2009 - CRE

Erick­van­Egeraat,­­
Chief­Architect­at­Erick­van­Egeraatassociated­architects­­
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There­is­really­no­need­to­actually­travelto­London,­like­I­foolishly­did­last­month,to­experience­first­hand­how­messed­upthat­economy­really­is.­The­City­does­not­justmake­you­feel­bad­but­the­overwhelming­displayof­omnipresent­ignorance­actually­makes­youpity­yourself­for­having­to­witness­it.­Travellingthrough­Europe­this­past­holiday­season­however,­I­was­probably­quite­fortunate­not­to­meettoo­many­people­boring­their­days­with­endlessreflections­on­our­economies.­Nonetheless­itproved­to­be­quite­difficult,­even­for­me,­not­toallow­myself­to­get­lost­in­the­thoughts­abouthow­to­deal­with­it­all:­‘Save­or­spend?’­‘Bargain,innovate,­
validate...’­ ‘Family­ first­ or­ countryfirst?’­
Were­ lies­ the­ root­ of­ all­ this?­ Can­ weescape­from­it?­One­would­trust­we­would­learnfrom­the­past,­but­instead­we­seem­to­be­fallingback­into­our­narrow-minded­certainties.I­remember­my­mother­as­a­very­kind­andcautious­person.­We­used­to­talk­a­lot.­Or­maybe­I­should­say­I­was­the­one­who­talked­and­it­wasmy­mother­who­listened­for­even­as­a­youngchild­I­was­already­very­talkative.­She­was­alwaysconsiderate,­very­tidy­and­precise;­caring,­butalso­often­worried.­Once­in­a­while­she­could­beoutright­blunt­and­cynical.­Like­one­time­yearsago­when­I­proudly­presented­her­with­my­newfiancee
, ­who­was­born­and­raised­in­the­Eastern­
Europe.­My­mother’s­reaction­was­disappointingand­blunt:­‘Are­you­marrying­a­communist?’­Andeven­though­I­knew­she­liked­my­bride-to-be,my­mother­stood­firmly­in­her­view:­‘Once­Red,always­Red’,­she­replied.­Not­a­thing­about­myfiancee
, 's­disposition,­age­or­background­couldmake­her­change­her­mind.­It­made­us­talk­lessand­my­mother­even­more­worrisome.
To­ me,­ my­ mother’s­ reaction­ will­ alwaysremain­indicative­of­a­real­quandary.­When­people­speak­from­experience,­it­isgenerally­based­on­an­unfortunate­incident­orless­advantageous­episode­in­their­lives.­As­badexperiences­are­usually­not­an­incentive­to­bebold­or­open­minded,­the­automatic­response
#06 (112) / 16–31.03.09
is­therefore­more­likely­to­be­caution,­suspicionor­flat-out­distrust.­This­is­precisely­the­reaction­which­is­now­generally­considered­the­mostdamaging­answer­to­today’s­unhealthy­economic­situation­and­we­have­no­choice­but­to­takea­step­back­and­gather­strength­to­see­past­theshortcomings­of­our­conventional­views.­Four­years­ago­in­2004­I­myself­lost­one­ofmy­offices­due­to­large­outstanding­paymentsowing­and­the­overnight­discontinuation­ofprojects.­Equally,­the­present­financial­tragedyhas­not­left­my­activities­unscathed.­These­daysdelayed­
payments­ on­ ongoing­ projects­ combined­with­prolonged­hesitation­to­start­newprojects­are­enough­to­hit­hard­on­a­relativelysmall­group­of­companies­like­the­one­I­run.­Itis­not­even­necessary­to­cancel­large­projectsto­make­an­architects’­firm­stumble.­I­have­toadmit­that­I­unfortunately­lost­a­lot­of­moneyon­both­occasions­but­I­am­still­happy­to­beable­to­continue­my­work.­Now­you­may­askhow­I­can­continue.­The­answer­is­that­besidesthe­overwhelming­support­I­have­received­thesepast­months­from­my­clients,­staff,­friends­andcolleagues,­my­work­is­ultimately­based­on­onething:­value!­My­team­and­I­simply­work­anddespite­certain­mistakes­and­the­need­to­startagain­we­always­make­value­–­true­value!­Andthis­is­much­more­than­just­money!
In­ America­ the­ Democrats­ and­ the­
Republicans­continue­to­debate­on­end­aboutwhether­Fannie­Mae­and­Freddy­Mac­were­theinstigators­or­the­victims­of­last­year’s­housingand­mortgage­crisis.­Analysts­speak­in­detailabout­the­repackaging­of­loans­and­the­saleof­securities.­Entire­libraries­can­now­be­filled
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Value (f)or money
­ We­are­now­more­than­two­months­into­the­New­Year­and­the­initialpanic,­or­let's­call­it­hysteria,­over­the­economic­meltdown­has­far­fromquietened­down.­On­the­contrary,­both­in­America­and­England,­it­seems­tohave­turned­into­a­media­controlled­collective­chastening.­
with­all­that­has­been­written­on­the­subject.­This­discussion­has­certainly­brought­interesting­perspectives­on­the­government's­role­inproviding­good­housing,­especially­in­a­countrythat­is­so­proud­of­allowing­the­free­market­todo­its­work.­To­be­fair,­Fanny­Mae­and­Freddy­Macdid­not­trip­over­just­a­financial­problem.­Theywere­essentially­unable­to­provide­what­theywere­supposed­to­do:­guarantee­the­value­of­themortgaged­objects­to­American­home-owners.­Greedy­as­any­other­successful­business,­theytoo­bought­into­bad­loans.­Despite­the­billionsof­dollars­made­and­spent­to­stimulate­homeownership,­they­failed­to­warrant­the­value­ofthe­products­they­were­expected­to­promote.­
Here­in­Russia­we­face­a­similar­dilemma.­
At­the­heart­of­the­current­debate­is­the­question­of­whether­large­investment­projects,­i.e.the­Sochi­Olympics,­should­be­carried­out­byfederal­institutions­or­entirely­left­to­privateinvestors.­But­please­wake­up!­This­is­not­amatter­of­either,­or,­but­both.­These­projectsneed­both­parties­to­cooperate.­And­what­ismore­is­the­federal­government­should­regulate­and­adjust­not­only­the­financial­marketsbut­­the­real­estate­ones­as­well.­And­not­onlyhere,­but­everywhere!­In­the­early­nineties­it­was­not­just­Russiabut­the­entire­world­that­considered­deregulating­was­the­best­thing­to­do.­Up­until­the­lateeighties­the­entire­real­estate­production­inthe­Netherlands­was,­like­here­in­Russia,­heavilyregulated­by­the­state.­In­those­days­the­performance­of­each­house­or­apartment­I­builtas­a­young­architect­was­thoroughly­checkedagainst­its­price.­Was­this­a­good­thing?­Yes­it­
was!­Was­it­fun­and­exciting?­No,­not­really.­Ofcourse­it­is­more­interesting­to­have­the­freedom­to­do­outrageous­things­the­way­we­cannow­–­but­not­at­any­cost!­Of­course­it­is­greatif­one­can­take­the­credits­and­leave­it­up­tothe­State­to­take­the­risk.­This­is­what’s­called­
‘privatisation­of­profits­and­socialization­of­risk’.­
And­the­year­2008­taught­us­the­hard­lessonthat­this­just­does­not­work.No­economy­stands­on­its­own­but­eachneeds­a­very­specific­trait­in­which­to­excel.­Russia­for­example,­will­never­be­a­cheap­producer­of­commodities­so­therefore­it­needs­tospecialize­in­selling­oil­and­gas­at­the­best­possible­price­while­at­the­same­time­becoming­market­leader­in­high-value­lifestyle­products.­Whynot­use­the­2014­Olympics­to­promote­state­ofthe­art­housing­which­is­inexpensive,­but­excellent­in­performance­and­to­show­that­you­canmake­good,­high-class­housing­that­is­also­trulysustainable­and­low­on­energy-use,­discharge­ofgreenhouse­gasses­and­waste.­Clearly,­neitherthe­State­nor­a­private­party­can­achieve­thisalone­and­it­needs­to­be­done­together.In­the­meantime,­we­regrettably­all­seem­tosuffer­from­the­same­disease­and­refuse­to­dowhat­is­essential­to­regain­a­healthy­economywhich­it­to­create­true­value­for­money!­I­wonder­what­it­will­be­for­Russia.­Willmy­
mother’s­ statement­ ‘Once­ Red,­ always­
Red’­prevail­or­will­Russia­surprise­us­all­andturn­‘Green’?­We­still­have­five­full­years­until­2014.­That­is­a­long­time.­Long­enough­toprove­that­taking­care­of­our­environment­isprofitable­in­more­than­one­way­–­­especiallyin­Sochi,­Russia.­­
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