City form to promote sustainable growth

Cities are economic and social microcosms in which thousands or millions of people and firms
interact. These interactions shape a city’s growth along three margins (figure 1):

• Horizontal spread extending beyond the city’s previously built-up area.
• Infill development closing gaps between existing structures.
• Vertical layering raising the skyline of the existing built-up area.

As cities grow in productivity and in population, they add floor space by expanding outward, inward, upward, or more usually along all three margins to varying degrees. The report uses the terms pancakes and pyramids as shorthand for two broadly different tendencies in the physical manifestation of city growth:

• Cities with low productivity and income levels generally grow as pancakes flat and spreading slowly. Low economic demand for land and floor space keeps land prices low and structures close to the ground, especially at the urban edge. Given slow expansion, growth in population density is often accommodated by crowding, starkly visible in the slums of developing country cities.
• Cities with higher productivity may evolve from pancakes into pyramids their horizontal expansion persists, yet it is accompanied by infill development and vertical layering. A rising demand for floor space in economically productive cities (especially near downtown centers), combined with a related rise in housing investment and consumption, leads developers to fill vacant or underused land at and within the city edge with new structures. These pockets of close-in land become dense with office and residential space. The same demand for floor space drives expansion not just horizontally in two dimensions, but also in the third the vertical. Structures are built taller on average, and at the urban core, they are built much taller, forming sharply peaked skylines.

While pancake expansion and pyramidal expansion are physical manifestations of city development, the drivers of that development are largely economic and institutional. What decides whether a pancake city evolves into a pyramid?
Much of the answer though not all lies in economic growth, productivity, and trade. A pancake city’s chance for pyramidal expansion hinges on its success at nurturing highly productive economic activities that benefit from urban scale and agglomeration potential. These activities are likely to be in tradable sectors: concentrating in cities, firms produce goods and services to supply to buyers outside the city and possibly internationally.
The other piece of the answer is found in laws, institutions, and capacity. Pyramids are more likely to evolve in countries and municipalities where property rights are clear, land values are transparent, land use and zoning are compatible with local preferences, and the enabling environment encourages durable investment in infrastructure especially early investment, informed by forward-thinking urban plans. A canonical framework developed for this report (Sturm, Takeda, and Venables 2021a) outlines the key institutional and economic drivers:

• Economic structure the extent to which tradable sector firms can benefit from agglomeration economies.
• Population size the ability of larger cities to have higher productivity, because agglomeration economies reflect scale along with density. Large urban populations also create opportunities for scale economies in providing network infrastructure and local public goods.

source :

https://openknowledge.worldbank.org/entities/publication/38f61a22-e924-593d-b406-a3ba916bc87f