Red Sky At Night, Urban Economists' Delight
6 July 2018 | SA Views | Alan Cameron
 


Catalysing vibrant night-time economy should be a key goal for any city that wants to benefit from the changes brought by the fourth industrial revolution, says property economist François Viruly.

This new era is becoming known by economic opportunities geared around personal convenience: "the fourth industrial revolution will alter where and when we work," Viruly observed at the 2018 Western Cape Property Development Forum audience at Century City Convention Centre.

Airbnb users show how technology can shape the built environment. It took the Hilton hotel empire almost 100 years to offer 610 000 rooms in 88 countries. It took Airbnb only 4 years to offer 650 000 rooms in 192 countries. The Hilton follows an old, asset-intensive model. It owns each room, occupied or not. Airbnb’s model is information-intensive and it only occupies the room when it is needed, Viruly points out.

“We know the fourth industrial revolution will be characterised by data availability embedded by the Internet of Things (IoT). And the IoT is already beginning to connect properties with municipal services through smart utility meters.

“I expect IoT to change how users interact with commercial and residential space, and this will affect the way the property market functions. It will alter how the sector is organised and who the players will be,” he said. “We are already seeing the changing dynamics in the built environment market through platforms such as Airbnb. Blockchain technology and smart contracts will provide opportunities to undertake property transactions securely through the Internet. This will provide us with opportunities to improve the market efficiencies and potentially reduce transaction costs,” he said.

Sweating your assets, at night

Just as an improvement in public transport can improve the accessibility of buildings and open new catchment areas, said Viruly, so “the night-time economy may make it possible to increase the number of hours that a building is used.” But he warned that the night-time economy will only function and grow if it is supported by appropriate municipal services and infrastructure.

“Having a mix of building uses is urban design 101,” agrees Barbara Southworth, Director at GAPP Architects and Urban Designers. Municipal and commercial designers should look for “an active ground floor that goes beyond café culture, like grocery stores that stay open after hours. These design elements are a no-brainer, but the only way they work is when the environment is safe,” Southworth said.

First Thursdays has served as an introduction to the night-time economy for users of the Cape Town CBD and, critical to this, has been the safety of patrons. Protection from opportunities for crime in public spaces as well as from motor accidents while crossing roads to access venues on the other side, points out Southworth.

By giving Cape Town a great night out during First Thursdays, the event has changed the perception of what is possible in the CBD. Several restaurants and retail outlets that started as popups are now established and open much later than usual, said Southworth. “And the new residents flocking to the CBD will amplify the demand. Look at urban nodes with high levels of residential communities, like Durban’s Florida Road, Johannesburg’s Maboneng precinct, and most especially Sea Point. It is not coincidence that they all come alive after dark,” she commented.

Urban areas designed for safety

Common to these areas is the distinct absence of blank ground-floor building facades, including the often-sighted roller-shutter door in front of an unlit shop window. “The streets feel safe because there are a crowd of people looking out onto it due to the intentional design of the bustling eateries and bars,” Southworth said.

City officials and urban designers should not think that the built environment will wait for their plans, especially in South Africa where the pattern of urban design often starts back to front, several speakers emphasised. Informal settlement residents typically build before any planning takes place. Failing to plan proper urban environments and working effectively to actualise them, leave informal and township areas characterised by the so-called ‘40 x 40 x 40 x 40 rule’ where residents live in a 40m² home, 40km from economic opportunity, spend 40% of their income on transport, and whose community is 40% unemployed. “We should instead reduce these numbers to the 20s,” holds Viruly.

Building micro-apartments of around 20m² are a growing global trend and Live Easy developers in Johannesburg are busy on their fifth nano-apartment development. In Cape Town, a Gardner Property Solutions partnership is launching micro-apartments in Woodstock via the 1 On Albert development. However the intended target markets are very different. While Live Easy is able to price monthly apartment rentals between R1950 and R3750, an entry-level 1 On Albert unit requires a bond repayment of more than R10 000. It is clear that there is an increasingly urgent need for lower LSM households earning between R3000 and R5000 to live in secure and private comfort close to their work. 

“If households are expected to live in smaller homes, to bring them closer to work and leisure, municipalities must ensure that the quality of the built environment in close vicinity to these homes is improved. This becomes more important if we wish to start delivering a mixed-use environment to lower-income households. While the delivery of affordable inner city housing has an important role to play in improving the quality of the housing environment, our challenge will be to look for larger mixed-use developments, in the outskirts of cities, which meet the needs of lower income households,” Viruly said.

And it is not just low-income households who will experience change. As employment trajectories trend towards the freelance sector, and the gig economy becomes increasingly important, municipal authorities have the opportunity to benefit their city economies by attracting and retaining geographically independent knowledge workers by facilitating accommodation opportunities suitable to new types of needs.

Becoming a city that never sleeps

And vibrant, bustling streets after dark will represent whether the leadership of local urban economic nodes have been successful or not.

Economies can only benefit by lengthening their working day to beyond sunset, and trends inspired by a non-centralised, convenience-orientated workforce with increasingly flexible working hours will change movement patterns and open up opportunities for night-time economic activity, Viruly expects.

The realisation of these trends will be especially obvious in environments that give residents a close proximity in which to live and play.

South African CBDs are densifying, diversifying and moving towards round-the-clock activities, says Tasso Evangelinos, CEO of the Cape Town Central City Improvement District, and agrees that night-time economies should be taken as seriously as daytime ones.

Today, a 24-hour economy is considered to be the mark of a thriving CBD, yet even internationally municipalities have been slow to pay attention to the needs of businesses that run at night and the public life they generate on the streets, he says.

Visitors, residents and businesses fuel night-time trading

After-hours trading is getting a lot busier as visitors return, residents move in, and more and more businesses catering for markets beyond the traditional late-night entertainment scene. But, he warns that if these environments aren’t managed with the same services and amenities enjoyed by daytime economies, a busy night-time economy can face immense challenges.

A case in point is Amsterdam, where the clubs all closed at 4am, and a noisy mass of inebriated patrons onto the street at the same time. The City authorities reacted to these and other after-hours issued by appointing a night mayor in 2012, with the business sector providing half the funding.

“I met the inaugural night mayor, Mirik Milan. He had to reconcile the different agendas of those he represented. But in keeping neutral, Milan has helped legitimise and reinvigorate Amsterdam’s after-hours scene while keeping residents happy too. And instead of enforcing stricter trading hours – as proved to be disastrous for the Kings Cross clubbing scene in Sydney – the City gave him the greenlight to test 24-hour zones. Patrons can now leave clubs when they please,” said Evangelinos.

So, he asks, how do we begin to do the same in South Africa’s reurbanised areas – to manage private enterprise and public space around the clock and avoid the pitfalls of other CBDs, specifically when we face challenges such as limited municipal resources, law enforcement and a lack of public transport? “It’s not simply a case of taking practices that work in the day and expecting a carbon copy to work at night,” he said.

High-level commitment from local government is key, and will inspire confidence in other stakeholders, he advises. And then, the private sector needs to be willing to work with authorities and each other to present a united front. “It’s all about finding common ground and dealing with challenges collectively, with the buy-in of all stakeholders,” he said.

As South Africa’s towns and cities change through growth and redesign, so economic models geared around individual conveniences will shift the ground beneath property owners and local authorities. Change is a constant, and each player in the urban economy value chain should make sure they do not fail to plan for it.

image2


Alan

Alan Cameron

Alan Cameron runs Places Plus, a placemaking consulting firm working to revitalise public spaces, parks and the pedestrian areas of urban centres and mixed-use developments with the aim to increase property owners’ return on investment and stimulate surrounding economic development. Follow him on Twitter: @cameron_an.


Disclaimer:
The information contained in this article is for informational purposes only and must not be regarded as a prospectus for any security, financial product or transaction. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial issue. Investors should consider this research/article as only a single factor in making their investment decision. We recommend you consult a financial planner/advisor to take into account your particular investment objectives, financial situation and individual needs. The views and opinions (where expressed) in this article are those of the author and do not necessarily reflect the official policy or position of Sharenet.

Share This Story

 
 
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.
© 2018 SHARENET (PTY) Ltd, Cape Town, South Africa