Businesses need less office and retail space than ever. So what does this mean for cities?

Boarded up shops in Quebec City. Image: Getty.

As policymakers develop scenarios for Brexit, researchers speculate about its impact on knowledge-intensive business services. There is some suggestion that higher performing cities and regions will face significant structural changes.

Financial services in particular are expected to face up to £38bn in losses, putting over 65,000 jobs at risk. London is likely to see the back of large finance firms – or at least, sizable components of them – as they seek alternatives for their office functions. Indeed, Goldman Sachs has informed its employees of impending relocation, JP Morgan has purchased office space in Dublin’s docklands, and banks are considering geographical dispersion rather concentration at a specific location.

Depending on the type of business, some high-order service firms will behave differently. After all, depreciation of sterling against the euro can be an opportunity for firms seeking to take advantage of London’s relative affordability and its highly qualified labour. Still, it is difficult to predict how knowledge-intensive sectors will behave in aggregate.

Strategies other than relocation are feasible. Faced with economic uncertainty, knowledge-intensive businesses in the UK may accelerate the current trend of reducing office space, of encouraging employees to work from a variety of locations, and of employing them on short-term contracts or project-based work. Although this type of work arrangement has been steadily rising, it is only now beginning to affect the core workforce.

In Canada – also facing uncertainty as NAFTA is up-ended – companies are digitising work processes and virtualising workspace. The benefits are threefold: shifting to flexible workspaces can reduce real-estate costs; be attractive to millennial workers who balk at sitting in an office all day; and reduces tension between contractual and permanent staff, since the distinction cannot be read off their location in an office. While in Canada these shifts are usually portrayed as positive, a mark of keeping up with the times, the same changes can also reflect a grimmer reality.  

These changes have been made possible by the rise in mobile communication technologies. Whereas physical presence in an office has historically been key to communication, coordination and team monitoring, these ends can now be achieved without real-estate. Of course, offices – now places to meet rather than places to perform the substance of consulting, writing and analysing – remain necessary. But they can be down-sized, with workers performing many tasks at home, in cafés, in co-working spaces or on the move. This shifts the cost of workspace from employer to employee, without affecting the capacity to oversee, access information, communicate and coordinate.

What does this mean for UK cities? The extent to which such structural shifts could be beneficial or detrimental is dependent upon the ability of local governments to manage the situation.


This entails understanding the changes companies are making and thinking through their consequences: it is still assumed, by planners and in many urban bylaws and regulations, that buildings have specific uses, that economic activity occurs in specific neighbourhoods and clusters, and that this can be understood and regulated. But as increasing numbers of workers perform their economic activities across the city and along its transport networks, new concepts are needed to understand how the economy permeates cities, how ubiquitous economic activity can be coordinated with other city functions, such as housing, public space, transport, entertainment, and culture; and, crucially, how it can translate into revenue for local governments, who by-and-large rely on property taxes.

It’s worth noting that changes in the role of real-estate are also endemic in the retail sector, as shopping shifts on-line, and as many physical stores downsize or close. While top flight office and retail space may remain attractive as a symbolic façade, the ensuing surplus of Class B (older, less well located) facilities may kill off town-centres.

On the other hand, it could provide new settings within which artists and creators, evicted from their decaying nineteenth century industrial spaces (now transformed into expensive lofts), can engage in their imaginative and innovative pursuits. Other types of creative and knowledge work can also be encouraged to use this space collectively to counter isolation and precarity as they move from project to project.

Planners and policymakers should take stock of these changes – not merely reacting to them as they arise, but rethinking the assumptions that govern how they believe economic activity interacts with, and shapes, cities. Brexit and other fomenters of economic uncertainty exacerbate these trends, which reduce fixed costs for employers, but which also shift costs and uncertainty on to employees and cities.

But those who manage and study cities need to think through what these changes will mean for urban spaces. As the display, coordination and supervision functions enabled by real-estate – and, by extension, by city neighbourhoods – Increasingly transfer on-line, it’s worth asking: what roles do fixed locations now play in the knowledge economy?

Filipa Pajević is a PhD student at the School of Urban Planning, McGill University, researching the spatial underpinnings of mobile knowledge. She tweets as @filipouris. Richard Shearmur is currently director of the School, and has published extensively on the geography of innovation and on location in the urban economy.

 
 
 
 

Mexico City’s new airport is an environmental disaster. But it could become a huge national park

Mexico City’s new Norman Foster-designed airport, seen here in a computer rendering, is visually striking but environmentally problematic. Image: Presidencia de la República Mexicana/creative commons.

Mexico City long ago outgrew the two-terminal Benito Juárez International Airport, which is notorious for delays, overcrowding and canceled flights. Construction is now underway on a striking new international airport east of this metropolis of 20m. When it opens in late 2020, the LEED-certified new airport – whose terminal building was designed by renowned British architect Norman Foster in collaboration with the well-known Mexican architect Fernando Romero – is expected to eventually serve 125m passengers. That’s more than Chicago O'Hare and Los Angeles’ LAX.

But after three years of construction and $1.3bn, costs are ballooning and corruption allegations have dogged both the funding and contracting process.

Environmentalists are also concerned. The new airport is located on a semi-dry lake bed that provides water for Mexico City and prevents flooding. It also hosts migrating flocks and is home to rare native species like the Mexican duck and Kentish plover.

According to the federal government’s environmental impact assessment, 12 threatened species and 1 endangered species live in the area.

The airport project is now so divisive that Andrés Manuel López Obrador, the populist winner of the country’s 2018 presidential campaign, has suggested scrapping it entirely.

An environmental disaster

Mexico’s new airport sits in a federal reserve. Image: Yavidaxiu/The Conversation.

I’m an expert in landscape architecture who studies the ecological adaption of urban environments. I think there’s a way to save Mexico’s new airport and make it better in the process: create a nature reserve around it.

Five hundred years ago, lakes covered roughly 20 percent of the Valle de Mexico, a 3,500-square-mile valley in the country’s south-central region. Slowly, over centuries, local residents – first the Aztecs, then the Spanish colonisers and then the Mexican government – built cities, irrigation systems and plumbing systems that sucked the region dry.

By the mid-20th century, the lakes had been almost entirely drained. In 1971, President Luís Echeverría decreed the area a federal reserve, citing the region’s critical ecological role for Mexico City. The smattering of small lakes and reforested land there now catch and store runoff rainwater and prevent dust storms.

The new airport will occupy 17 square miles of the 46-square-mile former Lake Texcoco. To ensure effective water management for Mexico City, the airport master plan proposes creating new permanent water bodies to offset the lakes lost to the airport and cleaning up and restoring nine rivers east of the airport. It also proposes planting some 250,000 trees.

The government’s environmental assessment determined that the impacts of the new airport, while significant, are acceptable because Lake Texcoco is already “an altered ecosystem that lost the majority of its original environmental importance due to desiccation and urban expansion.” Today, the report continues, “it is now only a desolate and abandoned area.”

Environmentalists loudly disagree.

Make Mexico’s airport great again

I see this environmental controversy as an opportunity to give Mexico City something way more transformative than a shiny new airport.

Nobody can entirely turn back the clock on Lake Texcoco. But the 27 square miles of lake bed not occupied by the airport could be regenerated, its original habitat partially revitalised and environmental functions recovered in a process known as restoration ecology.

I envision a huge natural park consisting of sports fields, forests, green glades and a diverse array of water bodies – both permanent and seasonal – punctuated by bike paths, walking trails and access roads.

The airport will come equipped with new ground transportation to Mexico City, making the park easily accessible to residents. Extensions from the surrounding neighborhood streets and highways could connect people in poor neighbourhoods abutting the airport – dense concrete jungles like Ecatepec, Ciudad Nezahualcoyotl and Chimalhuacan – to green space for the first time.

The nine rivers that empty into Lake Texcoco from the east could be turned into greenways to connect people from further out in Mexico State to what would become the area’s largest public park.

Space could also be reserved for cultural attractions such as museums, open and accessible to passengers in transit.


New master plan

This idea is not as crazy as it sounds.

As early as 1998, Mexican architects Alberto Kalach and the late Teodoro González de León proposed rehabilitating the lakes of the Valley of Mexico. Their book, “The City and its Lakes,” even envisaged a revenue-generating island airport as part of this environmentally revitalized Lake Texcoco.

Under President Felipe Calderon, Mexico’s National Water Commission also proposed building an ecological park in Lake Texcoco, which was to include an island museum and restore long-degraded nearby agricultural land. But the project never gained traction.

Granted, turning a large, half-constructed airport into a national park would require an ambitious new master plan and a budget reallocation.

But in my opinion, evolution and change should be part of ambitious public designs. And this one is already expected to cost an additional $7.7bn to complete anyway.

Toronto’s Downsview Park – a 291-acre former air force base turned green space – has transformed so much since its conception in 1995 that its declared mission is now to “constantly develop, change and mature to reflect the surrounding community with each generation.”

Local communities neighboring Mexico City’s new airport were not adequately consulted about their needs, environmental concerns and their current stakes in the Lake Texcoco area. A revamped park plan could be truly inclusive, designed to provide recreation and urban infrastructure – and maybe even permanent jobs – for these underserved populations.

Presidential race

Three of the four candidates in Mexico’s July 1 presidential election wanted to finish Mexico City’s new international airport. But eventual winner López Obrador was not so sure.

Early in his campaign, he said he would cancel it if elected. Instead, López Obrador suggested, a former air force base could become the new international terminal. It would be connected to Benito Juárez airport, 22 miles south, by train.

López Obrador has since said he would support completing construction of the new international airport if the remaining financing came from the private sector, not the Mexican government. Currently, some two-thirds of the project is funded by future airport taxes.

The ConversationLópez Obrador’s promise to review and likely upend the airport plan could open the door to its wholesale transformation, putting people and nature are at the core of a plan ostensibly designed for the public good.

Gabriel Diaz Montemayor, Assistant Professor of Landscape Architecture, University of Texas at Austin

This article was originally published on The Conversation. Read the original article.