What to read over the holiday season?

Posted: December 23, 2011 | Author: | Filed under: Miscellaneous | Tags: , , , , , , | 5 Comments

That violin's worth $3.5 million! He's playing some very complex Bach

When I started The Melbourne Urbanist I wasn’t sure what direction it would take. While primarily about planning and development issues, I imagined it might also have a major sideline in reading and literature.

Hence the Reading page in the sidebar. As things have turned out, there hasn’t been much interest in reading and books. For example, The Melbourne Urbanist had 25,000 visits in November but the Reading page only got 29 views, so next year I’ll probably move it elsewhere.

Clearly the readers of The Melbourne Urbanist don’t come here to talk literature. Fair enough, this is the age of specialisation and that’s one of the things the internet does well. However since it’s the holiday season, I have an excuse to talk books.

The thing newspapers love to do at this time of year is find out who’s reading what. Over the years I’ve found some good reads from seeing what politicians, novelists and others are reading (or say they’re reading). The Grattan Institute has put an interesting twist on this tradition – a suggested summer reading list for the Prime Minister. Here it is:

Fair share, Judith Brett, (Quarterly Essay 42, 2011)

Cities for people, Jan Gehl, (Island Press, 2010)

There goes the neighbourhood, Michael Wesley, (University of New South Wales, 2011)

Balancing the risks, benefits and costs of homeland security, John Mueller and Mark G. Stewart (article available at http://www.hsaj.org/?article=7.1.16)

The rational optimist, Matt Ridley, (Fourth Estate, 2010)

Cold light, Frank Moorhouse, (Random House Australia, 2011) 

Some interesting suggestions. Of these, I’ve only read The rational optimist and can’t recommend it highly enough (I quoted from it yesterday). It would be a great summer read. If you follow the link to the Grattan Institute, there’s an explanation of the thinking behind the list. Anything by Frank Moorhouse should be interesting and Cold light is about power, secrecy and, of all things, urban planning! So I’ll put that on my “to read” list.

Of the books I’ve read this year, I’d recommend Ryan Avent’s The gated city, He argues in a mere 100 pages that opposition to density is a key reason for American economic stagnation. This is an Amazon Kindle “Single” – it only costs $1.99 and if, like me, you don’t have a Kindle, you can read it on your computer or, in my case, on an iPhone (not so good for the beach, though). I’ve cited it before, here and here.

I’d also recommend Steven Pinker’s The better angels of our nature. He argues that violence at both social and personal levels is much lower than historically it’s ever been. Another fascinating book is Daniel Kahneman’s Thinking: fast and slow. Kahneman is a psychologist and Nobel laureate – lots of insight on why we think the way we do and, especially, why we so often get it wrong. Both of these books are long (and in the modern fashion look like they never had an editor), but they’re worth it.

The best novel I’ve read this year – in fact for a while – is The Finkler Question by Howard Jacobson. It deals insightfully and wittily with some big issues. And it’s beautifully written – a deserving winner of the 2010 Booker. Read the rest of this entry »

Do cities have a distinctive ethos?

Posted: December 20, 2011 | Author: | Filed under: Miscellaneous, Planning | Tags: , , , , , , | 12 Comments

What are they laughing at? Some Xmas cheer - the Berlin Laughter Project

City managers love a catchy idea. Ten years ago it was “creative cities”; next it could be the idea that cities should discover their own “ethos” to protect them from the homogenisation of globalisation.

Avner De-Shallit and Daniel A Bell have just published a new book, The spirit of cities: why the identity of a city matters in a global age, which they say revives the classical idea that a city expresses its own distinctive ethos separate from its national affiliation. They take their definition of ethos from the Oxford dictionary: “Ethos is defined as the characteristic spirit, the prevalent tone of sentiment, of a people or community”.

The authors look at nine cities which, they argue, each have a dominant ethos. The cities are Jerusalem (religion), Montreal (language), Singapore (nation building), Hong Kong (materialism), Beijing (political power), Oxford (learning), Berlin (tolerance and intolerance), Paris (romance), and New York (ambition). According to the publisher’s blurb:

Bell and De-Shalit draw upon the richly varied histories of each city, as well as novels, poems, biographies, tourist guides, architectural landmarks, and the authors’ own personal reflections and insights. They show how the ethos of each city is expressed in political, cultural, and economic life, and also how pride in a city’s ethos can oppose the homogenizing tendencies of globalization and curb the excesses of nationalism.

You can get a sense of what the whole idea is about from this transcript of a public seminar on The Spirit of Cities the Grattan Institute conducted with Professor Bell on 4 October 2011. You can also read the first chapter of the book, titled Civicism, and some of the chapter on Jerusalem, at Amazon (use the ‘look inside’ option). Chapter one is instructive because it sets out the rationale, theory and methodology, with subsequent chapters discussing each city in turn.

It’s an interesting idea, but I remain to be convinced. For starters, separating national from city-level characteristics is a minefield. As if to reinforce this difficulty, De-Shallit and Bell mess it up from the outset. They select Singapore as one of their examples even though it’s a city-state. Arguably, Hong Kong was too up until relatively recently.

And what, in practical terms, do we settle on as a city’s intrinsic ethos? I don’t find the discovery that Jerusalem is a city of religion, or that diminutive Oxford (population 165,000) is a city of education, provides any greater insight into these places than the discovery Karratha is a mining town. All that tells me is these are their dominant industries – that’s not telling me about the spirit of the place.

And if Bejing’s ethos is political power, that’s also true of most of the many other places that specialise in government, like Washington DC and Canberra (and there are many of them – for example, 33 capital cities in the US are not the most populous city in their State. Olympia, the capital of Washington State, has a population of just 50,000). Perhaps the hand of politics feels heavier to the outside observer in Beijing, but if so, that could be because of a national-level characteristic – it’s a communist state – rather than a city-level one.

It’s also very hard to separate out what’s city branding/marketing and what is the characteristic spirit of a place, or the collective aspirations and beliefs of its residents. New York is certainly a world power in finance and media and has marketed itself accordingly. But does “ambition” permeate the lives of all those New Yorkers – the great bulk of the city’s population – who aren’t “Masters of the Universe” e.g. the teachers, doctors, suburbanites, shop assistants, retirees, truck drivers, stay-at-home parents, people living in “the projects”? I don’t think so.

Similarly, does “romance” permeate all walks of life of Parisians or is it something projected onto the place by visitors (and maybe helped along with some savvy Gallic marketing)? Read the rest of this entry »

Are real estate agent fees limiting residential mobility?

Posted: November 17, 2011 | Author: | Filed under: Housing | Tags: , , , , , | 10 Comments

Real estate commissions are preventing residential mobility (Source ABS)

Despite an enormous increase in house prices over the last ten years, real estate commissions stayed relatively constant as a percentage of selling price. Agents consequently enjoyed a spectacular increase in the dollars earned on each sale even as the volume of sales was expanding.

In its new report, Getting the housing we want, the Grattan Institute notes real estate commissions are so big they’re a significant barrier to residential mobility in most States. This is an important public policy issue – the ABS reports that even though average household size is falling, the average number of bedrooms per household is increasing (see exhibit). Any barriers that constrain households from voluntarily moving to dwellings that better match their size should to be addressed. And the same goes for barriers that limit their ability to reduce travelling costs by moving to a new residential location.

In most industries, when firms start earning super-profits we would expect prices to be moderated by an increase in competition. However as the Institute observes, this hasn’t happened with real estate agents – competition is weak:

This is consistent with the industry elsewhere, too – the UK Office of Fair Trading recently conducted a review of UK real estate buying and selling. It found that while 32% of those who had used a traditional real estate agent believed that the fees represented either slightly or very poor value for money, 64% said that they did not negotiate a lower fee.

In Victoria, as in most States, there is no set commission, giving the impression of a lightly regulated industry. Vendors and agents are free to work out whatever arrangement they wish, whether it be a fixed sum, a sliding scale, or something else. However according to this real estate consulting group, the customary fee paid by vendors in Melbourne ranges from 1.6% to 2.5% of the selling price. This doesn’t include advertising or even a property sign – marketing is an extra cost borne by the vendor.

This introductory “how to” guide on buying and selling issued by Consumer Affairs Victoria implies an even higher commission. It illustrates a lesson on negotiation between a vendor and agent with an assumed commission of 3.3% up to $500,000 and 3.85% thereafter (p 22). That’s a $16,500 commission on a $500,000 property. I think there’s a fair chance the target market for the guide will interpret this illustration as somewhere around the “going rate”.

There’s hopefully an extensive literature that looks at why the cost to vendors has risen so much and why competition is so weak. If there is I’m not familiar with it and I don’t have time to read it anyway. It seems to me, though, that the internet should’ve reduced considerably the cost to agents of finding prospective buyers and that a good part of those savings should’ve been passed on to vendors. It also should’ve made it easier for innovators to enter the industry and set up new lower-cost business models. Read the rest of this entry »

Has the Grattan Institute got the answer to our housing woes?

Posted: November 15, 2011 | Author: | Filed under: Activity centres, Housing | Tags: , , , , , | 8 Comments

Housing preferences compared with existing stock and the composition of current housing supply (by Grattan Institute)

I have to say right up-front that I’m disappointed by The Grattan Institute’s new report, Getting the housing we want. It nominally proposes ways of increasing housing supply in established suburbs, but it really just puts up the politician’s standard solution – more bureaucracy, more money, and little explanation (press report here).

In the Institute’s defence, I must acknowledge that it’s taken on a difficult task. It’s much harder to propose practical solutions than it is to analyse problems, identify key issues and propose general directions for action. And the Institute has hitherto done a good job on the latter three tasks with a series of reports under its Cities Program.

The new book by Harvard economist Edward Glaeser, Triumph of the City, illustrates the way solutions attract criticism. The book was lauded for its sophisticated analysis of the benefits of density and the need to remove the many obstacles to redevelopment. But his big idea for an historic buildings preservation quota – meaning that cities could only protect a set number of buildings each year and so would be forced to prioritise – was lambasted by all and sundry as impractical and, worse, naïve.

A lot of critics had a similar reaction to Ryan Avent’s The Gated City. Great analysis of the need to promote density, they said, but potential solutions to NIMBYism like developers compensating neighbours for the negative effects of development were criticised as unworkable and unrealistic. As soon as detailed, practical solutions are suggested, the knives come out!

So the Grattan Institute is putting its corporate head on the line with the solutions-oriented Getting the housing we want. It’s a follow-up to the Institute’s earlier report, the impressive The Housing we’d choose. The earlier report established that there’s a significant mismatch in Melbourne and Sydney between where many people actually live and where they’d like to live (see my earlier discussion of this report).

Opposition from existing residents to redevelopment proposals is a key reason for this misalignment – they don’t see the broader good and they don’t see how redevelopment benefits them. Councils tend to fall in behind residents who’re committed in their opposition to redevelopment.

The new report is on safe and familiar ground when it advocates standard stuff like code-based approval processes for small-scale development. However its headline proposal is more problematic – the Institute proposes the establishment of Neighbourhood Development Corporations (NDCs), with initial financing coming from a proposed new Commonwealth-State Liveability Fund.

The idea is NDCs would undertake large scale redevelopment projects aimed at increasing housing supply. NDCs would be “independent”, not-for-profit organisations that work in “partnership” with all tiers of government, the private sector and residents. The Institute stresses the importance of in-depth consultation and says NDCs could only “go ahead with the support of local residents”. NDCs would have to provide a diversity of housing “in terms of both type and price” and would have “temporary planning powers”.

Disappointingly, there’s not a lot of concrete information in the report on the mechanics of the proposed NDCs and Liveability Fund. And there’s little specific analysis and justification provided in support of these ideas. However the report profiles three examples of existing organisational structures similar to what’s envisaged with NDCs. These are London Docklands Development Corporation; HafenCity Hamburg, and Bonnyrigg social housing estate.

These throw more light on what the Institute envisages. They make it clear NDCs are conceived primarily as mechanisms for managing large sites like E-Gate which are invariably disused, underutilised or owned largely by government. The familiar redevelopment challenges of land assembly, existing uses and resident opposition are usually much more tractable with these sorts of sites than they are with activity centres (e.g. see discussion of proposals for Ivanhoe).

I have trouble enough with the idea that changing management structures is the broom that will sweep away all the gunk that’s holding up supply. But the trouble with having such a narrow ambit is that the potential contribution NDCs can make to increasing housing supply is necessarily more limited. Moreover, it begs the question of whether NDCs are even necessary. Read the rest of this entry »

What type of housing do we prefer?

Posted: June 25, 2011 | Author: | Filed under: Housing | Tags: , , , , , , , , | 6 Comments

Comparison of preferred housing, existing stock and current supply (Grattan Institute)

The Herald-Sun reported last week that “the great Australian dream of owning a home on a quarter-acre block might no longer exist. Instead, Australians want more town houses and apartments in the more desirable areas”.

The important words are the last five – “in the more desirable areas”. Australians still love their big, detached houses but they also value location. The baby boomers could have a detached house on the suburban fringe and still have reasonable access to the rest of the city, but those days are vanishing. Now, people who want to live in an accessible location increasingly have to forgo space and accept a smaller dwelling, often a town house or apartment. As illustrated here, those leading this trend are young, small households without dependents – they’re less sensitive to space than families and place a higher value on density.

The Herald-Sun’s interest in this issue was sparked by a new study by the Grattan Institute, The Housing We’d Choose, on the housing preferences of residents of Sydney and Melbourne. It shows that more than half of households in these cities would rather live in a multi-unit dwelling in the right location than in a detached house in the wrong location.

This presents a serious problem for policy – the existing stock of housing no longer matches up with resident’s changing preferences. The Institute finds that a whopping 59% of Sydneysiders and 52% of Melburnians would prefer some form of multi-unit living. Yet this type of dwelling makes up only 48% and 28% respectively of the existing housing stock in the two cities (see first exhibit). Moreover, in Melbourne, developers are continuing to under-provide medium and higher density housing, leaving households with little choice other than to live in sub-optimal locations, albeit in a detached house.

I must admit I was disappointed with the Grattan Institute’s first report in its Cities series, The Cities We Need, so I wasn’t expecting a lot from The Housing We’d Choose. It’s not that there was anything technically wrong with the first report, it’s just that it seemed a curiously pointless exercise – as I noted here, it’s so high-level it didn’t take the debate on urban issues anywhere or advance the cause of better policy.

This time however the Institute has applied all those brains and resources to a meaty and relevant issue and, moreover, gone about it in a logical and determined way. While The Housing We’d Choose has some flaws, it shows up the limitations of the research being churned out by some of our local universities and lobby groups. This is the kind of study they should be examining closely.

The headline finding – that people are prepared to trade off dwelling size and type for greater accessibility – may seem self-evident, but the Institute has attempted the important task of measuring this preference. The researchers sought to simulate real life. They gave a sample of households in the two cities a range of real location, housing type and dwelling size options and asked them to make trade-offs in order to arrive at their preferred combination. The smart thing is the trade-off was constrained by real-life prices and the real incomes of respondents. Read the rest of this entry »

How can we improve our schools?

Posted: November 17, 2010 | Author: | Filed under: Education, justice, health | Tags: , , , , , , , , , | 6 Comments

High demand: tram or bike? (Fed Square, late morning, Tuesday 9 November, 2010)

The editorial writer in The Age today reckons many teachers and parents will be underwhelmed by the Government’s new $208 $258 million Education for Life promise. The writer bemoans the lost opportunity for the Government to advance some “big ideas”.

I agree that Education for Life won’t rattle the windows of most voters, but the objectives of the program are important and worthwhile. As explained by VECCI, it addresses the disengagement of many young people from the education system. This is a program that, if done well, might help to tackle the sorts of safety and security issues around trains that I discussed yesterday.

It’s a pity, though, that the Premier didn’t use the opportunity of the campaign launch to also pick up on the important message in the new report on teacher effectiveness released this week by Melbourne’s own Grattan Institute, Investing in our teachers, investing in our economy.

In the past I’ve wondered what the purpose of some of the Institute’s reports is, but not this one. Its message is clear and direct – improving teacher effectiveness is the single most important reform that could be put in place to improve educational outcomes.

The report makes three key points. Read the rest of this entry »

Will changing management arrangements give us better cities?

Posted: November 7, 2010 | Author: | Filed under: Management, Planning, Public transport | Tags: , , , , , , , , , | 7 Comments

Counting votes - Federal election 2010

Almost everybody, it seems, from political parties to academics, think tanks and planning experts, reckons the key priority for improving planning and public transport in Melbourne is to reform the way they’re managed.

The clamour for revised governance arrangements in order to effect reform has been increasing in Melbourne, with groups like the Committee for Melbourne, the Greens, the Public Transport Users Association and the Committee for Economic Development of Australia agitating for change.

It’s therefore sobering to see the Grattan Institute pointing out that reformed governance arrangements are not a silver bullet. The Director of the Institute’s Cities program, Jane-Frances Kelly, makes the point that:

the evidence from successful overseas cities does not support the idea that changing governance structures will help. In the successful cities we examined, no one type of governance was dominant. Unnecessary changes to governance structures can also be a distraction from the things that are vital. In short, changing structures is no cure-all. Read the rest of this entry »