Dubai: Final Thoughts

The ghosts of LA, Las Vegas & NYC mix and mingle in the UAE.

It’s been a week since I returned to the US from the United Arab Emirates. The best way for me to describe Dubai to Americans is to say that it’s a strange combination of the three well known US cities; New York, Los Angeles and Las Vegas. It is a city, like Los Angeles, where every destination is linked by a freeway. There are virtually no functional avenues or boulevards. A city, like Vegas, where most large buildings are iconic in nature and intended to shock and amaze the average person with engineering feats and architectural marvels. And thirdly a city, a bit like New York, where everywhere you look, you see skyscrapers. Some of them are truly magnificent and capture everything I love about the form; but unlike NYC, Dubai lacks the urban fabric. The places in between. There are so few hole-in-the-wall places worth exploring, because there is no wall.

To be fair, there are two older neighborhoods (Bur Dubai and Deira) where urban fabric is the norm, but they are both eyed with some level of contempt by city planners and are marked for destruction. These neighborhoods are where the action is and they are actually quite remarkable. As other neighborhoods like the Dubai Marina, The Greens, and Jumeriah struggle to maintain value, Bur Dubai and Deira will be affected the least.

This leads to my second key observation: Dubai seems to have the very real and common problem of value retention with age, much like most of the American suburbs. It would seem that most buildings over ten years old are slated for the wrecking ball if they haven’t been demolished already. Fortunately this is a problem that will eventually go away as some buildings are spared and the age of the city diversifies. My biggest question is how will they patina. The Empire State building has become increasingly valuable over time, will these? At present, the design of most of these buildings and their neighborhoods makes them difficult to maintain and challenging to repurpose for adaptive re-use. It will be interesting to re-visit the city over time, to see how condo buildings have been converted to offices, or dead malls into living neighborhoods. Fortunately for the Emiratis the Americans will have to tackle this problem first.

My final thought is on velocity and market segment. In our new market reality of limited credit and less flexible lending, there are many buildings sitting vacant in what should be desirable neighborhoods. This leaves the neighborhood relatively lifeless and exposes it to the possibility of urban blight. Dubai has never seen a neighborhood devalue or become dangerous. What will happen if the target demographic never moves to a half built neighborhood? There are still newer ones on the books, waiting to be built as soon as the economy turns around. How will the built environment absorb an unexpected population of differing means and culture? I believe the best way to handle such a scenario is simply to accept it and open the door for the neighborhood to reinvent itself at the smaller scale. Poor neighborhoods need smaller, cheaper spaces in order to nurture new growth. Cheaper will happen with time, but the zoning code must also allow for storefronts to be modified, apartments to be split in two and offices to be resized. This is what NYC has done so well for so long, what Los Angeles is still learning and what Vegas will soon experience. I hope that Sheikh Mohammed recognizes the opportunity for appropriate infill when the time is right and allows it to happen naturally.

Direction of the Industry: Part 4

4) Green Technology, the 2030 plan and Original Green – There are several new city plans including PLANYC (2030 plan) and the Abu Dhabi 2030 Plan that talk at length about a city with intelligently designed transit, water, electrical, communications and other building infrastructure. They also heavily emphasize sustainability goals. I believe the concepts behind the plan are relevant to the city of the future in the extreme. Conservation of resources is not just important environmentally, it is fiscally intelligent as well. The enthusiasm for green technology will continue to drive improvements in the real estate products that can be provided, and I have done my best to stay on top of the subject. I am a LEED Accredited Professional, attended the annual GREENbuild conference and the Congress for the New Urbanism this year and have been exploring a much deeper level of the movement.

I think the USGBC and other rating organizations like it (BREEAM, CASBEE, CaGBC, GreenGlobes, etc.) are achieving meaningful results through the use of standards which (for better or worse) are increasingly becoming law across the globe. International real estate investors need to understand the principles and goals behind these systems as they become increasingly popular in the marketplace and in regulation.

I also believe that the more fundamental solution to our environmental problems comes from a historical understanding of transportation, planning and architecture. Before the US and British industrial revolutions, all energy was expensive. There are literally thousands of years of building tradition in cities from all types of climates all around the world. These traditions incorporate the best practices from generations of master builders and end users. I am very much in favor of technologically modern buildings that make financial sense in the current economy, but I am also very interested learning as much as possible from our ancestors.

This leads to a concept called the Original Green, which discusses the more fundamental issues I’m referring to. As architect and author Steve Mouzon puts it, “If a building cannot be loved, it will not last. And its carbon footprint is absolutely meaningless once its parts have been hauled off to the landfill.” In a nutshell he argues the following:

  1. We must first build sustainable places before it is meaningful to even discuss sustainable buildings.
  2. Sustainable places should be nourishing, accessible, serviceable, and secure.
  3. Sustainable buildings should be lovable, durable, flexible, and frugal.

These tenants encompass the entire green movement and are the universal principals Abu Dhabi 2030 seems to be based on. The Congress for the New Urbanism (CNU) is an organization I have been involved with for the past five years. My membership in this organization has provided inspiration and perspective for most of my ideas on environmentalism in the real estate industry. The CNU works to create compact, walkable and diverse places that are inherently sustainable and enjoyable to live in. The Original Green concepts derive from many of the principles discovered by the CNU.