Will Melbourne be like Watts (L.A.) in 1965?

What if the geographically most extensive countries had the biggest populations?

Journalist Kenneth Davidson is often quite sensible so I’m astonished to see him arguing that Melbourne’s planning system is creating a potentially explosive situation like the 1965 riots in Watts, Los Angeles.

In fact there are a number of contentious propositions and assumptions in his column in The Age (6/12/10), Planning must be for people not developers.

He argues that Victoria’s planning system is dominated by developers and is effectively creating two cities in Melbourne – the inner city and the fringe suburbs – with citizens divided by geography as well as class.

Now there’s no doubt there are clear geographical differences by social class across Melbourne – there’s nothing new about that – but invoking the spectre of the Watts riots of 1965 seems a bit excessive. They were a reaction by the black community to racial injustices, including severe police brutality and entrenched job and housing discrimination. More than a thousand people were injured and 34 died. The Watts riots were different by orders of magnitude to Sydney’s 2005 Macquarie Fields riots or the 2004 Redfern riots.

Mr Davidson seems intent on sheeting home almost every planning issue in Melbourne to greedy developers. I accept the argument that speculation and lack of competition are issues in the Growth Areas, but there’s much more to the “two cities” phenomenon than that.

I’ve pointed out before some of the underlying forces that drove gentrification of the inner city. These include the exodus of manufacturing and migrants to the suburbs, smaller household sizes and the rise of the knowledge economy.

On the other hand, ordinary households go to the fringe because houses are affordable and because they mostly work in the suburbs. The additional cost of transport is more than offset on average by greater space and by the benefits of home ownership.

The sort of social distress Mr Davidson seeks to invoke with his image of Watts is not caused by developers or planning processes. He gives the misleading impression that inequality is driven by physical processes when in fact there are deeper structural causes. Geography is much more the symptom than the root – the underlying issues are social and economic.

His remedy is to promote development of affordable housing on old manufacturing sites in the inner suburbs. This would improve liveability as well as be cheaper. He cites a Curtin University study that says the upfront infrastructure cost for fringe developments is $136,000 per dwelling compared to $50,500 in the inner city.

The trouble is that even small (73 m2) entry-level two bedroom apartments in the inner suburbs average $530,000. They are neither affordable enough nor large enough to provide an alternative to the fringe for families of limited means. Houses double that size with a garden can be bought on the fringe for less than $300,000.

The assumption that there are still plenty of disused industrial sites available for redevelopment in the inner suburbs is in any event questionable, as I’ve argued before.  Too many commentators seem to assume brownfields sites are an infinite resource.

Further, the infrastructure cost estimates that Mr Davidson relies on are deeply flawed. I’ve pointed out here that they are based on an earlier unpublished paper that simply summarised 22 previous projects. Some of these date back as far as 1972 and cover the USA and Canada as well as various cities in Australia. Worse, the figures also conflate infrastructure costs with economic costs.

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).

Mr Davidson’s demonisation of developers extends to condemning the former Government’s idea of higher densities along bus and tram routes as “simply handing over the government’s planning function to developers”.  I’ve been critical of this idea myself (here and here) but I think his criticism is a gross over-simplification at best.

There was much more to it. The motivation was to create more housing in locations served by public transport. That seems to me a worthy objective (if done right) which wouldn’t happen without developers prepared to carry the financial risk of constructing housing units.

Mr Davidson proposes as an alternative that the focus of redevelopment be confined to just 25 activity centres. Since he simultaneously seeks to limit sprawl, it is not obvious how he reconciles these two competing objectives.  Higher density dwellings in centres are already priced well above houses on the fringe, so restricting the supply of redevelopment sites to an even smaller number of locations is likely to make apartments even less affordable than they are now.

Mr Davidson advocates building housing over railway stations within these activity centres. Just how that is going to produce affordable dwellings given the further cost that building in airspace over an operating rail system involves is anyone’s guess.

There are other assertions in the column that are probably contestable, not least the claim that extending “the urban growth boundary (now about 25 year’s supply) actually increases the cost of housing”.  Or the claim that building “family friendly” activity centres would reduce youth alienation and vandalism. I don’t have time to look at those issues at the moment – maybe another day.

Developers are part of the problem but they’re also part of the solution. Readers of The Age are entitled to a more balanced and, dare I say it, less shrill, assessment of issues from the paper’s regular columnists.

P.S. More on the map of the world’s countries rearranged by population.

6 Comments on “Will Melbourne be like Watts (L.A.) in 1965?”

  1. Michael says:

    Responding to Kenneth Davidson? That’s a bit easy, Alan, surely.

  2. Michael (another Michael) says:

    I can understand the appeal of developing brownfield sites because they are often extremely ugly and developing them would kill two birds with one stone. I find the land shortage argument hard to believe. Are there accurate figures that indicate how many houses in greater Melbourne are empty? I happen to live in a suburb where most of the old houses built in the 50’s are beyond repair and are being replaced by two story units. Many however have just sat empty for years.

  3. […] is surprisingly reminiscent of Kenneth Davidson’s prescription for Melbourne. However unlike the Minister, who is moving to increase land supply in the Growth Areas as well, Mr […]

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