Australian cities: the things we don’t talk about

A production process where the dwellings are designed and built before subdivision is quite different from the process where land is first subdivided.

With this process it is possible to design a building to fit into its particular environment. It is possible to design relationships between houses that do not depend on standard subdivision patterns and standard set backs. It is possible to retain trees, get aspects right and maximise the usefulness of land.

Trouble is that it costs more. In particular, generally the buildings have to be completed before a cash flow is generated.

How to get the design advantages of the second method but some of the economies of the first process.

The answer lies in having less, but more effective, controls. Since the first “town planning” legislation imposed subdivision control at the beginning of the 20th century, that has been the main planning weapon. Before a subdivision is allowed consideration has to given to its proposed use, the density, which is determined by the lot size, and the design, determined by the set backs and heights. Subdivision control is a proxy for control over what type and where buildings are to be built.

It would be more effective and efficient to deregulate and just control buildings and services. Control over subdivision should be abolished. Owning a parcel should not assume the right to build; only permission to construct would matter.

Deregulation would free up design, doing away with the tyranny of the lot boundary. Density would be controlled per hectare rather than by minimum lot sizes. Instead of subdivider developers first providing moonscaped standard subdivisions, building designers would be free to design in response to the environment, maximising both density and the use of land. Backyards could be restored rather than wasted in useless setbacks and wasted verges.

Importantly rural living could be allowed without destroying rural lands. Governments have sought to restrict rural living by increasing minimum lot sizes. Rural values have increased to reflect the semi-urban value of a house lot, be it 20 or 40 hectares. Much better to use a density control and insist on concentrations of development designed for the place, with the remainder of the land parcel being retained as rural.

As well as simplifying the control system, by expanding the scope of Australia’s excellent digital land information system to add parcel formatted development rights and consents, there would be increased simplicity and certainty. And the opportunity to create places that have been designed rather than merely zoned and reshaped to look exactly the same as every other place.

The one bit of policy work that is needed is how to enable an early cash flow for developers. This is the main stumbling block to achieving cities that have been designed rather than being the product of a series of standard formulae.

Other reforms

Many other governance reforms would be needed to achieve the lofty aims in the Australian Cities report.

• The zoning system delivers monopolies to retail chains, which are not interested in creating anything other than boxes surrounded by car parks. These can only be accessed by car. Only international fast food outlets can afford the monopoly rents demanded by the centre owners. They too want boxes and car parks. In these circumstances accessible urban places cannot be created.
   
• The Cities report goes on about the shortage and affordability of housing at a time when new houses have never been bigger. The problem is essentially one of demand rather supply. The heavy subsidies for homeowners have distorted the urban markets. Until some balance in the subsidies is achieved there will never be affordable housing for those who are not homeowners. And housing will always out market other uses, including much of what make cities interesting.
   
• Australians put their capital into their house, rather than the supporting infrastructure. Other very successful cities have smaller houses and better infrastructure. We get the type of cities we pay for, which is very little. Rates should be higher (and local government more efficient) and everybody should pay land tax (c.f., Henry Review), which could be hypothecated to support urban infrastructure and better common property. Increased outgoings would help make housing more affordable.

Conclusion

There is even more, of course. The point is, let’s have some honesty in these urban reports. For years the same hopes have been stated. Nobody writes why it is that those hopes are not realised.

If we had some real analysis, we might see some real solutions.