How Do You Make A City From Nothing?

Tasked with carving vibrant urban centers out of the jungles of Guatemala, the proponents of charter cities must figure out what actually is required to create one.

How Do You Make A City From Nothing?

On the morning of June 28, 2009, Honduran president Manuel Zelaya was awoken by soldiers, stashed on a plane and deposited in Costa Rica still wearing his pajamas. The coup had been a long time coming, practically since his election three years before, when he proved to be more of a reformer than his backers in Congress had bargained for. The army accused Zelaya of plotting to rewrite the Constitution to pave the way for his re-election; Zelaya decried the plot as illegal. A truth and reconciliation commission would later decide they were both wrong, but by then Zelaya wasn’t getting his old job back, and it’s fair to ask whether anyone would want a second term.


Honduras has the world’s highest murder rate, with more homicides per year than all 27 nations of the European Union combined. San Pedro Sula, its second-largest city and the center of the garment trade, is more violent than Ciudad Juarez, home to Mexico’s drug cartels. This isn’t a coincidence: Mexico’s literal war on drugs has driven the cartels south into Central America, with increasingly lawless consequences. Killers are rarely brought to justice–even when they’re the police.

Anti-Zelaya protesters before the coup.

When the son of a university rector was murdered in October, police officials admitted the suspects were fellow officers but failed to detain them. A former police commissioner who subsequently charged that their ranks were riddled with drug traffickers was assassinated in December. In the face of such institutional dysfunction, it’s tempting to imagine how a clean slate could provide the country with a much-needed opportunity to reinvent itself.

A year after the coup, Honduras still found itself an international pariah, cut off from foreign aid while investors streamed toward the exits. Aides to the new president Porfirio Lobo were brainstorming ways to lure them back when a friend sent them the link to Romer’s charter cities TED talk.

Lobo, his chief of staff Octavio Sanchez and Juan Orlando Hernandez, president of the Honduran Congress, flew to Miami in November 2010 to hear Romer’s pitch. Impressed, Lobo invited him to the Honduran capital, Tegucigalpa, to make his case to Congress. Accompanied by his father, a former governor of Colorado and past chairman of the Democratic National Committee, Romer traveled to the capital in January, and within weeks Congress had passed a constitutional amendment granting Lobo’s government the power to create Special Development Regions (“las Regiones Especiales de Desarrollo” or “REDs”) modeled on charter cities. The vote was 126 in favor; one opposed (with one abstention).

The Lobo administration wants to get the first RED up and running in the next year or two, before the next presidential elections. To get this done, the administration has empowered Coalianza, an agency created in March 2011 to manage the country’s public-private partnerships. Overseeing a handful of staff are three commissioners, including Sanchez and Carlos Pineda, a 41-year-old lawyer and the eldest member of what he calls “our de facto think tank”–a close-knit group of free market reformers who go back a decade together. “The international community was against us, unemployment was 42 percent,” and foreign direct investment–never more than $1 billion annually to begin with–had been almost halved, Pineda told me recently at Coalianza’s headquarters, an airy, unmarked villa on a gated street in Tegucigalpa.

Unlike a previous generation of instant cities such as Brasilia, or debt-fueled fantasies like Dubai, the REDs are deliberately being planned on the cheap. “How do we do things with no money down?” Pineda asked rhetorically. “How do we not max out the credit card?” One answer is to let others pay. To that end, the Constitutional statue passed last July enshrines the principles of free trade, low taxes and open immigration in the zones, in the hopes of making them more attractive to manufacturers than Mexico or China. On top of that, the REDs can establish–or outsource to foreign governments and companies as necessary–their own hospitals, schools, courts, judges and even police. They are public-privatized states-within-a-state, or rather pieces of states-within-a-state.


In practice, this means creating separate police for the REDs under the tutelage of foreign instructors or private security forces. Judicial nominees might come from outside Honduras (as they are in Hong Kong), and the final court of appeal might be the Supreme Court of Mauritius–an island nation ten thousand miles away.

Day-to-day governance is hardly less complicated–local governors will be watch-dogged by audit committees and report to a nine-member “Transparency Commission,” whose pro tem chairman is Paul Romer. From there, the REDs dissolve into a welter of overlapping and competing jurisdictions–municipal governments, unincorporated areas, even “opt-out” zones administered under Honduran law, not the RED’s.

All of which underscores the monumental planning challenge facing Coalianza. Each zone–or rather each site, of which a RED may have several–is 200 square kilometers, or more than twice the size of Manhattan. The buildout will begin in 50-hectare (123-acre) increments, that being the average size of your typical free trade zone. The land inside will technically be owned by the RED, which means the government must either acquire or grandfather in (and tax) whatever acreage it doesn’t already own. Romer’s ideal charter city occupies uninhabited land, “but there is no place in the country like that,” Pineda said. Still, he and his colleagues hoped to avoid what he called the “original sin of taking land by force.”

A dozen sites are under consideration to be the first RED. All lie along the coasts or near the borders of Guatemala, Nicaragua and El Salvador, as residents are expected to vote with their feet until elections are held. They hoped to make an announcement within the next 60 days, Pineda told me, but stressed that everything was still provisional–a “menu of options,” he said, that “should be treated as a draft.”

At dinner that evening at his favorite hole-in-the-wall baleada joint–baleadas being Honduras’ answer to the burrito–Sanchez, the president’s 30-something right-hand man, took this sentiment still further. Pineda’s ideas were his own, he claimed, not government policy; the renderings I’d seen weren’t official; announcements by competing groups–one calling itself the Free Cities Institute and another Future Cities Development Inc., a builder of cities for profit–were delusional; and the design of these cities was not only unsettled, but was ultimately unimportant. They were an urban Rorschach blot, in which each of the principals saw a provisional path to social transformation.

“It’s a tool for everyone to imagine their future,” is how Sanchez described the REDs. “You see what you want to see.”


Planning the Unplanned

Imagining the future is one thing; designing cities for as many as 10 million inhabitants (in a country of only 7.5 million) is an altogether different exercise–especially if you doubt that urban form and planning make any difference in their success.

“Do you know of the South Pacific cargo cults?” Romer asked me last October. He was referring to the tribes who had ritually restored World War II landing strips in hopes the U.S. Army would return, bringing C rations with them. For 70 years, they’d mistaken circumstance for causality. “I think architects may be running their own cargo cult,” he said. Their obsession with form had blinded them to the true importance of rules. Look at the Army: “It went from one of the most segregated institutions to the most integrated” gradually in the decades following the Vietnam War. “The buildings didn’t change.”

“It’s important that buildings don’t catch fire or fall down when there’s an earthquake,” he added, affirming the necessity of building codes. “Otherwise, I don’t think it matters all that much.”

Romer had made a similar point a few years earlier in a debate with Yale University economist Chris Blattman, who had compared charter cities to the infamous high-rise public housing projects of Chicago’s Cabrini-Green. Romer replied that high-rises had worked “remarkably well” in sheltering the poor of Hong Kong and Singapore. “The key difference between these cases lay not in the hardware or architecture but rather in the supporting rules, particularly those related to crime,” he wrote. Architectural historian Katharine G. Bristol made a similar case in her 1991 essay “The Pruitt-Igoe Myth,” arguing modern architecture hadn’t failed the residents of infamous St. Louis projects —institutions had.

Still, plans must be made, not just for Honduras but for the potentially dozens of charter cities Romer hopes to inspire around the world. His guru in these matters is Shlomo “Solly” Angel, who teaches planning at NYU and Princeton and was his first recruit for the Urbanization Project. Angel saw the developing world’s urban explosion first-hand during a 30-year career as an advisor to the United Nations and the World Bank in Bangkok, Nairobi and across Latin America, including Honduras. Most recently, he’s turned to geographic information systems and satellite photography to document the astounding pace of urban expansion.

Angel’s working theory of instant urbanism can be reduced to two principles, each of which is controversial. The first is that outward expansion is inevitable and must be accommodated, and the second is that the mistake most planners make is to plan too much, not too little. “What I try to do is the opposite of what these other guys are trying to do,” he told me recently in his SoHo loft. “They’re trying to specify more and more and more. I’m saying: ‘What is the minimum amount that I could specify?’ And after that, I say I don’t care.”


The minimum, he believes, is a grid, Manhattan’s being the exemplar. In 1811, when the city was barely settled above Houston Street, a three-man commission produced the plan to grid the entire island up to what is now 155th Street, a grid that was later extended into the Bronx and Brooklyn. Thomas Jefferson had performed a similar feat in drafting the Land Ordinance of 1785, which eventually gridded three-quarters of the United States into townships.

Angel’s plans for cities such as Santo Domingo, Ecuador, called for extending their grids into hundreds of square kilometers of farmland. “We don’t have to specify everything” if we have a grid, he argued–not even streets. In Bangkok, he noted, developers negotiate directly with residents to acquire the right-of-way needed for the city’s filigree of residential streets. But in the absence of a grid, its few arterial roads lie miles apart, causing its infamous traffic jams.

Markets can do most things, he said, but we still must plan the public goods–including the location of the port, the airport and the arterial grid. “When you talk to economists, they somehow have convinced themselves that planning has no role–that the market can generate whatever it needs to generate,” he said. “Look: The market will not actually generate the public goods necessary to build cities.”

On this point he’s in agreement with another of Romer’s muses, a World Bank planner and consultant named Alain Bertaud. As a junior architect, Bertaud toiled on the construction of Chandigarh, the Punjabi capital designed by Le Corbusier. The experience seems to have soured him on his profession; he rails against planners’ “intellectual stagnation” on his website.

To Angel’s rules, he adds two of his own. First, any charter city should be “a very dense, mono-centric city,” he told me, to maximize accessibility to the factories that are its raison d’etre. In a country like Honduras, where horse-drawn carts are still common, sprawl and long commutes could inhibit economies of scale. Second, the authorities shouldn’t limit plot sizes anywhere in the city, in order to let residents lease as much or as little space as they can afford.

“One of the main problems with Chandigarh is that it was immediately surrounded by slums,” he said, “and then those slums were pushed further and further away.” Any city meant to attract the working poor must not only embrace informal settlements, but actually formalize them. “You have no way of knowing what tradeoffs they will want to make on housing when they come. The best solution is to let it float completely…I would demand a minimum amount of infrastructure, but not space.” As an aside, he added, “no urban planner would go for this.”


Angel’s and Bertaud’s insistence that private interests can’t produce public goods would appear to contradict the desire of Romer and Coalianza to let investors pick up the tab for just about everything. Not only would this be a windfall for Honduras, but it would also be a triumph over economists such as Jeffrey Sachs (whose Millennium Villages Project has come under fire yet again) who argue the only thing that can save impoverished nations is a massive infusion of aid.

And what is a “public good,” exactly? Highways? Hospitals? Utilities? Schools? Charter schools, for-profit clinics, and infrastructure operators such as DP World (which runs 60 ports worldwide) all demonstrate how public goods can be privatized–including roads, the most prominent example being the lease of the Chicago Skyway to investors for $1.83 billion in 2004. The REDs thus also represent an opportunity to realize the fully privatized metropolis envisioned by the George Mason University economist Alex Tabarrok in The Voluntary City.

As Tabarrok explains it, the key is to “internalize the externalities,” i.e. compelling everyone to pay the costs of public goods. Companies might be enticed into planning and paving streets, for example, so long as they can charge congestion pricing. “Since they’re starting from the ground up, there’s a huge opportunity to do things differently,” Tabarrok told me. “There’s no reason why you can’t have private roads or private security firms.”

This thought has occurred to Patri Friedman–seasteader, grandson of the University of Chicago economist Milton Friedman and managing partner of Future Cities Development, Inc. In an interview last fall, Friedman described his firm as a “platform” for creating cities with “cutting-edge legal systems” and decentralized, privatized infrastructure. Although Friedman claimed to have signed a preliminary agreement with the Lobo government to develop a proprietary flavor of RED, Sanchez strenuously insists otherwise.

“Maybe having a corporation run the place is a pretty good idea,” Tabarrok said. “People will accept it–I don’t think people want democracy all that much. They’re not that concerned about democracy until their wealth has built up to a considerable degree. Not having a democracy is okay, especially when people can leave.”

Click here for part three.


This article was first published in Next American City.


About the author

He is the author, with John D. Kasarda, of Aerotropolis: The Way We’ll Live Next, which examines how and where we choose to live in an interconnected world