The Economics of the World Trade Center

In STS302H, we talked about the building of the original World Trade Center, and now a new World Trade Center is going up, topping out at 1776 feet, making it the tallest building in the US. The new WTC, originally called "Freedom Tower," will demonstrate American determination in the face of terrorism, but will the building make economic sense? That is the question Joe Nocera, a New York Times reporter, asks, and his answer seems to be no. He says that the new World Trade Center will be the most expensive office building ever built, costing almost twice as much per square foot as other skyscrapers. This suggests that either the owner of the building will have to subsidize those who want to rent space in it, or charge much higher than the current market rates. Most businesses will not want to pay higher rent just for the privilege of being in the WTC, so that means that the owner, the Port Authority of New York, will have to subsidize rents. This story is a reminder that technologies are symbols, but they also have to work economically. In this case the symbolism of the WTC seems to be overwhelming the economics.