Who Are the Real Investors in Our Cities?
Posted April 7, 2014
Keywords: Demographics, future urban planning, Taxes & Mortgages, urban investment, Redevelopment & Infill, Economic Sustainability, Leadership & Management, Finance, Urban Planning, Land Use, Populace, Resources, Economy, Urbanism
|Who shapes the city?|
What is an investor? The usual answer to that question is someone with money. We need investors, the received wisdom goes, because they’ll develop property, build businesses and create jobs.
The logic then proceeds on the assumption that to attract investors we have to do what investors want, and what they want is a rate of return that makes their investment worthwhile. The bigger your ambitions, the more you have to turn to the investors with deep pockets and even deeper demands.
The big property companies and pension funds have two key concerns: to get out more than they put in, and to avoid risk. If they can make a quick buck by selling their investment on to someone else - ‘flipping the asset’, as it’s often termed - so much the better.
Those requirements are legitimate - within the narrow frame of reference generally used. Listen to such investors, or to the consultants and professionals who work for them, and you’d imagine this is the only way to get anything done. Money talks, so everybody else must listen dutifully because otherwise it will go elsewhere.
At recent events I’ve heard financial investors and their cheerleaders in the public sector repeating such arguments as if they were axiomatic. There’s a whole lexicon that accompanies such thinking: words like hard-nosed, realistic, businesslike. And having established this hegemony of thought, financial investors are in no hurry to cede any territory.
This matters because it affects the future of our towns and cities, our local businesses and communities. By assuming salvation comes from large-scale redevelopment, big businesses and wealth funds, we become locked into a way of thinking that directs subsidies and sweeteners at the already wealthy, while treating local initiative and entrepreneurship with bureaucratic disdain.
It’s time to widen our horizons to recognise the other investors in our cities and communities. Investment doesn’t only come in monetary form: some of the biggest investors are those who put their energy and creativity into making better places for people. They invest their intellect, passion, time, families and lives.
Such investment is often treated as if it has no value - or worse, as an inconvenience that stands in the way of the investment that really matters. But is the life of someone who gives their energy and commitment to a city really worth so much less than the temporary attention of a fund manager or property owner who might sell up in a few years?
I was at an event on city centres and the future of retail in Sheffield this week. Unlike many such forums, there was a real diversity of voices from the academic world, community organisations, architects and designers, the city council and the property industry.
But it was clear that while there was a platform for many interests, there was an obvious hierarchy of insiders and outsiders. Leigh Bramall, Sheffield’s lead councillor for business, skills and development, made his speech and left before hearing from Sue White, chief executive of Voluntary Action Sheffield. Given that Voluntary Action Sheffield supports and represents more than 900 organisations across the city, isn’t their investment at least as important as that of organisations like Scottish Widows, which is redeveloping the city’s Moor area?
Unlike many financial investors, community and voluntary organisations are there for the long term. They are motivated by what they can contribute and not just by the returns they can expect. The quality and longevity of their investment needs to be taken seriously. This goes beyond the traditional seat at the table on strategic partnerships and civic forums; it means seeking their input as equal partners in the physical and economic development of the city and ensuring that physical changes work in ways that support civic and social development.
The same goes for other organisations that have a permanent presence in the city. Sheffield’s universities and teaching hospitals are major landowners and employers. These ‘anchor institutions’ are as important to the development and future of the city as the commercial property industry, and can change it for good or ill.
Locally based businesses need to be part of the conversation too: not just the large ones, but the start-ups and independents who are the city’s future. These people too are investing far more than money.
Sheffield City Council has made much of the opportunity for new thinking presented by the collapse of its plans for a New Retail Quarter (see my post a couple of weeks back). A space has opened up that allows it to move ahead with a much greater recognition of the value of all the investors in the city, and especially those who want to see it become more creative and inclusive. Will it take the opportunity?