Has spare infrastructure capacity in the inner city disappeared?

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The received wisdom is it costs much less to provide infrastructure for an inner suburban dwelling than for one in the outer suburbs. However, as I noted last time, we don’t know how big the difference is or even, for that matter, if it’s positive or negative – we simply lack reliable evidence.

There are reasons, however, to suspect the savings in infrastructure outlays associated with urban consolidation might be much less than is widely thought. It’s plausible that the popular claim of an $85,000 per dwelling saving could be well off the mark (note I’m only talking in this post about the capital cost of infrastructure, not the economic costs and benefits of a fringe vs central location).

From the time urban consolidation was first seriously put on the table in Australia as a policy option, a key premise was the availability of ‘spare’ infrastructure capacity in the inner city. This part of the city had previously supported larger working class and migrant populations, so there was ‘free’ infrastructure to be had in support of a restoration of earlier population levels.

There’s not much sense in assuming any capacity is free (it all has to be paid for) but looking from the perspective of 2011, there are reasons to question if there actually is any spare physical capacity left, at least in relation to some types of infrastructure.

A key reason is a lot of whatever spare infrastructure capacity existed has already been used up by gentrification. At the 2006 Census, there were 36,488 more residents in the inner city of Melbourne than there were in 1976 (and 76,422 more than when the inner city was at its lowest ebb in 1991). In fact of the 31 municipalities in metropolitan Melbourne, only the City of Moreland and the adjacent City of Darebin had significantly fewer residents in 2006 than in 1976 – Moreland had 14,585 fewer and Darebin 17,137 fewer. That is not a lot in the context of projections Melbourne will grow from a current population of four million to seven million by circa 2049.

Even where there are fewer residents today than in the past, they might still have a much larger “infrastructure footprint” than their predecessors. Modern households have many more resource-intensive devices like flat panel TVs, air conditioners, heaters, computers, spas, and so on, than their predecessors. They have more cars than former residents, so there’s less room for parking. They also have higher standards – the primary school that used to accommodate 300 kids in six or seven classrooms now has to build twelve to handle the same enrolment.

Moreover, households today are smaller on average, so they have fewer ‘economies of scale’ in resource consumption than earlier generations. Two households of three persons each use more gas for heating than they would if the same six residents shared a single dwelling. Gentrifying households are also wealthier on average than the sorts of households who used to live in the inner city and inner suburbs 30 to 40 years ago. On a per capita basis, wealthier households consume more of just about everything worth having. Again, that will require more infrastructure capacity.

Thus it’s possible infrastructure in some locations could be at or above capacity even with a much lower population than those places housed in the 1970s. Read the rest of this entry »