency, says Grzegorz Buczek, an K, & Pichler-Milanovi N, architect and Secretary of the Main Transformation of Cities in Central and Eastern Europe: Committee for Planning and Architecture Towards Globalization, United in Warsaw.38 Nations University Press, 2005 PPPs were introduced in the mid-1990s 38. Grzegorz Buczek, Main Committee for Planning and to spearhead market-led change in the city. Architecture, interviewed 02 Feburary 2007

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Box 2: Wrzeciono

Located near the Vistula, the river that bisects the capital, in the north-western part of the city, Wrzeciono was constructed in the 1960s and 1970s. Its multi-storey buildings are of very low standard, but in the 1990s modern, better quality housing was added. Grzegorz Węcławowicz, of the Polish Academy of Sciences, who has carried out research on the estate, says that the original Wrzeciono community consisted of blue-collar workers working in the adjacent steelworks. “Inhabitants were fairly homogenous and lived in dwellings of comparable standards, sharing similar styles of life”.39 By 1989, after years of low productivity and isolation from external markets, the heavy industry sector was in decline. Many workers in the steelworks lost their jobs and unemployment on the estate was high. Even now 38 per cent of residents are on welfare – and not only the older generation. Opportunities and aspirations are low; crime and drug addiction are rife. As well as unemployment, residents suffer from social isolation – only 9.5 per cent participate in a sports club, cultural association or other social activity.40 Cut off from both the labour market and from society at large, the estate has become an island of deprivation. Housing co-operatives and district authorities are the most powerful actors in area change, and they have focused on renovating the existing housing stock, taking advantage of grants for insulating buildings and a 20 per cent renovation tax allowance. In Wrzeciono, policy efforts have concentrated on the privatisation of social housing stock and improving living environments. But physical changes in housing standards do not automatically confer a social dividend; unemployment, drug addiction and crime have not disappeared. Local government has tried to identify the most vulnerable people and provide them with community support. At the same time policing on the estate has been stepped up and, most importantly, a concerted drive made to get people into work. There are labour clubs that help residents with the contacts necessary to get a job and some short-term job creation schemes have been organised by government agencies. Although the estate is now far better maintained than it was, Węcławowicz’s survey found that 73 per cent of the respondents from the area were unaware of the policies that had been put in place; 92 per cent still thought unemployment was the major problem on the estate; and only 3.5 per cent of the people said the situation had improved.41 Yet the market economy may be providing the answer. Gentrification is slowly penetrating Wrzeciono; better-off newcomers are buying the newer properties dotted around the older stock, bringing hope of improvement but also possibly the seeds of future trouble.42

Grzegorz Węcławowicz believes that finance because of the budgetary rules. “local government is just afraid to get Although 95 per cent of cities have developed involved with the private sector”. The situ- one, in practice local governments have often 39. Ibid, p 16 ation is worrying because, since 1994, had to fall back on more piecemeal 40. Ibid municipal government has been required approaches to city change. The fact that 41. Weclawowicz G, Guszcza A, Kozlowski S, Bielewska A, to develop a planning strategy, which property tax is calculated on long time lags Adamiak A, Krasowska M, Fader includes a local physical development compounds the problem, especially when A, & Bierzynski A, Large Housing Estates in Warsaw, Poland: strategy (LPDS) concentrating on renewal, they make up 14 per cent of the municipal Opinions of residents on recent and oversee its implementation. As part of budget: if development brings rising values, developments, RESTATE report 4f, p 58, Utrecht 2005 this, it has had to come up with its own local government will see no financial benefit 42. Hills J, Ends and Means: planning system and regulations. until five years down the line when the value The Future Role of Social Housing, CASE report 34, The planning strategies are a long-term of the land is recalibrated. This is often London 2007 commitment and therefore difficult to beyond the time horizons of local politicians.

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Public participation in renewal provides Kabaty, a neighbourhood in the south of a further disincentive. After so many years Warsaw. of silence, people are eager to join in con- As long as “subsidiarity is national gov- sultation exercises. But Ewa Korcelli- ernment’s urban policy, change will be Olejniczak, of the Polish Academy of slow,” says Buczek. “There is a need for a Sciences, suggests that giving equal privi- small revolution.” And as long as local gov- lege to all voices is wrong.43 In cases it has ernment is effectively discouraged from produced documents without expert developing Warsaw and national govern- analysis and without a “main-idea” on how ment loath to intervene directly, the city to change the city. It also drags out the will only change slowly. process, in some cases to over three years and cultivates an anti-development outlook. As a result LPDSs are implemented The future of Polish cities on average between three and four years The First Congress of Polish Cities organ- after they were drafted, longer in bigger ised by the Association of Polish Cities in cities, by which time they are often out of 2003 identified four areas that must be date. addressed if cities in Poland are to renew “Urban policy is an incomplete puzzle themselves. First, regeneration will only without an idea of either what the picture improve if income flows to local authori- on the box is or where the pieces are,” ties are liberalised. Secondly, the state says Grzegorz Buczek. This is, he thinks, financing system should be decentralised a direct result of subsidiarity having gone so that local taxes and subsidies benefit the too far. Because national government has local area. Thirdly, a comprehensive revi- not set a framework for urban policy, talisation policy has to be established by local government has either avoided local government. Finally, new legislation undertaking policy or gone about it in a should be designed to encourage public- piecemeal, almost random way. Only the private partnerships, regional development Ministry of Construction, which was and spatial planning. made responsible for developing a If these four points are realistically national urban policy in August 2006, addressed then Polish cities have the poten- issues orders from the centre, so ques- tial to thrive; without them the window of tions of bricks and mortar tend to domi- opportunity afforded by membership of nate planning. Buczek comments: the EU could be lost. The country is “Bricks will sort themselves out if the already suffering from a braindrain, losing economy is doing well.” the young to those countries and cities Subsidiarity has had a dramatic effect which offer better opportunities and in post-socialist Poland. Devolving power wages. If this generation is permanently is all well and good, but unless the skills lost, development in Poland could be crip- and willingness to use them exist at local pled. On the other hand, designing and level to undertake development, the putting into practice proper development opportunity for change is limited.44 So far is a way to attract them back. a lack of understanding or experience of Criticism should be tempered, however,

local development has led to failure of given the size of the task in 1989 and the 43. Dr Ewa Korcelli-Olejniczak, delivery. The lack of co-ordination is so lack of experience in undertaking develop- Centre for European Studies, Polish Academy of Sciences, profound that it is not unknown to have ment. As Professor Markowski says: interviewed 19 February 2007 a situation where an estate of more than “Eighteen years after the end of Soviet rule 44. Prud’homme R, “The dangers of decentralization”, World 120,000 people could have five schools it is easy to change the physical structure of Bank Research Observer, vol 10, but no public health facilities, such as in the cities, but not the mindsets of the peo- pp 201-20, 1995

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45. Markowki T, “Major tenden- ple who run them. It is difficult for local investors in the city, not even the most cies and structural problems of major Polish cities in the new authorities to recognise and accept the sim- important one, and that encouraging pri- economic context”, DISP, 103, p ple fact that they will be one of many vate investment is their principal task.”45 5, 1997

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On any Saturday, Fa Yuen Street in Hong Mong Kok. Visitor numbers, the econom- Kong is a seething mass of addicts all ic value of the area and its image have all searching for the same fix: sports shoes. been raised. But many local residents and Colloquially known as Sneaker Street, it is conservationists have not welcomed the dedicated to the fine art of the trainer. change. The delightful Bridal Gown and Towering displays of shoes line each side Bird Streets disappeared under the rubble; of the street threatening to engulf the ground rents have gone up, forcing out pedestrian. The area, called Mong Kok small independent retailers, who have (meaning flourishing or busy corner), is been replaced by large chains. Chaotic one of the most densely populated places vibrancy has been replaced by well-organ- in the world, a jumble of traditional shops ised malls. and markets, commercial and residential “Many lament the loss of character in space. Mong Kok as it undergoes renewal,” wrote This traditional Hong Kong is a world a journalist investigating the area in 2007. away from the clone-town model of retail “Twenty years ago, there was a variety of found in Western shopping centres. But small businesses such as tailors and herbal you must visit Sneaker Street soon if you tea shops…but many have been replaced want to enjoy the old: it is one of several by chain stores. There’s not much left of hundred projects designated for complete old Mong Kok.”2 Many felt that their urban renewal. Its probable future can be memories and communities were lost in viewed only a couple of minutes walk the quest to renew the area. And they were away, in Langham Place, a 120,000 sq ft, not consulted. 59-storey shopping mall, hotel and office There are good reasons for renewing the complex that typifies the changing face of district. The shops on Sneaker Street may Hong Kong. be prospering, but the residential units Langham Place was opened in 2004, a above them are inferior structures, offering joint redevelopment by the Urban below average living conditions. Traders Renewal Authority (URA) and a property and residents are therefore at odds over the company, Great Eagle Holdings that plans to bulldoze the area. Traders would 1. Moving Forward with Urban replaced four city blocks and cost HK$11 much prefer a more modest project of Renewal, Urban Renewal billion or approximately £1 billion.1 It is rehabilitation that would improve the Authority, Hong Kong, 2006 2. Moy P, “Out of Character”, now a commercial and tourism centre and social and economic environment without South China Morning Post, Life has dramatically changed the character of displacing their businesses. Residents want Section (C5), 22 March 2007

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Figure 1: Hong Kong3

the URA to buy their properties as soon as cities. The only affluent enclave that stands possible, as they can get up to three times out is the colonial residencies of the Peak. their market value in compensation if they From the top of the Peak, the dragons’ own the property. backs of the city’s skyline (as the architect Rem Koolhaas once described it) immedi- ately signal that this is a global power- Urban environment house, a commercially orientated, efficient Even a cursory glance at a map of Hong and cost-effective city. But these mega- Kong shows that it is a unique city. Made structures that dominate your field of up of over 260 islands on the Pearl River vision are surrounded by old and dense res- delta, connected by the Mass Transit idential, commercial and public spaces Railway (MTR) and Kowloon Canton which thrive on the markets and the hawk- Railway (KTR) and stretching to Kowloon ers that line them. More than in 3. Outline Zoning Plans, Planning Department, The and the New Territories, this is archipelago Manhattan or the City of London, the two Government of Hong Kong urbanism. worlds of the skyscraper and the old city sit Special Administrative Region, Hong Kong, 2008 Hong Kong covers 1,000 sq km, yet only tight together. 4 4. Cookson Smith P, The Urban 170 sq km are actually built on. This is a This interaction between the political Design of Impermanence: staggering figure given that close to 7 mil- economy of the city and the form of the Streets, Places and Spaces in 5 Hong Kong, MCCM Creations, lion people live on 17 per cent of the land. city was brought up repeatedly by the peo- 2006 In density terms, there are 357 people per ple I spoke to. The political structure of 5. Ibid, p 79 ha. In the five boroughs of New York, there Hong Kong is relatively simple (Figure 2). 6. New York – County, Population, Housing Units, Area, are 39 people per ha, 258 people per ha in According to the Basic Law initiated in and Density: 2000, US Census Manhattan.6 Efficient public transport has 1997 with the transfer of sovereignty from Bureau, Washington DC, 2000 been essential to mobility, while lack of Britain to China under the “one state, two 7. Dr Adrienne La Grange, Department of Public and Social space has prevented the segregation of pop- systems” agreement, Hong Kong controls Administration, City University, ulation to the degree that occurs in its own internal domestic policies, includ- Hong Kong, interviewed on 21 March 2007 American, European or even other Asian ing health, migration, education, crime

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and macroeconomic conditions. China controls foreign policy and defence. It also wields great influence over the appoint- ment of the Chief Executive. Despite its small size Hong Kong is not a unitary state. It is composed of 18 urban area district boards, comparable to the Greater London boroughs. Unlike the Chief Executive and his Government, members of the boards are elected, but have only limited powers. In the words of Adrienne La Grange, Professor of Housing at the City University of Hong Kong, they are “effectively powerless in terms of Plate 1: Hong Kong Skyscrapers renewal”, except for their nuisance value in developments.7 1997 (figure 5).9 This was a crucial period There are four other factors critical to an of city building and much of the modern understanding of how the city works. First, cityscape was fashioned during this time of Hong Kong, like many other ports, has hyper-investment. traditionally been an extremely open city, a Secondly, Hong Kong’s people have a transitory place rather than one of pro- culture of respecting authority and accept- longed settlement. Mass home ownership ing decisions. This has meant that city is a relatively recent phenomenon; between planning decisions have not normally met 1982 and 1997 ownership of private hous- with too great a degree of resistance. Just as ing increased from 56 per cent to 72 per the population shuns conflict, government cent.8 People began to see the city as a avoids intervention, especially in how the home rather than simply as a market place. city works and grows. This leads to the This shift coincided with the 1989 third point, that when it comes to urban financial deregulation in Japan. Japanese development, government generally fol- capital flooded into the immature Hong lows the course of least resistance and Kong debt market looking for returns and greatest profit. In Hong Kong, the new found it in property: real estate prices and modern is seen as good, while the tra- increased eightfold between 1984 and ditional is seen as backward. To own a “sec-

Figure 2: Hong Kong’s Political Structure 8. La Grange A and Pretorius F, “Shifts along the decommodification-commodification continuum: Housing delivery and state accumulation in Hong Kong”, Health Education Urban Studies, vol 42(13), pp Crime Public Account China Hong 2471-2488, 2005 Foreign Policy Defence Kong Migration Urban Policy Taxation 9. Jessop B and Sum N-L, “An Entrepreneurial City in Action: Hong Kong’s Emerging ‘One State, Two Systems’ Strategies in and for (Inter) Urban Competition”, p. 2301, City Planning Urban Studies, vol 37(12), pp 2287-2313, 2000 Urban Area Housing Urban Lands Bureau 10. La Grange A and Pretorius F, District Boards Bureau Renewal Authority “Shifts along the decommodification-commodification continuum: Housing delivery and state accumulation in Hong Kong”, Urban Studies, vol 42(13), pp

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ond-hand” apartment, for example, is con- Annual land lease and development sales sidered inferior; being “modern” reflects account for on average between 25 and 35 the right image to an international audi- per cent of the Government’s budget ence. This mentality lies at the heart of (Figure 3). The importance of this revenue Hong Kong’s recent growth. stream is very clear: in 2004 alone, land sales receipts came to HK$21 billion – a pot that is vital if public borrowing and The Land personal taxation are to be kept to a mini- The Hong Kong Government sees itself as mum. The city also has to bear in mind being a revenue generator rather than a rev- that it pays 95 per cent of healthcare costs enue distributor.10 By the standards of and that its population is ageing (Figure 4). developed nations, it is a minimalist gov- This is the result of increased longevity, ernment with comparatively low overheads, later childbirth and strict controls on low outlays and levels of public debt. unskilled immigrants from the mainland. Government spending is only 17 per cent As with personal and commercial taxa- of GDP, well below half that of the UK.11 tion, net receipts from land sales tend to Hong Kong has one of the freest economies conform to general market trends, an area and one of the lowest rates of personal and over which the Government has minimal business taxation in the world. In a 2006 control. During the Asian economic crisis survey it was ranked first in terms of gov- between 1998 and 2000, ground rents fell ernment efficiency. Of course, it is no more and many marginal office and residential immune to outside events than anywhere developments lay empty. But during a else and during the Asian financial crisis of buoyant market encourages the Govern- 1998, the Government had to intervene to ment to sell leases to take advantage of high defend the currency; interest rates peaked prices driven by high demand for business at 16 per cent.12 and residential premises (Figure 5). Under the “one country, two systems” Land reclamation is a further option, agreement, state land was transferred from although a very expensive one, and has the British to the Special Administrative allowed the Government not only to Region (SAR). State land makes up over increase the supply of land to a restricted 99 per cent of the total land stock of the market, but also to bolster the public country and it is the Government that sells accounts as well. For example, when Hong leases for development on the land, nor- Kong needed a new airport to replace Kai mally for a period of 99 years. Tak, it set about a four-year, HK$160 bil- 2471-2488, 2005

11. Leigh L, “Hong Kong Special Administrative Region: 14 Macroeconomic Impact of an Figure 3: The importance of land revenue to government budgets Aging Population in a Highly Open Economy”, IMF Working Paper, WP/06/87, 2006, see

www.imf.org/external/pubs/ft/wp 40 20,000 /2006/wp0687.pdf 18,000 35 16,000 12. Effects of the Asian Crisis on 14,000 Hong Kong, Institute of Global 30 12,000 Conflict and Co-operation, 25 10,000 University of California, 2002, 8,000 20 see http://igcc.ucsd.edu/pdf/afc 6,000 /afc_hongkong.pdf 4,000 15 of total government revenue (%)

2,000 Total Government revenue (£ millions) 13. Hong Kong International 10 - Airport, SPG Media PLC, 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

London 2008, see www.airport- Total land revenue and related income as a percentage technology.com/projects/c Total land revenue and related income as a percentage of total government revenue (LHS) heklapkok_new/ Total government revenue (£ million) RHS

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Figure 4: Population and demographic change in Hong Kong15

45 9

40 8 35 7 30 (million) Population

25 6

20 5 Population (%) 15 4 10 3 5

0 2 1961 1971 1981 1991 2001 2005 2013 2023 2033

Population (million) % Children (0-14) % Elderly (+65)

lion project (£10.5 billion) reclaiming the The Urban Renewal Authority strait between the islands of Chek Lap Kok The fact that land sales are a vital part of and Lam Chau on which to build Hong the public purse has far-reaching conse- Kong International Airport.13 However, quences for urban renewal and planning. since 2005, a moratorium on reclamation Renewal is a matter of financing the city has been in place to prevent the silting up rather than reviving failing areas, as it tends of the shipping lanes into the harbour. to be in other countries. Getting new Professor La Grange believes that the developments in attracts capital and con- State has become such a savvy land devel- tributes to the public account. oper because it is profoundly in its interests “Renewal in Hong Kong is not a case of to be so. “But,” she adds, “this leads to a solving dilapidation and no-go areas like in massive conflict of interest between the the UK, it never was because they really needs of the people of Hong Kong and the didn’t exist,” Peter Cookson Smith exp- wants of the Government.” lains.16 An honorary professor in the

Figure 5: Average land lease price per sq m, 1986 to 200517 14. Smart A and Lee J, “Financialization and the role of real estate in Hong Kong’s 60,000 regime of accumulation”, Economic Geography, vol 79(2), 50,000 pp 153-171, 2003

15. Council for Sustainable 40,000 Development, Enhancing Population Potential for a 30,000 Sustainable Future, p 43, 2006

20,000 16. Dr Peter Cookson, Honorary Professor, Department of 70m² to 99.9m² Architecture at Hong Kong 10,000 University and Director, Urbis, interviewed 20 March 2007

17. Private Domestic – 1982- 4 90 92 99 02 986 987 988 993 2006 Average Prices by Class, 1 1 1 1989 19 1991 19 1 1994 1995 1996 1997 1998 19 2000 2001 20 2003 200 2005 Private Domestic - Average prices by class (£/m²) Rating and Valuation Department, Hong Kong, 2007, see www.rvd.gov.hk/en/

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Department of Architecture at Hong Kong These were short-term measures to allow University and director of an urban design supply to keep pace with demand, particu- company, he is a respected commentator larly for residential developments. At the on architectural, planning and urban same time a water shortage meant that sup- renewal matters in Hong Kong. plies of freshwater could not keep pace with Urban regeneration in Hong Kong has construction needs. Sea-water replaced concentrated on developing easy-access, freshwater in concrete mixes, greatly speed- high-profit sites and not on stimulating or ing up the corrosion rate of the material and rebuilding the urban areas that exhibit the undermining the building structures. greatest need. Historically, this is very much Chungking Mansions on Nathan Road in the product of a scarce land market and a Tsim Sha Tsui is typical of the results. The vibrant economy. It fits with the laissez-faire decayed 17-storey building of five blocks is attitude of the State, Cookson Smith says, now the source of very cheap accommoda- “that for the Government regeneration is a tion for immigrant populations. case of what not to do, rather than what to In the light of deteriorating building do”. Regeneration has had to pay for itself, as stock and an urgent need to free up devel- Hong Kong itself had to while it was a opment space in the city the Government colony, and in turn it has filled the State’s set up the Land Development Corporation coffers through land lease sales. to oversee regeneration. According to Dr From a public policy perspective the Stanley Yeung, of Hong Kong Polytechnic only concerns were that the city was University, the agency’s origins lay in Mrs allowed enough space to grow and change, Thatcher’s urban policy of the 1980s.19 To so that it could support changing trade a large extent the LDC was a copy of the composition and patterns. “The city was a London Docklands Development Corpor- chessboard of opportunities both for the ation (LDDC) and the broader Urban Government and private developers. How Development Corporation concept.20

publications/pro-review.htm it changed was all a matter of strategy, and The Land Development Corporation 18 18. Cookson Smith P, The Urban renewal was a key pawn in the game”. was set up as a quango with a HK$100 mil- Design of Impermanence: In the early 1970s, the Government had lion endowment from the Government.21 It Streets, Places and Spaces in Hong Kong, p 81, MCCM introduced a few pilot schemes to improve had planning powers for large develop- Creations, 2006 slum areas in Hong Kong, with minimal ments, including compulsory purchase, and 19. Dr Stanley Chi-wai Cheung, impact. Its main concern was to build new could reconstruct buildings that were below Associate Professor, Department of Building and Real Estate, The urban developments away from the centre expected living standards. Economic max- Hong Kong Polytechnic University, interviewed on 21 of Hong Kong, now known as the New imisation was its first priority and the social March 2007, also present Tang Territories, to house the rapidly increasing agenda secondary. It cost the State a mini- Bo-Sin, Associate Professor, Department of Building and Real population. Influenced both by theory and mal outlay, but still allowed it control over Estate and Kevin Ka-lun Lau, experience of New Town developments in change. As Peter Cookson Smith succinctly Research Assistant, Department of Building and Real Estate England during the Fifties and Sixties, ten puts it, “This was a case of expedient urban

20. Leunig T and Swaffield J, new urban centres were designed around renewal through redevelopment.” Cities Limited, Chapter 3, Policy rail transport hubs for easy travel to the city In 2001 the new Hong Kong Govern- Exchange, 2007

21. Adams D and Hastings E, centre, and gradually built over fifty years. ment replaced the Land Development “Urban renewal in Hong Kong: They consisted of between 60 and 70 per Corporation with the Urban Renewal transition from development corporation to renewal authority”, cent social housing and were large enough Authority, modelled on Singapore’s redevel- Land Use Policy, vol 18(3), pp to accommodate half of Hong Kong’s pop- opment authority. However, it inherited the 245-258, 2001 ulation growth needs for the next decade. land the corporation had bought – plots for 22. Ibid, p 17 Changes to building regulations in 1956 more than 225 projects – and also inherited 23. Annual Report 2005-2006, Urban Renewal Authority, p 55, and 1962 allowed for higher and denser its staff. The URA was given the task of Hong Kong, 2006, see developments with lower building quality. regenerating these projects over 20 years in www.ura.org.hk/html/c222000e1

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a financially sustainable manner. After this system of regeneration is that it actually 20-year period the URA will cease to exist. makes a profit. In many respects the URA is The URA is not a government depart- more like a business than a government ment, nor a part of the Lands Bureau or institution. Like a business it has to report Housing Bureau, but an independent to stakeholders. This accountability means quango, a statutory body with a board that that it must not lose money in the long run. is accountable for the use of public money. It can borrow and owe monies and it can Unlike the LDC, the URA has a clear invest its capital in the stock market. Its mandate to improve not only the physical audited accounts for 2005-06 showed a bal- environment, but also the social and eco- ance of HK$ 6.2 billion. It received more nomic environment of urban areas.22 than HK$ 4.9 billion from property devel- In 1997, the incoming Government opers in that financial year (Table 1).24 wanted to tackle urban regeneration in a A typical project was the redevelopment “big way,” says Billy Lam, the Managing of First Street-Second Street and Bedford Director of the Urban Renewal Authority. Road-Larch Street plots, which the URA put It wanted an institution that would drive out to tender in 2005. Revenue accrued the development of a new Hong Kong; one from the auctioning of these sites totalled which would cement its position as the epi- HK$2.7 billion (£180 million). Kerry centre of the new economic system that Properties, one of the big five developers – China and India would stimulate. But the the others are Cheung Kong (Holdings), new Government’s plans were disrupted by Sun Hung Kai Properties, Henderson Land the Asian financial crisis, which delayed the and Sino Land – acquired the project in an establishment of the URA by four years. open auction. The URA spent HK$0.6 bil- “The URA was very much a creature of cir- lion (£40 million) buying the land and com- cumstances; unfortunately it was born at pensating owners, so this represents a net the wrong economic time,” admits Lam. profit of HK$2.1billion. Although these Nevertheless, the Government injected prices were substantially inflated by the pro- HK$10 billion (approximately £850 mil- posed extension of the West Island Line lion) of equity capital into the authority for MTR, this still is not a bad return for a gov- 2002-03 to 2006-07.23 A further HK$30 ernment agency. billion is earmarked for the next five years. It is clearly designed and empowered by government but removed from it, a duality The URA approach to regeneration at the heart of its successes and failures. In Hong Kong, regeneration is about redevel- The biggest advantage to the Hong Kong oping the city to allow economic growth,

Table 1: URA financial statements25 HK$ million FY 02/03 FY 03/04 FY 04/05 FY 05/06 FY 06/07

0e.html Current assets 1,390 1,499 1,527 1,685 1,642 24. Ibid p 111 Sale of land revenue collected 25. Financial Report, Urban on behalf of Governmen 720 463 45 2,837 2,688 Renewal Authority, Hong Kong Development charge collected 2007, see www.ura.gov.sg/ar/ 2007/ar07-10.pdf on behalf of Government 159 81 207 264 527 26. Ibid, p 25, Value of development projects completed 16 19 13 26 87 27. MTR Patronage Figures for December 2007, MTR Hong Kong, 2008, see www.mtr.com.hk/eng/investrelati

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although official policy also recognises the need to improve living standards and finding new functions for old spaces: “Redev- elopment of many old urban areas is essential owing to the poor standards, lack of amenities and dilapidation of many old buildings, as well as the pressing need to improve the living conditions of those residing there…This is the core of the urban renewal problem that the URA is mandated to resolve.”26 The URA refers to its work under the rubric of the Four Rs: Redevelopment, Rehabilitation, Re- vitalisation and pReservation. Plate 2: First Street – Second Street Redevelopment Redevelopment In 2006 there were 14 redevelopment proj- one that was only a few years old in the ects underway. The aim is to put together a same area. Not surprisingly, site assembly land package that will attract developers in, costs for the URA are three times more and then to sell this on for development. than those of a private developer, accord- The URA acts as a middleman. It solves ing to Billy Lam. But it is worth the expen- ownership issues with the plots either buy- diture: developers get large land sites, resi- ing out residents and leases or serving com- dents get better housing conditions and/or pulsory purchase orders, compensates and compensation and the URA makes enough re-houses the affected residents, and finally money from the exercise to cross-subsidise clears the site for the private developer. It rehabilitation and preservation work, and does not build redevelopment projects itself; improvements in transport. it merely creates the potential economies of But Professor La Grange expresses reser- scale. Because the Government has control vations: “You cannot underestimate the way of most of the land, the URA can set a price in which private property is viewed. It is that will subsidise the cost of extending the almost god-like. This is why redevelopment MTR where necessary (Box 1). is so problematic. If 80 per cent agree to Compensation rates for people dis- move, then the other 20 per cent of residents placed by development are well above mar- are compelled to sell. To some this removes ket rates; alternatively a resident might be their fundamental rights, but for the URA it able to have his 60-year-old flat replaced by gets over the last-man-standing problem.”

Box 1: MTR

Studies for an underground transit system were first begun in the 1960s as Hong Kong’s population increased. Construction began in the 1970s, since when the system has been constantly extended. More than 2.6 million passengers travel on the MTR (Mass Transit Railway) on an average week- on/patronage.php day, 76 million in an average month.27 It made a profit of HK$ 7,750 million in 2006, and its total 28. Financial Information, MTR, 28 Hong Kong 2007, see assets that year were valued at HK$ 120,421 million. It is 76 per cent owned by the Hong Kong www.mtr.com.hk/eng/investrelati Government and the remainder is owned by shareholders who can trade shares on the stock market. on/financialinfo.php Fares are between HK$4 and HK$26, or 25p and £1.75, with the average cross-town trip costing 29. Annual Report 2005-2006, Urban Renewal Authority, p 29, approximately 80p. This is an affordable, profit-making public service, which runs 24 hours a day Hong Kong, 2006, see www.ura.org.hk/html/c222000e1 and with minimal delays. 0e.html

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Rehabilitation es” in Mallory and Burrows Streets near Not all regeneration involves tearing down Wan Chai (Plates 3 and 4). They are being the old and replacing it with new build. A refurbished and turned into a 18,000 sq ft tradition of private multi-occupancy workshop for artistic and cultural indus- buildings without communal manage- tries, as well as 3,000 sq ft of public space. ment has led to overcrowding and neglect Michael Ma, the Director of Planning and in many places. So far, says Billy Lam, Design, says that it will cost HK$ 200 mil- 16,000 units in 178 buildings have been lion and require maintenance work every improved since 2001 – more than three three years, rather than the eight to ten times the number of buildings affected by years typical for new builds, because the redevelopment.29 The URA applies four buildings are made of timber.31 incentive schemes to encourage renovation (Box 2). Preservation For the URA preservation is about main- Revitalisation taining heritage buildings and areas but Revitalisation is about improving the physi- giving them a new function with an eco- cal quality of an area and rekindling life in nomic purpose. This is a move away from local neighbourhoods. As the URA annual the “living museum” mentality of heritage, report states, “Revitalisation is the final pie- as Billy Lam puts it, to a working museum ce of the jigsaw…[the] strategy is to plan and one. The authority has a mandate to pre- design flexibility to bring out the best of each serve buildings of cultural or architectural district according to its historic, social, eco- interest and has established a conservation nomic and demographic characteristics”.30 advisory panel to rule on buildings of cul- For example, the URA is revitalising two tural worth. But it is at pains to stress that rows of ten early 20th-century tong lau, heritage can go hand-in-hand with adapta- traditional Chinese tenement “shop-hous- tion for economic benefits.

Box 2: Rehabilitation Mechanisms

The Urban Renewal Authority oversees four schemes for encouraging rehabilitation of buildings:

Building Rehabilitation Loan Scheme: This provides secure, interest-free and means- tested loans for building improvements to properties that are more than 20 years old. A maximum of HK$100,000 can be borrowed and the repayment period varies. Better Mortgage Loan Scheme: This is a joint initiative between the URA, the Hong Kong Mortgage Corporation and 17 banks, including HSBC and Citibank. It offers preferential mortgage terms, in terms of interest rates and repayment structures on properties that are to be reha-

bilitated. Mortgages of up to 70 per cent of the property’s value are designed to increase home- 30. Hong Kong moving forward ownership rates. with urban renewal, Urban Renewal Authority, 2007 Building Rehabilitation Materials Incentive Scheme: It offers free goods, such as paint and 31. Michael Ma, Director, plumbing materials, to be used in the rehabilitation of buildings. Free professional advice on how Planning and Design, Urban to use them is also available. Renewal Authority, interviewed on 23 March 2007 Third Party Liability Insurance: This is available for buildings in the above schemes and offers 32. Paul Zimmerman, inter- better protection for tenants in rehabilitated buildings. It involves either a 50 per cent subsidy viewed on 20 March 2007 for third party liability insurance, or HK$6,000, whichever is lower. 33. Dr Chan Wai Kwan, Hong Kong General Chamber of Commerce, interviewed 23

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What the renewal critics say explains that public consultation is really a Of the four policies, revitalisation seems to one-way process.33 In a case such as the be the most flexible, but also quite vague. proposed redevelopment of Wedding Card It is a work-in-progress, as opposed to a Street, the URA will generally favour rede- well-defined policy; a means to placate velopment over rehabilitation as suggested critics of redevelopment more than any- by the residents, as it generates the greatest thing else. And there are a growing number returns. Yet he is quietly optimistic citing of civil society groups demanding consul- the “planning by the people” in Wan Chai tation on some of the URA’s large-scale H15 and Redcar Street, and the pressure schemes. Peter Cookson Smith comments: from NGOs such as the People’s Council “The Urban Renewal Authority is not a for Sustainable Development and Design- sensitive urban machine, but one designed ing Hong Kong (Box 3). to generate money. It is basically a paint- Corruption is also a real issue. Since ing-by-numbers exercise which has led to 2001, five URA officials have been too much insensitive private develop- imprisoned after inquiries by the ment.” Independent Commission against Corr- Paul Zimmerman, city activist and uption. They were found guilty of collu- founding member of the NGO, Designing sion with either developers or business Hong Kong, agrees. He complains that partners, who had bought up property there are no financial incentives for her- cheap in areas that were soon to be itage preservation, just disincentives. “The announced as renewal projects.34 The gen- projected image is that Hong Kong must erous compensation available means that be flexible for the global economy, this individuals can make substantial returns means that Hong Kong cannot let devel- on renewal speculation. For example, in opment be slowed by heritage.” 32 2002 two men were sentenced to two For many critics the root of the problem years in prison for defrauding the URA of lies in the lack of accountability and legiti- HK$1.675 million.35 macy in the political and decision-making Property developers have also started to process of the Special Administrative operate as a cartel. The five big developers Region. Dr Chan Wai Kwan, of the Hong will in effect buy all available renewal Kong General Chamber of Commerce, sites. With the scale of developments on

Plate 3: Before revitalisation - Mallory Plate 4: After revitalisation - Mallory Street/Burrows Street Project, Wan Street/Burrows Street Project, Wan Chai Chai

March 2007

34. Independent Commission Against Corruption, 2008, Hong Kong, see www.icac.org.hk/en/ home/index.html

35. Ibid

36. About Designing Hong Kong, Designing Hong Kong, Hong Kong, 2008, see www.designinghongkong.com/d esigncontest/aboutus.php

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Box 3: Designing Hong Kong

Designing Hong Kong is a not-for-profit organisation, whose aims are:

To promote the city’s welfare without compromising its future To identify ways and means of enhancing the quality and sustainability of Hong Kong’s living environment To undertake research and studies into the design and development of Hong Kong’s living environment To educate and raise the awareness among the community of the need to protect and enhance the living environment of Hong Kong, and the ways and means to do so To form alliances among members of the community with a common interest To undertake any and all lawful acts and deeds which are necessary and conducive to attaining the objects of the company36

It is part of a growing civil society movement that wants to preserve and enhance the city, and, critically, to hold the Government and URA to account. They have been lobbying hard for the redesign of the harbour front, which they consider the heart of Hong Kong.

offer, and the capital levels needed to Some critics wonder whether the URA invest to get these plots, the smaller devel- is necessary at all. They believe that the city opers have been driven out the market, would have renewed itself irrespective of leading to less competition and more government activity because of its position standardised development. as the financial and trade centre for a Billy Lam is sympathetic up to a point. booming China: the URA is doing a job There may be some validity in claims over that is not needed. “The URA simply lack of accountability, but he feels that intervenes too much in areas that it just there is a class issue at work. The better-off does not need to,” concludes Dr Chan Wai are using the destruction of heritage as Kwan. stick to beat them with, without acknowl- There is something to this. Acquiring edging the positive work they do, especial- sufficient land is not an insurmountable ly in improving living conditions. He con- problem for private developers. Although cludes that it is easy for an outsider to revel arguments about improving the social con- in a nostalgic notion of romantic decay in ditions of the population in certain areas old Hong Kong; the individuals living formed the logic of renewal in the early with the decay would rather see an days, these issues are disappearing rapidly. improvement in their housing and envi- The raison d’être for a renewal body in ronment. Anyway, the URA has a statuto- turn is diminishing. It is a reasonable guess ry responsibility to be fiscally prudent, and that when the Urban Renewal Authority’s therefore cannot be the heritage-preserving 20-year lifespan elapses in 2021 renewal machine that many had hoped for. It has to will not continue to be an area of public concentrate on schemes that will return the intervention. For the freest economy in the greatest revenue for the least cost – the world, with some of the lowest levels of large redevelopments such as Langham government bureaucracy, this would be Place or Kowloon Tong. only natural.

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Conclusion allowed the city to be flexible in response Hong Kong has taught us that renewal can to local and global changes, integral to eco- be an asset to the public accounts, rather nomic health. The URA attempts to pro- than a liability if the proper mechanisms vide this flexibility without spiralling social are put in place. In this case, the State owns costs, such as poverty and massive popula- most of the land, and the Urban Renewal tion displacement. Authority has the power to use compulso- But there is growing pressure from a ry purchase orders and generous compen- civil society that wants a say in its city. sation schemes to carry out city-wide Trust between the URA, the Government approach to change. The cost is that prof- and the people needs to be improved. itable redevelopment has been generally Urban regeneration without accountability preferred to rehabilitation whatever the can lead to inappropriate projects. In all desires of the people. Although public par- probability, Sneaker Street will follow the ticipation is limited, the URA acts as a course of Langham Place and be trans- buffer against overt political interference, formed into a thoroughly modern com- which is not to say that government pres- mercial centre. It will generate new jobs sure is not felt. and opportunities, but existing ones will be Professor Le Grange concludes: “Hong lost. It is a shame to lose the unique char- Kong’s urban structure is foremost about acter of a Sneaker Street or Wedding Card efficiency and efficient land use, and it Street, but that is the price the works thanks to two things: its transport Government of Hong Kong has chosen to systems and its massive amounts of public pay. The flexibility of the city, both in its housing.” These safety nets of high connec- economy and its structure, is the root of its tivity and low segregation of people, have success – but at the cost of its past.

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This tour around the world has revealed unique. Hong Kong has faced many chal- many things, and taught us important les- lenges over the past two decades, includ- sons. In this chapter we begin to draw ing uncertainty and fear of change, eco- together some of the key findings that we nomic turmoil in the region, and the rise have learned, findings that we will return of local economic rivals such as Shanghai. to in the third publication in this series. Yet through all of that Hong Kong’s gov- We found that size matters. Vancouver, ernment was able to act with considerable Hong Kong, Amsterdam and the Ruhr autonomy, to be entrepreneurial. The region all gain from being large. We do not benefits are apparent to anyone who visits believe that this is a coincidence. Within the city. Britain, London is a remarkably successful city, but so too are many of our other major cities. Leeds and Manchester, for “ When areas have to do what they are told, by bureau- example, are more prosperous than the crats hundreds or even thousands of miles away, regener- satellite towns that surround them, places ation is stifled. Where local areas are given more autono- like Bolton and Oldham, Dewsbury and my, regeneration appears easier Wakefield. Of course size is not everything: ” York, Harrogate and Macclesfield are successful small towns. But in general the rule holds: it helps to be large. More than that, No other area has the same degree of it helps to be the largest in the area, or at autonomy as Hong Kong. Nevertheless, least the hub of the area. Both Vancouver Germany gives considerable freedoms not and Hong Kong are hub cities, in a way only to the states – protected under the that, say, Bradford and Liverpool are not. nation’s federal constitution – but also to Hub cities attract high value added servic- its cities. That commitment to keeping es, which is to their advantage, but which power local runs deep in the German polit- can in turn be a problem for neighbouring, ical system. Cities in the Ruhr, such as rival cities. Essen and Bochum, have the freedom to We found that the degree of flexibility experiment, to adapt to local conditions. given to local areas matters. When areas Essen, for example, has used those free- have to do what they are told, by bureau- doms to devise local incentive mechanisms crats hundreds or even thousands of miles to attract firms such as ThyssenKrupp. A away, regeneration is stifled. Where local tradition of decentralised power structures areas are given more autonomy, regenera- is also strikingly seen in the Netherlands tion appears easier. The extreme case of and Canada, leading to more competent, this is obviously Hong Kong, where the although still limited, autonomy. “one country – two systems” constitution- Vancouver can break with national policy, al position guarantees Hong Kong a Amsterdam can design its own develop- degree of autonomy that is globally ment and fund it locally. It is hard to imag-

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ine local authorities being able to do like- incomes following accession to the wise in Britain. European Union, but realising this suc- But freedom alone does not guarantee cess will require local areas to think for success. The Polish cities of Warsaw and themselves, to develop and adapt, and to Łódź have considerable freedom, perhaps be both effective and accountable. as much freedom as Essen and Bochum in Finally, we have seen that location mat- Germany. Yet they have had much less ters. Vancouver is an innately attractive success in regenerating their areas. Success place to live, with a good climate, and a requires knowledge, as well as freedom. magnificent location. The same is true for Here Warsaw and Łódź suffer very badly. Hong Kong, whereas it is less obviously Since the Second World War these cities true for the other cities that we have visited. were part of a highly centralised system, Some things, such as harbours and moun- in which local authorities were not tains, cannot easily be replicated. Nor is it required, expected, or encouraged to easy to place a city at the economic centre: think for themselves. This was a system Amsterdam and the Ruhr are lucky to be at characterised by dependency on the cen- the centre of one of European economy, tre, not entrepreneurial activity in cities such as Liverpool was once – but is no across the country. In contrast Germany’s longer – lucky to be the principal European federal system expects and almost requires port for transatlantic trade. local areas to be different to each other, to It is the interactions between size, loca- look for fresh ideas, to think. There is tion, freedom and ability that will form the potential in Poland for regeneration, espe- four cornerstones of our third and final cially in the context of rising demand and publication.

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Appendix A: Key Figures

Year Vancouver Amsterdam Essen Bochum Lódz Warsaw Hong Kong Sources

DEMOGRAPHY

Total Resident Population (000’s) 2006 2,117 735 592 390 787 1,610 6,910 Urban Audit, Statistics Canada, Hong Kong Census and Statistics Department

Demographic Dependancy Index:

(<20 years + >65 years) / 20-64 years 2006 55.3 48.4 63.9 59.0 55.6 55.1 50.7 Urban Audit, Own calculations

Non nationals as a proportion of total poplation (%) 2001 40.0 9.0 9.0 9.0 0.1 0.2 5.0 Urban Audit, Statistics Canada, Hong Kong Census and Statistics Department

Total number of households (000’s) 2006 817 406 301 195 352 758 2,220 Urban Audit, Statistics Canada

Average size of households 2006 2.6 1.8 2.0 2.0 2.2 2.1 3.1 Urban Audit, Statistics Canada, Hong Kong Census and Statistics Department

Nationals that have moved to the city during the last two years as a proportion of the total population (%) 2001 5.4 0.9 4.1 5.4 1.5 2.9 n/a Urban Audit, Own calculations

Non Nationals that have moved to the city during the last two years as a proportion of the total population (%) 2001 2.2 1.9 n/a 1.6 0.0 0.0 1.6 Urban Audit, Own calculations, HKSARG Census Statistics Department

Life expectancy at birth for males and females (years) 2001 81 77 75 75 72 76 82 Urban Audit, Cascadia 2007, Hong Kong Census and Statistics Department

ECONOMIC

Mastercard Worldwide Centers of Commerce Index 2007 28th 11th n/a n/a n/a 49th 5th Mastercard

Annual average change in employment over 5 years 2005 0.8 n/a -0.33 0.24 -2.1 -6.9 n/a Urban Audit, Vancouver Economic Unit

Unemployment rate 2006 4.0 8.7 16.8 15..0 7.4 4.3 3.4 Urban Audit, Vancouver Economic Unit, Hong Kong Census and Statistics Department

Proportion of male residents unemployed, 15-24 years (%) 2001 9.7 6.3 7.2 7.7 44.1 35.3 24.2 Urban Audit, Statistics Canada, Hong Kong Census and Statistics Department

GDP per head (PPP) (£) 2005 17,288 16,844 25,195 21,488 4,994 8,612 19,353 Urban Audit, Canadian Centre for Policy Alternatives, Hong Kong Census and Statistics Department

Self-employment rate (residents) (%) 2001 20.0 12.7 8.9 7.2 8.4 9.2 n/a Urban Audit, Statistics Canada

Total number of recorded crimes per 1,000 population 2001 35 183 97 87 45 57 1 Urban Audit, Vancouver Police Department, Hong Kong Police Department

BUILT ENVIRONMENT

Livability Index Ranking 2007 3rd 13th n/a n/a n/a n/a 117th Mercer Consulting

Area (mile squared) 2006 1,111 64 81 56 113 200 425

Population per squared mile 2006 1,906 11,658 7,161 6,710 6,738 8,440 16,273 Statistics Canada, own calculations, City of Rotterdam, Statline.nl, Stadt Essen

Proportion of households living in social housing (%) 2003 2.4 56.0 14.7 16.5 21.3 14.4 16.9 Urban Audit, Vancouver Housing Centre, Own Calculations, Hong Kong Census and Statistics Department Appendix B.qxp:Layout 1 29/2/08 12:45 Page 80

Appendix B Additional Bibliography

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