Are Skyscrapers Torpedoing the World's Economies?

The Hong Kong skyline.

Does pride goeth before a fall, as the biblically based saying has it, for the world's booming cities too? A new report by an investment bank that postulates an "unhealthy" link between skyscraper construction and financial crisis suggests it might.

Barclays Capital recently issued a warning to investors about avid skyscraper-builders China and India, noting an "unhealthy correlation between construction of the next world's tallest building and an impending financial crisis":

[O]ften the world's tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction.

But Isn't Density Good?
The news might come as a bit of a downer to advocates of greater density, typically an environmental plus, but the focus of Barclays' attention appears to be "bubble" construction, where skyscrapers and other skyline-defining buildings are erected because they can be (due, in China's case, to cheap liquidity) or as shows of economic might, not because they provide a well-thought-out solution to the city's needs.

More growth is on the horizon in Istanbul.

It's a warning Turkey would also do well to heed. Construction cranes dot the Istanbul skyline despite a 26 percent drop in housing sales that has left 600,000 residences standing empty in the city and its outskirts, according to the recent documentary film "Ecumenopolis: City Without Limits. Meanwhile, thousands, if not millions of people live in substandard housing, including an estimated 1 million illegally constructed buildings that would be seriously vulnerable in a major earthquake. Many of the city's tall new developments are also far away from the city center, further snarling Istanbul's already nightmarish traffic.

Questions about how the city's ever-growing population can best be accommodated are essentially absent, however, from debate about new skyscrapers, which typically focuses on issues of aesthetics.

Looks Over Livability
While the architects behind the planned "Metropol Istanbul," a vast project including a 300-meter-high tower, boast that the complex will "bring character to Istanbul" (quite a claim for a city with more than 2,000 years of architectural history), critics fret about such developments' effects on the classic silhouette.

Last week, the Turkish prime minister issued an order to preserve Istanbul's skyline, enforcement of which could even include demolishing existing buildings, according to the culture and tourism minister. How new buildings impact transportation, neighborhood cohesion, and environmental sustainability seems a long way from getting on the table as well.

Are Skyscrapers Torpedoing the World's Economies?
A new report by Barclays Capital suggests a dark side to the building boom in places like China, India, and Turkey.

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