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The Value of Urban Design

Authors

Acknowledgements

Executive summary

1 Introduction

2 Overview

3 Findings

4 Discussion

5 Bibliography

2 Overview

2.1 Summary of findings

The following table summarises the principal findings from an extensive survey of writings and empirical studies of urban design. It focuses specifically on the elements of urban design about which there are 'useful' findings. Each finding is characterised in terms of the quality of the evidence it offers, using an asterisk system: *** conclusive, ** strong, * suggestive. This excludes findings that were classed as anecdotal. These findings are described in more detail in Section 3.

Table 2: Summary of findings about the key urban design elements

2.2 The overall value of urban design

To place findings about individual design elements in context, some general questions about the overall value of urban design are discussed with reference to the literature. This discussion serves as a preface to the fuller exploration in Section 3 of key urban design elements.

What is good urban design, and how do perceptions of urban design differ?

A task force set up by the former Australian Prime Minister [Australian Prime Minister's Urban Design Taskforce, 1994.] concludes that good urban design:

• demonstrates design excellence in urban development and architecture
• distributes benefits widely in the population
• produces environmental benefits
• responds to local features and needs
• is relevant to the contemporary world
• leaves open the possibility for continuing adaptation and change
• forges connections with the past.

Not surprisingly, different views and priorities exist among the potential assessors of urban design, with a gap sometimes arising between public and professional assessment of quality. [For example, Giddings and Holness, 1996; Hubbard, 1996.] Architects and designers tend to be more concerned with design concepts and theories, ambience, character, image, symbolic significance and aesthetics generally ('cultural aspects'). These are matters addressed through critical discourse and professional judgement, and exemplified in case studies. Users and owners, however, are more interested in fitness for purpose, which they assess more pragmatically.

In practice, the way the two groups assess a number of aspects of urban design may not be so far apart. A study of 'common' urban design elements in the city of Brisbane - ranging across the aesthetics of historic buildings and streets, constraints on new buildings adjacent to historic buildings, the use of trees, retention of vistas, noise levels, air quality, glare and the provision of street furniture such as seats, surfaces and fountains - concludes that the 'gap' between the two groups is not highly significant. [Holden, 1991.] A more recent study into assessment of the 'compatibility' and 'aesthetic success' of the design of new apartments on top of existing buildings in Wellington concludes that professional designers and the public made similar assessments. [Holden, 2004.]

What features of urban design can contribute value to the community? Recognising both differences in perception, and areas of common agreement, the literature reviewed in this study suggests that a wide range of features influence good urban 'quality of life' outcomes. These extend from micro features, such as street design, through to macro features, such as patterns of land use and the shape of transport systems. Other significant features include the selection of materials, massing and form of buildings, the design of elements at a range of scales (from street furniture up to urban landscape settings), and the layout of streets and spaces and their linkages.

An early and significant advocate of urban design, Jonathan Barnett, wrote that,"Design is a methodology that ... can help solve some of the problems of misallocated resources, misused land and the unnecessary destruction of historic buildings." [Barnett, 1982, p 7.] More positively, urban design provides a means by which to bring together a wide range of factors affecting quality of life and - going beyond utilitarian value - gives us scope to introduce coherence and beauty into our towns and cities.

Is good design profitable to the developer?

The answer is a qualified 'yes'; good design can be profitable.

There is often a market demand for better design. The Property Council of Australia finds that, with good design, higher than normal returns generally do accrue to the developers themselves. In addition, the study finds that while developers can sometimes do well without good design, good design is, by and large, a good bet: "While good urban design by itself cannot guarantee positive financial returns, and lack of attention to good design principles can still result in a financially successful project, it is also clear that it substantially enhances a project's likelihood of becoming a financial winner." [Property Council of Australia, 1999, p 3.] Similarly, a study of Eastern United States apartment buildings finds that developers can typically gain higher rents, and frequently gain a profitable return, on good design (fairly narrowly defined). But this is by no means guaranteed. [Vandell et al, 1989, pp 235, 236.]

Looking at design more broadly, United States (US) studies - some of which present strong evidence - find that people are willing to pay a premium to live in a neighbourhood that combines mixed land use, good public transport, effective street design and other factors associated with 'New Urbanism', as opposed to living in conventional neighbourhoods. [Plaut and Boarnet, 2003; Steuteville et al, 2001. New Urbanism is a particular US movement to reshape urban design, emphasising the re-building of community through design: see, for example, Loomis, 1999; Talen, 1999.] For example, a US study suggests that, "If the product mix and architecture is correctly executed and phased, TNDs [traditional neighbourhood developments - i.e. developments following New Urbanist principles] can command base pricing levels that are 10 percent to 15 percent higher than conventional single-product projects." [Steuteville et al, 2001 pp 18-19.] Another US study reports that people will pay a price premium of about 15 percent to live in a New Urbanist (or neo-traditional) community over a comparable conventional suburban subdivision, although clearly not all households have such preferences. [Eppli and Tu, 1999; cited also in Lang, 2005.] The UK Commission on Architecture and the Built Environment (CABE) cites an exploratory study carried out by property consultants FPD Savills in 2002, which indicated that volume house builders who had invested in higher quality design in residential schemes could expect to yield a residual value per hectare of up to 15 percent more than conventionally designed schemes. [Commission on Architecture and the Built Environment, 2002, p 5.]

Similarly, a persuasive study led by Carmona et al in London for CABE and the UK's Department of the Environment, Transport and the Regions (DETR), "consistently concluded that good urban design added economic value in the form of better value for money, higher asset exchange value and better lifecycle value". [Carmona et al, 2001a, p 74.] These elements tend to accrue to the investor, especially if the investor retains a longer-term stake. [Carmona et al, 2001a, p 75.] Other writers also note the longer-term returns from 'more progressive' design. [Leinberger, 2001.]

Microeconomic theory suggests that the gains to investors from investing in 'higher quality' design may not necessarily be ongoing. In a competitive market, design innovations yielding higher returns will tend to be copied, with the supply of imitations reducing returns to normal market levels over time, ie, there will be initial first-mover (innovator) advantages, but not necessarily ongoing higher returns. The other side of this is that the market will tend to penalise what is then perceived as poor-quality design.

Good urban design takes a variety of forms and may appeal to a range of market segments and public tastes. In terms of the design of specific developments, the market is generally differentiated, so that developers who make an exceptional design contribution with a particular property may be appealing to a particular market (perhaps upmarket) niche. They may achieve a good return, on perhaps a slightly higher investment, but limited market size means not everyone can exploit this same market segment. [Similarly, Lang (2005) notes that not everyone will pay more to live in a 'New Urbanist' development.] There may, however, be a demonstration effect that, subject to income constraints, tends to lift demand for high-quality design more broadly over time.

Does good urban design cost more?

Good design is sometimes more costly in the short term, but generally pays off over the lifetime of the building or place. [Leinberger, 2001.]

Steuteville et al [Steuteville et al, 2001.] in the United States note that while up-front planning costs may be higher for compact, mixed-use development, reduced infrastructure costs can make up for this. Overall costs do not rise as a result. In the United Kingdom, too, the CABE/DETR study finds that good urban design does not necessarily raise design or development costs, "good design is not necessarily expensive or unaffordable ...". [Carmona et al, 2001a, p 74; Worpole, 2000, p 25; CABE (2002) p 2.] Similarly, the Property Council of Australia notes:

... that the opposite [of higher cost] can be true. By and large, the design fee component of chosen projects does not vary greatly from general industry standards. And, judging from the information available to us there is little evidence that better design takes longer to produce, in the sense of delaying the time required for good general development planning and project preparation. [Property Council of Australia, 1999, p 3.]

However, there is some evidence of higher up-front costs from various studies, including one from the United States, which finds that:

... developments that have pedestrian-friendly design features are more complex and costlier to build [in part due to local regulatory requirements]. To lenders, this translates into higher project risk and, therefore, higher lending rates ... The outcome is that builders often have trouble obtaining financing of any kind for novel projects that might include, for example, a mixture of uses or a pedestrian oriented design. [Frank et al, 2003, p 174; see also Worpole, 2000, p 25.]

Where benefits of good design accrue more widely, who benefits, and how?

The literature suggests that many benefits of good urban design accrue beyond the site. The combined weight of evidence, such as the CABE/DETR study, strongly supports the view that good urban design - providing it is sensitive to context [Burayidi, 2001, p 63 stresses context-specific design.] - adds 'spill-over' social and environmental value. Economists describe such benefits as 'externalities'. Conversely, the evidence shows that some poorly designed places and developments "limit the spread of social benefits ... and may even create social (and economic) costs". [Department of the Environment, Transport and the Regions, 2000, p 43, and Carmona et al, 2000, p 78.]

Where urban areas have become run-down, the CABE/DETR study suggests that, "good urban design could confer social and environmental value and provide long-term economic spin-offs in the wider economy from regenerative effects". [Carmona et al, 2001a, p 74.] The study goes on to note that private sector activity alone has great difficulty providing, "the full range of positive social impacts that well-designed development can deliver". [Carmona et al, 2001a, p 78.] This underlines the point that because some of the benefits of good urban design accrue beyond the site, the market by itself will tend to under-provide it.

The Property Council of Australia notes that good project design need not generate wider benefits; to do so requires integrative and interconnecting design.

[G]ood urban design enhances a project's performance in itself as well as within its surroundings. Good architecture can mean greater longevity, better internal performance and higher symbolic and aesthetic value, but in itself cannot guarantee that the project connects well with its surroundings in the sense that it utilises the wider setting as an asset - and becomes an asset to its context in turn. [Property Council of Australia, 1999, p 3.]

If a design does ensure connection and supports local character, a range of benefits flow. Some are economic, such as increased attractiveness and competitiveness of the city. This is important in an age where knowledge workers and others are increasingly vital to economic innovation and success; such workers are also more discriminating about the sort of city they wish to live in. [Florida, 2002, p 95; Planning Institute of Australia, 2004, Appx A, p vi;Worpole, 2000, p 19.] 'Quality of life' is increasingly the basis on which towns and cities compete for inward investment and population growth. [Worpole, 2000, p 36.] Other literature, such as the CABE/DETR study, points to the social value of greater city pride - social inclusiveness and wellbeing, increased vitality and safety, and the simple satisfaction gained by both residents and visitors from the availability of pleasant amenities and facilities. [Carmona et al, 2001a, pp 78, 79.] There are also a range of potential environmentalbenefits - reduced emissions and energy use (also an economic gain), less diffuse run-off of polluted water, and improvement of derelict sites with brownfield redevelopment. [Carmona et al, 2001a, p 79.]

The Australian Prime Minister's Urban Design Taskforce, mentioned above, emphasises the 'softer' benefits (among others) of good urban design. It concludes that:

The quality of urban design matters. It does so in terms of experience and meaning because of the messages and feelings different places provide us with; functionally, for the efficient and effective working of the city; socially, as a means of building equitably supportive towns and cities; and for the way it can strengthen economic life and competitiveness. Urban design gives us the tools with which we can consciously improve the quality of cities and regions. [Australian Prime Minister's Urban Design Taskforce, 1994, p 7.]

Urban design features that help to achieve these gains include compactness, mixed land use, greater connectivity (including more accessible public transport and support for pedestrian and bicycle activity), reduced impervious surfaces and improved water retention, and safeguarding of environmentally sensitive areas. The US Environmental Protection Agency (USEPA) notes that, "[u]sed in combination, these practices can significantly reduce impacts to habitat, ecosystems and watersheds, and can reduce vehicle travel, which in turn reduces emissions of local, regional and global concern". [United States Environmental Protection Agency, 2001.]

If such features are to create real coherence and vitality, they need to be brought together so that they can act synergistically. [This is also the implication of Williams et al, 2000, p 355.] Features that interact to good effect include broader measures such as appropriate land use regulation, but also micro design measures at the street level - such as steps taken to enhance street safety or calm traffic. The EPA review mentioned above notes that multiple place-specific initiatives are required to achieve lasting social, environmental and economic benefits: "The effectiveness of good urban design practices depends on how well they are implemented, and how they are combined with other programs." [United States Environmental Protection Agency, 2001.]

Such initiatives need to operate at a range of scales, from the wider city or region down to the neighbourhood or site. This is particularly true of transport arrangements, which are so pervasive in relation to urban design, but it also applies to other cross-cutting initiatives, such as ensuring the quality of green areas. [Greater London Authority Economics, 2003; Carmona et al, 2004.]