Leeds' Bridgewater Place could become the tallest residential building in the north. That is until Manchester comes up with something even higher.
Historic civic rivalry between Manchester and Leeds has found an old way to express itself anew: "campanilismo". Six hundred years after the parishes of renaissance Italy measured respect by the size of a bell tower, both cities are encouraging developers to build higher and mightier landmarks than their trans-Pennine peer.

The commonplace economic model of 10-12 storey office developments on prime sites has been sidelined by a new planning agenda that is set to double, treble or even quadruple commercial block heights by topping them with residential eyries.

Take Leeds. Later this month, its city council planning committee is scheduled to vote on Bridgewater Place, a development that comprises 10 000 m2 of offices, a 200-bed hotel and more than 20 000 m2 of high-rise residential space. The original scheme was sent back to the drawing board after city planners and the Commission for Architecture and the Built Environment objected to the height of the building, a pair of elliptical towers, the higher of which was 23 storeys. So developer Landmark St James and architect Abbey Holford Rowe have added four storeys, making it 27 floors high and the tallest residential development in the north.

Planners hadn't been worried that the building was too high, but rather that it was too low and therefore did not satisfy the city's drive towards landmark architecture. Leeds City Council has just published its City Centre Urban Design Strategy, which spells out the city's urban design approach. The strategy identifies four city-edge sites for distinctive landmark developments, located at "broadly speaking, the four points of the compass", according to Peter Vaughan, Leeds' environmental design officer. Vaughan explains that the city wants these landmark developments to act as gateways on routes entering the city centre.

The department is now committed to producing a tall buildings policy, continues Vaughan. "There is recognition that tall buildings will help to change the city's image, putting across its thrusting modern character." But Vaughan says the planning department is not encouraging the upwards revision at Bridgewater Place simply to bring the north's tallest residential tower to Leeds. "All the schemes we see for more than 10 storeys are basically residential. This is good for design quality because to get a good high-rise, you need slim, thin towers. Offices today want such large floor plates." Dominic Boyes leads the design team for Bridgewater Place and is a partner in architect Abbey Holford Rowe. "The City wants Leeds to earn the reputation as a great place to work and play – at least as good as Manchester," he says. Boyes has worked on all four of Leeds' major residential schemes and, in November 2000, was part of the team that received detailed planning to strip a 16-storey concrete frame office, called K2, back to its core, add three storeys, then reclad it as shops on the ground floor, offices on the first and second and apartments all the way up to penthouses on the 19th.

Boyes' colleagues in AHR's Manchester office have also been reaching for the sky. Director Andy Robson was part of the team that won planning permission last November for Manchester's Spinningfields project, the largest city-centre redevelopment in the UK after London's Broadgate. Working with Westbury Homes, AHR revised the original brief upwards from a 200-unit scheme of eight storeys to 400 units spread across three 16-storey towers, cutting into a 200 m 10-storey frontage.

Robson points to the economics of such development. "A 12-storey office block is about the same height as a 16-storey E E residential block, and both cost pretty much the same to build. But with commercial development outside London there is a flat rate of return as you climb the building, while with residential the return is perhaps twice by the 16th floor what it would be on the fifth. While the market is strong enough, the height of residential buildings is set to go way beyond that of offices." Robson's assertion finds backing from a number of high-rise residential schemes shaping up in Manchester's city centre.

No 1 Deansgate, a 20-storey scheme, is currently under construction. Designed by Ian Simpson Architects, the development contains 16 storeys of luxury apartments, which are tipped to sell for more than £1m. Known as the "slot site", a 25-storey residential tower block has also been designed by Assael Architecture to slot in between the new International Convention Centre and the grade-II listed Great Northern Railway warehouse in Manchester.

Then there is new statutory guidance. When John Prescott launched PPG3: Housing in March 2000, shifting the balance of new homes away from greenfield sites, he promised a best practice document on how to replace suburban supply by maximising urban capacity. On 14 December, this finally emerged. Called Tapping the Potential and compiled by David Rudlin of Manchester-based consultancy URBED, it formalises what is already going on both there and in Leeds. It identifies how to accommodate additional urban housing through a process it terms "intensification". It advocates that minimum parking standards and maximum densities within unitary development plans be relaxed to concentrate development near transport nodes. Leeds' urban design strategy predates this document – the vacant 0.6 ha Bridgewater Place site is just 150 m from the city station.

Leeds and Manchester are simply promoting a classic model of entrepreneurial housebuilding – the exploitation of the lack of rented accommodation by developers. AHR's Boyes lived in Leeds city centre until 1996 when he sold his flat for "silly money" as the new influx of professionals vied in a market of "not more than 200 city-centre apartments". Young people on relatively high wages don't like to buy, but prefer to rent close to where they work. "That creates a market for the investment product," says Boyes.

However, the investment product in Yorkshire tends to cost not more than £150 000. Latest briefs from developers show an increase in prices, which suggests that more of the new towers will be marketed to owner-occupiers. Persimmon City Developments, the urban division of housebuilder Persimmon, which has core knowledge of owner-occupation, has taken on the residential element in both the Bridgewater Place and K2 schemes.

As more schemes propose to nudge the clouds – Conran Partnership is understood to be working on a high-rise for Leeds – developers have an eye on the property cycle in both cities. Leeds is widely forecast to have several years yet to make up for its late start, which means Bridgewater Place, if approved, could turn out to be the literal high point of the cycle. By comparison, a rumoured 40-storey scheme for Manchester might never now emerge as the city's current market plateau brings pause for breath. Whatever happens, neither city wants its landmark to become, in the style of London's Centre Point or Millennium Dome, the next metropolitan catchphrase for white elephant.