Abstract
Built Up is a curiosity. Two types of book have been written about real estate. There are course texts, designed for aspiring professionals, and there are academic assessments of the process and/or outcome of land development. The former, exemplified by the series that Ronald Racster has written or co-authored, cover the nuts and bolts and are neutral or positive in tone. The latter, whether empirical or theoretical in character, pay more attention to the consequences and are almost invariably critical. Built Up tries to bridge the two.
The author’s goal, drawing on historical examples and diverse theoretical statements, is to develop a ‘theory of real estate development’ (p. 10). She is responding to the scepticism with which developers, and real estate as a discipline, are viewed. Her underlying purpose is ‘to compel the formation of an intellectual discipline by which the industry will be more critical and self-evaluating, visionary, and socially responsible’ (p. 13). She suggests that history offers valuable clues, along with examples of good practice, which could usefully inform and inspire innovations today. In particular, she claims that we should pay attention to 17th-century London, which she argues is when capitalism entered and transformed the industry.
Accordingly, the book is divided into three parts, all focused on residential development. In the first, she traces the emergence of the real estate market in London. This involved the commodification of land and its conversion into real estate, the emergence of specialised forms and agencies of finance and most fundamentally the ‘concept of real property as being a stable, owned, and traded asset’ (p. 10). In the book’s second part, Derrington examines the actual process of modern-style real estate development, and estate planning, as it matured in that period. Here she concentrates our attention on two entrepreneurs, John Russell and Thomas Wriothesley, both well-connected with the court of Henry VIII, and Nicholas Barbon who, among other things, brought finance into all aspects of the development process. Although she does not go into details, the author suggests that the ideas and practices developed in London then spread nation-wide, and indeed beyond into the British colonies. In sum, she claims that these innovations ‘produced an urban environment more equitable and beneficial to all’ (p. 9).
The third part of the book draws lessons from this quite-distant past. Initially, Derrington asserts that the objectives of real estate development are, or should be, not only to realise a competitive return but also ‘to provide habitation suitable to the needs of the intended occupants’ while ‘attending to the public realm’ (p. 325). To these three, in the conclusion she adds a fourth: effective ‘management of the business enterprise’ (p. 389). In this section, she refers to a wide range of authors, including those such as David Harvey who have been very critical of capitalist forms of urban development. Nonetheless, she concludes that entrepreneurs are fully capable of undertaking socially responsible development, and that indeed many have done so. She suggests that they have been able to ‘refine and perpetuate an ethical and cooperative culture, as well as being relentless in strengthening their professional networks’ (p. 381). As a statement about the past, this is debatable; as a vision for the future, it is, shall we say, idealistic.
Although it is not clear from the publisher’s blurb, or indeed from the introduction, Built Up is a text, as Derrington later puts it, ‘for the education of the future real estate developer’ (p. 395). Given the intended readership, I can only applaud her efforts to persuade prospective developers to work cooperatively with government and to consider wider public goals. If the argument sometimes sounds naïve, it is worth emphasising that the author can speak from experience. A real estate professor at Columbia, she has degrees in Architecture and Business from Berkeley and Harvard, as well as extensive experience in corporate real estate. Still, I wonder how effective her case will be. After all, as she is well aware, even those developers who do have social goals are businesspeople. First and last, they must pay attention to the bottom line. Indeed, given that land development is a long-drawn-out process (especially these days), one which is therefore unusually subject to booms and busts and inherently risky, few developers can afford to be satisfied only with a ‘competitive return’. Most grab what they can while the going is good.
And then Derrington could surely have made the case more effectively. The book is well-illustrated, which is appropriate given the subject, but the organisation is in some ways odd: instead of being placed at the beginning, the major literature review is saved for Chapter 10. The historical material is interesting and does effectively illustrate her argument: historians would surely agree that 17th-century London saw some significant innovations. But they would also point out that drawing direct lessons from the past is always problematic. Circumstances change, and in ways that can transform calculation. Seventeenth-century innovators were operating in a very different social, political and global financial context, while much of the wheeling and dealing was intended to consolidate the power of landed estates – which is not a good takeaway.
Leaving aside these quibbles, it is unclear whether most potential developers will have the patience, or curiosity, to be engaged by historical detail. More recent examples, situated in the current context of international finance, could have illustrated the argument just as effectively while appearing more relevant. And then there is the question of style. Larry Summers apparently believes that Built Up is not only ‘deeply incisive’ but also ‘great fun’, but this reader found much of the prose to be heavy going.
It is moot whether the perspectives of, say, Ronald Racster and David Harvey can be reconciled. At the very least, there are deep and enduring tensions. Downplaying these, Derrington believes that the task is do-able. It will be interesting to see how many readers are persuaded, and especially whether they act on that basis.
