Neocities Are Coming

I use the term neocities to describe technology-driven, planned cities that will begin construction in the next 2 decades. Similarly, neodistricts are futuristic planned districts to be built at the edges of existing cities. By 2040, we are likely to see at least 3–5 neocities and 30–50 neodistricts.

The Need

The industries of the future are growing fast. In the next few decades, healthcare (including biotech and pharmaceuticals) and engineering (e.g., robotics, artificial intelligence, new forms of transportation) will add millions of jobs. These jobs will be highly concentrated and go to a small number of cities. With high costs of living, low housing supply, and immigration limits, existing industry hubs will struggle to absorb new arrivals. According to a recent report by the Wall Street Journal, San Francisco and Silicon Valley annually add around 65K jobs but approve construction on only 10K housing units. While top destinations struggle to grow fast enough, it becomes easier to move jobs and capital to new places. As a result, the new wave of hub cities will emerge.

Enabling Trends

We are in the dawn of the post-car era in terms of urban planning. With the arrival of fully-electric transportation, we can finally move transit systems under the surface and organize cities around people, not cars. Advancements in speed rail technology (including Hyperloop), city-level climate control, and land reclamation technologies allow for urban expansion in previously undesirable locations. And, on the investment side, the world has trillions of dollars of long-term capital seeking alternatives to the stock market and bonds. Privately built and operated cities can emerge as a new asset class for capital markets.

Breakthrough Opportunities

Neocities have the opportunity to make major improvements over traditional cities across a number of dimensions: