Is a busway right for Mernda?

If I lived in Mernda I’d be pretty unhappy that the Brumby Government (here and here) is only going to give me a bus service rather than extend the Epping rail line beyond the new station at South Morang.

Sure, it’s Bus Rapid Transit with its own dedicated 7.5 km busway (here and here). And buses will be coordinated with arrivals and departures when trains start operating from the new South Morang station.

But it means I would have to change mode at South Morang. That will inevitably lose me some minutes. Moreover, a bus is simply not as comfortable as a train.

This seems like a politically fraught decision. The President of the Victorian Planning Institute says it’s bad planning and that buses are a “dinky service”. The President of the Public Transport Users Association (PTUA) says buses are “not as good as a train and are certainly not what residents are looking for”.

However I don’t live in Mernda. And I pay taxes, so I’m quite interested in public money being spent efficiently and equitably. I also understand that there are many demands on available funds, not just from other transport projects but from other portfolios like education, health and housing.

So when I stand back and take a look at this initiative I can see some positives. In fact I think this is the right decision. It’s how governments should be approaching this sort of issue. These are my reasons: Read the rest of this entry »


Why are outer suburban houses so damn big?

The economics of Seinfeld (click)

Everyone knows that Australians build the largest new houses in the world. According to the Deputy Governor of the Reserve Bank, real expenditure on each new dwelling is now 60% higher than it was 15 years ago.

Just why we need 85 m2 per person, on average, in our new suburban houses is an interesting question, especially given that the average household size in Australia has fallen.

As with most things, it’s the coincidence of a number of factors that provide the most plausible explanation, but in my view the key reason is that Australians increasingly see the purchase of a dwelling as an investment decision.

There was a time when buying a house was solely about consumption – i.e. shelter – but now it’s received wisdom that houses inexorably increase in price. They provide growing equity to borrow against in the future and capital to draw against if the unthinkable should happen.

Recent history has convinced home buyers that residential property is a good, even spectacular, investment. This reflects factors such as its tax-sheltered status, restrictions on supply, low interest rates and Federal and State home buyer assistance schemes.

From the perspective of many home buyers, a bigger house not only provides more consumption value but is seen as a sound long-term investment decision. Unlike a car, which depreciates in value, buyers assume every dollar spent on a house ultimately increases in value. A bigger house might even appreciate in value faster than a smaller house. Read the rest of this entry »


Do higher travel costs make the fringe unaffordable?

The new art of Cartosimpsonology

A common argument is that households who settle on the fringe because housing is more affordable end up worse off because of higher transport costs. They are forced to buy a second or third car and they use more petrol because they have to travel further.

Of course there’s an assumption here – that ordinary families actually could find a suitable dwelling, at an affordable price, in an area where transport costs are significantly lower than they would be on the fringe.

Consider the municipalities of Casey and Cardinia, which together comprise the largest Growth Area in Melbourne. At around 45 km and 55 km respectively from the CBD they are also the most distant fringe growth areas.

The median price of an established house and garden in Casey (Narre Warren) is $350,000. Now compare that with the City of Monash, which stretches between 13 km and 24 km from the CBD. The median price for a house in this municipality is $780,000 (although in Clayton it’s $618,000).

A more likely alternative for a settler in Monash who’s primary concern is affordability would be a unit. However the median price for a unit is $464,000 ($401,000 in Clayton).

Thus the Growth Area has a considerable advantage in price and size – it’s much cheaper and offers a three to four bedroom house with a garden compared to a two bedroom unit. Clearly a Monash location would need to offer a considerable saving in transport costs to offset Casey/Cardinia’s advantages. Read the rest of this entry »


Why is road pricing a good idea?

What Americans mean by a 'McMansion'. Click for slideshow.

I’m not aware of anyone who disagrees seriously with the contention that car travel is underpriced. The consequence of this inefficiency is we drive more than we otherwise would and more than is socially optimal.

The idea of road pricing is that drivers should pay the real costs they impose on others through traffic congestion, pollution, noise and carbon emissions.

There’s also another force at play here which exacerbates the problem of excessive driving. There are some costs that drivers actually do pay – standing costs like depreciation, insurance and registration – that are “disconnected” from the perceived cost of travel.

A person deciding whether or not to drive somewhere will tend to take account of the cost of their time plus petrol, but they usually don’t perceive the standing costs. This under-estimation promotes more driving.

There have been various experiments with road pricing, such as the well known Singapore and London central city cordons (giving rise to amusing interpretations such as this one by Boris Johnson). However this is a technologically outdated approach – transponders and/or GIS technology mean it is now feasible to charge motorists in relation both to distance and traffic conditions i.e by location and time.

A driver who paid a price for a litre of petrol that included both external and standing costs would have a strong incentive to drive less. A gauge on the dash showing the total cost ticking over with every kilometre would provide an even more powerful nudge to think long and hard about the wisdom of driving.

Road pricing can be thought of in simple terms as a two-part per kilometre tariff that recovers both external costs and those standing costs that can be disaggregated. One part is a charge reflecting the general cost of using the roads. The other is a variable price reflecting specific costs like congestion in peak periods.

There are potentially some important benefits for the wider community from road pricing: Read the rest of this entry »


A Doncaster rail line – is this really what the Greens stand for?

In my last post about the Green’s election manifesto, a Public transport plan for Melbourne’s east, I indicated I would take a closer look at the two new rail lines the party is proposing to finance – a line to Rowville and a line to Doncaster – with its nonexistent $6 billion.

I discussed the shortcomings of the Rowville line a few months ago when the Liberals also came out in favour of it (is there a winnable seat in the vicinity perhaps?), so here I’ll just concern myself with the proposed Doncaster line.

The Greens say a line is needed because Manningham is the only municipality in Melbourne without either a train line or a tram line. And they say a rail line was promised before – plans were drawn up in 1969 but never acted on.

I’m not impressed by this logic. Do we spend billions of dollars on infrastructure because some area is “entitled” to a track even if it’s not the best solution? Should we get the 1969 freeway plan because it’s a “broken” promise too?

I’d be more impressed if the Greens had provided some justification, but they haven’t. There’s no attempt to measure expected patronage and no indication of the possible economic benefits compared to other potential investments. Nor is there any indication of the annual operating cost and the ongoing subsidy that the line would require.

The proposal is that the line would run from the CBD via a tunnel under Carlton and Fitzroy to Victoria Park station on the Hurstbridge-Epping line. It would then run along the median of the Eastern Freeway (which was designed from the outset to take a rail line) until 1.5 km east of Bulleen Rd. At that point it would run underground to a new station at Doncaster.

There are some very serious questions that need to be asked about this proposal. Read the rest of this entry »


Victorian election – why have the Greens dug a black hole?

The Green's transport plan for Melbourne's east

If you think the Greens provide a real alternative to the tired, cynical politics of Labor and the Liberals, then you might be very disappointed in the transport initiative the Green’s are promoting for the forthcoming Victorian election.

The Green’s Public transport plan for Melbourne’s east proposes a massive $6 billion program of public transport works, including a new rail line to Rowville and another along the Eastern Freeway to Doncaster. It also proposes rail duplications and triplications, new train stations, level crossing upgrades, tram line extensions, transport interchange upgrades and improvements to bus services.

The Greens clearly and loudly proclaim that the $6 billion will be found by scrapping the Government’s proposed North East Link, the so-called ‘missing link’ between the metropolitan ring road at Greensborough and the Eastern Freeway at Bulleen.

It almost sounds too good to be true. No additional funding, no new freeway and heaps of new public transport infrastructure! Trouble is, as the Greens well know, it isn’t true – there is no $6 billion to reallocate. Read the rest of this entry »


Did Peter Garrett get it right after all?

Click to see how many Bixis are currently rented out and compare in real time with other world cities like London and Barcelona

Peter Garrett copped a lot of flak over the Rudd Government’s Home Insulation Program earlier this year.

There was widespread rorting and mismanagement, four workers died installing insulation and, up to 18 October 2010, almost 200 house fires have been linked to the program.

Did the program achieve anything positive?

According to this report, Tony O’Dwyer from the National Institute of Economic and Industry Research (NIEIR) reckons the scheme saved 1 to 1.5 petajoules of energy (gas) in Victoria this winter.

That’s even better than it looks because the ‘low hanging fruit’ had very likely already been picked in Victoria, given that around 87% of homes in the state were insulated when the program started. Nevertheless, the thermal efficiency of nearly 300,000 more homes across the state was improved under the program.

Now ace blogger Possum Comitatus has been burning the midnight oil to analyse the numbers. He concludes that the fire risk associated with home insulation is much safer now than it was before Peter Garrett introduced the Home Insulation Program.

Prior to this initiative, the industry did 65,000 installations per year and experienced 85 fires per year. However under the program, there were over 1.2 million installs per year and 197 fires. Read the rest of this entry »