For the first workshop of this year’s graduation studio ‘Follow the Money’ we invited Jelte Boeijenga; researcher/advisor on spatial planning and urbanism, with a strong focus on the aspect of finance in city making.
Jelte started the workshop with an eye-opening lecture based on his research ‘Money and the City’ – sketching the sometimes alarming financial situation of the 25 largest Dutch municipalities. As a consequence of the current financial and economic crisis the national government is taking harsh austerity measures, while following a policy of decentralisation. This means that more and more responsibilities are being transferred to the municipal governments, putting pressure on their financial situation. At the same time municipalities are struggling with immense losses on cancelled or postponed ground development, as a result of the collapsed housing and office market (more about it here). High interest rates and decreasing land value are the result, bringing various Dutch cities in financial difficulties until such an extend, that they cannot maintain some fundamental services as schools, libraries and sport clubs.
The second part of the workshop was focused on Jelte’s most recent project. This is again about money, but now specifically focused on the ‘time value of money’, meaning the value of money with a given amount of interest earned or inflation accrued over a given amount of time. (Wikipedia explains). The students were divided into three groups, each given an excel model, linked to a scenario in which they own a certain property. By adjusting various parameters of the model, they had to come up with a strategy for their property; should they invest in order to upgrade it, how much should they invest, or is it better to sell it with a loss? As a final product of the workshop the students were asked to visualize the relations of their decision in respect to the financial outcome.