With the housing market still hot as a red poker despite an uptick in interest rates, Nolan Gray, in a recent article from Bloomberg’s CityLab, explores the idea of building brand-new cities (in the mode of 21st-century China or the Brasilia of the latter 20th century) to address the housing crisis. Alain Bertaud, a fellow at the Marron Institute for Urban Management and a former city planner at the World Bank, engages with Gray in this published interview to explain whether or not this is a realistic solution. 

Host Abby Kinney and her co-host Charles Marohn of Strong Towns chew it over in this episode of Upzoned. 

“Historically, infrastructure follows the market, not the other way around,” Kinney notes. “Huge public investments in infrastructure where there are no jobs are not really a very smart investment because the upfront costs of building an entire city's worth of infrastructure are so incredibly high. The public sector would have to be in a negative cash flow for a very long time.”

Marohn talks about places where this has actually been done, with the government fronting the money for infrastructure and subsidizing individuals through mortgages and commercial real estate loans. “They fail in every financial metric that is longer than the immediate sugar high you get out of the transaction,” he says. 

There are interesting examples, as both hosts discuss, but it’s hard to beat an organically grown, incrementally developed city, where historic trial and error has made places that work. Where do you fall on this question?

“The Problem With Building a New City From Scratch,” by Nolan Gray, CityLab (April 2022).

Abby Kinney (Twitter)

Charles Marohn (Twitter)

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