I am triggered to write this piece because 2 ideas intersected. 1. Reading a tweet by Ewald Engelen stating: "Architecture is the bow on a box of debt." 2. Reading Piketty's "Capital in the 21st Century". Buildings are a form of capital, and often they are financed through taking on debt. Should we consider buildings as a particular appearance of capital?
Remembering a factoid from a lecture about real estate once, real estate is the largest national capital stock of any given country. This appears to be confirmed by the national balance sheet of the Netherlands for 2013 (
CBS 2013, page 98), albeit only if you first balance its financial assets against debts. The same holds true for GB (
ONS, 2014).
Staying with the Dutch accounts, buildings alone (without the ground underneath), were worth about 1264 bn euros in 2013 - 40% of all non-financial assets, and twice the GDP of that year. So we have to suppose that buildings are indeed a significant form of capital. In other words, buildings occupy a pretty large space in the capital stock and economy of a country.
It is certainly interesting and refreshing for architects to look at buildings as investment objects - as I am sure they are not doing enough, even though budgets are a daily reality and frustration for them, mainly as an inhibiting factor. The most important function of buildings as capital objects is, as with any capital, to generate income - rents. If this revenue exceeds the growth of the economy (including the effects of inflation and maintenance), it will make whoever owns the property richer.
However, it seems that a very large segment of the building owners, namely households, are not being entirely rational about the capital game. Most home owners have financed their property through a mortgage. This means that to whatever extent the mortgage is not paid off, the bank is profiting from their real estate. However, to the household who owns the house, the reason they are siphoning a portion of their income steadily into a single investment object is not to maximize profit - for you would prefer to spread your investment, presumably. The reason they are engaging in this risky strategy is in fact also the reason they can lend a lot of money from the bank for it: they will live in that object, and it will also generally retain much of its value even if they move out. It is that former quality that sets it apart from any other form of capital, and this is what architects prefer to focus on, almost exclusively - though paradoxically it appears that they are designing for the latter quality, the retention of value, assuming the most generic habitation preferences.
There are other important differences setting buildings apart from financial capital. Perhaps the most important of which: you can't move buildings around (though
perhaps we
should be
suspicious of
floating cities). There are no capital controls necessary or possible on buildings. Buildings can become worthless if all residents move away, and a few years later become valuable again when hipsters discover the abandoned territory (e.g. A'dam North). But I can't see a feasible way to move the value of a building to some other place.
Also, buildings can be used to accommodate the public space. With some emphasis on the word can, because
the opposite can also happen. Buildings have been a redistributive tool in the hands of the civic state, donating public works such as museums, swimming pools, and schools. Here, the tweet I mentioned at the start just doesn't apply at all.
Perhaps, then, this cynical reading on architecture as a superficial vehicle for some financial construction is more suitable for the bulk of floor space, conceived in a more market-oriented environment? To some extent, I do not disagree. From experience, I know that a lot of the built environment is designed as packaging for the rentable floor space units. Much of the residential work is to optimize the floor plans to specifications that have been calculated in advance in square and cubic meters, and to make the exterior look fashionable. It is built, somebody takes a mortgage and buys it, and the architecture really is a vehicle for debt for as long as it takes to pay it down.
I don't believe, however, that this is a universality, even in mass dwelling. I am thinking for example of the social housing in the interbellum called the
Amsterdam School. Here, the "bow" was elaborate, in service of elevating the working class. I have no illusions about the effectiveness of architecture in enlightening "the people" and creating spontaneous happiness - that effect is limited at best. But even if buildings are only objects representing capital and debt, or maybe especially if they are that, the quality of the bow surely matters? Or is that just a distraction?
