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Developers: the real city builders

By Ross Elliott - posted Friday, 5 December 2014


Developers are a much maligned breed but without them, nothing much happens. It's not the town planners, or urban designers, or even governments spending tax payer dollars that build cities – it's generally private money taking a risk that creates our urban environment. Why aren't we celebrating this a little more, and why aren't we teaching kids that developers are not the dirty word some sections the media, The Greens and various NIMBY groups like to make out?

Roughly a year ago I was following up on a healthy discussion about the role of urban growth boundaries and planning policy generally with a Government Minister. I looked out from the Minister's office and pointed over the city, remarking that nearly all of what we were looking at was delivered without the complex maze of planning regulation we now consider essential. Most of the urban form of any of our major cities was delivered without what we'd call town planning today.

There certainly weren't legions of planners in government offices trying to exert a command and control influence over community choice by wielding an ideological stick in the form of planning policy. Instead "back in the day" there were a handful of city engineers, and applications for development tended to be approved if they met basic building code and engineering guidelines.

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With this absolute minimalist approach to regulatory intervention in urban growth, we created large, efficient cities which somehow got it right. The roads, railway stations, commercial developments, hospitals and all sorts of community facilities and parklands grew mainly in response to market forces - shaped by consumer demand. Where people wanted to live and in what types of homes they wanted to live in created demand that developers responded to. Whole suburbs were developed in this way, and housing was affordable. In response to this, other developers identified opportunities for shopping centres, workplaces and other projects. Transport connections were delivered in response to the market driven locational choice of our urban inhabitants, and with them were developed the medical facilities, community facilities, parks and public spaces that also helped shape the character of our urban form. This largely market driven approach is how most of our major cities were shaped, with the exception of Canberra.

Not only was the vast majority of our current urban form delivered without the benefit of complex regulatory planning, but apparently it was so successful that huge swathes of the community now believe that much of it should be protected from any re-development. This is a sweet irony: the structures and precincts that were originally created with a quick 'how about we put it there' discussion and approved for construction with basic plans in a matter of days (no one had heard of an EIS) are now the subject of fervent protectionist instincts. These are from among the same sections of the community that talk loudest about the need for even more government planning and development control. They're actively espousing the conservation of an urban form that reflects a period of minimalist or non-existent planning.

But this same coterie of voices that champions preservation of suburbs, precincts, places and structures created by developers unassisted by the guiding hand of a regulatory planner, also somehow believe that only highly regulated controls over developers can achieve similar outcomes in today's world.

The community now views developers with suspicion and somehow we now place our trust in the hands of regulatory urban planners and academics, many of whom have never in their life built so much as a Stratco garden shed. This seems to be a widespread community sentiment which is a great shame because the longer it goes on, the more we are deluding ourselves about how our cities really grow and respond to the needs of their residents.

Will it ever change? No, I think that horse has well and truly bolted. But it could be worth reminding some of the loudest voices in favour of more and more regulatory control of a few home truths. Here are some of my thoughts:

Developers know the market best. You can assemble as many thinkers and urban planners and futurists in a room as you like but the moment someone has to risk their own money on a project, the room clears. Those left are the ones who truly know what a market wants in a particular location and what they're prepared to pay. They know the costs of delivery, the risk of time delay and the risk of market change. In this way developers are more acutely tuned to real consumer and business community demand. Their views could be more widely sought and respected in terms of what can work and what won't when it comes to urban planning. Otherwise we create plans which aren't based on reality and which – for that reason – are difficult to deliver without excessive taxpayer support.

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Developers tend to be ahead of the trends. There's nothing like a market driven psychology to keep you on top of trends and to know how fast they're changing, and in what direction. Regulators on the other hand tend to learn by third party reference, through various conferences, talk fests and media reports. These are often well behind the trend because they're referencing something someone else has already done. Once again, I'd be more inclined to put my faith in the views of a few developers when it comes to knowing the latest trends than an entire roomful of theorists who aren't in the business of risking capital. Especially their own.

We need developers. The anti-development voices seem to think that taxpayers and governments are the means to improved urban environments and that developers should be highly controlled and their role limited. But without developers and the private capital (not taxpayer dollars) they bring to projects, all the plans in the world will never materialise. It's the developers who create the houses, the shops, the cinemas, the restaurants, the coffee shops, 'green star' offices, industrial workplaces, medical centres, tourism resorts, hotels, theme parks, and other attractions that characterise where we live, work and play.

Today, developers are also increasingly providing schools for our children and public parks, particularly in master-planned estates. They are providing aged care and retirement living for our seniors. Private health organisations are developing new and world class hospitals, operating theatres and health facilities for large cross sections of the community, usually at lower capital cost and greater operational efficiency than traditional government delivery models.

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This article was first published in The Pulse.



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About the Author

Ross Elliott is an industry consultant and business advisor, currently working with property economists Macroplan and engineers Calibre, among others.

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