Who owns the city?

Sharp shifts in the ownership of urban land confront a growing number of major cities with a new type of urban politics. Several of the Urban Age cities are among them. These shifts are mostly from small private to large corporate modes of ownership, and from public to private. Formally, these acquisitions entail buildings – small and large, private and public. Thus the more common language to describe this process is as the buying of buildings.

But I want to argue that at the current scale of acquisitions, we are actually seeing a systematic transformation in the pattern of land ownership in cities which has deep and significant implications for equity, democracy and rights. This is particularly so because what was small and/or public is becoming large and private, though often with local government support. Some of the most noxious developments of “site assembly” happen when one or two city blocks are bought by one owner, whether local or foreign, and the city authorities cave in to their requirements for street closures, and more, often in the name of enhanced security.

The trend is to move from small properties embedded in city areas, crisscrossed by streets and small public squares, to projects that absorb much of this tissue of public space. This privatises and de-urbanises city space.

This proliferating urban gigantism is further strengthened and enabled by the privatisations and deregulations that took off in the 1990s across much of the world, and have continued since then with only a few interruptions. The overall effect has been a reduction in public buildings and an escalation in the amount of private ownership. This brings with it a reduction in the texture and scale of spaces previously accessible to the public – a space that was more than just public buildings. Where before there was a government office building handling the regulations and oversight of this or that public economic sector, now there might be a corporate headquarters, a luxury apartment building, or a mall.

In what follows, I examine these trends and then begin to conceptualise what we can think of as the making of a new urban landscape, which goes well beyond the notion of a new visual order. It is also partly a new ownership and control order as well as a frontier zone where the powerless and the powerful can actually meet.

When more and more in a city is corporate-owned

While foreign acquisitions may have received much of the attention in some cities, the process is far broader, and in many cities is mostly shaped by domestic investors and developers. The key issue is not the fact of foreign ownership, but the shifts in ownership mode – from modest or small to large and expensive, and from modest public properties to expensive private ones. Examples of scale-ups in private ownership are Gurgaon in Delhi, Santa Fe in Mexico City or Sandton in Johannesburg.

Foreign acquisitions of buildings in a city are not a new development. In The Global City, I documented the large-scale acquisition of buildings and urban land plots in the late 1980s, especially by foreign firms, in the three leading global cities in that early global phase – New York, London, and Tokyo. These acquisitions included iconic buildings, especially in New York and London, that would have shocked the average resident at the time had they known: Harrods in London, the Rockefeller Center and Saks Fifth Ave in New York, and more. In London, over half of the buildings in the City were foreign owned – especially by continental European and by Japanese entities.

It is not the novelty of it all that I seek to emphasise but rather its scale and impact on urban fabric, on daily life in the city, and even on social cohesion in an urban area. In short, the effect goes well beyond functional use. These acquisitions are not simply about buying an office building and a home that are needed if a firm and its employees are to live and work in that city. These are to a large extent just acquisitions – they could be as a safe or speculative investment, as a second or third or nth home. Thus, according to the Financial Times (2014), a good many residential and business properties in central London and residential properties in central Oxford, the two cities they studied, have been bought by foreign firms, investors or households over the last few years.

A share of the foreign-owned residential properties tend to be underutilised, and in some documented cases, never used – for instance, the extreme examples in the Hampstead area of London.1 This then also means that they contribute to a sort of de-urbanising, especially if they are large and have been constituted by combining several buildings on a block. This removes the texture and porosity, as Richard Sennett would call it, of the urban built environment. They do not contribute to cityness, but rather kill it.

Most recently, a so-called “super-prime” real estate market has been launched. This is a made – an invented – market, where properties are given minimum prices – 8 million, 20 million, often de facto 100 million US dollars in cities such as New York, London, and Hong Kong. As far as I can establish, these properties are not worth that much money: setting these minimums is a form of gating via exclusionary criteria rather than self-evident walls. But it is above all a mechanism for super-profits. It is also the making of a cross-border geography that connects particular spaces of major cities across the world and strengthens the new geographies of wealth and privilege that cut across the old historic divides of North and South, East and West.

Finally, the new wave of foreign acquisitions in New York City, for instance, includes among others, buyers from
Kazakhstan and from China. Among the largest are Chinese acquisitions. The economy in China is slowing down, Europe’s is not in top shape, and South America’s is unstable. In this context, New York has become an attractive destination for Chinese real estate investment. It is seen as a safe haven for investors, as the law definitively protects the rich.

These investments are massive, and include the biggest construction company in China, China State Construction Engineering Corp. The latter has bought New York-based Plaza Construction, which builds commercial and residential developments across the US. The largest of these recent investments is from Shanghai-based Greenland Holding Group: in December of 2013 they acquired a 70% stake in the vast Atlantic Yards project in Brooklyn for $200 million. The project will include 14 apartment buildings, in addition to the Barclays Center Arena. The investors expect to complete the entire project within eight years.

How do we interpret these trends?

There are familiar concepts that come to mind promptly, notably, gated communities and gentrification. They contribute to explaining some of this. But I am interested in going beyond these in order to get at what we might think of as constitutive elements of the city. One of these is urban land. Another one is the larger spatial formations within which inter-urban transactions and shifts take place.

The large acquisitions of urban land – whether by foreigners or locals – brings urgency to the work of actively making the public and the political in urban space. Today’s large complex cities, especially if global, are a new kind of frontier zone. Where the historic frontier, as seen from imperial centres, was in the far stretches of the “colonies”, today it is deep inside global cities, some of which are those erstwhile imperial centres. Actors from different worlds meet there, but there are no clear rules of engagement. These actors come from multiple diverse settings. Chinese investors are not the same as British investors, and these in turn are not the same as Dutch or Kazhakstani investors. Those making new, modest, neighbourhood economies are equally diverse: Jamaicans are not the same as Bangladeshis, and so on. Nor are the long-time residents and old leading firms the same as either the neighbourhood enterprises or the new foreign moguls investing in global cities. It is the world that moves into the city.

These cities, whether in the global North or South, have become a strategic frontier zone for global corporate capital. Much of the work of forcing deregulation, privatisation, and new fiscal and monetary policies on the host governments had to do with creating the formal instruments to construct their equivalent of the old military “fort” of the historic frontier. Now the “fort” is the regulatory environment needed in city after city worldwide to ensure a global space for their operations.

Under these conditions, the work of making the public and the political in urban space becomes even more critical. There are multiple actors and multiple perspectives – that of the citizen, the foreign investor, the immigrant entrepreneur, the old oligarchy, the grandmother, professional men and women, and many more. Let me illustrate my point with one type of actor, major developers. The challenge here is how to contain or govern major developers, both local and foreign, who consider urban space a commodity, a good to be bought and traded. City residents, no matter where they live, should have a voice when major developments in a city centre absorb what was once public space, streets, urban tissue, into a privately built and owned mega-building.

The mantra of “economic development” might be enough for some major developments but it should not be enough of a justification for all major building projects. Gerald Frug’s argument in A Rule of Law for Cities comes to mind, that “…we need to open up the contestability of economic development policy…to a democratically organised institution [which] should represent people city-wide. The participants should be empowered to establish the city’s strategy for economic growth, with the experts advising the decision-makers rather than being the decision- makers. The goal is to include the very people left out in the reigning economic development strategy.”

Having a robust urban public space is critical at a time when national political space is increasingly dominated by powerful actors, both private and public, only minimally accountable to a city’s people. There is a kind of “public-making” work that can happen in urban space, and that helps us see the local and the silenced. Our (still) large complex global cities are one key space for this making: they are today a strategic frontier zone for those who lack power, those who are disadvantaged, outsiders, minorities who are discriminated against. The disadvantaged and excluded can gain presence in such cities, presence vis-à-vis power and presence vis-à-vis each other. This signals the possibility of a new type of politics, centred on new types of political actors. It is not simply a matter of having or not having power. These are new hybrid bases from which to act, spaces where the powerless can make history even when they are not empowered.

This emergent frontier-space at the heart of major global cities arises in a context of increasingly hardwired “borderings” inside cities and across cities. Gated communities are but the most visible representation of these borderings. The uses that global corporate capital makes of our cities are part of that hard bordering. The common assertion that we are a far less bordered world than 30 years ago only holds if we consider the traditional borders of the interstate system, and then only for the crossborder flow of capital, information and particular population groups. Far from moving towards a borderless world, let me argue that even as we lift some of these barriers for some sectors of our economies and society, these same sectors are actively making new types of borderings that are transversal and impenetrable. It is in this context that the complex global city becomes a frontier space with political consequences.

1 See http://www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead

Saskia Sassen is Robert S. Lynd Professor of Sociology at Columbia University and co-chairs its Committee on Global Thought.