Comparing the relational work of developers

Producing space in Johannesburg, Toronto, London and Manila

In downtown Johannesburg, daring entrepreneurs have found that they can profitably reintroduce previously abandoned high-rise buildings back into the market by converting them into working-class rental accommodation (Mosselson, 2019). New markets have also been ‘discovered’ on the city’s periphery where owners of historically agricultural land supply entry-level detached housing to first-time black homeowners (Butcher, 2019). In the north east of the city, a Shanghai-based firm – attempting to diversify away from the flagging Chinese property market – bought an undeveloped site and planned to build a ‘new city’ for middle-class residents and commerce (Ballard and Harrison, 2019). Meanwhile, city authorities have worked to attract affordable housing developers into transit-oriented corridors in central parts of the city (Todes and Robinson, 2019).

A core commitment of the post-apartheid state has been the transformation of South African cities away from their segregated histories (e.g. RSA, 2012, 2016). Yet after a quarter of a century of democracy, many officials are exasperated over the persistence of segregated urban forms. As Harrison and Todes (2015) note, spatial transformation cannot be decreed through policy but must rather reckon with the ongoing production of post-apartheid urban space, not least by individual residents and the private sector. In South Africa’s largest conurbation, in which Johannesburg is embedded, the number of residential buildings of all sizes and types has increased by 60 per cent, from 2.1m in 2001 to 3.4m in 2016 (Hamann, 2018), and commercial buildings have increased by 30 per cent over the same period (Naidoo, 2019). Within these summary numbers, there are a plethora of markets ranging from elite golf estates to self-built housing of the urban poor.

Developers are key actors within this story but are so differentiated that they are almost unrecognisable to one another and remain poorly understood by those concerned with vanquishing the apartheid city. In 2016, researchers, developers and municipal officials gathered at an ‘Urban Lab’, a workshop held at the University of the Witwatersrand, Johannesburg, to understand the role of the developer in the city. The workshop, and the theme issue that has resulted, was liberated from what might have been a parochial discussion by the participation of scholars investigating developers in other cities, including Manila (Mouton and Shatkin, 2019), Toronto (Leffers and Wekerle, 2019) and London (Brill, 2019). Contrasts between these contexts underscored way that these actors, their interests and their relationships are ‘overdetermined’ by many different embedded processes and practices (see Hall, 1980: 325). Furthermore, comparisons, even of quite unlikely cases (Robinson, 2016), enabled us to ‘probe the constitutive connections and family resemblances’ across cases by using abstractions and appreciating broader conjunctures (Peck, 2017: 8). In heuristic terms, comparative exercises can help identify common questions that can be applied across all cases, even if the answer from each case is particular.

Making the work of developers the focus of analysis helps to defetishise the parts of the built environment that they produce. It may seem that the work of developers is to produce buildings, infrastructure and other elements of the built environment in order to generate returns, and indeed this is their primary goal. Yet much of the work of developers is not in the production of the material environment per se, but is in fact directed to building, sustaining, managing and responding to relationships and networks (Figure 1). Recognising and examining the social forms of work undertaken by developers and the conditions that shape, and are shaped by, this work helps to demystify the built spaces that we encounter (see Cook et al., 2007; Watts, 2014). The products that developers bring to the market are produced by configurations of actors who have to sustain partnerships with one another to meet their own interests within and beyond the production process.

Literature on developers is, of course, alive to the multiple relationships within which developers act. Stretching across scales and places, these include relationships with capitalists and landowners (Harvey, 2006), investors and finance (Rouanet and Halbert, 2016; Sanfelici and Halbert, 2019; Searle, 2013), state actors and planners (Adams and Tiesdell, 2010; Healey, 1994), construction firms and labour (Buckley, 2014), wider ‘project ecologies’ of consultants and experts (Henneberry and Parris, 2013; Robin, 2018), civil society, activist city makers with their own ambitions and multiple logics (Rouanet and Halbert, 2016) and even mafias (Weinstein, 2008). Individual actors may move between state, private sector and civil society, creating new network connections through those movements. These networks also utilise financial instruments (Weber, 2015), legal frameworks and project sites or places as spatial fixes (Charney, 2003), ‘anchoring agents’ (Theurillat and Crevoisier, 2014) or risk filters (Halbert and Rouanet, 2014).

In this editorial we focus on two themes that differentiate the various case studies. First, we consider the plurality of relationships that are enacted across a diverse range of interests and actors in the initiation of development projects. We ask which actors initiate development and what are their motivations for acting in urban space and for establishing collaborative relationships in doing so? How do actors with quite distinct interests – sometimes compatible and sometimes at odds with each other – work to translate their interests to one other? Which actors become allies or partners in these endeavours; how do these shift over time, place and political circumstances? Which actors offer resistance or visions that contradict the proposals of those initiating a development? The second theme draws attention to the ways in which relationships are enacted through the material production of space itself: how are development firms positioned within a set of material arrangements and value chains which entrain other firms and actors, all of whom are eager to both add and extract value, while producing new elements of the built environment?

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Figure 1.

‘Building Relationships’ branding for a firm behind a project in Rosebank, Johannesburg (Authors, 2019).

Interests of developers in relation to other interests

In the literature on urban development, developers’ interests include utility maximisation and accumulation (Ball, 2002; Harvey, 2006; Herbert and Murray, 2015), money laundering (Weinstein, 2008), speculation (Weber, 2015) and a sink for surplus cash in contexts with poor banking systems and limited investment opportunities (Huchzermeyer, 2011). Other research emphasizes how deeply habituated practice and ‘building cultures’ drive the production of space (Antwi and Henneberry, 1995; Davis, 2006; Guy et al., 2002) as well as more agentic strategies, visions and personalities (Coiacetto, 2001; Logan and Molotch, 2007). Often, a combination of logics and rationalities are at play, both economic and social (Rouanet and Halbert, 2016), and are negotiated through pragmatic compromises (Fainstein, 2001; Henneberry and Parris, 2013). Some development, such as suburban sprawl, is self-consciously suboptimal, but nevertheless profitable (Mohamed, 2006).

Establishing what makes a project attractive or logical for developers does not fully explicate why projects come into being in the first place or how they are shaped and redirected. Developers’ interests exist in relation to, and can be generated by, other interests. A comparative lens helps to contextualise the motivations driving developers in relation to other interests. In column A of Table 1, we differentiate whether projects analysed in our theme issue were initiated by private sector developers (single underline) or state actors (dashed underline) or both. In only two cases (4 and 6), do private sector developers feature as independent originators of development. They are motivated by the exchange values of their developments in the first instance, whether through sales to end users or by selling on to subsequent developers after having raised the value of land. In these two cases, state actors did not jointly initiate these projects but rather responded to developers’ projects in contradictory ways, with some supporting (column B) and others resisting aspects of the development (column C). Crucially, in Ballard and Harrison (2019), Johannesburg municipal government’s resistance contributed to an international investor’s decision to abandon its project. This state resistance or support could also change over time, under different political administrations and pressures from civil society, as in Toronto (Leffers and Wekerle, 2019).

In all other cases, however, state actors played a proactive role in proposing or jointly instigating development (column A, rows 1, 2, 3, 5, 7). State actors in both Johannesburg and Manila sought to achieve spatial transformation by incentivising or directly funding development. In Johannesburg, they framed their goals as social gains, specifically to provide access to urban space for working-class or lower-middle-class residents for whom housing had historically been undersupplied. There was no clear division between the social interests of state actors and the economic interests of the private sector. In cases 1 and 2, private sector actors articulated socially progressive intentions and rejected models of gentrification because they would be neither economically nor socially appropriate (Mosselson, 2019). In a number of cases, state actors saw the economic attractiveness of development as a core goal in and of itself, even where they also saw it as a means to an end.

Financial actors in these studies (thick underline in column B) pursued their interests proactively or reactively through state or developer-initiated projects. The increasing financialisation of urban development – treating everything from land to infrastructure to condominiums as fungible tradable financial assets (see Searle, 2016) – might drive the production of space in some instances: through new asset classes from which to capture rental streams, such as affordable housing in Johannesburg (Mosselson, 2019; Todes and Robinson, 2019), or in the ultimate power financiers had to ‘pull the plug’ as the Bank of China did in Modderfontein (Ballard and Harrison, 2019). But this is not a given. Our cases demonstrate other and older practices of developers in negotiating their relationships with finance through local ‘spatial capital’ (Mosselson, 2019). Some have deep enough pockets to survive financial famines – such as after the 2016 European Union referendum in the UK (Brill, 2019), or the pullback of banks from development finance after the 2008 property crash in Johannesburg (Butcher, 2019). The interests of financiers can intersect in unexpected ways with the interests of state actors in urban regeneration or reconfiguring the spatial logic of city building for other use values such as affordable housing (Mosselson, 2019; Todes and Robinson, 2019). State actors themselves were financiers in several of the cases (Mouton and Shatkin, 2019; Todes and Robinson, 2019).

So far, we have compared the way in which studies in this theme issue reveal a series of interests that come together in order to initiate a development project, partner with those initiating a project, or attempt to resist or reshape a project. In the following section, we consider the relationships that come about in the production process itself.

An exploded view of ‘the developer’

In order to analyse production processes in general, Hopkins and Wallerstein (1986: 159) proposed that it is instructive to start with the point of a product’s completion and move backwards to unravel the coordinated ‘network of labour and production processes’ responsible for various elements. Where firms were once the primary unit of analysis, economic geographers are increasingly attentive to interactions among actors within firms – as ‘unit[s] embodying multiple, potentially conflicting, interests’ (Boggs and Rantisi, 2003: 112) – and wider networks (Yeung, 2005: 37). Literature on project ecologies (Grabher, 2002; Henneberry and Parris, 2013) shows how project networks congeal episodically through the collaboration of interdependent networks of teams, firms, knowledge communities and personal relationships of trust, between which resources flow within particular institutional contexts (made up of both ‘organisational’ and ‘social’ layers) (Henneberry and Parris, 2013: 231–232).

We might relate these insights to literatures on firm specialisation, which make a distinction between Fordist systems, in which functions are vertically integrated within a single firm, and post-Fordist systems, where many specialist firms add value to a production process under the coordination of lead actors (Arrighi, 2007). As Gereffi et al. (2009) and others have argued, control over particular functions is an enormous source of leverage and establishes the terms under which actors make money. In manufacturing, more powerful actors attempt to allocate functions to themselves that have less competition and for which returns are higher, and they outsource work for which there is much competition and returns are lower. In other words, the distribution of power and benefits within a value chain, production network or project ecology is uneven.

In this collection, some of the cases exhibited instances of outsourcing in which the lead developer firm played a largely coordinating function, subcontracting work on environmental assessments, civil engineering and planning. The role of coordinator may shift during the development process (Brill, 2019) – with consultants rather than developers taking the lead at times (Ballard and Harrison, 2019; Brill, 2019). In particularly complex developments, there is a consortium rather than a single developer firm, where opaque coordination arrangements are themselves a source of power (Brill, 2019).

However, in other cases developers had internalised a wide range of functions. Entry-level suburban development in Johannesburg is, in the case presented here, vertically integrated, with developers taking responsibility for land assembly and land servicing, partially financing the costs from their own capital; marketing through in-house sales representatives; building housing through in-house construction divisions; vetting applicants’ credit worthiness; providing loans; and collecting monthly payments (Butcher, 2019). These developers manage complexity by offering highly standardised products with no option to customise. The routinisation and institutionalisation of these internalised functions was a source of market power for some (Butcher, 2019; Leffers and Wekerle, 2019). In Manila, developers were part of much wider vertically-integrated value chains under conglomerate control (Mouton and Shatkin, 2019).

Differentiating the relational work of developers

The work of developers consists not only of the material production of space the material production of space, but also to social forms of production – relational work as we call it. The interests of developers in going ahead with a project at all exist alongside the interests of state actors, finance and civil society. As a comparison of the seven studies in this theme issue shows, state actors do not only set the broad market conditions to which developers respond, they are also direct instigators of projects, or indeed they can resist those embarking on projects. It would be incorrect to assume, on the basis of this evidence, a diminishing role of the state, although the interests of state actors have contradictory effects on the accumulation interests of developers. Moreover, the cases show the ways in which the private sector is sometimes motivated by more-than-accumulation imperatives.

To the extent that there is adequate agreement on the merits of a project to proceed in preparing and producing it, this work is undertaken not by a discrete actor but rather a variety of actors within the lead firm and beyond it. This point has been well developed in both economic geography and literature on developers. In our comparison of cases in this collection we note the differentiation between developers who vertically integrate functions within their firm and those who build relationships beyond their firms, either with more or less equal status consortium partners or outsourced specialisations and functions. There is no inevitability towards the ever greater division of labour; specialisation in some cases can exist alongside functional integration in others. The assemblage that constitutes and forms around the developer can reflect powerful actors’ calculus on the advantages they might gain. An exploded view of the developer can help to disaggregate the many actors involved, their different roles, the ways in which they are connected and how those actors, roles and connections shift over time. In turn, this can advance our understanding of how the production of space unfolds and the ways in which power relations in urban development politics are negotiated.