Are infrastructure costs a lot higher in the outer suburbs?

Is this right? Trubka et al’s version of the difference in residential development infrastructure costs, inner vs outer,2007$$ (source: Trubka et al)

The new Australian Infrastructure Plan has some good recommendations, but it isn’t notable for the sophistication and depth of its supporting analysis (see Is the Australian Infrastructure Plan on the money?).

One of the tropes repeated by Infrastructure Australia is the idea that residential development infrastructure costs on the urban fringe are much higher than those in the inner suburbs. It says:

The research finds that the average cost (in 2007 dollars) of providing energy, telecommunications, water and transport infrastructure services to a unit of housing in existing inner urban areas is $26,500, while for outer urban greenfield locations the cost is $69,500. This represents a difference of $43,000 per unit.

The research Infrastructure Australia relies on is a 2007 report, Assessing the costs of alternative development paths in Australian cities, written by three Curtin University academics, Roman Trubka, Peter Newman and Darren Bilsborough.

The authors compared the costs of providing infrastructure in the first 10 km from the CBD of a notional city with the costs in the outermost 10 km (they also looked at the economic costs of the two locations).

A number of other influential reports have also relied on their findings to support their conclusions and recommendations e.g. Transforming Australian Cities; Residential Intensification in Tramway Corridors; and Macro-Urban Form, Transport Energy Use and GHG Emissions: an Investigation for Melbourne.

I looked at the Curtin University report back in 2010 and 2011 and wasn’t impressed. I pointed out in this article, Are infrastructure costs higher on the fringe?, that the underlying data is out of date and the methodology isn’t transparent.

As I said then, Trubka et al didn’t calculate costs themselves. They sourced their estimates from a 2001 report, Future Perth, prepared by the WA Planning Commission to assess infrastructure costs in Perth.

Future Perth didn’t calculate its estimates from first principles either; rather, it surveyed 22 earlier studies, some dating from as far back as 1972 and some relating to costs in the USA and Canada.

Future Perth is a working paper and hasn’t been published – hence the rigour of its methodology and the quality of the 22 studies it drew from hasn’t been tested.