Building the cities of the future with
green districts
Better design can make sense aesthetically, environmentally—and
economically.
At the current pace of urbanization, the world’s cities will add 65 million
inhabitants a year between now and 2025. The resulting demand for
infrastructure will mean that each year, India alone will need to add as much
floor space as exists in all of Chicago, and China more than twice that. The
way the world builds now will determine urban sustainability—in emissions,
waste production, and water use—for decades.
In this article, we examine what
could become the building blocks for the sustainable cities of the future:
“green districts.” The term is new and still imprecise. Our definition of a
green district is a densely populated and geographically cohesive area that is
located within a city and employs technologies and design elements to reduce
resource use and pollution. In general, green districts deploy design
principles that lead to dense, transit-oriented, mixed-use developments; they
also consider using renewable energy sources. EcoDistricts, a Portland,
Oregon–based nonprofit that specializes in helping governments and others to
develop sustainable cities, notes that green districts are interesting because
they are “small enough to innovate quickly, and big enough to have a meaningful
impact.”
Interest is growing. The US Green
Building Council has started a program, based on its successful Leadership in
Energy and Environmental Design (LEED) rating system for individual buildings,
to evaluate the concept of sustainable neighborhoods. Known as LEED for
Neighborhood Development (LEED-ND), it is the first system of its kind;
according to the council, the idea is to integrate the principles of smart
growth, new urbanism, and green building. So far, more than 300 projects have
earned the LEED-ND rating. Estidama, a program in the Middle East, launched a
similar rating system in 2010.
Several organizations are supporting
the development and promotion of green districts worldwide. In June 2014, the
Clinton Global Initiative and EcoDistricts began the Target Cities program. The
idea is to revitalize neighborhoods in eight North American cities (Atlanta;
Austin; Boston; Cambridge, MA; Denver; Los Angeles; Ottawa; and Washington, DC)
and in the process to create models from which other communities can learn.
There are three reasons to believe
that green districts will continue to grow.
Green
districts are economically viable
To date, the self-defined green
districts that have been built, including the Upton development in Northampton,
England, and the 1,145-acre Civano project in Tucson, Arizona, have
concentrated on offering environmental benefits. There has been less attention
to the question of whether they are economically sustainable. For example, one
estimate is that Civano, which is slated to have 2,600 families with sharply
lower waste, energy, and car use, cost $20 million more to develop than a
“similarly sized, conventional master-planned community.”
But that does not take into account return on
capital and long-term payback. To evaluate this question, we created a model
that compares the cost of building a green district versus that of a
conventional one. We looked at 15 well-developed green-district technologies,
covering buildings, waste, water, transport, and utilities. We also considered
ten design elements, such as permeable pavements, green space, bike lanes, and
building orientation. We then applied this analysis to three geographic areas
that have different needs but share an interest in the subject: northern North
America, the Yangtze Delta in China, and the Persian Gulf region.
In North
America, cities such as New York; Portland, Oregon; and Toronto are building or
planning to build green districts. In China, the government has made ecocities
part of its newest five-year plan. In the Persian Gulf, entire new cities such
as Masdar, United Arab Emirates, and Energy City Qatar are being built with
explicit sustainability goals.
In each market, we used the model to
assess a greenfield location—that is, a new district built from scratch. (The
model can, however, be adapted to brownfield or infill developments.) Looking
at a one-square-kilometer district with a mix of 70 percent residential and 30
percent commercial use, we assumed application of all relevant technologies. We
took into account that the mix of technologies deployed will vary. A green
district in Canada will not look or operate like one in Saudi Arabia.
The model calculated how much the
various technologies and design choices affect the cost of building and
maintaining a green district versus a traditional one. It considered such
variables as baseline energy demand, density, population, and per capita floor
space; then it estimated how much these affect annual operating costs and rate
of return.
In each case, we found that while
not every green solution costs more than the conventional alternative, green
districts overall do have higher construction costs (by about 10 percent). That
comes out to $35 million to $70 million per square kilometer, or $1,000 to
$4,000 per resident. However, annual owner operating costs are lower, with
savings of $250 to $1,200 per resident. The internal rates of return range from
18 percent to 30 percent. All this translates into a breakeven rate of three to
five years, depending on the region and technologies deployed. And this does
not take into account the substantial benefits of improved environmental
quality.
Our conclusion, then, is that green
districts are economically viable. The difference is not so much a matter of
cost as of timing. For example, installing a combined-heat-and-power system
costs about twice as much as a conventional natural-gas system. But the
operating costs are less than half, and the payback on the higher incurred
costs is about five years. And that does not even take into account the
associated environmental benefits, such as 30 to 50 percent lower emissions.
Compared with standard building and
construction practices, and depending on the region, the total impact of the
technologies considered in our model are substantial: 20 to 40 percent lower
energy consumption; 60 to 65 percent less freshwater consumption and wastewater
production; 25 percent less solid waste going to the landfill. Private-vehicle
kilometers traveled were 50 to 80 percent less.
The savings associated with green
districts result from how the different technologies work together. While
buildings represent the single most important element in energy and water
savings, for example, the benefits are not just about what happens within the
four walls. Other factors include where these buildings are located and how
people move between them.
Green districts have the greatest
potential to produce economic savings in areas with high resource demands and
costs. For example, technologies for reducing water use have a much faster
payback period in the desert nations of the Middle East than in regions with
more water. Similarly, a temperate city will likely have a significantly longer
payback period for district-heating technologies than one in a cold climate.
Logically, if local districts are resource intensive or resources are costly,
the district has a greater potential to produce savings than if resources are
cheap or already are consumed efficiently.
Green
districts can improve the quality of life
Green districts are not only gentler
to the natural environment but may also be kinder to the humans who inhabit
them. As cities grow, they often become more congested; that can raise the
costs of living and doing business. It also can mean more air pollution and
thus more respiratory illnesses. For example, the World Health Organization
estimates that of the 1,600 cities for which it has information, the air
quality in most of them does not meet its standards. Traffic congestion is not
only an annoyance but also an expense: according to recent research, congestion’s
cost, partly from wasting the time and patience of commuters, equals 1.5 to 4.0
percent of GDP. Through better transit design and energy planning, green
districts can set a course toward cleaner, less congested, more livable cities.
Most self-defined green districts,
such as Malmo in Sweden, the Shipyard District in San Francisco, and South
Korea’s Songdo International Business District, are attractive and livable
spaces. Some are also designed for social diversity. The Kronsberg development
just outside Hannover, Germany, for example, provides housing of various sizes
and types, including condominiums, semidetached, and single-family homes, as
well as multiple forms of housing finance and ownership. The goal is to attract
a wide range of residents, including the disadvantaged.
Green districts can also be part of
urban revitalization, transforming vacant or changing areas in existing cities.
Hammarby-Sjostad in Stockholm, formerly a run-down, underused industrial
district, is now a thriving “eco-village.” Its 25,000 residents benefit from a
transportation system that generates 30 to 40 percent less carbon dioxide per
household than a comparable nearby district, primarily because of 40 percent
fewer trips by private car. It also has a wastewater-treatment system, the hot
water from which is used in the local district’s heating system, and
substantially lower energy costs (by 32 to 39 percent).
The
way ahead
Given these advantages, why haven’t
green districts already become the norm? The case for them is strong, but real
life can get in the way. One issue is that developers pay the bulk of the extra
costs for green districts up front, but they are often unable to charge more
when they sell, because owners see only the higher sticker price and not the
long-term benefits of lower spending on water, energy, and sanitation. If
developers cannot recoup their costs, they are not going to bother.
The simplest way to overcome this
difficulty is for the developer and the operator to be the same—for example, in
new districts built by universities, government complexes, and medical centers
(Exhibit 3). These may therefore be the most logical places to start the
movement, because they are well positioned to test the value of green-district
technologies and design features.
However,
if green districts are to scale up, new business models are required. One
possibility is for developers to own and operate the districts they build until
they recover the additional costs, after which, they sell. This is a change
from the traditional business model of developers selling properties as quickly
as possible, often even before they are complete. Another option is for
owner-operators to step into the gap to take advantage of this opportunity.
This is a role cities might consider assuming, given that many utilities are
municipally owned, and this is where a lot of the operating savings are.
Given their environmental and
commercial potential, green districts can become increasingly important in an
urbanizing and resource-limited world. Green development will not make a bad
deal a good deal; like any other project, it requires the right location,
marketing, and design. But green development can make a good deal a great one
by maximizing a district’s economic, social, and environmental potential. On
that basis, green districts have a future—and possibly a big one.
By Shannon Bouton, David Newsome,
and Jonathan Woetzel
For the full article andExhibits
http://www.mckinsey.com/insights/sustainability/building_the_cities_of_the_future_with_green_districts?cid=other-eml-alt-mip-mc
No comments:
Post a Comment