Urban planning: local development plan defects- part 3

Urban planning: local development plan defects- part 3 is the third article of a series of articles. Local development plan defects part 3 and the remaining two articles are concerned with the new approach to the plan-making process. The studied plans and their plan-making process do not consider the economic status of the country for that the plan-making and their plans were the same in studying and outcomes.

Developing a local development plan should focus on the city’s economic status. The economic cycle for a country and its effect on a city’s economic activities. A city will flourish when its internal economic activities are in good condition. The important aspect that all planners when building a plan should consider is stabilizing the economic activity in a city. The economic cycle could phase various problems leading to a recession and the stop of all economic activities in the city. As per (Denis & Williams, 1996) the economic cycle and its growth are determined in the short run by the country’s economic activity together with the area’s industrial mix. Industrial activity and mix is a core in the economic cycle stability. Industrial activity continuity and success rely mainly not on the workforce, technology, or dealing with taxation, but on resources that make the product price competitive in the market.

Misleading and inaccurate forecasting for the economic activities and development to define development needs lead to a negative effect on the economic cycle specifically when the construction market supply more units than required in the market. An economic researcher (William C. Wheaton) showed in his paper the relationships between the real estate cycle and the economy. Apartments and industrial space have a considerable effect on the economy and its cycles. For that, all economic forecasting must produce accurate predictions of the market needs for development.

He shows in his research that economic shocks are according to real business cycle theory the root cause of recession of economic cycles. From the variety, of types of economic shocks type the financial shock like stock market crashes, and liquidity crises in the banking system these shocks can affect every industry in the economy. Country fiscal reservoir and banking financial system crash is the most effective source for providing funds for development. Protecting the country’s money reservoir and banking system stabilizes the economy and the economic cycle.  

To sum up, resources and proper utilization are the core of industry continuity. Defining needs accurately in conducting economic forecasts is essential to protect the development sector from a crash. The country’s fiscal reservoir and banking system is the core source for money supply and funding development in the city. Here we reach the three areas of concern, resources-needs-funds, of the new approach to building a local development plan.  

Resources

Planners in the public sector must focus on building the local development plan on the resources (endowment) that the city has to supply the industrial sector. This will stabilize the market in the city and keep the economic cycle (see figure 1) instability as well as support the city in times of recession. As the economic sectors that benefit in the late stage of recession are industrials that will keep economic activities active and all related cycles.

Natural resources in the city should be identified and all related industries that benefit from these resources as raw materials. All related economic activities also should be identified to create a business cluster. The new economic approach to local development is cluster-based and reflects the core drivers of jobs and wages. As Nalin & Pinki shows that the dense economic agents and their interaction increase returns. If a city lacks an essential economic agent that supports the main industry then the public sector should focus on encouraging this type of economic activity to rise in the city. Industries that produce products of daily consumption nature should be a high priority in support from the public sector.

In building the local development plan public sector planners should focus on producing policies that encourage the continuous consumption of these productions that industry produce in the area. For example, if a building material is produced in the city a policy should encourage related consultants to define the use of this material in the project bidding document specifications. To increase economic stability public sector planners in adjacent cities should encourage the use of products in their cities as an integrative approach and keep industries activity active regardless of the economic cycle status. Another possible way of keeping an industry active is first, the supply of the raw material to industries in cities at a far distance at a reduced price to create positive competition. A producer of wood (figure 2) raw material used in various industrial production like, furniture- landscape products-construction shutter products-finishing materials-building structures components, could give this raw material to these industries at a discount rate equivalent to suppose the cost of preparing this material by 30%. These industries take these raw materials from location taking into account the preparation of the product themselves and managing the labor and machinery.

Second, on-demand production is the most effective way of reducing the cost to the minimum, reducing risk in manufacturing operations, and increasing revenue. For example, a factory that produces paint for the construction industry could face massive competition not only in available raw material, demand, workforce, the technology used in production, and tax system but in mass production that decreases product price. This could be tackled by using on-demand production.  

Other than natural resources, human-made resources. For example, Amazon has created a revolution in the publishing industry that will not cost the city to support it. How much is the cost of producing a novel rather than the creative mind behind it? How can the public sector support this industry and make it flourish regardless of the economic cycle status?

Industries that benefit from the available city resources whether it is natural or human-made reduce the cost of preparation of raw material, the cost of purchasing it, the cost of production, the sales price competitiveness, workforce affordability, decrease fiscal loss in the recession time, and increase in the quality of developments projects in the city.

This approach of depending on resources and their related industries analysis and assessment in building the local development plan have various benefits for the fiscal system of the country. The public sector will benefit from the continuous industrial activities by removing the possibility of removing public sector employees in times of recession that could continue for 5 years. Accordingly their financial support and social support in these times. Authorities will continue to receive business tax and labor tax, a massive reduction in financial support from public funds for business and labor in the city. This liberates the public sector from financial overhead to achieve priority development projects in the city and produce an effective local development plan.