Is living at density the same everywhere?

A reader, Ian Woodcock, took me to task yesterday about my post on whether outer suburban families would willingly choose densities of 25-30 dwellings/Ha so they could walk to local shops and services.

In particular, Ian reckons I invoked a straw man when I argued that “it can’t be assumed that merely increasing outer suburban housing density will create an environment with the ‘buzz’ and ambience of a St Kilda or Fitzroy”. He says the relevant comparison:

is not with inner-suburbs like St. Kilda that have the highest density in Australia (!), but with the streetcar (tram) suburbs of the inner-middle ring, like Kew, Camberwell, Malvern, Armadale, etc. where densities are higher than the outer suburbs in many places, public transport is good, there is housing diversity and access to a wide range of shops and services, and moreover, social capital is high.

Ian’s broadened the discussion beyond walkability to the merits of density more generally. I’m not sure there are substantial parts of suburbs like Camberwell with average densities as high as 25-30 dwellings/Ha, but nevertheless I’m happy to make the comparison with them. I’ve set out my argument about the attractiveness of higher densities to Growth Area residents below:

My contention is that living in a townhouse or apartment in the inner or middle suburbs – whether it be St Kilda, Kew, Fitzroy or Camberwell – delivers an entirely different set of benefits than it would in the outer suburbs. In essence, it’s worth choosing to live in a town house in the former but not at present in the latter.

Camberwell residents who can afford it generally choose to live in bigger dwellings, usually a detached house with a yard. The rest live in smaller dwellings like newish apartments and townhouses because that’s the only way they can afford to live there. They want to live in Camberwell for all the usual reasons – it’s close to the city centre, close to large centres like Glenferrie Rd and close to private schools. They also like it for the status it confers and because it’s ‘people like us’ i.e. wealthy or aspiring to be wealthy.  As Ian says, it also has good public transport and a wide range of services. But most of those who live in apartments and town houses do so because they have to – it’s primarily about location, not dwelling type.

Some will argue there are people who could easily afford a big dwelling but actively prefer a small one. Undoubtedly there are some, but there aren’t many and they’re not usually families (who’re the main household type in the Growth Areas). The fact that empty nesters tend to hang on to their large houses signals that, if they can afford it, people put a high value on space. People who can afford it don’t buy studios or one bedroom apartments in Docklands or Southbank – they buy three bedroom units and penthouses. All those renovated and extended terraces and houses in the inner city don’t say “small is better”. Location and dwelling size are what economists call superior goods. As incomes rise, consumers tend to buy more of them – they might move to a better suburb or a bigger dwelling (although only the very rich can usually do both).

Now compare Camberwell to the Growth Areas. In the latter a detached house with a garden costs much the same as a townhouse. Households don’t need to forego space in order to live there, so why would they choose to buy a townhouse?

A customary argument is that if a lot of Growth Area buyers elected to live in townhouses they would all benefit from things like better public transport and greater walkability – they’d be better off! Just why they fail to see what’s in their own best interest is variously put down to greedy and risk-averse developers, spineless government or, in effect, the ‘false consciousness’ of buyers themselves.

I think there are more straightforward explanations. Very few Growth Area residents work in places where public transport could ever realistically be competitive with the car. Public transport’s share of all trips across all of Melbourne is currently around 11% and it’s much lower in the Growth Areas, partly because only a low percentage work in the city centre. This is not fundamentally because of poor public transport but because cars are a faster and more convenient way of getting to dispersed suburban work destinations. I think buyers make their own calculation – they’d like better public transport but they know they wouldn’t make enough use of it to offset the disadvantages of living in a smaller dwelling. In any event, they think Government should provide better public transport irrespective of what density they choose to live at.

They also think it’s only worth foregoing dwelling space for greater walkability if there’s something compelling to walk to that they couldn’t otherwise access by driving. If residents want to stroll or exercise, conventional suburbia can already do that. While ever driving is an easy option, residents of outer suburbs, even high density ones, will favour large centres over local ones.

Just because density is attractive to residents of the inner city and middle ring suburbs doesn’t mean the same delights will necessarily, or even probably, “export” to the Growth Areas. The value of density in the former two is tightly bound up with the value of the location — its proximity to the CBD, its natural and cultural assets, its demography, and so on.  As I said yesterday, Growth Area residents need a reason to live in townhouses. If the social cost of sprawl is too high then the focus of policy should not only be on making everyone pay their way but also on finding better urban development models that home buyers actually prefer over the current dominant form.

Of course all this is premised on the current framework of relative prices. While the decline in affordability seems to have stabilised, dramatically higher petrol prices could possibly change everything. There’s undoubtedly some price at which fringe buyers would actively want to live at higher densities. But the doubling of the real price of petrol between 2000 and 2008 and the huge squeeze on housing affordability in recent years haven’t together been enough to drive densities above an average of 15 dwellings/Ha in the Growth Areas, although that’s a considerable advance on what used to be the case. Nor can we say with certainty what effect peak oil and climate change will have in the future – many observers invariably fail to note that people respond to price signals by changing their behaviour and consuming less e.g. initially by driving less, by buying more fuel-efficient cars or by switching to substitute fuels. It’s a dynamic process and has a moderating effect on oil prices. One of those potential adaptations is higher housing densities on the fringe but my view is that people will focus on more efficient cars and, for those who can afford it, more central locations. Even so, it’s worth noting that, unlike the established suburbs where there are major impediments to higher densities, the Growth Areas could easily shift to 25-30 dwellings/Ha if economic circumstances lead to changes in buyer preferences.

6 Comments on “Is living at density the same everywhere?”

  1. Ian Woodcock says:

    All of which assumes two things: A) that everyone fundamentally wants a house and garden above anything else, and B) that the only way to accommodate new people in Melbourne is on greenfield sites on the fringe. However, if Camberwell, Hawthorn, Kew and similar places (which are not the same at all as Fitzroy and St. Kilda) are so desirable that people will (even) live in apartments to be there, then both A) and B) are disproved. And on the basis that people are willing to trade-off the house and garden for other things in high-amenity suburbs, we should therefore be looking at ways to build more apartments, including affordable ones, in places like Camberwell, Hawthorn, Kew, Malvern and the rest. There is no need to use up greenfield land on the fringe for housing at any density, never mind low-density housing.

    • Alan Davies says:

      Ian, both my posts are about Growth Area buyers (who account for roughly half new dwelling construction ATM) and the evidence is clear that, at current relative prices, they overwhelmingly choose to buy detached houses.

      When it comes to the established suburbs, I agree we should be looking to build more apartments and town houses in places like Camberwell etc, as I’ve said numerous times before on these pages. There are certainly many fringe buyers who, IMO, would choose a smaller dwelling in the established suburbs if cost weren’t such a disincentive (though few could afford Camberwell!).

      However I think there’s still a significant group who will want to live on the fringe, primarily because of the low cost per sq metre of land and dwelling.

  2. Simon says:

    One thing missing in this debate is the characteristics of density. I believe the big amenity of inner-city density is a human-scaled built environment that is not designed around cars. Current “new density” development is not like that – it’s filled with off-street parking and the expectation that everybody will drive, and so the resulting built environment lacks human scale and lacks the amenity of pre-automobile-era dense development.

    Then there’s the conflict between the short-term and the long-term. Sure, higher density in the growth areas has no real attraction NOW, or even in the next 5 or 10 years. But in 20 or 30 or 40 years it’s a different story.

  3. jack horner says:

    Walkability, public transport use, street life etc depend on a lot more than just residential density.

    You could double the net residential density, but if everything else about your car-dependent urban fringe estate is unchanged – the culdesac hell that turns 100m as the crow flies into a 500m walk; the ‘bunch of grapes’ style subdivisions that make it impossible to design a good bus route; the arterial road optimised for 80kph that you can’t cross safely from the bus stop; the hard top mall surrounded by a wasteland of carparks; employment dispersed among scattered office parks and industrial lands that bear no relation to the public transport network – don’t expect people’s habits to change much.

    Large tracts of between wars suburbia were built with net residential density little different from that of your typical urban fringe estate, but with high walkability and high PT use (because there were few cars, obviously). The aim should be to recreate that style of development in new areas. However it would require a radical change to the mindset of your property developers,** council planners and road engineers. I see no sign of that happening.

    Focussing only on net residential density is a way for them to cop out of all the other changes that are also needed outside the individual house lot to make a less car dependent city work as a system.

    ** and, possibly, consumer preferences, but I won’t here buy into the debate about who is leading and who is following.

  4. T says:

    I think there are fundamentally two types of buyers: those that value location over dwelling type, and those that value dwelling type above location. Obviously, everybody, if they could afford it, would want a detached house in hawthorn or kew or the like (those who say they would not prefer this if money were no factor are lying). Hence why those houses are so expensive. Those who can’t afford those houses need to compromise. Some will compromise on dwelling type because they can and they would prefer living in a unit in hawthorn or wherever then have the detached house out in the middle of nowhere. Others will place a higher value on the house perhaps because they have children and they don’t necessarily work in the CBD or whatever and will chose a more affordable house far away from the city. I agree with your view that very few people will feel compelled to compromise on both location AND dwelling.

  5. mc says:

    The benefits of higher density living are not unique to Melbourne’s CBD or attractive activity centres like Kew and Camberwell, though they are undoubtably strongest there.

    The people who live in outer-urban areas tend to be couples with young kids. Many such families would likely appreciate being able to walk to ammenities like schools, parks, cafes, pubs, hairdressers and supermarkets. Most retail works best in huge shopping centres, but plenty of facilities work well on a smaller scale.

    If these facilities are built together, medium density housing should sell nearby.

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