It’s a truism that development costs are much higher on the urban fringe than in inner areas. But there’s little evidence the claim still holds and good reason to think it’s no longer the case
A study of urban form in the US concludes that increasing the density of population and employment is a slow way to significantly reduce car use compared to directly pricing driving
It would be a pity if the “Sky Rail” brouhaha in Melbourne over removal of level crossings were to damage the potential use of elevated rail for totally new rail lines in all Australian cities
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 »
There are two things the new population strategy the Federal Government released on Friday gets right. First, it dismisses the concept of a specific population target and instead focusses on making Australia more resilient to change (I’ve discussed this before). Second, it points out that population size is not the sole cause of problems like traffic congestion or lack of skilled labour.
But overall Sustainable Australia: Sustainable Communities is underwhelming. In fact whatever else this document might be, it’s not a strategy. ‘Strategy’ was originally a military term and refers to a plan of action designed to achieve a particular goal. Whereas tactics are concerned with the conduct of an engagement – how a battle should be fought – strategy is concerned with the terms and conditions that it is fought on and, crucially, whether it should be fought at all.
I expect a population strategy for Australia should be looking at the range of possibilities for where the country could go in the future; the warrant for different choices; the costs and the benefits; and the various implications and knock-on effects. It should assess whether we want to embark on any of them and, if we do, what is the best way forward.
Given how fundamental this issue is to the future of Australia I’d expect to see some pretty sophisticated analysis. There might even be some data, some numbers, some theory and even some analysis. I’d expect to see the economic issues laid out and analysed with rigour – maybe something like this. I’d expect to see immigration discussed in a meaningful way given that for practical purposes that’s the only aspect of population growth that we have much choice about. And I’d expect it to start with the strong likelihood that Australia will reach a population of 35 million around 2050 despite what governments do (I set out my expectations of the strategy 12 months ago).
What is offered up to us with this document is none of those things. It’s a lot of very high-level and inoffensive motherhood statements and ‘principles’, combined with a lengthy description of a vast range of existing Government programs, from health to skills development to the NBN. If I were uncharitable I’d describe it as vacuous. This quote typifies the tone:
A sustainable Australia is made up of sustainable communities: communities that are vibrant, liveable places that have a mix of affordable housing, employment opportunities, access to services, transport and natural amenity.
That’s fair enough as far as it goes but the trouble is it doesn’t even take us to the front gate. Population growth is a serious business for Australia – we need a discussion that is couched in concrete terms and a strategy like this should provide direction and leadership. Population policy is essentially about immigration because that’s the only variable that can practically be affected by government action. Most of the concern with growth is around the impact on the functioning of our cities. Yet the strategy devotes considerably more attention to talking up regional development than it does to examining immigration. Read the rest of this entry »
According to Paul Austin in The Age (29/11/10), there’s little doubt that infrastructure inadequacies weighed heavily on voters’ minds in last Saturday’s election. His list of problems includes overcrowded trains, congested roads, the Myki debacle and long hospital waiting lists.
The pressure to “fix” these problems from voters in the eastern suburbs and sandbelt electorates that fell to the Coalition on Saturday will be immense.
Dr Gruen contends that governments in Australia have focussed on the cost of debt but have ignored the benefits. They’ve reduced the budget deficit to zero but exchanged it for an infrastructure deficit. Their constituents have saved on debt repayments, but:
they are paying inflated tolls on roads and heavy mortgage repayments that reflect the lack of land release and the loading of infrastructure charges onto the land that has been released. And they are paying with their time as they wait at peak hour in traffic that has slowed to a crawl or crowd into late trains and buses.
Thanks to the culture of strict fiscal rectitude that dominates modern government thinking, new debt has been kept off the government’s balance sheet by funding infrastructure in other ways – partly through asset sell-offs but mostly via Public Private Partnerships (PPPs). Read the rest of this entry »
The Age editorialises (21/11/10) that Melbourne 2030 is effectively dead and I agree. The latest nail in the coffin in The Age’s opinion is the apparently burgeoning growth of housing in townships and hamlets located in the peri urban area outside the Urban Growth Boundary (UGB).
I’ve argued before that this sort of “decentralisation” is poor policy (e.g. here and here). But I also think The Age has tended to ‘catastrophise’ the scale of the problem, especially with its highly misleading contention that Melbourne has “sprawled 50% beyond the official growth boundary, spanning 150 kilometres from east to west”.
However what interests me at the moment is why Melbourne 2030 failed. The key reason in my view is that it blithely assumed that enough affordable dwellings – mostly town houses and apartments – could be provided within the established urban areas to avoid the need for the UGB to be extended.
This objective was never realistic for a number of reasons. Read the rest of this entry »
There’s a long history of rent-seeking in Australia over major projects. Business puts a lot of effort into lobbying government and the media to subsidise projects the private sector wouldn’t otherwise touch with a bargepole.
So when IPA (Infrastructure Partnerships Australia) – the nation’s peak infrastructure lobby group – releases a new study calling for land to be reserved for a High Speed Rail (HSR) service from Brisbane to Melbourne, I don’t immediately assume it’s an impartial assessment.
However that didn’t bother The Age, which ran the story as the lead on the front page of Saturday’s issue. The paper reports that AECOM, who prepared the study jointly with IPA, was involved in France’s TGV and Britain’s HS2 HSR projects.
The Chairman of IPA, Mark Birrell, is also on the board of Infrastructure Australia, the body established under legislation to advise the Federal Minister on infrastructure needs and priorities.
No, rather than assume the report is impartial, I thank the angel of small mercies that the only promise on the table from the Greens and Labor is for a $20 million feasibility study of HSR. There may be a thousand more welfare-enhancing ways that $20 million could be spent, but it will well and truly have earned its keep if it leads to the right decision on what could be a $40 – $80 billion investment in HSR.
I’m not going to reiterate the many and varied problems I see with HSR, since I’ve covered them before (see here, here, and here, ). What I do want to address however is the way the planned feasibility study will be conducted. Read the rest of this entry »
The Victorian Employer’s Chamber of Commerce and Industry (VECCI) released five policy papers on Monday aimed at guiding the pre-election decision-making of the major parties.
The paper on Infrastructure and Liveability is of particular interest to the Melbourne Urbanist. Apart from a short introduction emphasising the economic importance of infrastructure, it’s essentially a list of actions, some very specific, which looks like it was cobbled together by the proverbial committee.
It includes some current projects such as the planned Melbourne Metro, but there are some other ideas that are very interesting, to say the least. Read the rest of this entry »
Just why people would move to regional centres on a scale sufficient to ease the demands on Melbourne significantly is not clear, as there’s little in the announcement to suggest the Government has suddenly discovered the secret to growing jobs in the regions.
The track record of policy-driven migration in Australia is poor. The decentralisation schemes of the seventies, based on growing regional centres like Albury-Wodonga and Bathurst-Orange, were conspicuously unsuccessful in lowering growth in the major capital cities.
Decentralisation was supposed to be driven by manufacturing, which at that time was on the march out of the inner city. However rather than moving to regional centres, manufacturing largely moved to the suburbs and offshore. It now offers even less potential for underpinning decentralisation that it did 30 or 40 years ago.
I think the practical impact of Ready for Tomorrow is more likely to lie in enhancing the liveability of the regions than in giving respite to Melbourne. It is really a regional development program. As The Age’s editorial writer points out, even if the annual growth rates of the eight largest regional cities were to double, it would only relieve Melbourne of seven weeks growth.
Nevertheless, I suppose the prospect of cheaper housing and lower congestion in reasonable proximity to Melbourne may be sufficient to attract some new settlers to regional centres, especially if it is hyped as the sensible thing to do by the Government and regional councils. Read the rest of this entry »
There was more evidence in The Sunday Age on the weekend that the spare infrastructure capacity that is widely presumed to be available in the inner city and inner suburbs has in all likelihood already been consumed.
What is unfortunate about this stubborn idea is that there are already sufficient good reasons for increasing housing density in established suburbs without having to resort to unsubstantiated and outdated beliefs.
New research by Professor Kevin O’Conner, Melbourne University, shows that the number of additional students who will be seeking enrolment by 2016 in the inner city and inner suburbs is equivalent to fourteen new schools.
However existing schools are generally at capacity. The principal of Port Melbourne primary is reported as saying “schools in this area don’t have the capacity to cope with more students….looking at my projected enrolments and those of neighbouring schools, and from what I hear about the plans for extra multistorey developments in Southbank and Docklands, we will be full soon”.
He could’ve mentioned that virtually every school within at least 10 km of the CBD already has one or more so-called temporary class rooms including, now, the two story portable, and some are using public parks for play and sport.
Unfortunately there is no credible contemporary analysis of infrastructure capacity and costs in different parts of Melbourne. As I’ve argued before (here and here), there is unlikely to be significant spare infrastructure capacity in the inner established areas. There are a number of reasons for this proposition: Read the rest of this entry »
Here’s more evidence that claims of “spare” infrastructure capacity in inner city and inner suburban areas are a tall story. The Sunday Age reports that Port Melbourne Primary School, Malvern Primary and Middle Park Primary are the first schools to get double storey portable classrooms.
Two storey portables are a natural evolution – practically every State primary school in Melbourne within 10 km of the CBD already has single storey portables. However I’m not concerned with whether portables are better or worse than permanent buildings but rather with what additional classrooms say about spare capacity in schools.
As I argued previously in Why ‘spare infrastructure capacity’ is exaggerated, it is a mistake to think that there is necessarily spare infrastructure capacity just because an area historically had a higher population than it has at present. Read the rest of this entry »
Are claims of spare infrastructure capacity in the inner suburbs real?
The Age reports that there were almost 30,000 more people living in Coburg and Pascoe Vale in 1976 than there are now (The Outer Limits). The paper quotes the former Mayor of the City of Moreland, who says that increasing the population density in many areas “is simply returning suburbs to previous population levels”.
The editorialist in The Age of 20 March stated that “some ‘traditional’ inner Melbourne suburbs – such as Coburg, Pascoe Vale and Fitzroy – have fewer residents than they did 50 years ago. Current ‘in-fill’ housing is thus regrowth” (emphasis added).
The idea of course is that there is spare capacity in infrastructure and amenities that can accommodate ‘restoration’ of the historic population level. This would be a good thing because any underutilisation of infrastructure is economically wasteful. It might also minimise further ‘sprawl’ at the urban fringe. Read the rest of this entry »
It is amazing how quickly supposed facts become accepted wisdom. A feature article in The Age last week, Fringe Benefits, repeated the highly questionable claim that “for every 1,000 dwellings, the cost for infill development (in existing suburbs) is $309 million and the cost of fringe development is $653 million”. Read the rest of this entry »