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Key Messages

Managing city growth requires that city leaders solve a three-dimensional problem.

• City leaders will need to plan and prepare for urban growth along all three dimensions¡ªnot only the vertical layering and infill development that will be enabled by future economic productivity, but also horizontal growth that will occur at the city¡¯s edge.

City growth is driven by economic fundamentals.

• The forces that peak a city¡¯s skyline, signaling high demand for floor space in the central business district, are those of economic agglomeration. They are the same forces that drive production of goods and job creation.

Flexible regulations are needed for urban redevelopment.

• Regulations need to be adaptable to changing demand and supply conditions, anticipating the emergence of new uses for scarce urban land.
• Also important here is to conserve irreplaceable cultural and natural amenities¡ªthese have not only intangible permanent value, but also a unique potential to create economic value and attract investment through neighborhood regeneration.

• A principal factor in setting a city¡¯s growth path is its plan for networked infrastructure, including roads and transit arteries between the city center and periphery.
• Some capital investments are best to plan for¡ªor even finance and execute¡ªin the earlier spatial development stages, when cities stand to benefit disproportionally over the life of the investment.

Some interesting takeaways from the report include:

The growth of urban built-up area worldwide is not as large as conventional wisdom suggests.

• Between 1990 and 2015, urban built-up area worldwide grew by 30 percent, or 66,000 km², the size of Sri Lanka, through both horizontal spread and infill. In developing countries, total urban built-up area increased by 34 percent. Significant, but not quite the explosive and rapacious expansion estimated in many recent studies.

Horizontal growth is inevitable for most cities in most developing countries.

• In low-income and lower-middle-income countries, 90 percent of urban built-up area expansion occurs as horizontal growth.
• Nevertheless, there is a silver lining: in high-income and upper-middle-income country cities, a larger share of new built-up area is provided through infill development. For example, a city in a high-income country that increases its built-up area by 100 m² will add about 35 m² through infill development and 65 m² through horizontal spread. But a similar city in a low-income country will add about 90 m² through horizontal spread and only 10 m² from infill.

Increasing economic productivity and rising incomes are indispensable for vertical layering, because building tall is capital intensive.

• A city that grows in population, but not in productivity and incomes, will not generate enough economic demand for its spatial expansion to keep pace with population growth.
• Our econometric results show that:
  • If a city¡¯s population doubles but incomes stay constant, the city¡¯s floor space per person declines by 40 percent.
  • If per capita income doubles but population stays constant, the city¡¯s total floor space per person increases by 29 percent.
  • Building tall is capital intensive¨Cso increasing productivity and incomes are critical for a rise in floor space per person through vertical layering and pyramidal growth.

Dysfunctional urban land markets, along with zoning and restrictive building regulations, are factors that can work against taller structures, economic density and pyramidal growth.

Improved transport technology enables economic concentration in urban cores, supports cities¡¯ economic and spatial growth, and boosts demand for livable residential floor space.

• Many developing country cities today struggle with the high road congestion and commuting costs¡ªin time and money¡ªthat result from poor transport infrastructure and limited public transit options. Such congestion impedes the separation of residence from workplace, limiting cities¡¯ spatial expansion along with their economic growth and productivity.

Forecasts by Jones et al (2021), prepared for the European Commission using the Degree of Urbanization approach, predict that total urban land area will grow 29 percent between 2015 and 2050¡ªin line with the spatial growth rates we measure here for 1990¨C2015.

Pancakes to Pyramids was funded by the Swiss State Secretariat for Economic Affairs (SECO) through the World Bank Umbrella Multi-Donor Trust Fund Sustainable Urban and Regional Development (SURGE), and the Global Environment Facility (GEF) through the Global Platform for Sustainable Cities (GPSC). 

Last Updated: May 27,2021