Matthew Soules, professor at UBC, discusses the impact of capitalism on the built environment in Icebergs, Zombies and Ultra Thin
After the 2008 global economic collapse – sparked by reckless lending practices, the consolidation of mortgages into toxic financial products and sky-high oil prices – there was a wave of academic interest that involved a variety of disciplines. .
University professors in public policy, finance, real estate, sociology, and law all dug the roots of what happened. But according to Matthew Soules, associate professor at the UBC School of Architecture and Landscape Architecture, there has been very little exploration in his field of the impact of the financial bubble on building design.
“It’s for a good reason,” Soules told the Georgia Straight during a telephone interview. “It’s because we often don’t think about architecture [as] being so important for the economy and politics. “
Soules was not trained as an economist: his undergraduate degree was in history and fine arts before studying architecture. But he has long been interested in the economic dimensions of his profession.
He took a finance course at the Sloan School of Management at the Massachusetts Institute of Technology and studied real estate development at the John F. Kennedy School of Government at Harvard University. And over the years, he has questioned whether architects can offer a unique perspective on the global financial crisis, given their role in shaping the built environment.
Thus, in 2012, he applied for a federal research grant Social Sciences and Humanities Research Council to study this. His candidacy was accepted, allowing Soules to hire research assistant students to visit regions of the world where the speculative construction bubble burst most dramatically.
They started in Ireland in 2013 before moving to Spain and then to four US states: Florida, Arizona, Nevada and California.
“We took a drone and went to these overdeveloped wasteland and documented them,” Soules recalls.
Along the way, they spoke to local architects, real estate developers, town planners, academics and sociologists. Soules also studied what happened in Melbourne, London, Paris and cities in China.
He went on to publish articles and speak at conferences before realizing: the patterns of behavior that led to the 2008 collapse have never gone away.
In fact, it seems to him that architectural products are increasingly marketed as financial investments. The built environment was linked to financial markets through real estate investment trusts, securitized mortgages, and the entry of multibillion-dollar private equity groups, such as the Blackstone Group, into the housing market.
This led Soules to write his new book, Icebergs, zombies and ultra thin: architecture and capitalism in the 21st century, which has just been published by Princeton Architectural Press.
Wealth stored in real estate
He told the Law that too often the real estate conversation is framed poorly around race, which he called “misguided” and “wrong direction”. To demonstrate his point, he said he knew people who live in Point Gray with investment property in Kitsilano.
“The reality is that British Columbians are huge investors in our own real estate – and Canadians elsewhere in Canada – Canadians of all races and Americans of all races. Then, of course, the global community of all races, ”Soules said.
So what are the “icebergs” in the title of his book? This refers to a recent phenomenon in wealthy areas of the UK – like London’s Chelsea and Knightsbridge areas – where the super rich are building “very large extensions of underground basements for their homes”.
In some cases, Soules said, these underground bunkers have multiple floors, with swimming pools, cinemas, or space for car collections.
“This is… one of the things happening around this time as more and more wealth seeks to store itself in architecture,” he said. “So it’s sort of these underground storage vaults, these iceberg houses.
Pencil-thin towers make the housing more liquid
“Zombies” refers to sections of towns where there are empty houses sucking up the vitality of the neighborhoods.
“Pied-à-terre and second homes have existed for a long time,” recognizes Soules. “But more and more people are buying them around this time – second homes, third homes, and second homes.”
He noted that this is done for various reasons, but the result is that these second homes are often underutilized.
Meanwhile, “ultra thin” refers to the pencil-thin towers being developed in many cities. Vancouver was an incubator for these projects, even though its height restrictions prevented them from reaching the sky like those in other cities.
“These towers in New York are almost the climax of that thinking, but they are everywhere to varying degrees,” Soules said.
Once upon a time, he added, the credo was that all real estate is local. But nowadays it is becoming more and more global. And his book points out that in this era of “financial capitalism” there is an inherent pressure to make real estate markets more “liquid” – that is, more easily traded like other financial assets, such as stocks and bonds.
To make it liquid for the sake of finance, real estate is becoming less and less local, he said. “I think one of the main reasons it is becoming less local is that it is becoming less
And one way to reduce social entanglements is to reduce contact between apartment building residents, either by having one or two dwellings per floor, or by building vast underground living spaces under mansions.
“We are slowly, progressively building a less socially vital society where we literally relocate by reducing our contact with other humans,” Soules argued.
Architects can design vibrant communities
According to the second quarter forecast from the BC Real Estate Association, “the disproportionate appreciation in house prices over the past year is expected to continue to stimulate residential construction.” Around 40,000 new units are expected.
“This is in addition to an already large pipeline of units under construction, desperately needed for timely completion in supply-strapped British Columbia housing markets,” noted BCREA.
But as the supply continues to grow, it does not appear to sufficiently meet the demand from real estate investors. Prices continue to rise, even after immigration levels collapsed and the economy contracted during the pandemic.
Soules has not completely given up hope, pointing out that architects know how to create spaces that support vibrant communities.
But he also admitted that the financialization of real estate is so complex that architects alone cannot solve the problem.
“It will involve developers, financiers, politicians and the general public,” Soules said. “I think what’s great is that there are people talking about it.”