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Urban Densities: Keep it Real

October 19, 2011

Jessica Irvine in today’s Sydney Morning Herald presents some views on how low-densities in Australian cities keep the cost of land and housing higher than it should be. She quotes a new paper from the Reserve Bank entitled Urban structure and housing prices: some evidence from Australian cities.

She makes very very obvious points – about how much less dense Australian cities are than European, for example. She discusses theoretical models out of the Reserve bank paper. She makes the point – again, an easy one – that zoning restrictions are one culprit. Fundamentally she says more medium and high density housing is the alternative to expensive urban sprawl.

Yes, we know all this.

I cannot believe such an article could be written without reference to two hugely relevant recent developments. One, Barry O’Farrell in April this year gave control over density and zoning decisions to local government. As a result, this will see more high and medium density developments rejected.

Two, the Land and Environment Court has overruled attempts by the previous Labor government to have high density development along the North Shore rail link in Ku-ring-gai shire, boosting densities near the railway station and along a major transport artery. This decision means 10,000 more future dwellings will have to be delivered on Sydney’s urban fringe.

These two decisions make it harder to achieve high densities. They mandate more sprawl. They are mightily relevant to what Irvine presents as an entirely theoretical debate about densities and prices.

Jessica finishes her piece saying “Interestingly, the … researchers found evidence that Sydney’s population density has increased in recent years.” Yes, it is interesting. It was also the product of 16 years of sound planning policy. Sydney has the highest population density of any Australian capital. Over the past decade only 21 percent of new homes were built in greenfield areas, compared to over 50 percent in other Australian capitals. Melbourne is going for growth on the fringe. Cities either grow up or out. Stop them growing up and they sure as hell will grow out.

  1. nickmof permalink
    October 19, 2011 11:59 am

    When I read that article this morning, I too noticed that there was nothing new in her revelation. It’s either up or it’s out. After living in London for 8 years, most families who want to live within the m25 have given up the idea that they can live centrally in a house with a garden. It’s a given that you may well be bringing up kids in an apartment.

    In Sydney mums and dads desperately want to bring up their kids like they themselves were brought up . . On a quarter acre block, creeks, trees, grass, sprinklers. They have not accepted that the price of this dream is HUGE. The sooner we all accept that life is not and will never be what it was like in the 60s and 70s!! Build up and get used to it!! The kids will understand.

  2. Tony O'Donnell permalink
    October 20, 2011 9:17 pm

    I think this view is proliferated by eastern suburban Sydney and, inner city dwellers generally. The real facts are that our cities will continue to grow out and the real planning and resource allocation that is necessary is to accommadate this in advance. The Irvine and Carrs of this one fail to point out one simple fact : that the cost per square meter of high density housing to the consumer is vastly greater than the cost of acquiring outer suburban space per square meter. For example, three bedroom units in Coogee trade for as much as $700,000, providing floorspace of about 40 sqm meters.That’s a whopping $17500 dollars per square !!!! Recently five acres with a four bedroom house and pool with stables at Leppington sold for $850,000. That’s about $170.00 per square meter !!!!!! (For the Eastys and Co this suburb is not out as far from Sydney as say Campbelltown). Good luck too those dumb enough or well off enough to pay for the flat in Coogee. Personally i don’t want to live above or below my neighbor and my kids play in our back yard pool surrounded by our three mid sized dogs (not flat friendly I’m sorry). So lets end this debate on the great con job that we should pay a THOUSAND times the value per square meter to live in a shoe box inner city cockroach farm and not be so bold as to acquire some level of space with our working class dollars. The failing of successive governments to provide adequate infrastructure to the growth areas is the point that needs examining. Thanks anyway Bob, but I don’t want to live in shoe box dwellings beside Chatswood rail station. I note that neither Irvine nor yourself have chosen to either.

    • Bob Carr permalink
      October 21, 2011 6:58 pm

      Sorry, pal, but with high immigration ( three million more Australians in a decade ) you are not being given a choice.

      By the way there was $61 billion of new infrastructure in the Carr years including the longest urban road and the biggest urban rail project in Australia. Spending was one third higher in resl terms than under the previous government.

  3. mr smith permalink
    October 24, 2011 9:38 pm

    Why has Sydney stagnated over the last decade since the heady days of the 2000 Olympics? I would argue that a big contributing factor was urban consolidation however I would like to hear a rebuttal on this point. By restricting supply on the fringes we just drove up prices on the existing available land, and caused young families to leave Sydney, leaving us with an older demographic than most other cities in Australia and resulting in a declining tax revenue base for the future. It also caused the waning of the residential construction industry.

    Mr Carr I was wondering whether you think Sydney can regain its turn-of-the-millenium spark and dynamicism even while continuing to pursue the urban consolidation policies established during the Carr years?

  4. mr smith permalink
    October 24, 2011 9:40 pm

    Further on Sydney’s malaise over the past decade – the fact that scarce NSW public money was spent on various feasibility studies that went nowhere (especially in the years following your premiership) rather than being usefully applied to building more public infrastructure didn’t help matters either. Nor that the Fed Government seems to want to always stick it to Sydney by denying or witholding Infrastructure Australia funds while Victoria received several billions at the same time (and will receive $800million more in compensation for the carbon tax).

  5. Peter Pando permalink
    October 26, 2011 10:10 pm

    Dear Mr Carr,

    I guess for you to write this there must be a second Kuringai Shire in NSW, because medium density development proceeded at an unnatural pace on the North Shore under the previous Labor government. The glory days of developers writing their own legislation to walk over NSW residents led to the landslide last election, and sure, builders didn’t get their string of development pearls on the North Shore past the courts, but they got a decent amount through in the prior years. We are enjoying this reprieve from the heavy-handed, patronising methods of the previous planning ministers, and long may it last. You probably can’t see it, but your drive to wipe out suburbia to serve the projected incoming population, which you enthusiastically and ‘coincidentally’ promote, resembles imperial invasions of indigenous land. You’ll be endlessly popular if you import a new crop of voters to live in your buildings, but not among those who know better.

  6. Alphonse permalink
    October 27, 2011 12:19 pm

    Totally correct that it’s either up or out, and that up is better for the totality of us, whatever some individuals’ personal preferences.

    But please stop blaming the Land and Environment Court for the Ku-ring-gai decision. If the Minister and Department had played it straight their scheme to put more people within walking distance of the stations on the North Shore line would have been bullet proof.

    Pratfalls are pathetic, but denying them is risibly pathetic.

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