To follow up on why making massive housing projects--or really any other massively tall public works building--don't make sense, I figured I'd make a list of the reasons they're a bad idea.
1. Politicians want to put their name on them, and all financial concerns go out the window in the rush to honor politician X.
4. Too high for water pressure from fire hoses.
5. Too high to jump into a net.
6. Can't see what's going on at street level.
7. You talk to people at street level, but not in a long hallway.
8. Large spaces devoted to stairwells.
9. One mishap can render the whole building useless and put thousands of people into temporary housing.
10. Politicians play games with the store fronts for rent, or don't provide them at all.
11. Easier to vandalize vehicles in big parking lots/structures than in a closed garage.
Now you can get around part of this with a privately owned structure, especially in an office setting, but even so, there seems to be a limit to the size of building that can be efficiently operated. For example, the cost per square foot of the new World Trade Center is, at about $1000/sf, about five times the average for office space. Now it's cool to look out when you're 1500 feet above the streets, but is it cool to the degree of a million bucks for an executive office?
Really, it has a lot to do with what was going on when Diesel made his famous engine. The world was going to ever greater scales with the steam boiler, and part of Diesel's motivation (beyond efficiency) was to provide an engine that would work on a smaller scale--say for the individual craftsman or small factory. He succeeded, and in the process severely limited the economies of scale we can, or ought to, try to achieve in various areas of our daily life.
In other words, our society, and our urban planners, need to catch up with what Diesel would have told them around 1900. We don't need to design everything around a steam boiler anymore.
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