Obsolete city – Interview with Constantin Alexander, political scientist and sustainability economist
Cities are undergoing radical change: megatrends such as digitalisation, climate change and the mobility transition, as well as disruptions such as the coronavirus pandemic, are having an immense (spatial) impact. The consequences are the loss of turnover, jobs, image, quality of life and even vacancies. Many uses of space are in danger of becoming obsolete.
How can opportunities for sustainable transformation be generated from these challenges? We talk about this with Constantin Alexander, sustainability consultant and researcher for sustainable urban development at Leuphana University Lüneburg and team member of the ‘Obsolete City’ research project funded by the Robert Bosch Stiftung.
The ‘Obsolete City’ research project focussed on the design of urban transformation. What exactly is behind it?
Constantin Alexander: In short, the transdisciplinary research project ‘Obsolete City’, which emerged from a hackathon organised by the Robert Bosch Foundation, investigated which areas of a city are at risk of becoming unusable, i.e. obsolete, in terms of their original function or functionality. In order to visualise the transformation potential of these areas, various large cities were examined and positive, sustainable adaptation measures were developed.
We are witnessing the end of the real estate industry, which is supposedly geared towards perpetual growth, and simultaneous social change, from digitalisation and the mobility revolution to a change in religiosity, which is having an impact on the usage structures of urban structures. As a result, structures and uses of space in cities are confronted with a sometimes very high risk of becoming obsolete - both properties themselves and immaterial structures and processes such as business models: factories, shopping centres, multi-storey car parks and cinema complexes—to name just a few examples—are undergoing a radical reassessment in terms of their functionality and productivity.
Instead of leaving these areas to speculation, we see these obsolescences from an economic and spatial perspective as an opportunity for urban development geared towards the common good. From a market economy perspective, changes of use are nothing unusual, on the contrary: the old makes way for the new, perhaps even better. Just think of the conversion of harbour and railway areas, the mobility areas that will be freed up as a result of the traffic turnaround or the potential of cemeteries as areas for leisure and recreation.
But first you have to know which areas are at risk in order to intervene at the right time. Otherwise you end up with stranded assets. How did you proceed?
Shareholders and stakeholders must actively deal with this risk and develop concrete tactics and strategies for an active obsolescence risk analysis and obsolescence transformation management. A method was developed for this analysis as part of the interdisciplinary research project: the so-called Obsolescence Risk Index.
In order to measure obsolescence, it is necessary to analyse the space on the basis of quantifiable parameters. Such an analysis is also dependent on the framing of the question, the perspective and also a possible goal or purpose.
From an economic and political perspective, there are three factors that lead to obsolescence:
- The loss of function
- The loss of use
- The loss of mereological integration
While a function or use can be resolved through conversions, interim uses and recycling, the loss of mereological integration is more difficult to quantify. Take, for example, the non-measurable aspect of building culture. This does something to us subconsciously, but if the cultural value is lost, the building falls off the grid. The same applies to a church building that is no longer in use and no longer allows for systemic integration.
A holistic risk analysis requires the identification of specific parameters that are set in relation to the analysed object. A great deal of qualitative and quantitative information is available for the definition of obsolescence risk and the decision to assess and categorise an area or area category accordingly. It is therefore interesting to map the spatial effects and thus show the risks. In the cities studied, Hamburg and Hanover, the land uses affected by the megatrends of digitalisation (of trade and work), mobility change, and religious change were mapped. Specifically, these are: retail, department stores, shopping centres, supermarkets, office complexes, large-scale car parks, multi-storey car parks (underground and above ground), car dealerships and garages, the automotive industry and suppliers as well as cemeteries, churches and chapels.
The example of Hamburg shows that what is the city's greatest identification factor, the harbour, also has a high risk of obsolescence. The expansion of HafenCity, the establishment of HafenCity University and, most recently, the rumoured sale of port terminals to private investors illustrate the dynamics of change. Or think of Duisburg, which still has the largest inland port in Europe as its industrial centre. What will happen to the city if the change towards climate-neutralised steel at ThyssenKrupp is not successful? Or the example of Stuttgart, whose supplier industry for the automotive sector is undergoing radical change—what impact will this have on the development of the city?
The number of potentially obsolete spaces shows the relevance of the topic. Not all uses of space will become vacant in the short term, but due to the multidimensional crises, a so-called cluster risk must be assumed: If similar space uses are located in geographical proximity, devaluation and vacancies can have a contagious effect. A strategic approach to these risks is therefore required in order to recognise this development as an opportunity and to use the (impending) obsolescence of space utilisation for a sustainable transformation of our cities.
At what levels does the room for manoeuvre take place?
In order for a structure, process or entity to be transformed, three aspects must be fulfilled from the perspective of the responsible shareholders:
- Physical transformability
architectural, physical construction and engineering factors are relevant here, such as room depth, access, technical infrastructure. - Expected return
It is estimated whether the costs of a transformation will be covered by a new use in the form of rental or leasing income or by sales proceeds. The time horizon is of course very important here, i.e. from how many years break-even is expected. - Complexity of the authorisation processes
The more complex and lengthier an authorisation process, the more expensive and the lower the potential return.
On this basis, owners decide whether to sell an obsolete property, whether to adapt its use, whether to aim for a genuine change of use or whether to let the property strategically expire in order to take advantage of tax benefits, for example. Identifying obsolescence risks and (potential) productivity losses can be an important tool in favour of shaping urban transformation. From a regulatory perspective, the implementation of the EU taxonomy and the associated obligation to include ESG criteria in accounting will be a driver. Time for everyone to use the crisis to lay the foundations for a sustainable future by making strategic adjustments.
Constantin Alexander
Constantin Alexander is a political scientist and sustainability economist. He teaches at the Institute for Sociology and Cultural Organisation (ISKO) at the Leuphana University of Lüneburg, where he is doing his doctorate on sustainable change in complex systems. As a senior consultant at diffferent in Berlin, he advises companies and organisations on sustainability and communication. There he also heads the so-called Skill Hub Sustainability Management.