Does Inequality Promote Skyscrapers?

It's not an accident that China and New York City, which have perhaps the greatest distance between their rich and poor, also lead the world in skyscraper construction.
December 2013
A new generation of “super tall” apartment buildings has emerged in New York City.
A new generation of “super tall” apartment buildings has emerged in New York City. Flickr/Dumbo711

Like tall, new, elegantly dressed kids in class, they poke their shoulders and heads above their classmates, peering out over and into Central Park. There is the just-completed One57, a 1,004-foot-tall building where a duplex inside its shimmering, multicolored glass walls costs $90 million. There’s the under-construction 432 Park, designed by South American architect Rafael Viñoly, whose top floor at 1,398 feet will be higher than that of the Empire State Building’s. And there’s the planned 1,550-foot Nordstrom Tower, where the luxury department store will take up the first eight floors and residences most of the rest.

It’s the latest trend in New York City: “super tall” residential skyscrapers. A half dozen or so, maybe more, are going up, and they are remaking the city’s skyline. Not many other American cities are joining New York in this trend, but it’s a different story across the waters.

Skyscraper construction has exploded over the last decade, particularly in Asia and the Middle East. China now has more than 1,200 skyscrapers, according to the nonprofit Council on Tall Buildings and Urban Habitat. These include close to 300 giants more than 200 meters high (656 feet) and 24 super tall ones that are more than 300 meters tall, roughly 1,000 feet. In the United Arab Emirates, a country of just 8 million people, there are more than 250 skyscrapers, of which 20 are super tall ones. Most of them are in the emirate of Dubai, including the Burj Khalifa, the tallest building in the world.

By comparison, the United States has 900 skyscrapers. These include 163 above 200 meters and 14 super tall ones. (These figures do not include those under construction.)

As these buildings have shot upward, something else has too, something perhaps less awe-inspiring than a quarter mile of glass: inequality of income and wealth. In the United States, it’s an ongoing political debate about whether this matters and what to do about it. There are different ways to measure income and wealth inequality, but by any measure, places like China and Dubai rank extremely high in it.

In China, the richest 10 percent make 21 times more than the poorest 10 percent, according to United Nations statistics. In the United States, that number is 16 times. In Germany it’s 7 times, and in Japan, it’s 4.5 times. Germany and Japan have few skyscrapers. China and the United States have a lot. Is it any accident then that China and New York City, which have perhaps the greatest distance between their rich and poor, also lead the world in skyscraper construction?

I don’t think it is. I first wrote about this issue back in 2006, and what I noticed then was that nations that have relatively equitable incomes, much more so than the United States, have few skyscrapers, whereas nations with great wealth and great poverty have more.

I believe a city’s skyline is a physical portrait of the distribution of wealth and thus political power in a society. For example, cities and countries where the middle and lower classes have more political power tend to regulate skyscrapers out of existence. As cool as 1,000-foot buildings may look, they don’t make particularly good neighbors. They blot out light and air to surrounding properties, and with them usually comes soaring real estate values.

But these are just theories. Can they be supported by evidence?

Jason Barr, an economist at Rutgers who was intrigued by my initial essay, has been collecting and analyzing data on the subject over the last few years. His work is not finished, but his latest findings suggests that there is a correlation between super tall skyscraper construction in New York City over the last century and years when the top 1 percent garnered the largest share of national wealth. For instance, inequality hit a peak in the late 1920s—when the Chrysler and Empire State buildings went up—and in the current decade, which is also witnessing a new round of skyscrapers.

Barr has also found evidence that doesn’t fit my theory. Brazil, like China and New York, has great income inequality and relatively high wealth, but few skyscrapers. “There is this desire to really stand out,” Barr says. “That doesn’t seem to exist as much in some countries, and really seems to exist in others. I don’t know what to tie it to yet.”

Whatever the cause, the new skyscrapers in New York elicit awe and a bit of joy in me. They are stunning to look at from the greenery of Central Park. At the same time, it saddens me to think that the best apartments, those in the sky, will probably be empty most of the time.

As with the chateaus of France centuries ago or the great mansions of Newport, R.I., in the late 1800s, families that can afford multimillion dollar apartments usually own many homes, and occupy them briefly.

Join the Discussion

After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.

More from Economic Engines