Over the weekend, I had a very productive conversation with my former High School art teacher, Rachel Santel. She now runs a successful house flipping business in the St. Louis and St. Charles area. (www.rachelsantel.com). She is also a great artist! We discussed her experience with the house-flipping business, as well as the real estate industry in general. After speaking to other companies and startups in New York working in this "home renovation" space, I wanted to talk to someone who was actually doing the work on the ground, and not someone at a desk with VSCode and an Excel sheet, building yet another web platform. What are some lessons that can be learned from real life experiences that new-fangled "startups" just don't understand? 

I've been noticing a lot of folks working in the world of BIM and construction technology startups lately. With the recent backlash against Autodesk and the increasing costs of architectural software, I see that there are lot of new players (and venture capital) moving into the world of construction tech, trying to find new ways to "disrupt" traditional construction and reduce costs. There have been major players in this field over the past decade, from Katerra to WeWork, but many smaller companies have emerged most recently. Many are pitching home renovations (Block Renovation), prefab backyard studios, new BIM/parametric platforms (BlenderBIM , Hypar), and new Construction Technology tools (Join). These startups are working towards the demystification of the construction and design industry, which has been marred by stagnant productivity, entrenched incumbents, and increasing costs (See McKinsey Report and 5D BIM). They are trying to move the industry towards greater digital adoption, more standardization, transitioning from service to products, and more vertical integration in the supply/value chain.

While these developments are great for a very old industry, ​I am questioning if they are enough. Industry digitization will help foster more transparency across disciplines and reduce construction time, but there still seems to be major structural issues in the economy that reduce product quality and increase costs. Until these structural issues can be addressed, digital tools will just seem more like band aids/stop-gaps to long-term problems, rather than clear, viable solutions in and of itself. For instance, an open-source BIM platform is great. This reduces overhead technology costs for everyone (architects, engineers, developers, contractors). On the other hand, do we really think that a better rendering engine in the documentation program, (that is 10% better than the current market) will help improve construction quality and reduce costs THAT much? What are we really solving here? 

My hypothesis is that inefficiencies in construction and construction quality are not the fault of the architect, but of the economy in general. Incentives are not aligned for the industry to make better quality products, due to market and political factors. Until there is political reform in these areas, it would be difficult to change the overarching realities of construction and real estate. 

HOWEVER, if this is the reality we live in, and operate in, and these are the major serious problems facing the industry, then we can work with it and find solutions. After all, you can't find solutions if you don't even know what the problem is. 

Why is construction expensive and product quality poor?  

• Cost of Land: Rising cost of land, due to land and RE as an attractive investment vehicle during uncertainty, and just time and speculation
  • Solution: Can there be more regulations against exorbitant RE speculation?
  • Solution: How can we expand land and RE supply (this is a pipe dream)?

 

• Cost of Labor: Rising labor costs due to less skilled labor pool (more retirement, less newcomers), more stringent government protections (unionized work on public projects, major cities), more employment insecurity pushing prices per job (when will I get my next gig?) for independent contractors
  • Solution: Can the government incentivize more trades skill training? (immigration?)
  • Solution: Can we develop robotics to reduce reliance on a shrinking labor pool?

 

• Cost of Materials: Rising costs of materials, due to shrinking competition (M&A of large manufacturers, supply chains), higher company investments in technology per product (embedded costs), more embedded technology, more stringent codes, trade wars, brittle supply chains (overseas factories, increased logistics), more "optimized" products (break faster, planned obsolescence)
  • Solution: Can we increase material and supplier competition? (Break up monopolies, or have less protectionism)
  • Solution: Can we incentivize long-term material life versus short-term optimization?
  • Solution: We need more home-grown, local suppliers and supply chains to reduce costs; reduce the "brittleness" of  just-in-time global supply chains

 

• Government Approvals: More uncertainty and drawn out processes for government permitting, due to aging populations (growing NIMBY and anti-progress), shrinking local government budgets (allocations to building and planning departments, less people for more projects), outdated zoning codes (more time spent on "special circumstances/permits"), more hostile political atmosphere in general
  • Solution: More Youth Voter and Civic Participation (Fight the negative aspects of NIMBYISM)
  • Solution: Increase local government budgets, after decades of tax cuts (Incentivize public good over private interests)
  • Solution: Update zoning codes to reflect demographic, economic, and political realities
  • Solution: Invest in stronger parties (Ian Shapiro Lectures) that support moderate long-term development, but development in general

 

• Sustainability and Codes: More energy and environmental requirements force new buildings to adopt new and often expensive components, which haven't reached economies of scale (and which suppliers charge more for); old renovations must meet updated code requirements; costs of sustainability requirements are embedded into project, b/c public/users doesn't have a good understand of its benefits and longer-term savings (lack of public education and short-term mindset)
  • Solution: Improve public education on sustainability; help them understand the long-term costs and benefits, b/c right now the education is very poor and full of holes
  • Solution: Make more tax credits available for sustainable development to offset the cost of new technology adoption that hasn't yet reached scale; make those competitive with legacy products that are much cheaper

 

• Developer Incentives: Increased costs across all these fields (see above) incentivize developers to focus on the high end of the market, to retain profit margins respective to the amount of risk they undertake (this means that new development is focused on upper classes, global investor class); affordable housing lotteries, or components, still don’t solve the central problems listed above, and affordable housing costs are spread across the market-rate ones
  • Solution: Solve the problems above (rising material, labor costs) to incentivize projects at the lower ends of the market
  • Solution: Properly reform affordable housing requirements; or, just expand and incentivize public housing developments to reduce the predatory forces of the market (so that private markets have more price competition versus public housing)
  • Solution: (Magic) Raise middle class wages to incentivize developments for middle class (higher purchasing power, bigger market); This seems like a pipe dream, though.

In the seminal 1978 book Delirious New York, architect and theorist Rem Koolhaas lays out a "retroactive manifesto" to architecture and urban design in 20th century New York. The book follows the development and growth of New Amsterdam, from a small Dutch port, to the postwar metropolis of the 1960's, through his theory of "Manhattanism", which posits that the city's culture of congestion and density defined its seminal architectural developments. Shaped by a rational city grid, and curtailed by the 1916 Zoning Ordinance, the city becomes an archipelago of hyper-dense, chaotic, mixed-use buildings, bringing chaos and vitality to each urban block "island". The book exported the theory of density throughout the world, during late 20th century globalization, and foreshadowed the resurrection of New York City in the 1980's through the 2010's, becoming a sort of defining architectural ideology of the past 30 years. If Corbusier's Towards a New Architecture defined and characterized architecture of the industrial age, then Koolhaas' Delirious provides critical commentary on postmodern/post-industrial architecture, eclipsing stylistic movements and political agendas (i.e. postmodern architecture, deconstructivism, environmentalism, etc.) of the late 20th century.

Forty plus years on, both New York and the impact of Delirious has changed irrevocably. Since the book's publication, "Manhattanism" has become the norm rather than the avant garde outlier, in America and everywhere else. Mixed use buildings and density are the hallmarks of contemporary buildings, and even one of the OMA partners call the typical office mixed-use offering "Bento Box Architecture". Moreover, New York has arguably become a victim of its own success. After forty years of almost nonstop growth, several recessions, and a pandemic, the model of "Manhattanism" has turned the once grungy, 1970's metropolis into a "boutique city", a more unequal and stratified palace of consumption, a playground for the wealthy. Post 1978, investor capitalism, the personal computer, the internet, and then globalization made New York fabulously successful. The city's architecture transformed along with the economy, with successive mega-urban redevelopment projects like Battery Park City, Time Square, World Trade Center, the High Line, Downtown Brooklyn, Billionaire's Row, and later Hudson Yards. In many ways, it can be read as the natural and inevitable outcome of "Manhattanism" - a nonstop consumption palace pushed to the extreme, which to its many critics (critics of capitalist corruption, or critics of liberal identity politics) can only lead to inevitable disaster or eventual decline.

While the pandemic appears to have proven critics right, with the city's economy in tatters and folks leaving in droves, these doomsayers are missing the point. Since the late 19th century, New York has been a hotbed of architectural and development innovations, shaped by changes in the economy and technology. From the newspaper barons of yesterday to today's tech titans, New York's power brokers have consistently reshaped the city to their own image, decade after decade. To isolate and chronicle New York's recent boom, and to negate developments prior to the 1970's, or to only understand New York architecture through the specific case studies of Delirious, would be a grave oversight. A longer view is necessary. 

From the 1870's until today, New York architecture, specifically tall buildings, can be classified into seven distinct ages, lasting 10-20 years each, and corresponding roughly to the boom-and-bust business cycle. Each of these time periods corresponded to unique circumstances facing the city - a booming industrial population, the rise of automobiles, and even the growth of global capital today. They were grand structures built by companies and organizations who wielded the power of the day - steel magnates, insurance companies, consumer products, financial firms, and global investors. These players utilized architecture to project wealth and status, but also to make a bold and lasting statement on the New York skyline. The buildings were designed by the leading minds of their times and employed the most cutting-edge technology. While style, ideology, and construction methods may change over time, these facts remain the same. 

Architecture as a Living History Textbook (Reading Architecture)

​1870-1900: The Early Height Experiments