NEW LONDON SKYLINE 2026: Architectural rendering as advertisement—paid by The London City Corporation
THE DENSITY FALLACY
The notion that we have to build towers to achieve high density is a fallacy.
We have built high density neighbourhoods from human-scale products for centuries. One of the best examples is the West End of London, build in the Georgian period. Canadian examples can be reviewed here.
Towers are necessary to generate towering profits. Combined with public sector maga-projects like the Elizabeth Line, they spike land values and create massive congestion.
Have you wondered—as I have—where the half-million-plus daily passengers expected to travel London’s much touted, brand new, cross rail Elizabeth Subway will land? Well, now we know. We call it towers-and-skytrain in Vancouver, but it will be towers-and-the-underground in London. The notion that we have to build hi-rise in order to achieve hi-density is a fallacy. The Georgian urbanism of the Great City of London is one of the proofs that we can achieve high densities building at human scale. Our own survey of Canadian human-scale urbanism is another. However, it is mega-density that is being proposed for London Town now. The Georgian urbanism is about to be stripped away in order to raise revenues from real estate to finance subways and greatly increase rents in the British capital. The first western city to reach 1 million inhabitants since the times of ancient Rome is headed the way of Wall Street and Hong Kong. Greed is on its way to tower over ‘good’ urbanism.
Below we will examine the economics behind process by studying the ‘profit curve’ that informs decisions made by developers about how high to build. We shall see them piling typical floor upon typical floor until the economies of scale reach the tipping point when adding more floors threatens to shrink the profit margin. Then we will ponder the mind-set of legislators willing to give away density just to pile-on more congestion into the Great City to its ultimate unravelling.
ST. PAULS CATHEDRAL GATEWAY TO THE CITY OF LONDON WITH THE NEW TOWERS SHOWN ALONGSIDE
This new vision of London goes hand in hand with the great city asserting its place in the banking industry on the heels of the Brexit announcement. This London is meant to stand toe-to-toe with Hong Kong, New York and Frankfurt. However, realities even more practical than world class and prestige lie behind the rush to build these irreconcilable leviathans. Driving this ‘New London Renaissance’ are two intersecting concerns: the high price of rents and the cheap price of hi-rise construction.
The British have always used a French expression to talk about the structure of land ownership in their realm: pied-à-terre or ‘foot on the dirt’. The dirty secret in the UK is that land ownership has remained in private hands since the times of Henry VIII. In bygone days the crown might deed land to a wealthy entrepreneur in exchange for money to finance some war or another. That family would then join the nobility and pass the land from eldest son to eldest son down the generations. In fact, the Queen still collects 15% of the rents in the prestigious Regent Street as I found out during my last visit three summers ago. The balance goes to the government. However, any private individual receiving 15% of Regent Street rents has reason enough to call themselves ‘Queen’. The custom grew for the landed gentry—owners of great estates on deeded land around the countryside—to rent a more compact townhouse in the City, or just upstream at Westminster. From these rented houses and private clubs they would conduct their daily business. The Lord of the Manor would leave the country estate by carriage or by train and make his way to the City. He might spend the season in the pied-a-terre or just a few days or weeks as necessary. Often times he would leave England altogether and travel to overseas to inspect his holdings in America, India or elsewhere in the great empire where the sun never set. An empire where social justice was more often meted out according to social standing, and property rights were held as privilege.
THE CITY OF LONDON, SITE OF THE GREAT FIRE, NOW HOME TO THE HI-RISE RENAISSANCE
During my last visit I met well paid employees at Microsoft who rented a room in a townhouse in London Sunday to Thursday night, then hopped the underground to spend the weekend at a larger abode somewhere outside the metropolis. The reason: stratospheric rents in a Greater London still presenting the four-storey human scale of its golden age, the Georgian Period. Rather than build a Palo Alto like San Francisco did 30 miles (50 km) away linked by a modern highway, or a district like La Defence 10 km (6 miles) outside Paris linked by a modern subway, the City of London is building up. The resulting urbanism will have the characteristics of density pilled on. The City is unique. Built on a Roman castrum, London bridge the equivalent of the Ponte Veccio in Firenze. This other stuff, this modernism you can see anywhere. Bigger subways & higher buildings is the wrong approach. Yet, that is more or less what is coming to the great capital in the name of ‘more development’. The right approach would leverage the new digital technology to build a finer grain urbanism at human scale as urban extensions not directly dependent on Greater London. We have to learn how to build new urbanism in place of this vertical inflation.
However, the big players are too impatient for slow and steady approaches. If they can secure a plot of land—or an entire district as in the case of Canary Wharf—then better that the sky be the limit. They will collect rents in ever higher hi-rises centrally located in the transit saturated City.
Or is there a limit developers dare not exceed? It turns out that hi-rise construction takes place within narrowly defined economic limits. Financial perils, even bankruptcy, await the construction project that does not carefully plot its progress. A simple graph generated by economists puts the whole business in terms simple enough for a business person to follow.
Units Costs for Buildings Drop the Higher You Build: This is the Bread and Butter Formula of the Hi-Rise Developer
It should come as no surprise that the business side of building hi-rise can be simply mapped on a chart. The graph above plots the cost per square metre of building construction on the vertical axis and the height of the structure along the horizontal axis. The resulting ‘ski jump’ curb tells the rest of the story. Somewhere past 90 meters (30 stories) construction moves apace at a 33% discount. That’s money in the bank. However, no need to stop building just yet. Some amount of cost increases can be recovered due to the fact that the top floors—the penthouses—achieve higher market valuations. Also, there is the ‘prestige’ quotient to take into account. The markets attach added value to ‘the highest’ building in the district. The power and wealth being projected by sheer verticality helps sell the property. But much beyond the 40th floor, according to this analysis, and the rising costs of construction will fail to deliver adequate compensation.
The rationale is that the cost of building a one-storey building is more or less fixed in any one location. Adding floors helps increase the area of rentable space offsetting the costs of land acquisition and site servicing. However, tall structures require a new engineering typology. Something capable of withstanding the loads of the buildings own weight, the weight of the occupants and their chattel (live and dead loads in engineering parlance). Additionally, tall structures must be made strong and flexible enough to contend with such forces as wind, unequal thermal loading on opposite sides of the building and earthquake (in some locations). All that new structural invention comes at a price. To recoup the costs developers must build up—but not too high up.
The ski jump curve shows this phenomenon in a nutshell: costs per unit of construction go down for every floor added on. That is the sole reason to ‘build up’. Its all about rents, and not the ‘quality of the resulting city’. That can be dealt with later. Or can it?
COPYCAT TOWERS VISIBLE ON THE SOUTH BANK OF THE THAMES TO THE RIGHT IN THE PICTURE
It is obvious to see that the tower developer operates within the narrow criteria of maximizing profits and minimizing construction costs (risk). Every other consideration including the quality of the resulting public realm, or the ability of the neighborhood environs to support high levels of social functioning, do not enter into the equation. We elect governments to mediate between private profits and the greater good of society. However, since an elite group consisting of just a few players have sufficient capital to build hi-rise, when they move into a city their wealth quickly finds a way of distorting local politics. Our elected leaders soon find themselves voting to build new infrastructure mega-projects in line with promises from developers to fund to their re-election campaigns. Coming together around the final outcome is pressure from higher levels of government to generate public revenues to offset the costs of public mega-projects like the new Elizabeth Line.
In a nutshell these are the forces corrupting our cities. It is an experiment that has been building since the early 20th century with the construction of the Equitable, Metropolitan Life, Woolworth, Chrystler and Empire State buildings in Manhattan, and the skyline of Chicago. As soon as it starts a vicious cycle of soft corruption sets in. This mechanism is the one responsible for changing the skyline in London, England; Vancouver, Canada; the Island of Malta; the Ramblas of Montevideo; and a place near you. There is nothing irrepressible or preordained about it. Governments simply need to decouple from the neo-liberal or fascist formula of public sector mega-projects funded with density giveaways to private developers. Yet, since the times of Baron Haussmann in the mid-19th century in Paris, governments have lacked the imagination to build public infrastructure without taking the easy way out.
The Social Risks of Hi-Rise
Today, even the island of Malta is experiencing development pressure to build hi-rises. This tiny island of 122 square miles, lying just 50 miles off the tip of the boot of Italy, is as famous for counting English among its official languages as for the high concentration of ancient ruins on its soil. However, its diminutive proportions heighten the sensibilities of local officials to pressures from outside developers to build towers:
“The significant increase in property prices over the last years has diverted economic resources. Investment has gone into property instead of other sectors that could provide our economy with better value”
Economists count ‘social costs’ among the economic risks of building hi-rise. They also underscore the fact that the costs of building hi-rises have remained stable while property prices (land values) in hi-rise districts end up spiralling out of control. In supply-and-demand economics this is seen as proof of a supply dominated market. Put another way, it is a sign that the market is out of balance. A situation—all else being equal—that will correct sooner or later.
Economists also see a misallocation of resources at play. A significant increase in property prices over a decade can divert economic resources from other sectors. When all private and public investment goes to the property markets and mass transportation projects, respectively, other sectors of the economy are starved for funding. These include public medical care, roads, parks, schools and public services all struggling to deliver on their mandate. While on a parallel track, one can also trace increasing pressure for privatizing medicine, schools, social clubs and resorts. As the city builds out badly, those who benefited financially from the enterprise simply move away. They go in search of a better quality of life keeping only a pied-a-terre in the congested, imploding metropolis.
The ‘health costs’ of building hi-rise are well documented, yet not recognized by private wealth or addressed by government policy. Danish architect Jan Gehl is hear to say in the movie The Human Scale (2012):
“I would say that anybody living over the fifth floor ought generally to be referring to the airspace authorities. You’re not part of the earth anymore, because you can’t see what’s going on on the ground and the people on the ground can’t see where you are,”
Towers undermine human social functioning in recognized ways:
1. High-rises separate people from the street alienating them from their neighborhood and triggering a downgrading in the construction of the public realm.
2. High-rises exceed the human scale.
3. High-rises radically reduce chance encounters and propinquity.
Architect and urban designer Kevin Kellogg uses the term propinquity to refer to what I term “social functioning”:
“[It is] one of the main factors leading to interpersonal attraction. It refers to the physical or psychological proximity between people. Propinquity can mean physical proximity, a kinship between people, or a similarity in nature between things.”
4. High-rises create hot-points of congestion. Demand for services peaks at each high-rise building while parking loads in the hundreds of automobiles are released from just a few access points.
5. High-rises lift the price of land; Human scale buildings offer resiliency and affordability.
6. High Rises built of glass, concrete and steel pile-on Green House Gases; Human scale buildings are built of value-added, renewable wood building products.
7. High Rises are not good for human health and social functioning.
The health issue is highlighted by psychologist Daniel Cappon writing in the Canadian Journal of Public Health:
“What is there to say? We must have the incontrovertible evidence and the mechanism whereby the high-rise leads to the slow fall of urban humanity. Meanwhile, we must not go on blindly building these vertical coffins for the premature death of our civilization.
What shall we do instead while we are waiting to learn the ultimate facts? We can satisfy the economic needs for high density per land acre, which of itself is not likely to produce ill health, while restricting height and redistributing spaces in terraced, human-scale fashion, supporting social confluence and relationships or, at least, not impeding the nurturing of precious human resources.”