Skyscrapers: Inevitable Future or Temporary Fad

A brief excursion into history

Skyscrapers have become the pinnacle of technological progress. The foundation for such bold solutions dates back to ancient times, with the invention of the first piston water pump and the first elevator. Even in Ancient Rome, people actively used them to construct two-story or more buildings, creating the highest levels of living comfort at the time. Moreover, some ancient Roman insulae, or multi-story residential buildings, reached 25 meters in height, equivalent to 10 stories at the time! Most rooms in these insulae were rented out. The upper floors were typically rented by the poor, while the lower floors were only accessible to the wealthy.

Much time has passed since then, during which technological advancements have continued. The discovery of steam and the advent of electricity played a key role in this process. Over time, improvements in elevators and water pumps transformed top floors from cheap to prestigious, and skyscrapers became luxury real estate.

The first skyscraper in the modern sense appeared in Chicago in 1885. It was the Home Insurance Society Building, also 10 stories tall, but now 42 meters. Its architect was William Jenney.

Is the future skyscrapers?

This position is advocated by the authors of the monograph "The City of Tomorrow," urbanist Matthew Claudel and architect Carlo Ratti. They compiled statistics that are literally staggering: the number of city residents increases by 250,000 people every day. Consequently, every month the planet is seeing the birth of a new London, or practically two St. Petersburgs.

2008 marked another milestone in human history. It was the year that the urban population exceeded the rural population. And according to WHO estimates, by 2050, 75% of the world's population will be urban dwellers.

Such predictions are likely to come true. Just look at China, where the population of megacities has increased by 500 million over the past 30 years, roughly equivalent to three times the population of Russia.

Accordingly, both long-time city dwellers and those who have recently moved to the metropolis need housing. The time when cities expanded solely outward is long gone; now they are also growing upward. It's therefore no surprise that Matthew Claudel and Carlo Ratti believe the 21st century promises to be the "century of skyscrapers."

To avoid confusion in terminology, skyscrapers are generally defined as buildings over 150 meters tall. By the end of 2020, more than 5,300 such structures existed worldwide, 70% of which were located in Asia. Another 740 were under construction. The coronavirus pandemic also impacted this sector of human activity, resulting in some construction projects being suspended. Subsequently, after the epidemic subsided, some, though not all, resumed.

The idea that the 21st century could become the century of skyscrapers is supported by the fact that more than 40% of existing skyscrapers were built after 2000, when the issue of vacant housing in cities began to grow exponentially. Experts predict that by 2050, the number of skyscrapers will reach 41,000, making them seven times greater than the number of existing buildings of this type.

Not only is the number of skyscrapers increasing, but so is their height. Just two decades ago, the average height was 285 meters, while today that figure has risen to 385 meters. This has led to the so-called Moore's Law for skyscrapers. According to it, since 2000, their average height has increased by 1.8% annually.

Harbingers of economic downturn

Skyscrapers leave no one indifferent. But some view them from a professional perspective. For example, in 1999, Hong Kong economist Andrew Lawrence wrote an article introducing the concept of the "skyscraper index" to the public. It immediately became popular, although many analysts around the world quickly dubbed it the "skyscraper curse."

E. Lawrence will trace the connection between the construction of the world's tallest building and economic downturns and crises. His logic is simple and clear. In a stable financial situation, investors are eager to create and implement a project to build a record-breaking skyscraper. After all, this solution promises enormous profits, despite the initial high cost of the undertaking.

But even with no hitches and stable financing, the construction process takes at least 3-5 years. Consequently, the building's opening coincides with the height of the next economic crisis.

Consequently, the start of construction on the new, largest building in the world is seen as a harbinger of economic downturn. Let's not be unfounded and provide some historical background.

Bank panic (1907)

It was preceded by the construction of the Singer Building and the Metropolitan Life Tower (New York). These towers were intended to be the tallest in the world. The former stood 186.5 meters tall and was opened in 1908, a year after the onset of the economic crisis. The Metropolitan Life Tower, which began construction later, stands 213 meters tall and was completed in 1909.

The Great Depression of 1929–1933

On the eve of one of the largest economic crises in the United States, construction began on the Chrysler Building, a 320-meter-tall structure. Construction began in 1928, and it opened in 1930, after the onset of the Great Depression. During this same period, ground was broken on the famous 443-meter-tall Empire State Building. Construction began in 1929, and it opened to the public in 1931.

It's significant that the Empire State Building opened during the height of the Great Depression. Consequently, within ten years, no more than 20% of its space was rented. It's no wonder that city residents nicknamed the tower "the empty building." To increase the value of its space, the owners even had to force employees to keep the lights on on the empty floors to simulate active business activity. The situation improved somewhat in the 1940s, but the skyscraper remained unprofitable until 1950.

The collapse of the Bretton Woods system and the Nixon shock, namely the refusal of the 37th US President Nixon to exchange the dollar for gold in 1971.

Construction began in New York City in 1966. The World Trade Center, more commonly known as the Twin Towers and destroyed in the September 11, 2001, terrorist attacks, opened in 1973. Its South Tower was 415 meters tall, and the North Tower was 526 meters. It was planned to be the largest in the world. Four years later, ground was broken for the Sears Tower (Chicago). It surpassed the North Tower by only 1 meter and was also opened in 1973, at the height of the economic crisis.

Asian financial crisis of 1997

In 1992, construction began on the well-known Petronas Twin Towers in Malaysia. They reached a height of 451.9 meters. They were not completed until 1998, a year after the onset of a major economic crisis.

Global financial crisis of 2008–2009

In 2004, groundbreaking took place on the Burj Khalifa (Dubai), a skyscraper that remains the tallest building on the planet to this day. It stands a dizzying 828 meters tall. Construction took six years, and the tower opened in 2010, again immediately after a severe economic crisis, this time shaking the entire world.

1998 default

This financial crisis is well known to all Russians over 30 today. After the economy stabilized in the post-Soviet space in 1996, the idea of the great Russian architect Boris Thor – to build a huge business center and park on the territory of an industrial zone – was enthusiastically embraced. The project was named "Moscow City," but the sudden default of 1998 significantly disrupted the plans. Construction was virtually frozen and only gained a second life in the early 2000s. The project was repeatedly revised and adjusted, and ultimately little remained of Thor's original vision.

Subsequently, economic growth allowed for the rapid development of the former industrial zone, and new skyscrapers began opening almost annually. However, even today, Moscow City and its surrounding areas remain underdeveloped, and new grand projects are being planned, meaning a new crisis may be just around the corner.

Coronavirus pandemic crisis (2020–2021)

The construction of the grand Jeddah Tower in Saudi Arabia occurred during this period. According to the project, this skyscraper is expected to reach a height of over 1 kilometer—1,007 meters, to be precise. Construction began in 2013, with completion scheduled for 2018. However, as is often the case with projects of this type, the completion date was initially pushed back to 2019. And as we recall, at the end of that year, the first reports of a new deadly infection and its rapid spread emerged. Panic gripped the world, and construction of the Jeddah Tower was halted due to financial difficulties. There is no new information yet regarding the expected continuation of construction or the commissioning date.

Why we can't escape skyscrapers

There are very good reasons for the rapid construction of skyscrapers. First and foremost, this is the high cost of land in cities. If a high-rise building is built on an expensive site, the investment will pay for itself once it reaches a certain height (this value directly depends on the price of the land). Once this height is reached, the building will begin to generate profit. Therefore, despite the high cost of building skyscrapers, their construction is profitable and can not only fully recoup the initial investment in land acquisition, labor, materials, etc., but also generate a significant profit.

The highest prices are for the following plots:

• located in the city center, for example, Manhattan Island in the USA or Moscow City in Russia;

• in cities with significant land shortages, such as Hong Kong.

Incidentally, Hong Kong is the world leader in skyscrapers. Its small footprint is home to 546 buildings taller than 150 meters.

Moscow City can't compete with it in terms of the number of towers, but there's still room for several buildings. And although the business center is already vibrant and appears complete, it hasn't yet fully taken shape. As of 2022, the entire Russian capital will have 46 skyscrapers, 12 of which are located in Moscow City . In the near future, the "Russian Manhattan" will be expanded by three more towers: Grand Tower (Moscow Tower) , One Tower , and the City-20 mixed-use complex. High-rise construction is also actively underway in areas adjacent to the business center. In particular, three residential towers, the Capital Towers , are already nearly completed on the neighboring Presnenskaya Embankment. Their opening is scheduled for 2022.

Profitability and its impact on building heights

Skyscraper construction requires the implementation of new, complex, and expensive technologies. Today, old multi-story brick buildings are being demolished to make way for glass and concrete giants. But even on the most expensive site, building an infinitely tall building is unprofitable. The profitability of any tower follows a U-shaped curve. This curve indicates that profitability from increasing the number of floors increases only up to a certain point, after which it declines sharply. Therefore, skyscrapers that are too tall do not pay for themselves.

Back in the early 20th century, the average ceiling for a skyscraper's profitability was calculated in the United States. It was 63 floors. Of course, this figure can vary slightly depending on the country and its economic status, but the changes are insignificant. This is because the usable space gained up to the 63rd floor helps to dramatically increase the return later. However, increasing the number of floors beyond this level entails additional costs for strengthening the building's frame, reducing wind sway, installing air conditioning and ventilation systems, raising water to the upper floors, and so on.

It has been calculated that every 10 additional floors adds an additional 10% to the project cost. This leads to project revisions and the abandonment of certain floors, spires, and other features. Therefore, approximately 70% of all existing skyscrapers in the world are less than 200 meters tall. Most investors are pragmatic and value profit over the opportunity to indulge their own vanity.

Why are economically unviable towers being built?

The remaining 20%, especially the top 20 tallest buildings in the world, are a tribute to prestige, status, and ambition, particularly political ones. They aim to generate profits not by covering costs through sales of square meters, but by attracting tourists. Therefore, the world's tallest skyscrapers are being transformed into tourist attractions. A variety of methods are used to attract visitors: observation decks, roped-off walks at dizzying heights, all kinds of attractions, glass floors, and so on.

This is what happened with the Burj Khalifa and the Malaysian Twin Towers. The transformation of Dubai and Kuala Lumpur into skyscraper cities led to a sharp influx of tourists. As a result, both megacities quickly became among the most popular tourist destinations. Based on statistics from the pre-COVID period, the tourist-to-local ratio was as follows:

• Dubai – 15.3 million tourists per 2.7 million population;

• Kuala Lumpur – 12 million tourists to 1.7 million local residents;

• Paris – 18 million tourists for a population of 2.2 million.

But when it comes to record-breaking, one mustn't forget the vanity of individual politicians. An analysis of the world's top twenty tallest skyscrapers reveals that only four were built in democratic and relatively free countries. The rest are located in monarchies and autocracies, either satisfying the leaders' ambitions or becoming part of "party politics."

China is a shining example of strong-willed decisions

Only the Communist Party of China has the capacity to ensure massive skyscraper construction, which it did before Xi Jinping came to power. The country boasts over 1,500 completed towers, compared to 5,300 worldwide. Moreover, 23 of the top 50 tallest buildings are located in China. Thus, China alone is home to nearly 30% of the world's existing completed skyscrapers and almost half of the record-breaking buildings.

But in 2021, the ruling party banned the construction of high-rises taller than 500 meters and imposed restrictions on buildings taller than 250 meters. With this decision by the Communist Party of China, he voluntarily withdrew from the unofficial race.

It was dictated by the specific policies of Xi Jinping, who became the country's leader in 2012. Immediately after coming to power, he decisively changed China's political course and focused all his efforts on returning to traditional values. Just two years into his rule, Xi Jinping decreed the abandonment of unusual architecture. Two years later, the Central Committee issued a decree declaring architectural excess unacceptable. As a result, all buildings constructed in China from that point on must be "economical, environmentally friendly, and pleasing to the eye." This prompted a rapid review of existing projects. In particular, the spire of the flagship skyscraper, Pian'an, was removed, immediately rendering it the tallest in the world.

The Chinese authorities' decision is understandable and justified. Amid economic growth, the country began building skyscraper after skyscraper, each project more insane than the last, many of which remained unfinished. There was also a widespread imitation of famous European and American buildings. In 2021, the ruling powers even issued a separate regulation prohibiting copying. As we see, politics isn't always driven by vanity, ignoring common sense, and China is a perfect example of this.

Therefore, the top 5 Chinese towers are stable and will not change anytime soon. They include:

• 632-meter Shanghai Tower;

• 599-meter multifunctional center in Shenzhen;

• 530-meter financial center towers in Guangzhou and Tianjin;

• The 528-meter Beijing Tower.

With China's exit from the skyscraper construction race, high-rise construction centers have shifted to Dubai, Kuwait, and Saudi Arabia. It remains to be seen what the Persian Gulf monarchs will surprise the public with.

Thus, skyscraper construction is justified in many cases, but it can also be a clear sign of "growth disease." It was first "diagnosed" in the United States, then the "virus" spread to Europe and Russia, "mutated," and struck China in a severe form. We can only expect further outbreaks in other parts of the world...