RW

It’s similar to what Marxist critics talk about in terms of accumulation crises. Overbuilding is the physical embodiment of an accumulation crisis in the broader economy, but in the real estate sector. It’s not as if all these folks who work in real estate are just brainwashed, but there are certain precepts like obsolescence that they hold on to, which may have some basis in reality and in history. Those precepts exist to enable their professions to make money and to profit off of change in the built environment.

This goes back to Neil Smith’s idea of the rent gap, that capitalists seek out and construct differential rents, the possibility of taking a building that is underutilized given the potential value of its location and investing in it and converting it, and then being able to capture the difference in value. This is the basis of tax increment financing (TIF) — we’ve got land that is not taking advantage of its “highest and best use,” and if the public or private sector invests hard in that land, you can go from zero to sixty almost overnight, in terms of the returns you’re generating from that land. Capturing those differential rents is what motivates the real estate industry.

But you come up with discourses that stigmatize space because of the whole idea that you should buy low, sell high. How can you suppress the value of a property even lower than it may already be? How can you construct it so that you can turn it into something very high value in order to capture that difference?

It involves lowering it on the low end and raising it on the high end, and I argue that obsolescence allows real estate actors to do just that. It’s a value judgment, but it’s used so pervasively in the real estate industry, this concept of obsolescence, very flippantly. Obsolete means no one values it anymore because it’s old or just not right. What do you mean that a building that was built in the 1980s, that cost millions of dollars to build and had some of the highest-profile tenants in it, is now “obsolete”? I can understand a record album or something, but this massive investment suddenly is not valuable to anybody?

Architects and engineers will tell you why a building that was built in the 1980s is no longer adequate for the needs of the modern economy, and they’ll tell you how these days, office buildings don’t have as many partner offices; they have more communal, collective space, and there’s more of a trend toward this “hot desk” idea, where people come in, come out. They don’t need an office with a door. They want more light. There’s just a different aesthetic.

You’d think from the way real estate brokers talk that all these 1980s buildings had been afflicted with some kind of terminal disease. My informants used really harsh language to describe them, and then they would say, as evidence, “Look at their vacancy rates, no one wants to be in them anymore,” as opposed to pointing out that the tenants had been poached and offered all kinds of concessions and inducements and TIF funding to move into these new buildings across the street. They made it seem like it’s just that preferences have changed, there’s nothing we can do about it, and we have to build more buildings because these 1980s buildings suck. Paying attention to these kinds of very common discursive tropes allowed me to question one of the real estate industry’s explanations for why all these new buildings had to be built.