Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1478

In reading a recent Financial Times article called,  Are creative people the key to city regeneration? , I was reminded of a famous line from the late urbanist Jane Jacobs : “New ideas need old buildings.” What she meant by that is the following:

Cities need old buildings so badly it is probably impossible for vigorous streets and districts to grow without them…. for really new ideas of any kind—no matter how ultimately profitable or otherwise successful some of them might prove to be—there is no leeway for such chancy trial, error and experimentation in the high-overhead economy of new construction. Old ideas can sometimes use new buildings. New ideas must use old buildings.

And what she was effectively getting at is that we live in a world obsessed with historical data and precedence. To use the words of business thinker Roger Martin : “The enemy of innovation is the phrase ‘prove it.’” Because, if it’s never been done before, how can you prove it? You can certainly imagine it. But you can’t prove it.

If you’re in the business of building buildings, convincing your lender to give you the money to build something that’s never been done before, is an almost impossible sell. That’s not the way it works. Which is why Jane Jacobs famously said that “new ideas need old buildings.”

We’ve seen this story play out in countless cities around the world. The creatives move into an scuzzy neighborhood, make it cool and then investment follows. The neighborhood has been proven. But for this cycle to continue, we need a continuous stock of derelict buildings and undesirable neighborhoods, or at least areas that offer the same kind of affordability and flexibility to creative entrepreneurs.

Often these circumstances have been the result of failure. The proven ideas that got the buildings built in the first place became no longer relevant. And so the buildings were left to expire. But in many global cities, these kinds of areas are an endangered specifies. However, it’s in our best interest to make sure that we don’t lose our creativity alongside them.

Continuing with our discussion of Vancouver , I was reading today that baby boomers  in the metro area (those aged 55 and older) are estimated to be holding over $163 billion of clear title property . That is, homes without any mortgage. This figure comes from Rennie Marketing Systems out of Vancouver.

What’s interesting about this number is that it signals both a lot of equity that could be used for downsizing, rightsizing and lateral moves into a condo, and a source of capital for millennials to buy their first home. In fact, according to a survey that Rennie Marketing also conducted, somewhere around 40% of first time buyers in Vancouver are getting deposit help from their parents and/or grandparents.

But the question that comes to my mind is: Are there going to be enough middle aged people willing and able to buy $163 billion worth of real estate? Because one person’s sale is another person’s buy.

If you’re a regular reader of Architect This City, you’ll know that I’m a supporter of congestion and road pricing . Any valuable good or service, such as a road, that’s offered for all intents and purposes as free, will never be able to keep up with demand. You need to price it.

However, the political risk associated with implementing something like this has made it such that few cities around the world have done it. London and Singapore are the two most common examples.

The more populist solution is to simply build more roads and highways, even though study after study shows that this doesn’t work. If it did, we would have already solved the problem of traffic congestion. And we most certainly haven’t.

Which is why I’m excited about a new startup that recently launched called Urban Engines . Their solution is twofold. It’s based on incentives and on treating people and cars in cities as sensors that feed back data into their network. Here’s a brief video. If you can’t see it below, click here .

[youtube https://www.youtube.com/watch?v=oaCp5Tl-uAc]

The data piece is almost a no-brainer (provided they can get the data). The more data we can collect about the way people and cars move in a city, the more they’ll be able to optimize and manage the flows. The possibilities are endless.

But what I found really interesting is their incentives based approach. Typical road pricing methods are, one could argue, a punitive approach. As traffic increases so does the price of the road. (I like to look at it as efficient pricing.)

With Urban Engines, their approach is the opposite: it’s to reward people–through money and lotteries–for driving during off peak times. It’s smart because selling a reward program to cities will be a lot easier than selling a new charge.

Overall, this a great example of how startups are stepping up to solve some of our most important societal problems. For more information on Urban Engines, check out their website and this writeup on CityLab .