With the world economy at the beginning of a seemingly disastrous recession, many global industries are experiencing the toughest times in decades. The field of architecture is no exception.
The Architectural Billing Index (ABI) is a fairly new but highly recognized tool that is known as the profession’s best economic indicator.
The American Institute of Architects (AIA) administers a business survey to the largest commercial architects in the United States. The responses to the survey reflect a precise correlation between architectural billings and construction spending records. A total score of 50 or above indicates a rise in billings, a score below 50 indicates a decrease. With the score reaching its lowest total in the ABI’s thirteen year history
(34.7 for the month of November 2008) and having consistently scored below 50 for the past eleven months, it is no secret that the industry is going through a major slump. With projects ranging from billion-dollar high-rises to 300k home renovations stalling or closing, the industry’s shortcoming are evident at all levels.
Dubai, which just months ago was considered the forefront for architectural and real estate prowess, is now suffering from some of the hardest design and development setbacks the U.A.E. has ever seen. Just days ago,
Nakheel PJSC, the developer that is financing the construction of the latest
“tallest building in the world” was forced to merge some of the available units. This move takes a crucial toll on the original design of the building as well as the building’s overall intentions and purpose. The decision to make this move is more startling to architects than it is developers, considering it is the architect’s design that is being compromised in order to preserve the overall project. This announcement follows last months traumatizing decree that construction on the building itself will be delayed. The two main culprits of this stop in architectural progress are the global financial market’s current limitations in lending as well as
Dubai’s 25% drop in property prices from their peak in September. Seen more as an inspirational blow to architects than anything else, the come down of Dubai’s architectural aptitude is a depressing sign of the field’s current status. It was only months ago that “starchitects” such as
Zaha Hadid,
Rem Koolhaas, and
Herzog & de Meuron were unveiling projects that were incomparable to anything else in the world. Projects that were viewed as inspirational masterpieces to the whole architectural community are now being subject to doubt. For architects, this event is comparable to a small child watching as Disneyland is forced to close its doors or if a musician heard the news that
Coachella was being cancelled. Is it possible that that which Dubai represents architecturally will survive the financial climate? Hopefully. But how much of an impact will this have on architects, developers that finance projects, and our creative ideas themselves?
Another incident that is being seen as a bizarre but catastrophic morale bruiser is the recent torching of the TVCC building in Beijing, China. The giant CCTV complex buildings consist of the China Central Television Station tower, and a separate but adjacent Television Cultural Center tower which was meant to contain a luxury hotel, cultural center, and retail establishments.
Both buildings are questionably
Rem Koolhaas’ and Ole Scheeren’s greatest design achievements yet. While the CCTV building opened in December of 2008, the TVCC was due to open in May 2009. In the peculiar incident, a
Lantern Festival fireworks accident was the cause of the ignition of the building. A tradition in Chinese culture, the Lantern Festival commemorates the conclusion of the Chinese New Year and involves children going out at night to play under the light of fireworks. Ironically, a CCTV employee ignited the firework that lit the neighboring building aflame. The firework hit the ground floor of the TVCC building, and then grew to consume the building. Koolhaas and Scheeren were originally criticized for their participation in the construction of an $800 million building housing an organization (CCTV) who’s goal is wide spread censorship and questionable human rights activities. However, Koolhaas later expressed his intentions for design contributing to political evolution when he said,
“with an effort to support within [China's] current situation the forces that we think are progressive and well-intentioned… We’ve given them a building that will allow them to mutate.” While the intentions of the building might have been in question, there is no denying the architectural masterpiece that the CCTV campus is. Clad in a beautiful zinc titanium alloy and shaped as a distorted boot, the TVCC building was intended to be the “little brother” to the giant CCTV building. Nicknamed the “fun place” by architects that designed the two towers, TVCC was supposed to be the more lighthearted piece of the monolithic CCTV structure. While the children of Beijing might have been treated with the greatest fire display in recent Lantern Festival history, the architectural community is shocked at the destruction of an icon that didn’t get to be. While it is uncertain what the plans are for restoring the burnt tower, the emotional impact of watching the masterpiece erupt in flames is devastating. But almost more shocking than the fire itself, the cause of hundreds of millions of dollars in damage was a $5 bottle rocket. The ability of a colossal structure like the TVCC building to be so easily destroyed must shock the core of an architect’s thought process.
The world economy’s impact on the architecture community is also being seen closer to home. Plans for Downtown Los Angeles’ revitalization are being grounded as funds for projects are dwindling. Four separate plans for $1 billion plus projects have been frozen in past weeks.
Related Cos.’ $3 billion development was just put on hold,
Moinian Group’s $1 billion project has been halted,
Houk Development Company’s $1.3 billion skyscraper has been arrested, and
IDS Real Estate Group’s $1 billion residential tower has also been stopped.
Oskar Brecher, director of development for the New York-based Moinian Group said,
“The credit markets are all seized up, especially for a project of this size. The ability of banks to finance large projects... is just nonexistent.” Developers of downtown Los Angeles which have had such ambitious plans for revitalization are being forced to sit back and wait while the larger powers that be are trying to deal with the economic situation. As a resident of downtown Los Angeles I too am being forced to sit back and watch idly as my neighborhood sits at a middle-ground between successful urban metropolis and desolate cityscape. I can only hope that developers, residents, and those thinking of future plans for downtown stick the course and understand that times will eventually change. It is important for people to consider the success of
L.A. Live when considering whether or not to follow through with plans for other billion dollar projects downtown. While I understand that my professional expertise probably isn’t as relevant in solving this problem as a developer’s, it is important to acknowledge the architect’s role in the equation at hand. A designer’s fundamental upbringing could play an integral part in the diagnosis and prevention of future meltdowns.
Understanding that architecture and construction comprise a large portion of the nation's economic status, Congress recently passed
President Obama’s $838 billion economic stimulus package that incorporates many architecturally related proposals. The package primarily focuses on the demand for energy-efficient buildings and the proposal for federal facilities. The details of the plan consist of $7.7 billion for the
U.S. General Services Administration (GSA) $6 billion being allocated specifically towards energy-efficient upgrades, $1 billion for border station construction projects/upgrades, and $10 billion for U.S. defense projects. While this proposal offers a great deal of encouragement to the architectural community, many are already doubting whether this is enough of a spark to affect the architectural community itself. One crucial issue is that the government is saying that there are approximately $10 billion in projects that are “ready-to-go”, meaning that groundwork could begin as soon as needed. If this were the case, the role of the architect is being skipped. The priorities of the GSA have a lot to do with who gets to benefit from the stimulus package. Kevin Kampschroer, director of the GSA’s Office of Federal High-Performance Green Buildings said,
“If we have a design that was done five years ago, before the Energy Policy Act of 2005 was passed, there would be work needed to bring it up to today’s expectations.” This is promising, but the beginnings of a neglecting undertone already seem to be forming in the statement. Another issue at stake is what role the small architecture firms might play in the package. In order to nurture long term economic success, the stimulus package needs to include smaller firms in some way. It is unclear at this point how it will plan to do so.
While the economy has caused a lot of decline in design community, there are still dynamic projects that have remained afloat. For instance, the $198 million
Spaceport America Project is still underway in the desert of Upham, New Mexico. Architect
Norman Foster designed the project which is intended to accommodate up to five spacecraft. New Mexico Governor Bill Richardson announced that the state just signed a 20 year lease with
Virgin Galactic to solidify the project. Another intriguing art project that has taken form due to the economy is a collection of photographs taken by Japanese artist
Todd Hido. The exhibit documents the interior of foreclosed homes. Now we can sleep peacefully at night knowing that while artists wallets might be hurting during the economic crunch, at least their creative spirit hasn’t been harmed.
Being a resident of California my entire life, I too am concerned for the condition of the state as a whole. I appreciate your diligent analysis of the irresponsibility’s of the state legislature in passing the new budget with its lack of green initiative. While I can recognize the serious ramifications of passing the budget with the absence of ecological reform, I think it is also important to consider how grave the California financial crisis is as a whole. The California unemployment rate is almost at 10%, the state’s total debt ($42 billion) rivals that of many developed countries, and the darkest clouds of the recession are still to come. With no end in sight, it is a top priority to have a budget laid out and initiated as quickly as possible, even if that means that some obvious issues are negated. I can appreciate you mentioning the serious health factors at stake, but you might be expecting a slight bit too much from California. It is quite the feat to have our state’s most important budget proposal thought up, written out, passed in legislature, and executed. Arguably the toughest of those processes is going through the legislative process. I’m sure it is safe to assume that careful consideration was given to the grueling nature of the process while the budget was being drafted. You mentioned yourself, “…months of ugly stalemate” were the cause of the premature nature of the budget proposal.
I find it interesting how it was only 20 years ago that the notion of moving to the suburbs was deemed the most socially accepted / conscious choice an American young professional could make. It’s exciting to watch as writers like yourself are beginning to note the obvious inconveniences and general incompetence associated with the suburban American lifestyle. It’s encouraging to hear intelligent factual analysis begin to be incorporated in discussion of the fallacies of suburban neighborhoods. As a designer, the notion of a makeshift community evolving arbitrarily 30 miles away from all relevant forms of life is innately flawed. I am glad to hear the scientific community contribute to the hopeful demise of the suburban routine. I think it is going to be extremely thrilling to watch as environmental concerns begin to play a greater factor in determining urban sprawl than out of date social norms.
