Forecast 2050 - Episode 7 - Devon Zuegel on Cities in 2050 - Transcript

Devon Zuegel believes America has been building cities wrong for decades. She grew up spending summers in Chautauqua, an intellectual community in western New York where four generations of her family shared a household and she knew her neighbors better than the ones at home in California. Now she’s building a village called Esmeralda 90 minutes north of San Francisco to prove that formula can be replicated.

We sat down in San Francisco to talk about why cities are a technology, age-segregation and the impending population crisis, and what it will take to build more places worth living in by 2050.

Watch the full conversation here:

Transcript:

Chautauqua Inspires Esmeralda

Finn Murphy: Devon, thank you so much for joining us. Your vision of the future is something that you are building, and it’s something very unique. It would be awesome to tell us a little bit more in context around what being the founder of Esmeralda is all about.

Zuegel: Esmeralda is a few things, actually. It’s a new village that we’re building 90 minutes north of San Francisco in Sonoma County, and there’s really two main pieces of it, and we like to call it the hardware and the software. So the hardware is the physical infrastructure—the roads, the sewage, the electrical, the buildings, the physical spaces that you inhabit, the parks.

And then the software is programming and events and things that are sort of meant to activate that physical space and bring people together. This is a formula that I know really deeply from a place that I went to often growing up. There’s a small town in western New York called Chautauqua. Some people have heard of it. It’s really quite famous. It’s about 150 years old, and it’s a small town of 8,000 to 9,000 people in western New York that is walkable and livable because it was built before the cars. It does have cars, but they’re not the primary users of the space like most American cities.

But the thing that makes it really special is that every summer for nine weeks, they host events like lectures, workshops, kids’ camps, and it’s kind of like it turns into a giant liberal arts college campus, but multi-generational. And the reason I spent so much time there was my grandmother lives there, and I would visit her each summer, and my grandfather too, when he was still alive. And it just holds a very close place in my heart. And even though I would only spend some weeks there each year, I found myself knowing my neighbors in Chautauqua better than the ones in the house that I grew up in because of the programming that brings it all together.

So I loved going there as a child, but I grew up in California, and so I wanted to bring some of that magic to the West Coast with Esmeralda.

Cities Are A Technology

Murphy: I sometimes think about cities—we don’t think about them this way, but they are one of the great technologies that humans have used over the years to bring people together, to make great progress, to overall better just the aggregate groups’ lives. Today, 45% of the world’s population live in cities. By 2050, 70% of the world’s population are going to live in cities. What do you think we’re getting most right in urbanism today, and what do you think is going most wrong?

Zuegel: Yeah. Well, first, I’m really happy that you call cities a technology. And to sort of define that even more closely, to me, a technology is anything where we learn how to do something better to solve a problem. And that could be anything from a different type of hardware, but it’s also—I think of governance as a type of technology.

And with cities in particular, I think it’s basically trying to get the good parts of scale without the bad parts. The good parts being, you know, you’re close to many people and there’s a fast exchange of ideas. There’s a large market, so you can have restaurants of every type and every culture. People use less electricity and less energy in general when they live in cities. So those are the benefits of scale.

But the downsides of scale are, you know, maybe it’s smelly because everyone, like in New York, puts their trash out on the sidewalk. And we figured that one out in many other places. Somehow New York hasn’t figured that one out just yet, but it sort of goes to show how it is solvable. Like in Barcelona, they put the trash all in one corner of a block, so at least when you walk by, it’s only smelling in one spot. That’s an improvement compared to just putting it on the sidewalk. And I think of that as a technology—we’ve found a better way to do things.

As much as New York’s trash smells, I wouldn’t say that’s the biggest problem that we have with cities. I don’t know if this is the biggest, but one that I spend a lot of time thinking about and trying to design around is how much space we devote in cities to cars, and to parking in particular. Most cars are sitting unused, parked for 97% of the time. Sometimes it’s higher in certain cities, and cars take up a lot of space. A single parking space is about the same size as a studio apartment or a small bedroom.

And so when you use that land for car storage—that’s what it is, it’s car storage—you end up not being able to use it for other things. And it’s not just about making better use of that space itself, but also what it does to the broader fabric of a city. The main thing it does is it spreads everything out. It doesn’t seem like a big deal. You know, if you have a normal street with parking on either side, it only adds, you know, eight feet on each side. What’s the big deal? But if you do that on every single city street across the city, suddenly everything is 50% farther apart than it needs to be.

And I do want to say I don’t hate cars. I actually love cars. I have raced cars in the past, but I think that the role that they play in cities is mostly counterproductive, especially in denser ones. So that’s a big one. And I think that’s something that American cities particularly struggle with. But also because America is sort of one of the countries that many others look towards as models, a lot of the new development that’s happening around the world is looking at it and being like, oh, if America is doing it, it must be a good idea. I love America, but that’s not one place where we’re getting everything right.

The Autonomous Vehicle Takeover

Murphy: When you think about Esmeralda and your urban design, you’re planning your city over the next 50 years, and you can end up in this counterproductive discussion on progress because we’re like, why build a high-speed rail when there’s going to be autonomous vehicles? Why invest in public transport when we’re going to have X? And sometimes it feels a bit reductive because it’s often NIMBYs finding a new excuse to say no to things. You’re actually building a new city. How is that coming into your thought process and your planning in terms of new technologies that are coming online?

Zuegel: Yeah, it’s a really fun thing to think about. So just to give a sense of timeline, right now we’re in the process of getting all the approvals to build out the village. And the village will have about 2,000 people at full buildout. So it’s on the smaller end of things, and it’s very close to Cloverdale, which has an existing population of about 9,000 people. We’re going to make sort of a combined market of about 11,000 people at full buildout. And we expect full buildout to happen in about 11 years from now.

Right now the land is just empty. It’ll take several years before even the infrastructure is built, and then we’ll build the buildings. So the first buildings will probably come online in about five years. Given that timeline of the 5-to-11-year range of when they’ll come online, I personally expect self-driving cars will become super dominant over that time.

When I’m in cities that have Waymo, I almost always pick Waymo because it’s safer, it’s really clean. It’s a very consistent experience. I can call my mom or whoever while I’m in the car and not bother the driver. Whenever I talk to people who’ve taken a Waymo, they’re like, wow, that was actually a really good experience beyond just the self-driving piece—they just do a good job overall.

And so the way that we’re planning for it is that—I mentioned street parking earlier, and street parking sort of assumes that everyone needs to have their car close to their house or close to where they’re going. And I think one of the things that’s very exciting about self-driving is that the car can drop you off and then go to a remote parking lot. And so suddenly we’re not using our most valuable land in the center of our cities for car storage.

As a side note, something else that really bugs me is that most cities in America will not charge anything for parking or a very low price. And you should think of it as charging rent like you would for an apartment or anything else.

For what we’re doing, we’re taking that into account and saying, hey, for a while people will still have regular non-self-driving cars, even in ten years. There’s a whole stock of cars that will need to be turned over. People typically hold on to a car for a while, so we want to both be adaptive to that, but then also adaptive to the future.

And so instead of having street parking, which is very hard to modify later because you’ve just sort of said that the street is going to be this wide, we are not having any street parking. And instead we’re going to be clustering the parking in parking courts—basically little parking lots—so that one day when we don’t need those parking lots anymore, we can redevelop those into homes, schools, you name it. Because if you have it all consolidated in one place, you have a contiguous piece of land that’s larger, versus if you just have this long strip along the street, it’s much harder to make use of it. So that’s one of the things that we’re planning on.

The New Multigenerational Society

Murphy: One of the things I think we’re going to experience writ large in the US, in the West, is this transition from majority-young society to majority-old society. What do you think the multigenerational towns and cities of the future actually look like? How do they compensate for this change in the dynamic of the makeup of the people?

Zuegel: So I guess the first thing I’ll say is we’re still figuring it out. We have the software and the hardware piece, right? And we’re actively building the hardware right now. But we want to be developing the software in parallel. So what we’ve been doing over the past few years is we have an event called Edge Esmeralda, where for a month we live in a small town close to where we’re building this village, and a thousand people come, and it’s sort of like a temporary college campus. And we all live and learn and work together in this village.

And through that, we’ve gotten to learn: what does it mean to have a successful design that works for, you know, newborns and octogenarians and everything in between? And we’ve learned a lot from that experience because people in different age groups do have different needs.

American life right now is going more and more in the direction of age segregation. And I think a big part of why is it’s just simpler in some way. You know, if you’re designing a building for seniors, it’s going to be extra important that you have ramps everywhere and there’s no stairs that they have to climb and stuff. And so when people are designing buildings, it’s just easier to think: what is a building that’s good for an 80-year-old?

The downside is that when you end up having that age segregation, you miss out on so many wonderful interactions. I learn a lot from people who are both younger and older than me, and I hope that I teach them things too. And I think there’s a lot of wisdom in spending time with people at different ages.

I think also, even though I mentioned at the first level things can be simpler if you plan for the segregated needs, I think actually on a second order, a lot of things become much more complicated. I’ve seen this sort in my own life, looking at my grandparents on the two sides. I mentioned on one side of my family, my grandparents lived in Chautauqua, and we’d go spend time there, and at one point we had four generations of Zuegels living in that household—everything from me to my great-grandparents.

And then on the other side, my grandparents had chosen to live in a much more conventional retirement community. And it’s beautiful, it has great views, but it’s kind of hard to get to. And so visiting—I love seeing them, but visiting them is kind of challenging. You know, it’s not a place that’s made for me to be there. And so frankly it’s more of a lift to go see them. And when I go, I don’t really want to stay because I’m only there to see them. I’m not really there to live my life while I’m there.

And so I think things actually end up getting more complicated because now you’re more separated from people you care about simply because of the environment, for example. Also, childcare is one of the biggest things that people talk about as a challenge. When I look at my husband’s family, he’s from Argentina and he grew up in Buenos Aires, and he had 40 or 50 family members within a 30-minute drive of where he grew up. And it just doesn’t seem like having kids is such a big deal there, because there’s always someone around who loves you and wants to take care of you. The burden is more spread across the whole family.

Again, by sort of segregating by age, you end up losing out on all those benefits that are a lot harder to measure.

American Colleges Make the Economy Dynamic, but Break Up Families

Murphy: One of the things we were looking at in these projections into the future is what happens when you have these very large numbers of retirees and an increasingly small number of people in the workforce. And does that actually accelerate a lot of these segregation choices where young people will want to congregate where other young people are, and that will pull them closer towards these urban cores? Do you think there are places around the world where policy decisions have been made that actually help encourage this multigenerational living?

Zuegel: I think one thing that makes Argentina special, and a few other countries that I know of have this characteristic too, is that they have one main city. Like a third of the Argentinian population lives in Buenos Aires. Japan has this with Tokyo. I forget what the ratio is, but it’s a huge portion of the population. Paris has this—it’s very centralized.

So basically, if you grow up in Paris, Tokyo, Buenos Aires, you end up staying there, probably, because that’s where the most opportunity is. Whereas in the US we have a much more distributed system of cities where, you know, if you’re an 18-year-old or you just graduated college or something, you’re deciding what you want to do. And if you’re really into film, you’ll probably go to LA. If you’re really into finance or fashion, you’ll probably go to New York. If you’re into software, you’ll go to San Francisco.

And so you have this multipolar world where that ends up pulling people all over the place. And even if you grew up in Manhattan, which is an incredible city, super vibrant, so many opportunities—if you just happen to be really into tech, you’re probably going to move to San Francisco and be away from your family. I’m not saying that that’s a bad thing. I actually think it makes America really dynamic, but I think it contributes to this problem that we’re talking about.

I think another thing that contributes is the American culture of college. So when young people turn 18 and they’re thinking about going to college, it’s sort of a moment that by default will uproot them and take them somewhere else. And I think the way that the US does college is different from many other countries where we have a campus culture, where you live on campus and it becomes your life. And college is almost more about the social scene than about the classes in many cases.

Whereas in many other countries, you go to the college that is close to where you grew up, and maybe you still live at home with your parents. There’s not as clean of a moment where today’s the day you move into the dorms and now you’re away from your family. Rather, it’s almost like an extension of high school.

Again, I think there’s pros and cons to both systems. I for one loved having independence at the age of 18 and I thought that was really cool. And I think it also does make the economy more dynamic because you think, where should I really be going? But it also, I think, comes at the cost of more multigenerational places. So it’s a hard trade-off.

Murphy: If you forecast out, do you think these behaviors will be the same? Do you think college—there’s going to be a smaller and smaller pool of young people going to these universities. How do you think that might change if you look into the future?

Zuegel: I think fewer and fewer people will probably choose to go to college over time. And so what that means is maybe they won’t have that clear moment where it’s like, today is the day you move into the dorms, you’re out of the house. Maybe they go to a technical school nearby or they already have some skills, so they just start work. And I think that’s less of a moment that would immediately pull you to a different location.

You still could, right? If you’re 18 years old and you want to be a mechanic, or you want to start a tech company or something, there’s nothing stopping you from going to another place. But I think the college application process just makes it so much more likely because, you know, people will apply to ten schools or whatever, and then they’ll go to the one that they get into and it happens to be in Massachusetts, or it happens to be in Illinois or whatever, and they go there. So I do sort of expect that as fewer people go to college, we’ll see a reduction in this to some degree.

Remote Work and the Expansion of Metro Regions

Murphy: Do you think remote work had any real impact on this?

Zuegel: I think so. I actually haven’t looked at the numbers recently since COVID, but just anecdotally, so many people I know have moved to be closer to their families. And I think, I mean, part of that is I’m in my 30s now, so maybe my friends are just getting older, but I do think that there was sort of a step change during COVID where people felt a little less tied to place professionally.

It has loosened people’s constraints, but people also still do really value being in a metro region where they can get in. And one of the bets that we’re making—we’re 90 minutes north of San Francisco. That’s close enough where you could drive into the city and back in a day, no problem. Or you could spend an evening and come back. Especially with a self-driving car in the near future, you could just be responding to email as you go into your meeting.

And people probably don’t want to make that drive every single day, but maybe they do it two days a week or three days a week. That was much harder to imagine just six years ago, before COVID. People were not doing such a hybrid sort of thing. And so I think basically my bet is that metro regions now can be a bit bigger because you don’t need to be in the office five days a week, and so you can have a little more tolerance for a slightly longer commute.

I do think that that will create huge traffic problems. So I’m not saying that it’s necessarily a great thing. We’re building right on top of the SMART train line, which goes from Cloverdale down to Larkspur, and you can take the ferry into San Francisco. So I still think transit will be actually really important for keeping things from getting too congested.

Basically, I think people will actually still really value being in metro regions. They just won’t need to be right next to the office like they previously wanted to be.

A Real Alternative to the Suburb/City Dilemma

Murphy: What’s the important thing for you and the types of people you want to live in the town?

Zuegel: I think of what we’re building as an alternative to the suburbs. So I’ve never been to Ireland, but many places in Europe have this pattern of development that I really like where there’s the heart of the city, and then it has train lines going out, and then you have these very compact, walkable villages along those train lines. And if you want to get into the city, it’s actually not too hard. You just hop on the train, you’re in the city, then you come back and you walk and you get your baguette in the morning or whatever.

I think in America we don’t have very many of those. The train is not the most critical piece of that, but it certainly helps that pattern of development. What we typically have in the US is just kind of like continuous sprawl in all directions as opposed to pockets of high energy. And that has a number of challenges, but it means that everyone’s got a little bit of green space in their yard, but they’re not really usually that close to nature. And then also everything—there’s not much in walking distance from most American homes, so you have to get in your car to go everywhere, which further makes everything more spread out.

And so what we’d like to do is create this really high-energy pocket that is really great for walking and biking. When you’re in the village, you don’t need to get into your car basically at all. And I think the types of people that we’re hoping to attract are people who value family but are also very intellectually curious and like to build things.

And I think in the Bay Area you often get the second thing—the intellectualism, the builder energy. But it’s much harder to find places that have that and also the family component. And so many people I know are looking towards some suburb and they’re like, I have to decide between living in San Francisco or Berkeley or Oakland, which have this vibrant energy but also needles all over the ground and the schools are not very good. Or I go to the suburb where I don’t really know people that well because everything’s spread out. I can’t walk to my favorite coffee shop. But at least my kids will be safe and they’ll have a good school.

And I think we’re trying to get the best of both worlds, where it’s this high-energy place where you do bump into people and there are interesting things going on, but also it feels very safe and has a really high quality of life and education.

Real Life Is The Classroom

Murphy: One thing I found is very important to Americans is: are you near a good school? And it’s really deeply integrated into the future of cities and the future of communities. What do you think is going to be the big trend in schooling as part of communities over this next period of time?

Zuegel: Well, there’s two ways to answer that. There’s what I think will probably happen by default, and then what I want to have happen. And I’m not exactly sure what will happen—it’s harder for me to predict that. But I think I can say what I’d like to see happen, what we’re doing to try to turn it that way.

Conventional school puts you behind a desk most of the day. There’s workbooks and stuff you draw on and there’s a teacher at the front of the room. It’s very much like someone’s handing you knowledge and hoping you can grab it. And I think that to some degree that can be very useful. There’s certainly a place for that. There’s certain types of things that you can learn that way.

But my experience going to Chautauqua growing up was the coolest educational experience ever because the entire town was the classroom. And I think also part of what I loved about it was that the education between the adult and the kids is very integrated.

So I’ll describe a typical day in Chautauqua. At 10 a.m., they have the morning lecture that basically everyone in town goes to, and it might be Jane Goodall talking about chimpanzees, or it might be the inventor of the digital camera pulling apart a digital camera and telling you about all the pieces. And in the bleachers there’s people who are 90 years old and there’s their grandchildren and everything in between.

And I think not only is the content cool, but also the meta experience of being like, oh, adults can choose to learn for their entire life. It’s not just something that you do at school. And I think that that’s a really deep lesson for kids to learn. And it’s one that you don’t just tell them—you show them.

Also, going back to the idea of the whole village being the classroom, I think this is true of many people, but I’ll speak for myself, which is that I learn best in my body and in space. And I think that there’s something about memory—people will make memory palaces. I think if you learn things when you’re out in an environment, it’s just stickier and it means more. I think it just also feels more real because if it’s just a workbook that you’re doing, it’s harder to make it tangible.

I remember learning addition and subtraction or whatever, and they would do dollars and cents. They’ll be like, imagine someone gives you a dollar—you buy something for a dollar, but you only have a $5 bill. And how do you know that kind of thing? It’s kind of boring to do it on paper, but if you go in person, you’re actually buying a candy bar and you have a $5 bill, and then they give you back four—you learn addition and subtraction in the real world. And I think that one of the reasons why many kids will be demotivated in school is it just feels disconnected from their life.

So one of the things that we’ve been experimenting with with Edge Esmeralda, the month-long event that I mentioned that we host with 1,000 people each year, is people are invited to bring their kids and have their kids run as free as possible throughout the town. And there’s sort of a cultural norm around all of the people attending there that it’s normal for a kid to just be on their own, you know, as long as the parents are comfortable with it, and there’s a certain independence that comes from that. And it’s also encouraged for adults to be interacting with the kids.

If I had to sum it up in a sentence, it’s making school more like real life as opposed to this segregated place that is just this bubble where we hold kids for eight hours and then drop them back off with their parents.

Esmeralda’s Open Door Policy

Murphy: Do you think it’s possible to build a town in a city where it’s just an open-door policy? And how do you actually get there? Is that the aspiration?

Zuegel: It is. Yeah. And I’ve got to experience it myself. I actually got to experience both sides of what we’re talking about. Growing up in a suburb here in California, I did not have that much independence until I basically got my driver’s permit when I was 15. That’s just sort of mostly a function of where we were living. It was sort of disconnected from things and there’s a freeway I would have to cross, and so my parents wouldn’t want me to bike, kind of reasonably.

But then in the summers I would go to Chautauqua, which is the safest place ever. People leave their doors unlocked. It’s also in the middle of nowhere, which I think is helpful. I’m not happy about that dynamic, but it does make it feel kind of like this safe bubble. And from a really young age, my parents would be like, oh yeah, just go walk to camp by yourself or can you get us a gallon of milk or stuff like that.

But I think it’s possible to do it in larger cities, too. And I think that there’s a really strong aspect of culture. One of my favorite pieces of media is called Old Enough. Have you ever seen this TV show? It’s a Japanese TV show. And the premise is they get really, really little Japanese kids, like a three-year-old or a four-year-old, and they do an errand by themself for the first time. And then a video crew…

Murphy: That’s cute.

Zuegel: It’s so cute. And, you know, their mom will be like, can you buy some udon for me to cook later tonight? And she’ll give them money. And they go and they usually don’t get it quite right. They buy the wrong thing or something. But I think in Japanese culture, including in really big cities, they are more comfortable letting their kids go. I think also Japanese cities are a lot safer. So there’s some very real hurdles that we have to get over. But I think there’s really a cultural component, and I think we can push that boundary a bit more than we do.

Making Cities Worth Living In

Murphy: What do you think are the things that need to happen for more people to want to live in cities, not just because there’s more economic opportunity, but because they believe their lives will be better? What are the policies you’ve seen that you think can be most transformative?

Zuegel: So I think one is—cities are really loud. Many cities are really loud. Some much quieter than others. But I think people are much more affected by the noise than they realize. My friends watching this will make fun of me because I think I’m particularly noise-sensitive. But I think there’s a lot of research that shows if you sleep in a noisy environment, your risk of Alzheimer’s goes way up. Your cortisol is much higher. I think there’s just this general sense of something’s wrong when you’re in a noisy environment.

And cities are loud, mostly because of cars and mostly because of internal combustion engines to be specific. So I’m really excited that the world is going more electric because cities are going to get a lot quieter. And I encourage you next time you’re walking down a normal city street, just notice how much of the noise is just the cars.

There’s really a wide range here. Like in Buenos Aires—they have, because it’s a relatively poor country, a lot of the cars run on diesel or biofuels that I’m not even really familiar with. Often they’ll also be missing—they’ll be really old engines that don’t have certain things like their muffler. And so it’s way, way louder, especially the buses. They are really loud.

On the opposite side of the spectrum is Tokyo. It’s the biggest city in the world—38 million people. But as long as you’re off of a major street in Tokyo, it’s basically dead silent. The most striking thing to me in Tokyo is you walk around and you can hear your own footsteps, and it’s the biggest city in the world.

I should say that not all the noise is from internal combustion engines. Some of it’s also just the wheels on the road—that makes a lot of noise too. But if we can just get rid of IC engines, we’re going to get 50% of the way there. Okay. So that’s number one.

I’d say number two—this is more in the policy technology side of things—but I think finding ways to finance public transit and make it really, really high quality is important. And one tool that I just don’t understand why it’s not more widely used, because it feels like free money, is basically when you build a subway line or a train or whatever, any place that you put a station, you’ve instantly made that land much more valuable because now more people can get there. You know, it’s basic network theory.

And so you think, oh man, there’s all this increased value that this has created. Surely we can use some of that to pay for the train. And a number of countries do this. Hong Kong’s MTR does this where they basically own the land around the stations, and then they build malls there. There’s other things you could do where it could get a portion of the property tax increment that’s created in that area. There’s a lot of ways you could structure this.

The technology of cities is about getting benefits to scale. And something like public transit is something that allows you to get a lot more people in a smaller amount of space and happily using it without tons of traffic on the road. Basically, that creates huge positive externalities. But, you know, BART, for example, here in the Bay Area, they own some of the land around the stations, but they haven’t really employed this tool. And yet they’re always asking for funding and they’re always getting budget cuts. And it’s just—they’re creating so much value. If they just get a small sliver of that value, it’ll pay for all of it. So I’d love to see that more widely used.

And we’re using a tool a bit like that with Esmeralda. There’s something called an Enhanced Infrastructure Financing District, EIFD. The basic idea is that the land right now, it’s vacant, and that means that it has a relatively low value and it pays a certain amount of property tax, which is a percentage of that value. Once we build infrastructure and build homes and restaurants and cafes and make it a cool place to be, the property value will shoot up and that increment in the property tax is going to be an ongoing revenue source for the local government forever, hopefully.

And what we can do is we’re probably going to bond against that and pull some of that revenue forward and say we’re going to actually pay for this infrastructure through those bonds so that we can make it happen, which will then unlock all this future value.

Long way of saying, I think this is a broader category. It’s not just for trains. And I think that the world is starting to wake up to it, but I think we could step our foot on the gas and do so much more and build a bunch of cool stuff and pay for it much more easily.

The NIMBY Problem

Murphy: What do you think is the biggest thing blocking those kinds of policy changes?

Zuegel: I think the essential thing is that many people just think development and humans are bad. I don’t know if they would say it in those terms, but if you kind of peel a lot of the implications of things that they’ll say, they basically assume that any net additional person is creating, you know, burden on the environment or on infrastructure.

I don’t agree with that. I think people are generally good, and certainly there’s a lot of bad development out there that does ruin the environment. But it’s not inherent to the idea of development. But even if you were to take that as a statement of truth—that’s just because you’re not building more homes or whatever in one place doesn’t mean that those people aren’t going to exist, and they’re going to just go somewhere else and build it.

And so the NIMBYism problems that we have in our cities—I think people think that they’re being very environmentalist and protecting the environment. But what they don’t realize is that if you’re not building up in San Francisco, you’re building out into the beautiful California landscape. If you’re really an environmentalist, unless you’re going to stop people from having babies—but, you know, I guess someone might want to do that.

I think that basically it’s actually inconsistent. You’re kind of pushing development to the fringes and eating up greenfield land, as opposed to densifying, which is actually saving the environment. And I think the core of that is it’s just not intuitive. You know, if you were to ask the average person, what’s the most environmentally friendly place that you can live in America? I think most people would not know the real answer, which is Manhattan, because it’s super dense. Most people walk and bike everywhere.

So yeah, I think that’s one of the core things. I think a second piece for the sort of tax increment concept that I’m talking about—it’s just wonky and unintuitive and it’s kind of a second-order effect. And I think it’s really hard for most people to think in terms of second-order effects, especially on something that it’s not their core focus. And I’m sure this happens to be the thing that I spend all my time thinking about. But I’m sure that there’s something in medicine where I do one thing, but then it has this downstream effect, and I just don’t even realize, you know. So I think, yeah, second-order effects are really challenging.

The Digital-Physical Divergence

Murphy: What do you think is the most counterintuitive reality that we’re going to experience about urban living or city living? If you look 25 years from now, will there be anything that will be so markedly different?

Zuegel: This is a bit of a sad prediction, and I think it’s already kind of happening, but I do fear that it’s going to accelerate. Even as we have all this really cool technology that comes online, and it makes a bunch of things easier, I don’t see those improvements getting into the built environment nearly as quickly. And so I think that we may end up in a world where we have incredible digital technology, and then we live in these crumbling buildings and crumbling infrastructure.

It’s just so much easier to do things in the digital world than in the physical environment. And I think that that’s accelerating. And if anything, the physical environment has gotten harder, partially for regulatory reasons, like NIMBYism, but also partially for safety reasons, which—people often talk about how fast they built the Golden Gate Bridge. But what they don’t talk about is that a lot of people died.

Murphy: Oh, yeah.

Zuegel: Yeah. And I want to build things faster. But I also do not want to kill people while we’re building. Or the Hoover Dam—I don’t even remember. An obscene number of people died building that. And so our productivity in construction has gone down in part for really bad reasons, but in part for a really good reason.

So I think unless we can find a way to automate more in the built environment, that divergence is just going to accelerate.

One thing that’s been a puzzle for me, and I actually have been trying to figure out, so if anybody knows, please let me know: It feels like in the mid-20th century we were on this trajectory of being able to manufacture buildings. You know, people always talk about the Sears catalog—you could order a house. Or mobile homes started to become a thing.

And the cool thing about manufacturing is you can make processes really efficient because they’re in a factory, and then you can ship them to places. One of the reasons why phones are so cheap is because they’re small enough to build in a factory and ship off, right? At some point we got off of that track and we’re not really manufacturing buildings much anymore.

A gut instinct I used to have, but I no longer have, is: well, maybe it’s just because inherently you’re going to have lower quality that way. And, you know, yeah, we still make mobile homes—they’re just kind of flimsy. And most people don’t want to live in a mobile home. Most people want to live in a solid house, right? But I don’t think that’s inherent. You could make a really nice house in a manufacturing process. There’s no sort of physical reason why you couldn’t.

I think part of the challenge is that mobile homes ended up being perceived as lower status. And actually, it’s really hard to now create a new mobile home park in this country because people don’t want to live near them for the most part. And what that means is that you then end up having this sort of self-perpetuating process where people only make low-end mobile homes because you’re not allowed to—in most cities in the Bay Area, I haven’t read every single code, but I could guess that most of them would not let you put a mobile home on a normal property. But why not if it looks nice? What’s the problem?

The Cities That Have Gotten It Right Before

Murphy: What is your most optimistic take on this future of urbanism, where new cities, where things are being tried, maybe for the first time, that haven’t been tried in a long time?

Zuegel: There’s a number of towns and neighborhoods that I’ve studied that have been built in the last three decades or so that are really wonderful, and it’s a small number, but it’s been growing. Seaside, Florida. Serenbe outside of Atlanta in Georgia. Las Catalinas in Costa Rica. Seabrook, Washington. I could go on, but there’s a few dozen of them.

In the real estate world, most development that happens is based on comparables. Because you’re putting so much capital into a project, you want to know that someone else has done basically what you’re doing and it worked. In fact, they see doing something different as a problem as opposed to—oh, great. Oh, thank God someone else already did this. I can be sure that I won’t lose all my money.

As these neighborhoods and towns have been built and are growing up, and there’s more and more of them and they are successful and they make money—the money part is really important, I think. And it’s not—I’m not doing this to maximize my net worth. There’s probably easier ways to make money. But I think it’s really important so that we build more.

Again, it’s so capital-intensive. For it to really scale up and become the pattern of development across the country or across the world, it needs to make a return. Money makes money. So I think I’m seeing more and more people being able to look to those references and be like, oh, that actually works. And in fact, they made more money. That’s one of the things—these communities, people love living in them. They have a super high price premium because people like them more.

And so I think just as more and more of that data comes out, more and more people will build in that way and hopefully learn the lessons that got them there.

Murphy: Where will the best city in America be in 2050?

Zuegel: Oh wow. I always struggle with “best” questions because it’s like, best relative to who? I guess relative to me. But I’ll put it this way: the city that I look to most for inspiration and learning is probably Tokyo. Not because they’ve gotten everything right, but to me, it is a city that proves that things are possible that I didn’t even realize were on the menu.

Like I mentioned, you can walk into a side street and suddenly you can hear your footsteps. Growing up in the Bay Area and coming to a city like San Francisco, I just never would have considered that as possible. For example, they have virtually no public parking spaces. If you want to store your car, great. Just like how you store your sofa—you figure it out.

And I think that there are certain things that just kind of open my mind of what’s possible. So I think Tokyo is really special, and I think the rest of the world has a lot to learn from it.

Murphy: I think that’s really a nice note to end on. Thanks so much, Devon, for coming and chatting. We will come back in 25 years’ time and do this in Esmeralda. But I really appreciate you coming. Thanks so much.

Zuegel: Thanks for having me.