The Wolfson Economics Prize: Here’s how we double the size of Oxford

Oxford: City of the future. Image: Getty.

Last night, the London think tank Policy Exchange announced the winner of its Wolfson Economics Prize. This year, the £250,000 prize was awarded to whoever it was who came up with the best plan to tackle Britain's housing crisis – specifically, by creating "a new garden city which is visionary, economically viable and popular". Given the widespread opposition of existing homeowners to building anything anywhere in this country, this would be no mean feat.

Historically, “garden cities” have mostly meant either brand new towns, or massive expansions of tiny villages. But the winning team, led by David Rudlin of Manchester-based consultancy Urbed, took a different approach. Prevailing wisdom is that the economy of the future will be all about services, technology, knowledge and so forth. If you're going to build a lot of houses, then, it helps to do so near existing institutions that generate those things. Ideally, that means a university.

So the winning team came up with "Uxcester": a template for doubling the size of any city that already has a population of around 200,000. It's not based on any specific place, but is an amalgam of about 40 of them. Specifically, these ones:

Instead of just extending a city in all directions, Uxcester would mean adding "three substantial extensions", each of which would house around 50,000 people. All these homes would be within 10km from the city centre, and within a 10 minute walk from a tram stop (oh, the plan has trams, too, by the way). As a result, everyone should be able to get into town in half an hour or less.

Between these new developments, there'd be country parks and so forth (the “garden” bit of the garden city). So while we would be building on the green belt, in practice, we'd probably end actually making more green space accessible to the public, as opposed to the current morass of pony clubs and farm land that’s there now.

This design, as shown below, is known as the “snowflake” pattern. Awww.

Actually, there’s even more cutesy jargon in the plan. While the government would assemble the land and provide the infrastructure, it wouldn't actually build most of the housing. Instead, it'd sell it as individual plots and let the private sector do that part. This, Urbed says, is the "trellis" and "vine" model.

In theory, this is all very lovely. In practice, no British city actually wants to double in size, and translating theory into practice is going to be remarkably hard, as Urbed admits:

"We are also aware that by working in a fictional place we are avoiding some of the complexities, both political and practical, that each of these forty small cities face. The danger is that each will say 'that's all well and good but wouldn't work here'.”

So, they decided to test it by looking at a real city. Oxford is meant to be one of the great centres of the urban economy, but it's in danger of falling behind (it only has two science parks; in Cambridge, there are 18). To prevent this horrific fate, Urbed has set out how it could expand:

This plan would mean expanding the nearby settlements of Kidlington and Abingdon, and building on empty land to the east of Oxford. (To the west, this would be harder, so this area's been left untouched.) All these new suburbs would be linked by some kind of tram network, and protected from the elements by a new "flood attenuation system".

There's one other problem of course, brought about by high land prices:

"In the UK most of the money and talent in the house building industry is focused on unlocking the land through a contested planning system; on the Continent it is focused on what is built on that land."

Urbed's solution is to begin the process with a Garden City Act, which would give the government the power to make compulsory purchases of land, and then build on them. This shouldn't be expensive:  because it has no development value, green belt land is relatively cheap.

There would no doubt be political battles to fight before introducing any such policy, not least from the aggrieved homeowners, landowners and golf course who’d complain of the damage done by building new homes. But this proposal does at least move us beyond the fight over whether to build at all, and instead delves into how we might do so. It’s worth thinking about.

 

The other finalists were:

  • "Stoke Harbour", a new city of 144,000 people on Kent's Hoo Peninsula (runner up).

Homelessness charity Shelter, architects PRP, with advice from KPMG, Laing O'Rourke, Legal & General.

  • Four garden city "types", to be used to deliver up to 40 new garden cities over the next 25 years.

Consultancies Barton Willmore, with EC Harris, Pinsent Mason, Propernomics.

  • A new garden city south east of Maidstone Kent, to be served by trains on the High Speed 1 rail route.

Chris Blundell, a director of Golding Homes, writing in a personal capacity.

  • An "arc" of 30-40 new garden cities, of 25,000 people each. These would be built around London, from Southampton to Oxford to Cambridge to Felixstowe.

Wei Yang and Partners and Peter Freeman, in collaboration with Buro Happold Consulting Engineers, Shared Intelligence and Gardiner & Theobald.

All images taken from Urbed's "Uxchester Garden City" report. You can read the rest here.

 
 
 
 

High streets and shopping malls face a ‘domino effect’ from major store closures

Another one bites the dust: House of Fraser plans to close the majority of its stores. Image: Getty.

Traditional retail is in the centre of a storm – and British department store chain House of Fraser is the latest to succumb to the tempest. The company plans to close 31 of its 59 shops – including its flagship store in Oxford Street, London – by the beginning of 2019. The closures come as part of a company voluntary arrangement, which is an insolvency deal designed to keep the chain running while it renegotiates terms with landlords. The deal will be voted on by creditors within the month.

Meanwhile in the US, the world’s largest retail market, Sears has just announced that it will be closing more than 70 of its stores in the near future.

This trend of major retailers closing multiple outlets exists in several Western countries – and its magnitude seems to be unrelated to the fundamentals of the economy. The US, for example, has recently experienced a clear decoupling of store closures from overall economic growth. While the US economy grew a healthy 2.3 per cent in 2017, the year ended with a record number of store closings, nearly 9,000 while 50 major chains filed for bankruptcy.

Most analysts and industry experts agree that this is largely due to the growth of e-commerce – and this is not expected to diminish anytime soon. A further 12,000 stores are expected to close in the US before the end of 2018. Similar trends are being seen in markets such as the UK and Canada.

Pushing down profits

Perhaps the most obvious impact of store closures is on the revenues and profitability of established brick-and-mortar retailers, with bankruptcies in the US up by nearly a third in 2017. The cost to investors in the retail sector has been severe – stocks of firms such as Sears have lost upwards of 90 per cent of their market value in the last ten years. By contrast, Amazon’s stock price is up over 2,000 per cent in the same period – more than 49,000 per cent when considering the last 20 years. This is a trend that the market does not expect to change, as the ratio of price to earnings for Amazon stands at ten times that of the best brick-and-mortar retailers.

Although unemployment levels reached a 17-year low in 2017, the retail sector in the US shed a net 66,500 jobs. Landlords are losing longstanding tenants. The expectation is that roughly 25 per cent of shopping malls in the US are at high risk of closing one of their anchor tenants such as a Macy’s, which could set off a series of store closures and challenge the very viability of the mall. One out of every five malls is expected to close by 2022 – a prospect which has put downward pressure on retail real estate prices and on the finances of the firms that own and manage these venues.

In the UK, high streets are struggling through similar issues. And given that high streets have historically been the heart of any UK town or city, there appears to be a fundamental need for businesses and local councils to adapt to the radical changes affecting the retail sector to preserve their high streets’ vitality and financial viability.


The costs to society

While attention is focused on the direct impacts on company finances, employment and landlord rents, store closures can set off a “domino effect” on local governments and businesses, which come at a significant cost to society. For instance, closures can have a knock-on effect for nearby businesses – when large stores close, the foot traffic to neighbouring establishments is also reduced, which endangers the viability of other local businesses. For instance, Starbucks has recently announced plans to close all its 379 Teavana stores. Primarily located inside shopping malls, they have harshly suffered from declining mall traffic in recent years.

Store closures can also spell trouble for local authorities. When retailers and neighbouring businesses close, they reduce the taxable revenue base that many municipalities depend on in order to fund local services. Add to this the reduction in property taxes stemming from bankrupt landlords and the effect on municipal funding can be substantial. Unfortunately, until e-commerce tax laws are adapted, municipalities will continue to face financial challenges as more and more stores close.

It’s not just local councils, but local development which suffers when stores close. For decades, many cities in the US and the UK, for exmaple Detroit and Liverpool, have heavily invested in efforts to rejuvenate their urban cores after years of decay in the 1970s and 1980s. Bringing shops, bars and other businesses back to once derelict areas has been key to this redevelopment. But today, with businesses closing, cities could once again face the prospect of seeing their efforts unravel as their key urban areas become less attractive and populations move elsewhere.

Commercial ecosystems featuring everything from large chain stores to small independent businesses are fragile and sensitive to change. When a store closes it doesn’t just affect employees or shareholders – it can have widespread and lasting impacts on the local community, and beyond. Controlling this “domino effect” is going to be a major challenge for local governments and businesses for years to come.

Omar Toulan, Professor in Strategy and International Management, IMD Business School and Niccolò Pisani, Assistant Professor of International Management, University of Amsterdam.

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