Wednesday, May 9, 2012

Block Size & "Efficiency" of Scale

There is a concept in development, particularly with regards to retail buildings, that the bigger a building is the more spread out, thus diluted, and in turned lessened your overall costs are to buy the land, build the building, and operate it.  I guess it rhymes with the similarly pervasive modern corporate ideology of 'more with less.'  

It's a pretty dumb concept.  Not dumb in that it is particularly incorrect.  There are truths within it.  But that it is an abstraction that doesn't differentiate nor take into account other complexities and agents at work.  Like any statistic.  Applied too liberally and the pitfalls are not a matter of if, but when.  With regards to cities and urban development, there are two big blind spots that come to mind undermining the big picture for the sake of the small (or small-minded):
  • It doesn't differentiate hierarchical values within space.  Then properly align those values to appropriate values relating to context.  One simple gradient when thinking about a typical building whether it be residential, office, or retail is that storefronts, windows, and views are inherently more valuable than interior space.  In other words, the perimeter of buildings is the most valuable square footage.  While this can factor into which space the boss of a business takes in an officeA big box retailer assumes efficiency of scale because it has storage or warehouse space sharing the same roof as the storefront/interface/exchange zone.  This is not locationally nor land use efficient in terms of real estate pricing because you would put the lesser value square footage where real estate costs less.  In other words, warehousing out to the edge of town on less valuable dirt.  (Caveat here being that in sprawl, all dirt is cheap and therefore these "dumb" efficiencies of scale make sense.  Similarly note, there is really no storefront.  Why build windows when you can do cinder block walls.
  • It doesn't take into account efficiencies in the surrounding movement system.  Bigger block size condenses movement onto fewer, less adaptable corridors.  Minimizing the network.  If there are only a limited few ways to get around, if anything happens (say a car accident) along any of those corridors, other moving parts can't reroute as easily.  The overall system is less interconnected with each other.  Further, the small blocks discipline development.  Essentially forcing it upwards into density.  I say "forcing" it, but really it is a rational response to a system in balance.  Movement isn't slower because of the increased intersections (stop lights), but sped up because everything is in greater proximity.  You're not going as far, opening up more transportation options - thus, infusing an additional level of complexity and intelligence into the users and in turn the system in whole, ie the city.  You can bike, you can walk, you can drive.  You can even take transit, because the amenity of proximity leads to density and therefore tax base to support and ride otherwise cost-prohibitive transit infrastructure.

The point being, that within the narrow purview of "efficiencies of scale," of limiting costs of infrastructure upon the city (bigger block sizes, less roads) or minimizing overall building costs on per square foot basis has its own limitations or diminishing returns.  
Think of a beehive.  There is a balance between usable and storage space with movement space.  If the bees veered too far in either direction it wouldn't work as well.  City form has similar limitations and necessary balancing acts currently out of balance.  Here's why:

Below are three slides (24 thru 26) from the full highway tear-out presentation.  The entire first half of the presentation is a theoretical critique of contemporary urban planning and development built within the confines of broken and autocratic transportation planning.

The above slide illustrates the disparity between applied or 'planned' infrastructure that doesn't suit its purpose.  The image on the left shows built infrastructure the invisible city made apparent and the infrastructure which doesn't match our natural desire lines.  

The above image shows the movement networks of centrally planned ancient Rome and the highly adapted modern Rome.  There's a rational order and grandiosity applied to the planned, but it doesn't match the needs of the people.  As expressed over 2000 years, we begin to 'erode' the big blocks into more suitable smaller blocks.

When move in straighter lines when wanting to save time, to decrease dissatisfaction.  Alternatively, when wanting to spend time in desirable places, we aim to maximize satisfaction.  Only a more complex, tighter knit grid can accommodate dual purposes of public space.

Lastly, there is the issue of maximized real estate value.  Here is the data from an exercise in more accurately evaluating the 'efficiencies' of large blocks/buildings vs. small blocks, if you can't or won't zoom:

First, I scaled the drawings and outlined the buildings.  Then I measured the linear distance of all the perimeters of the buidlings.  As you can see there is more than double the building perimeter total length in the smaller block than the larger block network.  

Total Building Frontage (linear):
Ancient Big Blocks: 11859
Modern Small Blocks: 27977
2.36x more linear frontage.

Next, I measured the overall area of all the buildings on site within the study area.  As it turns out, the smaller blocks actually yield more overall Floor Area (note: this does not count multiple floors or density).  The reason is that the more complex movement network allows for narrower roads rather than fewer bigger roads.  And since grandiosity is generally counter to human comfort, the open spaces are inherently smaller.  Though, as you can see Piazza Navona retains its shape, but is more accessible rather than closed off from surroundings.

Ancient Big Blocks: 355770
Modern Small Blocks: 419655
Modern small blocks have 1.18x more square footage.

If we buy into the idea that building frontage is worth more than interior building space, which is a pretty safe assumption, then we can establish a value difference.  For argument sake, I established a simple dichotomy.  Within the first 10 feet of building depth is worth double what the interior space is.  

As you can see the 18% advantage in overall square footage turns into a 47% premium in overall value of the building.

Ancient Big Blocks: $7,115,400
Modern Small Blocks: $10,491,375
147% more value due to increased storefront space.

If we extrude that hierarchical value over four stories for office or residential above retail, the effect is amplified.

Ancient Big Blocks: $28,461,600
Modern Small Blocks: $41,965,500
$13.5 million more for the small block style of development


Ancient Big Blocks:  $31.5  / sq.ft. of single-story floor area
Modern Small Blocks: $46.53/ sq.ft of single-story floor area
Verdict: 50% premium for small street & block structure.

 Needless to say, the highly adapted and evolved to suit human use and habitat performs far better than the 'planned.'  I say planned somewhat derisively, but there is still a need for planning.  It just has to be more in line with actual human use.  Misteps and trial/error are inevitable and necessary.  The key to planning and development is reduce (or skip altogether) the lag time between planning, design, and ultimately evolved end state to ensure success, return on investment, and lasting value for investors, developers, and users alike.

I understand fully that this is another formulaic abstraction.  The point is rhetorical. In summary, we're throwing away value by chasing after an abstract and false ideal of efficiencies of scale by putting warehouse and storefront together in the same building to save costs.  What's that saying, "ain't nuthin' more expensive than free?"