Is unused infrastructure capacity in the inner suburbs all used up?

There was more evidence in The Sunday Age on the weekend that the spare infrastructure capacity that is widely presumed to be available in the inner city and inner suburbs has in all likelihood already been consumed.

What is unfortunate about this stubborn idea is that there are already sufficient good reasons for increasing housing density in established suburbs without having to resort to unsubstantiated and outdated beliefs.

Proposed 520 unit development, Coburg. How much 'spare' infrastructure capacity will it use?

New research by Professor Kevin O’Conner, Melbourne University, shows that the number of additional students who will be seeking enrolment by 2016 in the inner city and inner suburbs is equivalent to fourteen new schools.

However existing schools are generally at capacity. The principal of Port Melbourne primary is reported as saying “schools in this area don’t have the capacity to cope with more students….looking at my projected enrolments and those of neighbouring schools, and from what I hear about the plans for extra multistorey developments in Southbank and Docklands, we will be full soon”.

He could’ve mentioned that virtually every school within at least 10 km of the CBD already has one or more so-called temporary class rooms including, now, the two story portable, and some are using public parks for play and sport.

Unfortunately there is no credible contemporary analysis of infrastructure capacity and costs in different parts of Melbourne. As I’ve argued before (here and here), there is unlikely to be significant spare infrastructure capacity in the inner established areas. There are a number of reasons for this proposition:

First, most areas now have much the same population as they had in 1976. Of the 13 municipalities that are wholly within 15 km radius from the CBD, only two, Moreland and Darebin, have substantially fewer residents now than they did 35 years ago (these two municipalities have around 32,000 fewer).

Second, the households currently living in the inner suburbs consume more electricity, gas and water than households did in 1976. All those air conditioning systems, flat panel TVs, second cars, swimming pools, spas and irrigated gardens suck up spare infrastructure capacity. Another example is the significant reduction in average school class sizes that has taken place over the last 30 years. The same number of school children now requires many more classrooms. And now kindergartens have to provide an extra five hours per week for each four year old from 2013.

And the professional households that are increasingly moving into the inner suburbs are more affluent than the working class households that predominated 30 years ago. As the Australian Conservation Foundation points out, affluent residents use more resources per capita than lower income residents.

Third, average household size is smaller now. The same number of people is spread across more dwellings, meaning economies of scale in infrastructure provision are lower. To illustrate, it takes almost as much gas or electricity to centrally heat two people living in a house as it does if four live in it. Hence the same number of people as 30 years ago requires greater infrastructure capacity now even before you get to the increased consumption mentioned in the previous point.

Fourth, some infrastructure has been converted for other uses. Richmond primary school, for example, was sold under the Kennett administration and converted to apartments.

Of course there’s no such thing as ‘spare’ infrastructure in the sense that it’s somehow free. If there’s growth, then any ‘spare’ capacity is inevitably going to be used up. The key problem is that providing new infrastructure capacity is likely to be much more expensive in central areas in most cases than it is in the fringe areas. Land is more expensive and the cost of disruption to existing activities is high. What isn’t clear is how much of the cost of expanding capacity in the established suburbs is borne by developers/home buyers compared to the fringe suburbs.

It might be possible to take a different approach – for example building smaller schools in apartment towers – but clearly something is lost compared to the space available to new schools on the fringe. This is not comparing like with like.

Sometimes the cost of providing “increased” infrastructure capacity is hidden and is effectively carried by residents rather than the Government or developers. For example, in responding to the concerns of residents that traffic movements from the proposed redevelopment of the old Coburg High School in Bell St would increase from 110 per day to 1,000 per day, the Panel constituted to examine the proposal concluded that:

Traffic volumes on Rodda Street would increase compared to the very low levels currently enjoyed by residents. However, the level of traffic would remain well below the standards adopted for planning for residential access streets even in suburban areas, let alone on the edge of a Principal Activity Centre”.

Let me say that I support this particular project, but none of us should be under any illusion that additional traffic is simply using “spare” capacity and is completely without costs unless the road is congested.

What is needed very badly is for the Victorian Government to undertake a credible, independent assessment of the contemporary costs of providing infrastructure in the inner areas and established suburbs. This should be compared against the costs on the fringe and, given the Government’s new regional initiative, the costs in regional centres. As I’ve pointed out previously, no such study is currently available to inform public discourse on this issue.

Densities need to increase in Melbourne’s established suburbs to increase affordability, but it is neither necessary nor desirable – in fact it could be self-defeating – to perpetuate myths in order to achieve that goal. My view is that, prima facie, there is unlikely to be much spare capacity and certainly not in all types of hard and soft infrastructure and not in all locations. Even where there is, it isn’t “free”. But please, Mr Madden, let’s have an investigation to establish the facts.

7 Comments on “Is unused infrastructure capacity in the inner suburbs all used up?”

  1. Joseph says:

    Entirely agree with your call for an assessment of the cost of providing infrastructure in inner suburbs compared to urban fringe. A quick back of the envelope calculation on cost of road building illustrates the problem. The Airport Link project currently in construction in Brisbane is budgeted to cost $4.1bn for a 6.7km road equating to $612m per km. Also under construction is the Peninsula Link highway in VIC with cost $759m for a 27km road or $28m per km. The implication being that to construct major roads in urban areas requires tunnels which can be more than twenty times as expensive as building a greenfield road.

  2. […] used to support these sorts of claims. As I pointed out long ago (here, as well as here, here and here) that report’s development cost estimates are based on an earlier unpublished paper that […]

  3. […] isn’t likely to be much “spare infrastructure capacity” in the inner suburbs. In addition to the arguments I’ve previously made, allowance also has to be made for the possibility that infrastructure that […]

  4. […] I’ve discussed on a number of occasions the very high probability that whatever spare capacity existed in the inner city and inner suburbs has already been used up e.g. here, here, here, here […]

  5. […] was also imagined that “spare” infrastructure capacity in established suburbs would give government a financial incentive to tackle planning restrictions […]

  6. […] And the idea that there’s still “spare” infrastructure capacity in the inner suburbs is also doubtful, as I’ve said before (here, here and here). […]

  7. […] A better approach would’ve been to compare the greenfield house against a townhouse of similar value located in the established suburbs, say 20 km or more from the centre (or perhaps against a greenfield townhouse set within a walkable neighbourhood). Alternatively, the authors could have followed the ACF’s lead and compared the resource use of all suburban residents with those of inner city residents – but the catch here is the ACF found that, even though they live in smaller dwellings, inner city residents have a higher ecological footprint (see here and here)! […]

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