What are we doing to ourselves?

“Walk the streets of Manhattan these days and it’s hard to believe that, only months ago, this was one of a handful of “supercities” whose dense concentration of innovative businesses and highly skilled workers was meant to drive economic growth in the 21st century. Six months into the pandemic, less than 10 percent of the city’s white-collar workforce is back in the office, with less than a quarter expected back by the end of the year and only half before next summer, according to a survey by the Partnership for New York City. Broadway theaters are closed indefinitely, tourists are nowhere to be found, and the Hilton hotel in Times Square has permanently closed.”

So began a recent article in The Washington Post, surveying the impacts of Covid-19 restrictions on major US cities. It went on:

“Empty or boarded-up storefronts are common along what were once the world’s glitziest shopping districts, while nearly two-thirds of the city’s restaurants say they could be out of business by the end of the year. Just about anyone who can has fled to weekend retreats in the country, some of them permanently, while home sales in the most sought-after suburbs have doubled. Most hours of the day, Grand Central Terminal is eerily quiet while the city’s subway system, facing a $16 billion shortfall, warns of a 40 percent service cut.”

The Washington Post article suggested that the positive in all this was that falling rents and prices – be it for office buildings, department stores, or housing – would render these centres once again ‘affordable’ and stimulate a long term recovery. I can’t see that as a positive, given the scale of capital destruction in the interim will be something for which there is no historical precedent. 

In Australia, the situation – apart from Melbourne (whose policy led self-destruction will be the stuff of entire history books) – is less dire. But are we making it worse for ourselves than it need be? 

The fascination for ‘working form home’ will I suspect prove a more short-term phenomenon. Come a hot summer, those ill-equipped spaces in our homes will prove pretty uncomfortable as workplaces. There are many other WHS and related reasons why, long-term, homes are problematic but the bigger question is, in the absence of medical or government advice to the contrary, why are large corporates and much of the public sector continuing to work from home when there is no longer any need to be doing so? 

The claims that people are just as productive or more so when working from home will need some scrutiny. It may be the case for some, but for positions that require supervision, mentoring, and leadership, it’s hard to see how productivity has been enhanced. Yes, for many the absence of a commute is attractive. But let’s balance this self interest motive against the capital destruction that is taking place across our cities. Shops, food courts, restaurants are suffering. Many are closing, some for good. Theatres, entertainment venues, pubs and clubs are struggling. And with them, jobs are disappearing. Public transport services continue to operate at the same frequencies but with a fraction of the passengers, making this an even more expensive service to operate for the taxpayer.

It’s time that federal, state and local government workers returned to the workplaces that the taxpayers continue to fund. It’s also time for major corporates to do likewise. In doing so, we have some hope of letting the real benefits of private sector spending do the job of keeping the wheels in motion. The idea that we are willing to sacrifice so much private investment in the form of vulnerable businesses and employment, on the basis of unproven, untested hypotheticals about home-based worker productivity, is illogical. The scale of value destruction could total hundreds of billions if this keeps going. And that will come to bite into superannuation balances and add to tax bills for those left in jobs.

This doesn’t mean we shouldn’t plan for changes in how workplace decisions are made. There will no doubt be an appetite for a number of suburban or satellite business hubs. There will no doubt be some occupations where the long commute to the city office is no longer necessary. But to continue a wholesale abandonment of city workplaces on the basis of how we feel, is foolhardy. There is too much at stake.

In the same way that the capital city does not thrive without viable regional economies, the suburbs and regions will not thrive without a viable city centre. The economies are inter-dependent. Yes, for too long we have been pre-occupied with the mystical allure of the emerald city, and invested disproportionately in it, while denying equitable investment into suburban and regional centres. You don’t fix that by then allowing the economic life of the inner city to sucked from it, and redistributed into loungerooms or kitchen tables. On the basis of what? 

At the very least, having over capitalised the city centres, the least the very people for whom this was done could return to using them!

We are making things worse than they need to be - for the city, as well as the suburbs and regions that are economically connected to it. It reminds me of that epic scene at the end of The Planet of the Apes, when Charlton Heston realises he was on earth the whole time, but in its future. “We finally really did it,” he says, surveying the Statue of Liberty in a post-apocalyptic scene. “You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!”

Is there enough diversity in regional planning?

The doyen of city planning, Jane Jacobs, was not herself a trained town planner, nor was she a University graduate. Described as a journalist, author and activist, her seminal book The Death and Life of Great American Cities (1961) nevertheless inspired generations after her to formally study town planning and to make it their chosen careers.

Today, formally trained planners dominate discussions on city planning, urban development strategy and land use. From a profession which in the 1980s was a relative minnow in the development industry landscape, planning as a profession now reigns supreme. Town planning departments across all levels of government have grown exponentially, private town planning consultancies have evolved into global concerns and even lawyers have developed specialised planning businesses of significant scale and billings.

With many regional plans now needing a comprehensive refresh to reflect changes likely coming in a very different post-Covid world (less rapid population growth, less centralised employment, more suburban hubs, changes to transit and more) it’s time to call on the planners to help map out strategies for adapting to these changes.

But are planners alone enough? Could we benefit from a wider diversity of experiences drawn from across the industry?

The urban development industry represents a very wide cross section of expertise and professional training – many of which are not invited to the decision-making table. Some – for example developers or their agents or representatives – are actually banned from some types of engagement via legislation.  In practice, their views and contributions can be treated with suspicion or outright hostility.

Even the views of the voting public – the ratepaying, taxpaying, home-owning residents who are democratically entitled to their opinions on planning decisions that impact them - run the risk of being treated with scorn.

“The community doesn’t understand the full story because they are not experts in the field of City design and planning” said one town planner last year, incensed that the wider community did not support townhouse developments in their low-density neighbourhoods (something championed by some within the planning community).

“It’s concerning that we listen to the general public for planning in our city rather than the experts who understand growth of a city,” said another (who on that basis must regard community consultation as a waste of time – something to be endured rather than informed by?)

These views, thankfully, are not representative. But perhaps before a sense of moral superiority takes root, it might be helpful to reflect on the valid contributions of all the participants in the industry?

For the ultimate diversity checklist, maybe we should start with the “untrained” public. It’s their taxes after all, and their homes or businesses. Their votes are important - and valid. With the public come their elected representatives. We are a democracy after all and politicians - elected by the people - are there to do this job. Their views matter.

I would then add to the list developers because - to be honest - nothing happens without a developer taking a risk. Things can be planned, designed, imagined, debated… but without the commercial acumen of developers, it won’t actually happen.  We may deride them and collectively pile on in social media tirades about “greedy developers” but before you do, remember the house you live in, your local shopping centre, your workplace, and very often the social infrastructure you enjoy is the result of someone being a developer - and you are a beneficiary. Developers in turn need investors, without whom they have no-one to sell developments to and without whom, development doesn’t happen. So let’s make space for them as well?

There are also engineers of course – civil, structural, water and environment, and traffic. Where would we be without them? They should absolutely be at the planning strategy table. No discussion on infrastructure is meaningful without some engineers and their slide rulers. I would also add real estate agents to the room. Yes, even them – because they bring with them the market reality serums that are antidotes to the Kool-aid that it seems is often passed around when it comes to regional planning. I would also add building contractors – civil and structural - because actually being able to build stuff is important. Architects should be there too - if only to infuriate the builders. But also (very legitimately) for their valued understanding of built form design and its influence on human behaviour. Landscape architects and designers are a variant on this who are equally important. Project managers bring a broad view of project life from inception to delivery. Let’s make a spot for them too. Valuers are essential, as are quantity surveyors. Both have unique and critical contributions to offer on cost and land use value. Surveyors need a spot at the table too. Got to put those lines in the right places! Environmental consultants are almost an essential inclusion these days. And of course let’s please not forget the urban economists, property economists, urban geographers and market researchers. The wealth of knowledge these people bring should never be excluded from the room.

Have we forgotten anyone? What about the lawyers?  OK, in for a penny in for a pound – multiples of which they’d charge to be at the table. But without these people, how would we ever draft legislation or regulations to put legal meaning to the intent of regional plans? If they aren’t part of the debate is there a risk their legislative or regulatory drafts won’t reflect the actual intent?

By now, our professionally diverse (but representative) regional planning group is going to be needing a very large room. The point being that the insights and expertise to think strategically about how to plan for a region requires a cross-section of inputs, some of them trained in specific disciplines, some of them not, but each of them equally as valid. Locking out particular groups for fears of conflict, or due to fears “they don’t understand” or for other reasons deprives us all of superior, more broadly accepted outcomes.

Otherwise, if formal qualifications in one particular discipline or another came to mean a barrier to participation, even the likes of the great Jane Jacobs would these days be locked outside the room.

Learning to live with less

Population growth has been a mantra of our property industry for as long as I can remember. And once again there are predictions of a surge in growth, driven (this time) by people allegedly fleeing Victoria. However, there are good reasons to think this may not happen, and that we may need to prepare for an extended period of minimal growth. This may not be a bad thing.

One of the first things to understand about our recent rates of actual and predicted future population growth is that they have been extraordinary in terms of the actual numbers and also in terms of the rate (speed) of growth. On a global scale, our forecast rates of population growth in major cities exceeded many leading world cities and was on a par with places like Shanghai and Beijing. In just 15 years, Brisbane, Sydney and Melbourne were predicted to grow by around a third – roughly three times the rate of growth of cities we often like to compare ourselves with like Copenhagen (for some reason), Los Angeles, San Francisco, London or Paris.

Given we started this forecast period with widely acknowledged urban infrastructure deficits (failing to keep up with population growth in the past), how we were supposed to not make the problem worse with these rates of growth is something smarter people than me might like to explain. Let’s just say the Chinese do things very differently so we can’t use Shanghai or Beijing as comparisons.

These predicted rates of growth were driven by three components: international migration (net overseas migration or ‘NOM’); interstate growth (net interstate migration or ‘NIM’) and natural growth (more births over deaths). And all three now look severely compromised by the policy responses intended to manage Covid.

In Queensland’s case, NOM has grown in importance in recent years, now accounting for more than a third of our population growth. However, with the closure of international borders, there’s been a virtual halt to 457 work visas, along with foreign student visas. Net overseas migration to Australia – Queensland included – will slow from record numbers to a trickle. This is likely to recover but unlikely to recover to pre-covid levels for some years: rising unemployment in Australia would not be helped by importing more labour on work visas. I cannot see a Federal Government supporting NOM at the same levels as we have seen in recent years when so many Australians themselves are out of work – something sadly that’s unlikely to change for a few years yet.

The rate of natural population increase is also significant, and typically stable. It has sat at around 30,000 per annum since 2016. There are two schools of thought here: lockdowns and work-from-home will lead to a post Covid baby boom (for obvious reasons) or that the post Covid recession will see fewer people plan on starting families until their financial futures are more certain. I can see a bit of both – an initial baby bump possible at year end after the March-April lockdowns, followed by a slowdown in births as the full implications of the recession sink in. In short, less growth from natural increases is my punt, for the foreseeable future.

The final source of population growth has been net interstate migration and this is where some are seeing hope of significant growth. The numbers of net interstate migrants to Queensland has been increasing since the 40 year lows recorded from 2010 to 2014, but will this continue?

There are a few things to keep in mind here. First, when NIM reached levels of 1,000 a week (around 50,000 per annum) in the late 1980s and early 1990s, Queensland’s total population was around 2.4 million. Today it is around 5 million. To have the same proportional impact, we would need to see NIM rise to around 80,000 per annum – and we are a very long way from that.

Second, there has been a close correlation between periods of high net interstate migration and periods of economic prosperity in Queensland. People did not come just for the weather or the lifestyle (attractive as these were) but they came in numbers when Queensland’s full-time jobs growth was strong, even stronger than NSW or Victoria.

There have been recent media reports speculating about Victorians (in particular) seeking refuge from Covid impacts in their home state and moving to Queensland. I don’t believe the media reports will reflect significant real numbers for the reason that Queensland’s full-time jobs growth has actually been negative in the last five years and anaemic in the last ten.

It’s important to look at full time jobs because these are the things people need to secure mortgages and to provide family security. Much has been made of the Gig economy, but part time and casual jobs are particularly vulnerable in recessions and especially to downturns in Covid-sensitive industries like hospitality, travel and tourism. Which happen to be synonymous with Queensland.

Would Victorians (for example) logically leave a state that has produced more full-time jobs than any other in the last five years for a state that now has fewer full-time jobs than five years ago? I have heard some in the property industry argue that if you had to be unemployed, where better than in Queensland. Which is true, but is this what we want? Migrants arriving without jobs to go to or limited prospects of getting any in the near term isn’t helpful. This won’t stimulate our economy but will add to the drain on services in costly areas for governments (meaning taxpayers) like health and education. Fewer full time employed taxpayers and a rising population of dependent unemployed is not a recipe for economic growth. Property professionals spouting this line need to take a long, cold shower. All population growth is not alike.

So each of three sources of population growth looks challenged in a post Covid Queensland, for the next few years at least. Less NOM, fewer NIM and less breeding.

Is this such a bad thing though? Provided we continue with infrastructure projects, it could allow the State to begin to close the infrastructure gap which has widened significantly in recent decades. The pressure is everywhere to see – rising congestion, hospital waiting lists, rising school class numbers, and hostility to development generally. If Covid forces a breather on the rapid rates of population growth we’ve been used to, perhaps it will mean we can actually enhance our quality of life and standards of amenity in the process?

It’s also worth keeping in mind that there are many global examples of low growth cities and regions which remain highly attractive and economically prosperous. The surplus of demand by people wanting to live and work there, relative to supply (deliberate limits on housing supply and population caps) invariably makes these very expensive real estate markets, completely unaffordable for many. But from a selfish property market point of view, they are still viable markets for development and redevelopment. Locally, think Noosa. Being horrendously expensive for residential or commercial property hasn’t stopped some of our other property markets before?

 

So many levers, why don’t we use them?

In the pursuit of suburban and regional renewal, have we fallen into the trap of thinking this is a responsibility for local governments? Have we become too reliant on local government powers to provide incentives to attract and stimulate development – things like density bonuses, rates relief, infrastructure charges relief – without lifting our thinking to wider opportunities to support targeted geographic areas? Are we relying on too few of the levers actually at our disposal?

Local government development incentives can be highly effective, as Brisbane City Council showed when it targeted the limited supply of 5 star hotel rooms across the city some years back, along with student housing and seniors housing. Each sector was offered specific incentives designed to bring forward proposals for adding to supply in that sector, in support of city-wide economic development objectives. It worked, although it wasn’t intended to support specific geographic areas within the city.

On a wider geographic level, these can become more problematic: some local governments lack the resources to provide sufficient stimulus options to make much difference to a project’s viability. And some location-specific initiatives within one local government boundary might offer region-wide benefits, but neighbouring local governments are unlikely to chip in out of a sense of noblesse oblige. There are many other valid reasons why the task of economic attraction shouldn’t be delegated entirely to local governments.

Let’s take a hypothetical example of an outer suburban or regional business district which has seen better days. Picture plenty of ‘For lease’ and ‘For sale’ signs – some of the signs old enough to warrant a heritage listing in their own right. Regional plans may identify it as a centre of wider employment potential but without strategic policy support beyond the reach of local government those sentiments are unlikely to be realised. Somehow the ‘planning’ and the ‘doing’ never quite align. Our business district continues to promise potential but nothing much changes.

If asked what’s needed to turn that around, I suspect many of us would think the first order priorities are physical – infrastructure and placemaking upgrades being top of the pops. These things are unquestionably important in business attraction and centre renewal but, for the sake of argument, what other levers could be applied? What other things could we do to make a particular suburban or regional business district more appealing as a place to base jobs?

For starters, we often overlook the impact of utilities providers on the costs of both doing business and developing new assets. Many years back, these were public utilities and some – such as water and sewerage – were local government owned. Today many utilities providers work to a set of objectives which do not include business attraction or incentivising development. Nor do they respond to the economic development wishes of their former owners. But their cost structures for new or upgraded infrastructure can add significantly to local project costs and hence detract from the ability of getting our hypothetical run-down centre up to speed. A new project in our renewal centre will be competing with other existing centres where services are already in-ground, and not as fully priced into the location costs; which puts us at an immediate cost disadvantage. If we are serious about making outer suburban and regional centres competitive, is it valid that we leave utilities off the team?

Another lever we usually don’t engage in incentivising regional or suburban renewal is the tax lever. Payroll tax for example is levied at the same rate whether you are major accounting or law firm in a CBD tower, or a mid-size business in a suburban or regional location. Same payroll value, different locations, same tax bill. (Payroll tax in Queensland kicks in at $1.3million per annum in wages and is 4.75% for up to $6.5m per annum and 4.95% for over $6.5m per annum. The Queensland Government introduced a regional discount in 2019 - of 1%. It's a start but unlikely to to be deal maker. It also doesn't apply to outer suburban or regional areas within South East Queensland). If our aim was to make our run down outer suburban centre or regional centre more attractive to a cross section of businesses, is there any valid reason we couldn’t offer payroll tax exemptions based on place of business? (Sure, there’s a risk that some will set up “post box” locations to exploit initiatives like this – there always are. But consider that the opportunity cost of the lost revenue is relatively small if confined to specific locations, plus the specific geographic location ought to make validity checks relatively easy? This could actually be an easier tax measure to police than many already on the statute books).

And if a “horses for courses” approach with payroll tax to favour specific places of work is a potential lever, why not a similar approach to things like land taxes, depreciation rates or the big one – income and company taxes?

Let’s imagine our run down regional or outer suburban centre given the collective support of Federal, State and Local Governments, along with utility providers. Bring your business here and pay a concessional rate of company tax, your workers will receive extra income tax rebates based on location, your payroll taxes are zero, you are offered accelerated depreciation on built assets and fixed equipment, land tax is half what you would pay elsewhere, while energy, water and other utilities are less than what you’d pay in a major centre. Plus the housing for your workers is plentiful and affordable. I’m writing the economic development pitch already!

It’s only a crazy idea because we’ve never really been fair dinkum about supporting the efforts of suburban or regional business districts wanting to refresh their appeal. We have tended to assume that the inner cities are where it’s at and directed the bulk of our infrastructure investment there for that reason. We’ve also benchmarked and tuned our statewide and nationwide tax and regulatory settings to the economic environments of major centres. Little wonder that they have thrived while many suburban and regional centres have struggled.

It isn’t enough to be able to offer cheap land as the prime location incentive for regional or outer suburban areas – a tactic we often see resorted to. It’s cheap for a reason, and land cost itself is rarely the deciding factor. The cost of building in an outer suburban or regional area is either no different or (often) more expensive than building in a major centre – so you are effectively at a disadvantage from the outset. If the tax and regulatory framework is also designed on a ‘one size fits all’ basis, whether you are regionally or city based, then the odds start to become well and truly stacked against you.

We might stand a chance if we factored in the very high costs of inner urban infrastructure needed to support a highly centralised economy. For example, mass transit projects designed to ferry people to inner city workplaces are eye-wateringly expensive, but those costs are borne by taxpayers, usually without much dissent. Providing a similar ‘leg up’ to regional or outer suburban centres, in the name of a more resilient and dispersed economy that shares benefits more widely across the country, shouldn’t prove as problematic as it seems.

Nothing in this is new of course. The notion of a ‘Northern enterprise zone’ to develop the economy across the north of Australia gets a regular airing, but rarely any traction. It’s an idea that has now been floated so many times that it almost invites ridicule when it gets aired again. But surely the idea can be no less ridiculous than the notion that the tax rates and other government costs ought to be the same for businesses located in the CBDs of major cities - where they are surrounded by taxpayer funded amenity - as it is for outer suburban or regional business centres?

We need to begin to think more broadly about ways to support a more geographically diversified economy. Continued concentration of our economic fortunes into a handful of cities is a strategy fraught with risk, as we are watching play out now in Melbourne thanks to Covid-19. Geographic diversification is no longer an economic or planning pipe dream – it’s a matter of national economic security.

Learning from Levittown

Attend any number of presentations on the subject of “sprawl” or read any number of articles denouncing it, and very often you’ll find the example of Levittown USA being used as a case study in what not to do. The 1950s era mass-produced housing development has been pilloried by designers, new urbanists, smart growthers and creative classists from the US to Europe to Australia. Admittedly, its design when first completed was far from inspiring. But the critics omit to mention some very important and enduring features of Levittown, some of which we could use more of today.

Figure 1 Levittown USA in the 1950s

What is Levittown? It’s the name given to a number of post World War II housing developments in New York and Pennsylvania. Developers the Levitt family sought to provide low cost detached housing, especially for servicemen returning from WWII and their families. Houses were manufactured using a Henry Ford assembly line approach, with construction teams devoted to particular components, allowing for an entire house to be built in as little as a single day. Houses with land came with appliances installed, lawns and of course a white picket fence. They sold like hotcakes.

Largely uniform designs on low cost land with efficient building techniques were the keys to making these homes affordable. Keep in mind, many residents were escaping cramped, unhealthy and relatively expensive rented accommodation in New York urban tenements. For them, the hope offered by a new home they could afford to own, with space around them, was a no contest compared with the lifestyles they and their parents’ generations had known.

Figure 2 Urban living was a dystopian nightmare for residents of New York in the 1920s and 1930s. Cramped housing, disease, crime - all were rampant.

Figure 3 The opportunity to own their own home, with internal room and external space, free from the conditions they and their parents had experienced, made Levittown an obvious and logical choice.

But for urban design critics at the time, Levittown represented everything they detested. The writer and urban critic Lewis Mumford had this to say in his 1961 booked “The City in History”:

“…a multitude of uniform and unidentifiable houses, lined up inflexibly, at uniform distances, on uniform roads, in a treeless communal waste, inhabited by people of the same class, the same income, the same age group, witnessing the same television performances, eating the same tasteless prefabricated foods, from the same freezers, conforming in every respect to a common mould.”

That set in train a repeating pattern of criticism over the decades that followed, all of which seems to have two things in common: first, the criticism is based on initial design (making next to no mention of the improved housing conditions it provided, liberating a generation of families, nor the affordable prices at which it could be purchased). Second, the criticism reflects mainly the early days of Levittown. Indeed, the opening photo in this article is the one I have seen used most in articles and at conferences where scorn is freely piled upon Levittown. The image is 70 years old people! Why not use a recent image to show what Levittown looks like today? Here’s one below for example -  which looks very much like any middle-class suburban environment anywhere. Criticising projects like Levittown in their very early days is a bit like criticising a 2 year old for their lack of literacy and numeracy skills. Give it a rest.  

Figure 4 Levittown today looks more like a bucolic scene of middle class suburban life.

Below is another image. Over time, owners have planted trees, the area has matured, schools filled, community facilities established, and transit connections improved. In fact, the demographic profile of Levittown today is that of a healthy middle class, middle income, well educated community with very high levels of home ownership (much higher than the Australian average).

Figure 5 A matured Levittown community that the suburb bashers never talk about

Levittown on opening day may not have been the most visually appealing landscape imaginable, but to the people who bought and settled there, they could no doubt see beyond the narrow view of wealthy urban critics like Mumford. They could see a future for their families and a lifestyle free from cramped and run-down housing, disease and urban crime.

Have we learned anything from Levittown? It doesn’t look that way. The prevailing view of new suburban master planned communities today has changed little from the ill-informed, jaundiced and smug denunciations levelled at Levittown. New suburban communities are regarded by the inner urban cognoscenti as some form of social aberration. This, they claim, is a condition that needs curing. This can’t possibly be what people want. It can’t possibly be good for them.

There are many modern-day versions of Lewis Mumford in Australia, generating a steady torrent of suburban disdain like this from Sydney Morning Herald urbanist and university professor Elizabeth Farrelly:

“The suburbs are about boredom, and obviously some people like being bored and plain and predictable, I’m happy for them … even if their suburbs are destroying the world.”

New suburban communities are wrongly accused of generating city bound congestion (though fewer than 10% of residents work in the inner city); they are accused of being environmentally irresponsible (yet they provide public open space and parkland at many times the levels available in inner cities); they are accused of being wasteful energy guzzlers (yet they are more likely to generate their own rooftop solar and dry their clothes without the aid of an electric dryer using instead the common clothesline); they are accused of consuming valuable farmland (though it is often marginal and the accusers have little understanding of farming realities); they are accused of catering for poorly educated, low income, fast food guzzling masses (though the demographic picture provided by the Census shows this to be entirely untrue); and they are accused of creating social isolation, loneliness and ill health (which even the most tortured methodology in the hands of the most ardent suburb hater couldn’t come close to proving).

Unattributed, unscientific, hearsay is accepted “wisdom” in so many circles that it is easy to despair. Evidence is out the window and in its place are unchallenged but fashionable belief systems. Faith over facts. It’s as if we are sick with urban prejudice but are only being able to choose between the witchdoctor, the anti-vaccer or the Chinese herbalist for remedies.

New suburban communities have much to offer Australia. If we simply sought to understand them better, we might begin to support them better too. Affordable housing in new suburban communities is surely an option people are entitled to aspire to? How many really aspire to a permanent life of renting in cramped conditions?

Levittown was popular with working and middle class Americans in post war America. It provided low cost homes and a better future for its residents, who busily went about planting trees and building their own community over time. It provided a start. 

New suburban developments deserve the same opportunity to provide these things to a generation of Australians. They can do without the moral guidance, partisan bias or professional snobbery of “experts” or the opinions of the inner urban cabal who wax lyrical on the need for affordable or social housing yet in the next breath reject models which could provide it.

The Suburban Alliance has commissioned some indepedent research into what mature masterplanned communities are really like, compared with the inner city. The report and two minute video summaries can be found here: https://suburbanalliance.com.au/causes/a-new-suburbia-case-studies-of-successful-suburban-expansion/

Back to the drawing board?

The global response to the impact of the Coronavirus seems consistent in at least one respect: everything we previously took for granted is now up for grabs. Long held truisms, established patterns of corporate and individual behaviour, doctrinal teachings, professional articles of faith – nothing is immune from Covid-19 induced change.

The immediate and long terms impacts are potentially going to reshape cities and the behaviours of the people who inhabit and work in them. Nothing seems untouched: from the nature of work and where it’s conducted, to urban mobility, immigration and population growth, housing preferences, retail spending and personal consumption. A more comprehensive shake up could not have been imagined only 6 months ago. 

Many Australian cities and regions adopted regional planning policies built on some common themes around the mid to late 1990s – the curb of rapid outward expansion, policies of urban consolidation and infrastructure strategies designed to support these principles. Regional plans have been reviewed and updated since then but the general principles haven’t fundamentally changed. Then along came a virus, and it potentially changes everything. Persisting with the assumptions that underpin these regional plans, as if nothing has changed, now makes little sense. They need a root and branch rethink. 

Central to many of these assumptions was a frenetic rate of population growth. In South East Queensland for example, the population was predicted to rise from 3.5 million in 2016 to 5.3 million by 2041 – a 50% increase in just 25 years. It took nearly 160 years to grow by 3.5 million but the next 2 million was forecast to come in 25 years. Melbourne and Sydney planned for similarly meteoric rates of growth. Those predicted rates of growth owe themselves entirely to Australia’s international immigration policies, which until Covid were running hot. That tap is now turned firmly off, and according to many is unlikely to be opened anywhere near as wide again. 

Even traditionally woke pro-immigration Labor Party spokepeople like Kristina Keneally are now calling for curbs to protect Australian workers. “The post-COVID-19 question we must ask now is this: when we restart our migration program, do we want migrants to return to Australia in the same numbers and in the same composition as before the crisis? Our answer should be no,” she wrote in an opinion piece for the Sydney Morning Herald. Many Labor colleagues refuted her suggestion but it is clear that on both sides of politics, the idea of rapid immigration driving population growth is off the table for some time. As this underpinned many of the key assumptions and forecasts of regional plans, this aspect at least needs a completely fresh look at the implications. 

That will also impact on assumptions around housing, deeply embedded in most regional plans; where it will be needed and what it will look. If patterns of settlement are going to change, and if housing preferences also change (as many seem to suggest) that will impact on everything from planning for schools, hospitals, and civil infrastructure. Demand for rural and semi-rural living could also change, as the attractions of ‘splendid isolation’ are not lost on people. The prospects for high density housing around high intensity transit nodes – transit-oriented development – is yet another dimension of the prevailing orthodoxy that Covid-19 could dramatically impact. Just shutting our eyes and pretending it won’t is not good strategy.

Other regional planning assumptions may also now be redundant. The assumption that ‘knowledge workers’ would willingly crowd into highly dense inner-city workspaces, commuting via crowded mass transit, was a sort of ‘Manhattan meets London’ aspiration of some planners. The Planning Institute of Australia indicated as much when in 2018 it responded to an ABC News report warning of overcrowding in Sydney and Melbourne through excessive population growth by suggesting: “We want Tokyos, Parises, and New Yorks – and we can do that by planning well.” Those once celebrated urban models are now looking less praise worthy, at least for the time being. (It’s fair to question how many average Australians ever shared those ambitions in the first place). Very high-density mass transit dependence by cities like Manhattan will be watched closely – how will workers, commuters and companies react and what does this mean for Manhattan’s future? Already there are multiple examples coming from Manhattan of corporations looking to decamp to more suburban or regional centres as a direct response to the perceived lasting impacts of Covid-19, accelerating a pre-Covid which saw millennials and businesses priced out. Regional planning schemes are all about the future and the future of Gotham - and cities like it - now looks quite different. It remains to be seen whether they will continue to aspirational city models for all but the most ardent urbanists.

The likely lasting effects of work from home are another consideration. This has gone from an interesting point of conjecture and discussion pre-Covid to a workday reality for many. So far, there seem to be both positives and negatives, depending on the person, the employer and the occupation. At this stage, significant proportions of those working from home may continue to do so by choice, or by edict (some employers taking advantage of the considerable cost savings). The city-wide impacts in the longer term are hard to gauge but they should be given some careful consideration for their impact on regional plans. Another reason for root and branch revision. 

While some employers will support work from home options for some of the workforce, others may seek lower cost suburban collaboration hubs. Can the assumptions about suburban employment hubs embedded in existing regional plans (what little there is) any longer apply? Do existing zoning mandates and prescriptive tables of permitted uses adequately provide for the quick pivots on land use from, for example, retail to professional services to cottage industry? And when it comes to assumptions about industrial land uses, are the rapid rise of logistics and distribution, the advent of ‘dark kitchens’ or the acceleration of delivery systems to support internet retailing adequately catered for in regional plans which predate these changes? It’s unlikely. The entire notion of industrial activity has changed markedly with more future needs around distribution hubs on very large sites near fast flowing transit corridors. Covid-19 has accelerated changes in industrial land uses – meaning more large format sites on urban fringes while older style industrial lands in inner or middle rings need a new life and future. Plans should reflect that new reailty.

Planning for regional growth, coordinating infrastructure delivery and maintaining quality of life is something that makes enormous sense. Clinging to plans which cataclysmic events have rendered redundant, does not. 

I can think of no business who plans to use their pre-Covid business strategy and assumptions as the basis for moving forward in a post Covi-19 era. The same logic should apply to planning. 

Are Australia's suburbs ready for post COVID-19 opportunities?

There’s no shortage of speculation about how the global Coronavirus pandemic, which has seen cities the world over in partial or full lockdown, might impact city planning and development in years to come. Much of that speculation falls into the category of what USA President John F Kennedy once described as “the comfort of opinion without the discomfort of thought.” 

Whatever your opinions and however well thought through, it does seem likely that sufficient sections of the community will have developed a lasting aversion to crowding and will have formed a renewed attachment to the suburbs in which they live. This won’t apply to everyone, but it will only take a proportion of the populace to change their behaviours to have city wide implications. If that happens, it looks as if the winds of opportunity may blow more strongly in a suburban direction than before. Hopefully, public policy will follow the people and their preferences will be supported where possible. 

This would mark a turning point in many decades of urban policy which have favoured the inner city over middle and outer suburbs. But one of the questions that needs to be asked is: “Are the suburbs ready?” 

If what may be about to happen is a drift of jobs and opportunity to suburban and regional business centres in response to the Coronavirus impacts on society and business, the answer in many cases would be “no.” It is hard to turn around 30 years of focus on the inner city and suddenly flick a suburban or regional light switch on. You might find the cabling lacking, the bulb blown and the switch no longer compliant. Our suburban business centres across Australia have largely been overlooked and their needs underfunded for a long time. Our love affair with all things inner city permitted a distorted approach to planning and to the funding of city-wide infrastructure – much of which was concentrated within a couple of kilometres of various CBDs. Inner city amenity has improved no end, while many of Australia’s suburban centres resemble their unfashionable and now daggy 1980s (or worse, 1970s) selves. 

To be attractive as potential suburban collaboration hubs for some former CBD office workers, or to support revitalised high street retail, or growth in professional services, the sciences, technology, or to facilitate the inevitable expansion of health and education opportunities, suburban centres need the very things that the inner cities now take for granted. In simple terms, the once run-down inner-city areas were renewed with a combination of public and private capital to make them attractive places to live, to work, and to play. That investment was initially led by public policy and public capital, but private capital quickly followed, ultimately dwarfing the initial public stimulus. It worked. We have created a lasting legacy of inner urban renewal across many of Australia’s major cities such that it’s world class, without question. 

The same can happen to suburban centres. High on the priority list must be transport connectivity. Rail level crossings, highly congested suburban road arteries, pedestrian-unfriendly intersections or high streets – remedying these are initiatives that public investment needs to lead because they are public assets and public issues. Often, they are State or Federal Government responsibilities. Additional investment in the public domain with streetscaping, landscaping, pedestrianisation, the addition of cycling friendly routes, enhanced parklands and open space are also public responsibilities needed to enhance the appeal of suburban business centres across the country. The private sector’s role will follow as demand returns – with the creation of new or improved suburban commercial buildings, improved cafes, shops, and upgraded buildings – all of which support future jobs growth in suburban centres. 

The Suburban Alliance recently ran a community survey via Facebook and 400 people responded. The questions asked what they most wanted to see happen in their suburban centres. Without giving the results away too much, the responses read like a checklist of what the inner city already enjoys: quality infrastructure, quality buildings, quality places and ample parking (the latter more a required feature of suburban centres which unlike the inner city are not well served by public transport). 

The benefits of supporting the appeal and infrastructure capacity of suburban business centres are many:

• They can support multiple work options for different occupations, closer to where people actually live
• Being closer, they can lead to less congestion and more active local commuters (such as walking or cycling to work)
• Being closer, they can save commuting time (and costs) meaning more family or personal time
• Middle or outer suburban areas of our major cities offer typically more affordable housing than inner areas
• They encourage and nurture a sense of local community and neighbourhood
• They can be more affordable for multiple business types with lower cost rents, lower regulatory fees and charges, and cheaper more accessible parking
• They can mean more health, education and community services closer to the communities that require them
• By encouraging a more dispersed economic model, we gift ourselves a more resilient urban model – one that is potentially less prone to localised natural disasters (like floods or severe storms) that can have big impacts if they occur in highly concentrated economies
• They deliver a lot more bang for the buck: $100 million spent in a suburban precinct goes a long way and has a major impact, with much of the value going to local professionals and contractors or suppliers. 

As Governments around the country crunch their numbers on post Coronavirus recovery measures, we can only hope that we are wise enough to recognise an opportunity when we see one. Renewal of the suburban and regional centres of Australia is that opportunity. While much of this responsibility has traditionally fallen to local government shoulders, we can also hope that State Governments – and the Federal Government – are alert to their capacity to help shape our cities for the benefit of the wider community, and to the more prosperous suburban future that quite possibly beckons. 

Turn and face the strange ch-ch-changes.

For decades we’ve lived with a range of accepted truisms around city planning, urban development and infrastructure planning. Then along came a virus. Some suggest the long-term impacts of the current pandemic will turn fundamentals on their head. Others – myself included – are more sanguine. But changes there will be and, as Bowie sang, we need to face them.

This article tries to sum up some thoughts of my own and distil a good amount of reading over recent weeks. Nothing here is a given, but simply offered to encourage us to think carefully about what lies ahead. The first thing to keep in mind is what Indeed.com’s global Chief Economist Jed Kolko pointed out to me a few weeks ago: "Many of the post-pandemic predictions are really just statements of how the prediction-maker has always wanted the world to change. The virus doesn't kill cognitive biases!" I will try avoid that trap.

Population growth:

Australia’s population growth has been driven by direct overseas migration, and much of that has concentrated itself into three capitals, each of which was predicted to grow by close to a third in the 2016 to 2030 period. That rate of growth was ahead of many world cities. Would we have managed, without falling further behind on infrastructure? Growth has taken a short term hit thanks to closed borders. It remains to be seen if those growth rates will slow over the longer term. A slower rate of growth may not be a bad thing: it could allow us to catch up with infrastructure, hence improving quality of life, rather than being in constant lag mode. This in turn could support property values by making places more desirable – as opposed to just crowded. Remember,  some of the most highly prized property markets around the world are actually in low growth areas. It is their desirability, environment and placemaking qualities that makes them so.

If growth is to slow, would that change a wide range of urban policy settings, with the dial turning from volume to quality?

Housing:

Predictions that housing demand will change quickly from inner city apartments to suburban housing are I think wrong. For starters, inner city apartment demand for much of recent history was driven mostly by speculators who had no intention of actually living in the one-bedroom, low cost apartment they were buying off the plan. That frenetic level of speculator activity created a false impression about the extent of real demand for inner city apartments. There are now more two and three bedroom inner city units being designed which are more likely to meet with owner occupier needs. But being larger, they will also be more expensive.

Suburban housing has tended to dominate urban settlement in Australia and while the pandemic may remind us that the burbs may not be so bad a place for a lockdown, those who live there now do so by choice, and because 8 in 10 of us actually work in suburban locations. The same applies to inner city apartment dwellers who choose where to live for work or other reasons. There may be some changes in preference if more people seek out suburban work locations (as opposed to densely populated inner-city ones) but I can’t see wholesale change here.

Neither can I see prices collapsing in the long term. The cost of new supply – land plus building costs plus taxes – tends to be fixed. Unless there is a major change in those supply side drivers, any movements in house prices will reflect shorter term economic circumstances (more owners needing to sell than buyers able to buy).

Finally, the argument that housing design will change to better facilitate home offices for work from home needs to be kept in context. This may happen on some new product but as this only affects new supply (and renovations to existing supply) we aren’t likely to see a wholesale change of our housing stock to accommodate work from home (which only works for some occupations anyway). There is also speculation that home isolation will mean a move to larger balconies in townhouses and apartments, as we appreciate the importance of space more. You could counter that this was always the case, but larger balconies and home offices mean larger floorspaces and townhouses and apartments are expensive to begin with. This prediction, if it eventuates, will simply make new product significantly more expensive. Will there be a sufficiently large market to pay?

Work from home?

No doubt the future will see more people working from home, either on occasion or routinely, than in the past. Some companies may direct that this change happens in pursuit of cost savings, and some individuals will request it for lifestyle or other reasons. But for the vast majority, my thoughts are that once a return to the workplace is allowed, many will return with enthusiasm. Productivity, creative engagement and the social value of work are genuine positives for that proportion of the workforce who do work in offices (and for whom work from home is possible).  As this article in Bloomberg wryly observed, the whole work from home thing has soured quickly for many:

“Many mapped out plans to fill time they would’ve spent commuting to take up new hobbies, like learning a foreign language, baking or getting into the best shape of their lives. It looked like the beginnings of a telecommuting revolution… A month and a half later, people are overworked, stressed, and eager to get back to the office. “

Offices: 

The office market could be in for some changes but these may take time. Markets like this will tend to be quite ‘sticky’ because of things like long term leases and fixed fitouts, which make quick adaptation difficult. However, it does seem likely that things like an 8 square metre per person benchmark - which was becoming common - could reverse and the trend head in the direction of more space per person. 

Imagine a company of 100 staff ready to lease new premises. Where once they would have needed 800m2 they may soon be thinking more like 1500m2 (15 or even 20 square metres per person were more typical in the 1990s through to early 2000s). Will they actually lease that 1500m2 or instead reduce their workforce for those premises to around 53 people for the 800m2 tenancy and instead send staff for whom a CBD location is non-essential to suburban collaboration hubs, or have some of them work from home? 

Less density of workers in expensive CBD offices makes them more expensive, per worker. Suburban business centres may benefit from this. How this change plays out will have a long-term impact on office space demand.

Retail: 

Hard hit even in the lead up to the spread of the Coronavirus by flat wage growth and online competition, shopping centres and retailers have been frontline victims of the viral shutdown. As we emerge from our burrows into a post viral world, industry consensus is that there are big changes for this sector going forward. Tenants may have taught themselves that the value of paying to be close to centre-generated foot traffic can be traded off against more aggressive online strategies with a neighbourhood shop front presence. And a proportion of consumers may equally have adapted to sourcing their immediate retail needs more locally, rather than travelling to major centres. There are potential lasting changes too in the types of consumption habits of consumers.

Major mall owners have survived multiple predictions of the end of bricks and mortar retail in the past, and I have no doubt they will innovate and survive again – but as in the past, it will likely mean significant changes to tenancy profiles and to the nature of the centre itself. Typically very well located, with public and private transport connections, these assets will always find a market. My money is on more health, education and community service functions increasingly making their presence felt.

For the suburban strip or neighbourhood centre though, the changes in retail could be a positive – provided they can provide a high standard of amenity (placemaking appeal) and convenience (eg ample parking) and affordable rentals. Given that many have received little government investment in their improvement for decades (governments were too preoccupied with the inner cities) and given that many landowners have likewise invested little in some of their assets, many centres may miss their opportunity for renewal. How governments and private owners might work together to avoid that happening will be interesting.

Public transport:

What happens with public transport in the future will be fascinating. Having already faced flat or falling mode shares, will a post-viral world see more commuters recoil at the idea of joining fellow travellers in crowded trains or buses, coughing and sneezing in close proximity? 

How could this affect demand, and will public transport providers respond with less passenger density (as some airlines already seem to be proposing)? And will this in turn mean even higher costs for PT given lower passenger density? And will more people drive instead, leading to a spike in congestion? Or will the whole idea of commuting en-masse to centralised workplaces served by public transport start to pale in favour of local commutes – including by walking or cycling - to suburban business hubs for collaboration and the social aspects of work? This is city changing stuff. Watch with interest for the short term response once the economy opens up again, and for long term changes.

Health:

Health was already predicted to the fastest growing industry in Australia prior to the pandemic. I can only see this accelerating. Health services are typically not centralised so this growth is likely to benefit suburban and regional centres – not just in the capital value of the infrastructure but also the jobs that come with it. Australia’s investment in health is good by world standards but not (I was surprised to learn) world leading. The graph below shows the number of hospital beds per 1000 of population, as just one metric. Will we move to lift this level of provision? How will we fund it if we do? (And from the graph, you can see in part why the UK and USA have struggled, and why India is so worried).

Education:

Education – especially tertiary – became one of our leading export industries in recent years. It was also a ‘clean’ industry and ticked a lot of boxes in terms of international relationships. There is no question that education sectors heavily reliant on foreign fee-paying students have hit a virtual brick wall – the question really is to what extent this will recover and how long it might take if it does?

Failure to quickly recover could jeopardise billions of dollars in proposed capital expansion and improvement plans, plus put pressure on fees for domestic students. It would also mean we would need to find a replacement source of foreign income. More coal anyone?

Manufacturing and industry:

A possible beneficiary of changed international trade arrangements could be the local manufacturing and industrial sector. Employing 20% of Australian workers, this sector has been in slow decline over the long term but can rapidly retool to replace a wide range of imported products. Skilled and affordable labour isn’t the issue it once was – the issue now is the high cost of energy. Australia’s energy costs have hurtled ahead of inflation to become some of the most expensive in the world. Given we have a small domestic market and international markets are a long way away, lower prices for longer is what this sector needs from the energy market, and a subsidised and expensive renewables market just isn’t ready to provide that yet. Again, more coal anymore? Or nuclear? Hmmm.

Finally, to end with something from a mate who was once head of planning for Brisbane City Council, ran his own business, later becoming a key part of the ULI growth story into Europe and Asia and who now teaches planning and real estate development at Texas A&M University – Professor Geoffrey Booth. As Geoff said to me in a recent note, changes from this pandemic are inevitable because our patterns of human interaction will change:

“Never forget that all real estate is place and it is people that create the enduring value of real estate – take out the people and there is no market, no demand, and no one to buy it or pay in one way or another to use it, and as a consequence, you the real estate developer, left with no raison d'être, starves to death. There will be a world after Covid-19 but as our patterns of repeat visitation have been severely disrupted, as a consequence, the real estate market will be forever changed.”

If only we knew how, and where, and when this will happen.