If we built a new city in the modern era, it would be very expensive to do it from scratch. While most cities evolve organically and do not require all of their costs in an up-front investment, we ran some back of the envelope numbers on building a new city just to see what it would cost if we did build it all at once. Here is what they tell us:
How much do typical new cities cost?
Generally, building new cities is very expensive.Costs are highly variable, and depend greatly on site-specific conditions, but mostly are dependent on the ultimate success of the city. New city development runs as high as up to $1 million per future resident, though more typically can be done for around $100,000 to $500,000 per resident. Generally, those figures come down as the city's population grows over time.
How much of the cost would be land?
The average cost of land in the United States is about $3,000 per acre, and the population density of the United States is about 0.15 persons per acre. One can assume land costs per person for a new city in the United States would be about $20,000 per new resident, or somewhere between 5 and 20 percent of the ultimate cost of the city.
What is the potential profit?
GDP per capita is generally fairly high within cities - around $75,000 per person per year. It is conceivable that capital costs could be made up through taxation and fees over a period of time.
What are some examples of cities and their total up-front capital costs?
New York City: Between $500 billion and $2.5 trillion
Population: 9 million
Price per resident: $55,000 to $170,000
King Abdullah Economic City: $55 billion
Population: 20,000 to 1.8 million
Price per resident: $30,000 to $2.15 million
Dholera City: $30 billion
Price per resident: $810,000
Songodo City: $40 billion
Price per resident: $500,000
Masdar City: $20 billion
Population: 45,000 to 50,000
Price per resident: $400,000
Columbia: $1 billion
Price per resident: $333,000
Khazar Islands: $100 billion
Population: 1 million
Price per resident: $100,000
Thames Town, China: $785 million
Price per resident: $78,500
Fuzhou: $5 billion
Price per resident: $45,000
Brasilia: $19.5 billion
Population: 3 million
Price per resident: $6,500
Roger Weber is a city planner specializing in global urban and industrial strategy, urban design, zoning, and real estate. He holds a Master’s degree from the Harvard Graduate School of Design. Research interests include fiscal policy, demographics, architecture, housing, and land use.