Ruining our cities to save them

The claim that concentrating development in dense “activity centres”, “urban villages” or “transport corridors” will ease the problem is a sham. Development controls will always drive up the price of land. When planners talk about affordability in this context, they really mean inferior housing in terms of space, amenity and title, even if it’s dressed-up as “design innovation” or “green rated building”.

But inferior quality may not be enough to compensate for escalating land values, so consumers get less housing for higher prices. And more are stuck renting instead of buying. Large numbers of low to middle income earners will be shut out of the housing market

Interestingly, Perth appears in Demographia’s “severely unaffordable” category along with Sydney and Melbourne, despite having only around a quarter of the population. Newman neglected this detail while praising the city’s rail network on the 7:30 Report.

Though Perth can fall back on the resources boom, south-eastern cities aren’t so lucky. They are service-based regions with dispersed patterns of employment, even by world standards.

Writing in a publication of the 2008 9th World Congress of Metropolis, Sydney University’s John Black observed that “apart from some noticeable peaks, employment density is quite uniform across the [Sydney metropolitan] region”. According to the NSW Department of Transport, only 12 per cent of Sydney’s jobs are in the CBD and second tier centres like North Sydney, Chatswood, Parramatta, Hurstville and Penrith have less than 2 per cent each. David McCloskey, Bob Birrell and Rose Yip of Monash University (demographers, not urban planners) report the same about Melbourne. The CBD hosts around 20 per cent of jobs and the rest are scattered all over the metropolitan region.

Platitudes like “we must locate people close to where they work”, or “we must locate jobs close to where people live”, have little basis in reality. They infringe another immovable law of economics, relating to economic rents or bid-rents. This mechanism determines how industries and firms are distributed. Put simply, a parcel of land will go to whichever use delivers the highest profits. Centrally located land (near major transport or infrastructure hubs) commands high prices, and goes to the most profitable uses. Peripheral land goes to less profitable or marginal activities.

Over the last 30 years, economic deregulation, flexible transport, advanced communications and population growth have raised up a sector in the latter category, extracting value from cheap outer-metropolitan land and low rents. It includes industries like transport and distribution, building and construction, food, consumer products, personal services, wholesale and retail. They depend on favourable location costs and proximity to urban markets and labour pools. According to the Greater Western Sydney Economic Development Board, “prime industrial land with direct access to transport infrastructure is 75 per cent cheaper [in GWS] than other areas of Sydney”.

Ultimately, green planning will phase out cheap urban land, undermining this sector and destroying jobs in the process. Breakthroughs in automotive and energy technologies offer the prospect of adaptation to a distant future of expensive oil. There’s no way to adapt to rising land values.

Green rated chaos

Many are in denial about this, recycling visions of the “concentric ring model” of urban form. This relic of pre-war sociology allocated industry to the core, or cores, and residences to the periphery. Take the Sydney Morning Herald sponsored Long Term Public Transport Plan, recently released with great fanfare. Authored by a committee of green-tinged experts and academics, the plan proclaims, according to a Herald feature, that “Sydney retains a strong centre-based structure, with nearly 40 per cent of the city’s jobs and most of its major retail, educational and entertainment facilities located within 26 key centres”. This is an essential precondition for the proposed network of denser rail infrastructure.

But the plan’s own figures don’t add up to Sydney having a “strong centre-based structure”. A hefty 60 per cent of jobs aren’t centralised and the plan actually cites 33 “centres” flung all over the Sydney region, from Norwest Business Park in the north, to Penrith in the west and Hurstville in the south. Apart from the CBD with 12 per cent, none of the centres have more than 1.8 per cent of Sydney’s jobs.

Concentrating housing in a city of dispersed jobs means horrendous traffic congestion, the costs of which loom large in State of Australian Cities 2010. Currently, around 72.3 per cent of Sydney’s people drive to work. No configuration of public transport will be efficient, leaving motorists to converge on dense localities. This is a city projected to explode from today’s 4.2 million people to 7 million in 2050. In Melbourne’s case, McCloskey, Birrell and Yip state plainly that raising densities along tram and train lines will end in chaos. Of the 1.4 million people who work outside central Melbourne, only 4.4 per cent use public transport.