Tuesday, March 29, 2016

New Economy, New Jobs, Old Thinking?

The changing nature of our economy is making itself felt across the business sector, and this in turn is changing the nature of work and where it takes place. But is our urban thinking keeping pace with this change or are we too sentimentally attached to old patterns of urban development to allow the new economy to thrive?

Urbanists (or new urbanists or their various incarnations) have celebrated the role of the city throughout history. They have been ardent supporters of urban development, particularly inner urban development, and have traditionally favoured century-old models of place-making, social collaboration, work and play.

Traditional European or US urban models of urban development have been studied diligently and even modern cities that developed well into the age of the private automobile have been urged to mimic initiatives that reflect traditional forms of the urban – be that in transit, housing form or other aspects of a city. The sentimentalism was the backdrop for the enigmatic movie "The Truman Show" – itself shot on location in a ‘new urbanist’ community of Seaside, Florida.

But then along came 21C digital technology and it looks like the urban party is at risk of being spoiled. The pace of growth in technology and its ready access has been responsible for everything from a rapidly ageing population (extended lifespans thanks in part to technological advancements in medicine, early disease detection and treatment) to the globalization of work, and lately for the increasing ability for work to take place where it suits us.

How is this challenging our traditional thinking about cities and urban development? The evidence is starting to appear in official employment data. Based on some analysis recently by Macroplan, if 2006 is taken as a base year, the changes since then are worth thinking about. 

Traditionally, cities (and particularly CBDs) grew off the back of white collar employment. Business, finance and property related professions were closely linked with growth of office space demand. But since 2006, the index for this category of employment across Australia is sitting at 63.7 as of January 2016. In other words, despite growth in the wider economy, this category of employment has declined. It is entirely possible that offshoring (via technological advance) has seen some of these jobs move to lower cost locations (perhaps driving office space demand in Delhi?) and also that technology has meant that fewer people can accomplish more tasks. There has also been a decline in ICT roles (sitting down from 100 at 87.2) and even legal, social and welfare professionals are down slightly at 94.

By contrast, medical practitioners and nurses are at an impressive 225.7 on the index. Similarly, health diagnostic and therapy professionals are at 207.8 and carers and aides are at 150.9. Health-related professions have been the big drivers of jobs growth in Australia, followed closely by hospitality and retail (123) or sales and marketing/PR roles (133.8).

This doesn’t mean that all the traditional white collar office job roles are disappearing – just that without growth in the health sector, our jobs market as a whole would probably be shrinking.  What does this mean for city development?

Health industries are unlike traditional white collar office industries. They rely on being close to the people in need of their services. Many services are increasingly mobile. They are certainly decentralized. They do rely on proximity to each other, other than some evidence of medical related clustering for consumer convenience.

Office workers and CBD jobs, by contrast, have relied on proximity to each other for the creative energy that follows and the professional networks that proximity thrives on. But it is precisely this type of function that is increasingly being liberalized from the need for proximity, either because the nature of work can be performed just as well elsewhere (in suburban centres or offshore) or because some aspects of technology are rendering it redundant altogether.

If this continues to happen, our CBDs will increasingly become less about ‘central business districts’ and more about ‘central amenity districts’ which are enjoyed for their access to recreation, entertainment, or cultural virtues. But this will also mean wholesale changes to our thinking about urban development are required.

Transport systems designed on 19th or 20th century models of suburban commuters clocking in at their CBD office may have to give way to widely dispersed models of employment where the place of work and the hours of work simply cannot be serviced by traditional public transit models. We may need to look to partnering with the Ubers of the world to make more of our investment in roadways without adding to congestion. We may need to rethink our planning mindset which allocated fixed uses to particular sites – such as retail – and instead encourage greater flexibility in land uses to respond to the fast changing nature and location of work.

The pace of technological change will demand nimble, responsive urban development and flexible approaches to land use planning if we are to grow our national prosperity. Our cumbersome governance structures, arcane planning laws and sentimental attachment to traditional forms of urban development might all need to change to allow that to happen.

Monday, March 21, 2016

Does town planning over promise and under deliver?

After several decades of increasingly sophisticated strategic town planning, community angst and confusion - along with industry annoyance - continues to test new lows. Things are getting no better and many would suggest that planning is increasingly becoming a process-ridden exercise more concerned with vague platitudes and politically correct language than delivering on outcomes. Is there something that could change this trajectory?

Urban development and urban growth in this country was largely a laissez faire model for much of the period since white settlement to perhaps the early 1980s. By this time, in response to community interest and also to try better manage growth, regulatory planning was having a greater say in land use and development permits. Town planning departments at various levels of government were still in the main small(ish) sections of the bureaucracy. Governments of the day were more interested in seeing things built and delivered than debated and delayed. Town planning was more focussed on granting permits than denying them.

But as the years progressed since, regulatory town planning has taken on a much greater role as a strategic ‘command and control’ centre within governments of all political persuasions. As community concerns and NIMBYism becomes more widespread, planning  has become much more focussed on process and on managing politics. Outcomes have become increasingly expressed as a collection of motherhood statements, often cobbled together to appease various politically active constituencies. It’s now less about laying out land use and infrastructure plans in a businesslike manner. Instead, it seems more about making promises for political purposes.

Modern town planning has some wonderful achievements to its name but  is it also now in danger of over promising and under delivering? Does this explain why the community and industry are losing faith in the process? I know many senior town planners are equally as frustrated that their profession is at one end becoming more about petty rule book regulation while at the strategic end, more prone to flights of esoteric fancy that promises more than it can realistically deliver.

By way of example of an over promise, take this statement contained in the 2013 version of the Draft Metropolitan Strategy for Sydney which promised: “A home I can afford. Great transport connections. More jobs closer to where I live. Shorter commutes. The right type of home for my family. A park for the kids. Local schools, shops and hospitals. Liveable neighbourhoods.”

Wisely, future versions of that set of heroic promises were expunged from the Sydney Metro strategy. Housing affordability, congestion and housing choice have all since deteriorated in Sydney to a significant extent, with little sign of improvement on the horizon. Why did town planners preparing that draft feel obliged to promise so much in the first place? It was an over reach, which only serves to raise community expectation to unrealistic levels.

Another example of a town planning promise that got carried away with the narrative is taken from a recent planning document that deals with an inner city neighbourhood of another one of our larger cities.  The ‘Vision Statement’ for the local Structure Plan promises to: “Provide for (the area) to become a higher density mixed use community that exemplifies inner city sustainability, social inclusiveness, sub tropical design excellence and innovation in its urban form. It will be attractive, affordable, public transport oriented, convenient and comfortable for pedestrians and cyclists, provide public spaces for local amenity and recreation and accommodate a diverse range of people. It will also take full advantage of its strategic location and maintain its role as an employment node.”

Wow. That pretty much covers everything. Perhaps the authors could have added: “Under this plan, no child will live in poverty” just for good measure?

This isn’t trying to single out either example because they are no longer exceptions but fairly typical of the sort of tone that seems expected from strategic planning documents. If these politically motivated sentinments aren’t included, political leaders are faced with potential community outrage from the semi professional objector lobbies. The problem is that measuring the performance of motherhood statements is impossible, and plans are frequently re-made (often in line with political cycles) before any performance assessment is carried out.

And this is the point: how often can you recall reading or seeing or hearing of any strategic planning document, strategy or paper being subject to any sort of rigid performance assessment? For example, “this plan promised to deliver “x” volume of new dwellings with y% of them at a multiple of four times average incomes for the area but it achieved only “z” number of dwellings and none of them were available for less than 6 times avarege incomes.” Or what about infrastructure targets? Plans that propose to collect infrastructure levies as a result of development activity in line with that plan, could also identify what infrastructure will be provided, at what cost, where and by when. Performance assessments could identify successes and failures on defined KPIs, and suggest explanations for the failures – with remedies in turn reflected in future planning schemes. A process of constant improvement based on performance assessment. Much like a business plan does.

This lack of agreed, measureable outcomes or KPIs in much of what passes for strategic planning today also means that performance assessment is limited to ambigous or fluffy language. How often do we now read things like “this has become a vibrant community featuring sustainable design principles and a cosmopolitan lifestyle which enhances livabliity, connectivity and inclusiveness.” Just what does that really mean? And how on earth could you measure it?

Perhaps our approach to town planning – and to being realistic with community and industry expectation – might benefit if we began to include measureable KPIs and objective outcomes as part of our planning schemes, along with the community consultation that goes with them? By creating a clear picture of the outcomes we intend, and the ability to measure progress toward those outcomes, is it possible that some of the “over-promise and under-deliver”  that seems to feature in strategic planning could be addressed? By treating strategic town planning as a business plan for a region or community, could we shift the focus from ‘vision statements’ as an end game to the nuts and bolts performance objectives that feature in good business planning models as the measureable outcomes of the vision?

It at least could be an idea worth exploring. If not, we must think the current trajectory is fine and that more of the same can only make things better. Who seriously believes that?

Tuesday, March 1, 2016

We are working less while living longer

The ageing of our society raises a host of difficult issues, most of which are studiously avoided by our current crop of populist political leaders. So while they’re building up the courage to confront some ugly economic realities of the ageing of our society, I’d like to add another consideration. It’s a set of numbers that aren’t often discussed but which add another dimension to the problems of ageing.

First, a quick recap on the ageing numbers. Australians aged 65 and over are the fastest growing age group in the country. There will, in the next 20 years, be another 2.8 million of them. Part of the reason is that we’re living longer, as life expectancy grows. Living longer is something we all wish for, but we’re yet to seriously work out how we can afford it.

Here’s the sobering picture which we all need to understand. Keep this in mind the next time some new medical advancement is announced which means we’ll likely all live a little longer still.

Take someone (the following numbers are based on males) who was born at the turn of the last century, around 1900. Their life expectancy was on average only 51 years of age. They went to school but mainly left school by the time they were 14, or even sooner. Then it was straight to work. With an average life expectancy of 51 years, most pretty much died on the job after working for 37 years. ‘Retirement’ was something largely unheard of, and certainly not something funded by welfare: families looked after their elderly until death. This generation spent, on average, 73% of their life in work.

Jump ahead to someone born in 1950 – a classic ‘boomer.’ Their life expectancy by now averaged 66 years. They attended school and many left at age 14, and retired at around 60. This gave them 6 years of ‘retirement’ and 46 years of work. They spent 69% of their life at work.

Jump again to 1975 and life expectancy rose to 69 years of age. But people born in this era were more likely to stay at school until say 17, to finish high school. They retired at around 60 and had 9 years of retirement before death. This generation spent 43 years at work – less than the previous generation – or 62% of their life.

And now to the millennials. Born in 2000, they can expect to live to 76. They will be at school and probably post school studies (and staying at home) to around 22, maybe longer if you throw in a gap year. If they still retire at age 60, they will have 16 years of retirement. They will work for only 38 years or just 50% of their life.

We have gone from generations who spent much of their life working (and thus supporting themselves and paying taxes) to a coming generation who, by living longer and staying as dependents for longer, will only spend half their life at work.

What is our plan for funding a life where half of that life is outside work? Even today, we are confronting a wave of retirees with minimal superannuation balances, certainly insufficient to fund their way into commercial retirement living or aged care housing. The majority of retirees, even today, will rely on the pension to some extent.

Coming generations are working less and - thanks to idiotic levels of housing affordability - postponing entry into the housing market, if at all. They are even postponing children, with the average age at childbirth rising somewhat. This generation will have had compulsory super for most of their working lives, but those working lives will only be 50% of their time on the planet. And they may not be retiring with a home that is owned outright, but retiring instead with a mortgage. Or no home at all.

So Australia, tell me this: if we are to preserve our standards of living and quality of life, what’s our financial strategy for doing so? By working for falling proportions of our time on earth, we are going to struggle to fund our own future retirement – let alone pay sufficient taxes to maintain infrastructure and provide funds for pension support for the many who have been unable to fund their retirement. Do we simply suggest that seniors have to work longer? This is about the extent of any wisdom from Canberra in recent years. But try telling that to a 60 year old on the job market. There are only so many Bunnings jobs to go around. 

It strikes me that longer lifespans is a double edged sword. While we may collectively want to celebrate the idea of living longer on this earth, we need to have a very serious discussion about how on earth we’re going to afford it.