A Prompt for Support Structures
Andrea Dietz (AD) Interviews Michael Murphy (MM)
AD: I tie the origins of Support Structures to a series of encounters that I had in my early days of moving to and living in Washington DC. One of those encounters was at a talk that you gave at the Aspen Institute in the fall of 2018. In your lecture, you offered a critique of the status-quo in architecture’s financing that really stuck with me. I am hoping you will summarize what you find problematic about architecture’s dominant funding model. What are its biggest shortcomings and where are they most evident? Are there specific experiences that led you to your observations?
MM: I think the biggest issue we have in architecture, it’s not necessarily a problem of intent or desire, it’s really a financial model problem, a business model problem. I mean, we’re basically a fee-for-service discipline—which means we’re paid for the time and materials of our labor. And yet, our value to the places for which we work—and I mean, specifically, the impact of our work on community, on regional economics, conveyed from introducing new resources into the built environment—compounds for years, sometimes generations, beyond our initial effort.
Interestingly enough, we are liable, as architects, for our long-term impact, if anything goes awry. But again, we’re not compensated for our lasting contributions. So, there is this enormous amount of risk that we take to insert new ideas into the built environment, and we’re also not compensated for that risk. We’re only compensated as a transaction, as an instance of labor. I think this set-up misconstrues, misaligns, incentives, when we actually could readjust to recognize the risk we take as professionals, and build-in compensation for accrued success, just as we are burdened by prospective failings.
This is the fundamental issue. The value [architects] create in society is not directly valued. And yet, we’re liable for the risks we take on… If [we] were compensated exponentially, like a musician, ostensibly, is compensated not just when a song is released, but every time it is purchased, we would cultivate an ethos of re-investment in architectural ideas and their impacts…
AD: I’m wanting to add in a bit of what I remember you saying in the Aspen Institute presentation. You used The Gun Violence Memorial Project as an example of projects that are not, cannot, be served through the standard commission structure. In other words, we don’t have mechanisms to realize architecture outside of the capital/developer pipeline. Could you talk a bit from this angle, as well?
MM: Oh, yes, this is also true. The current norms create enormous bias and gaps in the marketplace. The projects that have the resources to pay architectural fees and commissions are favored and enabled. But, in situations where a potential architecture’s constituents or ideas or issues may not be backed with monies to pay for its development upfront, there is a vast chasm between the need and the meeting of the need.
So, if we a look at a breakdown of the market of architecture, I’d say there are four verticals. There is, of course, the private sector, which is most of development and probably makes up over sixty percent of the overall market. Then there’s government work, which is probably another twenty percent. Follow that with institutional work, like universities and hospitals… But then, there is a tiny sliver for community nonprofits, that represent territories that are basically completely underserved. And because of the economics—because they can’t pay the upfront costs of design, design strategy, design iteration, in order even to estimate cost for a capital campaign—projects are incredibly risky… And, for architects, this work also is very risky. We don’t even know if the project will move forward, right? So, the architect is on the line, has to be an ally in moving things forward… and, if things don’t happen, be willing to take a hit for the failure of the project.
I think that responsibility makes sense in the for-profit sector—and, as I mentioned earlier, should be balanced with shared reward. But, the nonprofit sector, like what we experienced at MASS [Design Group], necessitates a third-party to finance pre-development services—a way for the architect to do the enabling work… which is strategy, conceptualizing the scope of the project, articulating the aim or the impact that the client is seeking to achieve, how big the project has to be, how expensive it has to be, what it will cost, what processes and policies have to be navigated in order to make it real. This, after all, is labor that has to be paid for.
AD: Do you see solutions or alternatives to this? Are there models that you look to?
MM: I mentioned music. Of course, music is having a difficult time, now that Spotify has essentially destroyed the licensing process. But I also look to artists, who are working to address this very issue. For example, an artist might sell a painting, let’s say for $10,000. Then, if the artist has become successful, it gets resold in an auction in five years for $10 million. But, that the artist doesn’t see any of that upcharge is criminal.
It's a similar problem in architecture. And yet, it’s a different product—because the product is fixed, not movable, only tradable within the real estate market—which does happen, but slowly. However, the value of the project, its ongoing value to the performance of the institution that uses it, its residents, is real. And then, of course, when it’s sold and that value transfers, any up-charge also reflects on the architect. If we tracked environmental and social value as part of the economic value in the ongoing impact of a building, we might begin to account for the value that the architect and design team created.
Another example, the carbon market, carbon impacts are tracked over the lifespan of a building. It might be more expensive, right now, to build with CLT [Cross Laminated Timber]. But, if we account for that reduced carbon impact over the lifespan of the building, the societal costs, over time, are significantly lower. What if, similarly, we considered more carefully which projects we are choosing to invest in, who we are choosing to build for, and weighed those choices against the contexts of the city, the region, in which the project might emerge?
All of these things accumulate and are values that can be calculated and could go back to those assuming the initial risk, to those making the thing possible. There are opportunities for this thinking through blockchain [technology]. And, there are other financing and credit, even licensing, models, if we think about it, other ways to compensate over the lifespan of a project… As it is, the only value now associated with architects is brand value, communication value, that hopefully leads to another project, nothing that mediates the risk that architects and designers take.
AD: What has to change to get architecture closer to an ideal? Do you see a role for government or policy in that change?
MM: I mean, I do think the model needs to change. You know, there are certain ways in which the model works perfectly—for those who know how to use it. But there are a lot of blind spots, a lot of gaps. So, I think we could have multiple market models; we don’t have to have just one. For example, I never thought of MASS as a critique of the [office] model, so much as an additional model.
One of the new models, I think, is for the design team to absorb the cost of the risk upfront and to be compensated through the accrued value of the project over time. And this works particularly well in the development world where people are pulling money over time, as projects get refinanced, as they accumulate income. Developers take a huge amount of risk, so they get paid for that risk. It’s unclear if projects will move forward; some don’t; a lot of money is always changing hands. That same sort of leveraging of the capital system could be deployed with architects as partners in, instead of vendors for, that system.
The other thing is, we think of cultural projects as isolated, as institutional, that we just need to figure out the capital for their building, instead of thinking about the impact of that building on the region around it, its city, its neighborhood, its street. But if we calculate the project not as just a cultural amenity, or health amenity, or education amenity, with housing and commercial districts around it, but rather as all of that, as one interconnected project, we could tap into different financial streams that can help pay the capital expenditure. If we thought about different and multiple inputs and outputs, if we thought about the project as something bigger, that would change the model.
Someone once told me, sometimes to solve the problem, we need to make the problem bigger. That’s the case, here. In architecture, we think just to the limits of the envelope. And actually, if we think about it as the envelope of the building and the neighborhood around it, or let’s say, the potential future developments around it, we might actually figure out a way to pay for the whole project in a different way… as multiple projects in one economic or environmental development initiative, with a cultural amenity at its core.
And, as it turns out, that is often what happens, right? It’s the anchor entities—be they nonprofits, cultural amenities, institutions—that hold the ground and pave the way for other investment, that create energy and capital and jobs, that set-up stability and security. These projects are good for places. They’re actually much more stable than industry. And so, when it’s so hard to raise money for these projects, and the scope of these projects is being constantly trimmed, we aren’t thinking about them as having an impact on place. We aren’t recognizing the value that these entities are generating to the economic livelihood of place.
AD: Last [prepared] question. You recently stepped down as founding principal of MASS Design Group to “[launch] a new venture which will focus on sharing the financial ownership of our built environment more equitably.” Is there anything that you are willing to share about this new initiative? Or, short of that, perhaps you might describe something that you will need for the initiative to achieve its goals, something that you want to see others working on?
MM: Well, it’s related to all of these things that I’ve been talking about.
I mean, the Montgomery, Alabama project that I worked on [through MASS], the National Memorial for Peace and Justice, is so illustrative. The Equal Justice Initiative took this huge risk. They raised a lot of money to build this memorial to the victims of lynching in a city where a lot of the economic and commercial activity had moved to the suburbs. There was a lot of national resistance—that it should go to Washington, that no one would go to Montgomery. There were all sorts of characterizations of why not to invest in a place that, let’s say, didn’t have the diverse economic portfolio that would allow it to thrive.
And Bryan Stevenson and his team at EJI [Equal Justice Initiative] proved that conjecture wrong. Not only has it been incredibly successful—because of its vision, the idea, the momentum behind it—it has made the city of Montgomery change. It’s had something like a million visitors and added millions of dollars in tourism revenue to the state of Alabama since it opened in 2018. It’s crazy. There are six new hotels going up in the city. They’ve opened a new museum, new restaurants. It’s transformational. And, it’s transformational for a building project to be a catalyst for that change.
But one of the issues is that all of this was purchased with philanthropy. The returns of the development that’s happening because of [the project] is not necessarily shared with the nonprofit that put in the work and took all of the risk. And they should be directly benefiting from all of the economic, social, environmental, and cultural value that they created in the city of Montgomery and nationally. Now, Bryan definitely is starting to get involved as a partner in more of the new development, including as a partner in new developments. Still, it occurred to me that if this were going to have a transformative effect on the places we work, we need to own the land, to capitalize on the value that we create and redistribute it to the constituents that the nonprofit serves or reinvest in the nonprofit to create an endowment and strength and stability to continue the work that they seek to do.
That seed was planted in that project. And now I see it everywhere. With new projects that are coming into community organizations and committee members that are resistant… if they were owners in the project, they may be more aligned with guiding a project to its potential, and directly benefit from that. So, ownership of the built environment turns out to be the next hill to climb—and a way to circumvent the problem of who is taking the risk and who is getting the reward.
Right now, I mean, what’s the narrative of neighborhood change? Artists move in early; they create value; they make it safer for investors to come in. The artists get forced out and move on to the next neighborhood. That’s the story of how cities advance around the world. But what of the artists who are making value where value wasn’t recognized before? At least from a market perspective, those who have ownership in the neighborhood change are those who are able to stay. Similarly, nonprofit institutions can benefit from the change they are leading by being co-owners in the land.
And so, my new initiative is to be both an architect and a broker for securing ownership for these organizations. This goes beyond getting free rent, which is sometimes the case. Now, you can get a subsidized rent as an anchor tenant. But I think it would be much more advantageous for anchor tenants, anchor neighbors, to be co-owners; even tiny, partial ownership could allow them to be collaborators in a more equally distributed, shared built environment.
It could be a win-win for everyone, developers included. Developers definitely want to see projects move forward and, now, they see a lot of resistance and actually need to bring in new kinds of partners to make things happen. Cultural institutions, then, are having trouble finding the financing to get projects done. If they were seeking different partnerships with capital markets, with developers, they could finance these projects more collaboratively. I think there is a real opportunity in that space.
Every, literally every, project I worked on in the last fifteen years with MASS Design Group had the same problem. Where are we going to find the money? What’s the bigger impact? And how do we, together, raise that money, not displace people, bring them in as part of the process, create a design that really inspires folks to think differently about place or topic? The number one thing that could change that dialogue was if they were co-owners, actual collaborators. But the organization that can broker that relationship doesn’t exist. That’s what I’m launching. And I think it will allow a more direct relationship for philanthropy and foundations to partner in real estate and cultural institution development, not just as donors, but as collaborators.
AD: I would imagine that that would require, for example, banking models, to change.
MM: Different financial vehicles will allow this to happen, that exist already, that we could just be leveraging in more, let’s say, creative and nuanced ways. I mean, I don’t think we’re too far away. We just need to be using the tools we have in front of us to change the risk equation and compensate the folks who already have been enabling value.
And, you know, on a broader spectrum, we have such a housing supply problem nationally that the activism around resisting change is a dead end. I mean, I understand where it comes from. But we have to build more and more and more housing everywhere in order to address the supply problem that we face in so many places. And so, to be pro-development, pro-building, pro-change—with ownership, with compensation—is probably the only way to go. And the only way to do that is to make people partners in the initiatives.
AD: Since Support Structures is focused on policy, is there anything in policy that you would want to see rewritten, adapted, edited?
MM: You know, architects in the US, we don’t have a floor. There is no bottom for how little we can be paid. And that, the antitrust case against architects in the late 1970s, has led to a race to the bottom in terms of the value of design within communities. It turned architects into vendors, fighting each other for that commission. I think that antitrust legislation should be rethought, realigned with what happens in, for example, Germany, where there is a floor for how little architects can be paid. That would actually support the industry and mediate the risks the industry inherently takes. It would offset where that burden has shifted, which is to universities.
Now, universities, by having professors in practice, wittingly or not, are subsidizing the architecture marketplace. They pay faculty the salaries that allow them to work during that inevitable period of time when they’re not being compensated by clients in order to build a portfolio of work that will get them actual paying work. And all of this leads to other problems, like involving students in start-up work, for example. So, if we had a floor, we might be able to eliminate some of these pressures, might find other ways for young professionals to start a business in the design profession.
This is a huge issue with architecture and design; it has a long time horizon just to get started. I call it the five-year hump. By that I mean that it takes like five years, if you get a project today, it won’t be built for a few years; then you have to market—which costs money; then you have to hope that that one project lands another project. You have to pay yourself for five years. And how are you going to do that? Universities are a clear option. Or by moonlighting while working other jobs. Or by being wealthy yourself. All of these practices undermine the real need of architects and designers to create new businesses.
So, a last policy change that could help is incentivizing young practices by pairing them with municipal projects and established firms. If recent architecture graduates were incentivized to work in a place and stay, were given a city project in partnership with an established firm (thereby de-risking it for the city), we would seed all of these young businesses that would create new visions for places throughout the country. Because they would have a five-year horizon worth staying for. You would seed a creative design program in and for a city with very little investment, just careful policy carrots. This would help increase diversity, increase inclusivity and increase quality in both architecture practices and the communities they serve.
AD: Wonderful. There is a lot of hope and potential in your insights. Thank you, Michael.
Michael Murphy co-founded MASS Design Group and served as President and Executive Director until September 2022. When he transitioned from the Board of Directors at the end of his term in March 2023, his commitment to the organization was recognized with the title Trustee Emeritus. Currently, he is the Thomas W. Ventulett III Distinguished Chair at Georgia Tech.