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.

Public transport: cheap or expensive?

As the year 2020 gets underway, there will be the usual changes to various government fees, charges and taxes. It’s nearly always up and public transport is no exception. This nearly always leads to gripes that “public transport is too expensive” and that to “solve congestion” we need more people to use public transport, so it should be cheaper. Whether it’s expensive or cheap depends on who’s paying. The numbers on this are interesting.

From January 7 in Queensland, public transport fares will rise by the CPI – around 2%. A typical two zone trip will now cost $4.03 – which is actually cheaper than in 2014 when the same trip would have cost $5.96. A one zone trip will be $3.31 and a four zone (the furthest) will cost $8.11 each way. Then there are various discounts for seniors, students and people with various special needs. (And then of course there is substantial fare evasion which, given fines are rarely enforced, means “free” travel for the naughty ones).

None of this will mean much to 85% of you because only 15% of us use public transport regularly. But almost 100% of us believe that more – and cheaper – public transport is a key to solving congestion. Which we hope will mean we can all get around more conveniently in our cars.

Few people however appreciate the extent to which every single public transport trip is subsidised by the taxpayer. According to Translink’s own reports: “the average fare trip paid by customers was $1.88 and the average Queensland Government (ie Queensland taxpayer) subsidy was $7.12.”  Their report notes that revenue from fares makes up only 21% of funding.

So for every time the average fare paying passenger swipes a nearly $2 fare off their Go Card, the taxpayer silently tips in over $7. Each way. Per person. Per day.

“The… subsidy was based on network funding from the Queensland Government (ie taxpayer) of $342.86 million less fare revenue of $90.57 million for the quarter” the report says. Which means (roughly) an annual taxpayer subsidy of around $1.009 billion.

Many public transport advocates will argue that fare increases are discriminatory in that they negatively impact lower income workers, and I for one would be in hearty agreement with that sentiment, if only it were true. Apart from the student and seniors concessions, the average public transport user favours PT because they work in the inner city – which is where most public transport routes head to, or come from. And for the average person, this means they earn a substantially higher income than their suburban worker counterparts, for whom PT is rarely a workable option.

Further, the average PT user does not commute from outlier suburbs but a higher proportion get onboard within a roughly 5 or 10 kilometre radius of the CBD. This also happens to correlate with higher average housing prices. As noted in this article in The Conversation: “the distribution of high-quality public transport typically favours wealthier households within Australian cities.” You can find loads more evidence about who actually uses PT and their demographic and geographic characters on this excellent site: https://chartingtransport.com/)

Of course, if you are a lower income CBD worker using PT to get to your inner city job, public transport could seem expensive. A two zone trip - $4 each way – is $40 a week. On the median annual income of somewhere around $60,000 per annum, that can mean a lot. But at the same time let’s keep in mind that’s only 20% of what it costs – the taxpayer is funding that person’s travel to the tune of around $140 per week.

Another argument often raised in the context of public transport costs is the suggestion that we should bite the bullet and just make it free (which means the taxpayer pays the lot). If my numbers are correct, that would mean an additional $1.009 billion per annum (being the annual taxpayer subsidy via Translink). There could be merit in this if it meant a vastly higher usage of public transport leading in turn to much reduced congestion and significant reductions in road and other network costs. The problem with this would be if the PT network was suddenly overloaded, requiring vast increases in capital investment to bring the network up to scale. And of course vastly more people using PT would mean vastly more tax payer subsidies.

This is, however, unlikely in my view for the simple reason that public transport only suits a finite proportion of the population. Typically, it works for those with CBD or inner city jobs (only around 15% of the regional population); those with regular clockwork-like hours (increasingly few of us); those who do not have mixed journeys to work (for example no school drop offs or pick ups); and so on. Making PT free could mean only a marginal increase in patronage, but at a very substantial cost. The rest of us would be cursing everyone else for not availing themselves of free public transport, while we continue to stew in congested roads in our cars. I mean, it’s not our fault – we need our cars. Not everyone else does, do they?

(In Peter Seamer’s recent book ‘Breaking Point: The Future of Australian Cities’ he recounts the story of the decision to make Melbourne’s CBD trams “free.” All that happened is that the wealthy CBD workers took up the offer, crowding the trams to the point of overcrowding and leading to far fewer people actually walking. There was no net community gain). 

So if you are among the nearly 15% of people who do make regular use of the public transport network, please don’t begrudge the taxpayer the fare increase and please don’t attack the politicians who have to announce it. Significant and overdue improvements are being made to public transport networks which users are not being asked to pay for. It’s a good deal and worth keeping in mind that for every dollar of the fare you are paying, the taxpayer is tipping in an extra four dollars. And they’re not complaining. 

How the future of work will reshape our cities

The growth industries and professions of the future will shape our cities in very different ways to the industries and professions that shaped our cities in the past. There are profound implications for urban planning and property, if we’re ready for them

The biggest growth industry for coming years and for the foreseeable future, the official forecasts all seem to agree on, will be in health care and social assistance. This includes professions from surgeons to GPs to nurses to child care or aged care, various therapies and counsellors, dental, and even laundry workers, cleaners and administrative support roles. Already our biggest single industry, it employs more than 1.5 million Australians. It grew by over 20% in the five years to 2015 and that rate of growth is unlikely to change going forward. Nearly half of everyone in this industry has a bachelor’s degree or some higher education qualification so they’re not all hospital cleaners – many will be skilled professionals.

This will be followed by the professional, scientific and technical services industry and very close behind that, the education and training industry. Construction, manufacturing (yes, still growing despite all attempts to kill it off) and accommodation and food services round up the top six biggest growth industries of the future.

This is important because the nature of growth industries of the future - and more particularly where they will be located - is going to reshape our cities in a very different way to the industries that grew with and shaped our cities in the past. This was highlighted in a recent report on employment in the growing region of South East Queensland, prepared by Macroplan for The Suburban Alliance.

The health care and social assistance industry is predicted by government authorities to grow more than any other industry in the years to 2041, producing around 220,000 extra jobs. But this industry has very different spatial needs to, say, the legal industry which has the highest inner city concentration of any occupation in the region. In health and social assistance, 200,000 of those 220,000 jobs will likely be in suburban business districts or otherwise scattered across suburbia. The biggest growth industry has little need or preference for clustering in the inner city.

Consider the implications for transport networks, property development and urban planning. What will it mean in terms of additional medical centres, hospitals, professional and consulting suites, new aged care and child care, and all the peripheral jobs that hang off these occupations? Where will they go? Will we see existing shopping centres morph from a largely retail focused offer to embrace a wider range of mixed uses? And if not in existing centres, what planning changes will be needed to accommodate this growth in new centres?

Our urban model, reflecting a 100 years of employment centralization, is changing to one of employment dispersal. Jobs are not moving from the city centre to the suburbs but the industries which fuel growth are changing, and with them, the patterns of employment location.

Even in the professional, scientific and technical services industry – one you would presume is largely centralized - much of that future growth (based on current spatial preferences) will occur outside the inner city. Take for example the generically titled occupation of “professional.” There were 284,300 of these in the South-East Queensland region but only 24% of them in the inner city. A further quarter were in a number of defined suburban business districts and the balance – half – elsewhere in suburbia. This is our second biggest growth industry and those patterns of employment distribution are unlikely to change meaning of the 146,000 new jobs in this industry to be created to 2041, the clear majority will likely be suburban based.

The third biggest growth industry (education) also shows little evidence of centralization – only 7% of educators are inner city workers the rest are suburban. Even of those professionals who describe their occupation as “Chief executives, general managers or legislators” delivers a surprise: there are only 21% of them in the inner city. And for clerical and administrative workers, it’s a similar picture: only 22% are inner city workers. The rest are suburbia based.

Engineers appear to have a preference for central locations with 42% of the 16,639 engineers of South East Queensland in the inner city as do the lawyers with 65% of them in the entire region to be found in the inner city. But there are only (fortunately?) just over 9,000 lawyers in the entire region so unless there’s to be an unpredicted explosion of work in the legal profession in the future it’s hard to see this occupation fueling demand for space and transport in the inner city of the future.

Fifty years ago, cities were full of clerical and administrative, managerial and professional workers, shuffling in to centralized offices in their cars or on trams, trains or buses to clock on at 9am and clock off at 5pm. The suburbs were centres of manufacturing and heavy industry, and retailing, wholesaling and transit related industries. That pattern is still there but in another fifty years’ time, our cities will have different industries generating the bulk of jobs and many of those jobs will need to be based in suburban centres to be closer to their markets or regional transport arteries.

And what are the implications for our city centres? Will they continue to evolve to embrace yet more entertainment, recreational and culture based hubs for the regions they serve, rather than largely just places of work? And how will different cities behave, given the economic drivers can be so substantially different?

There’s much more to be explored in this because the implications are profound. Sadly, much of our thinking around urban planning seems firmly rooted in traditional models which owe more to a sentimental rear vision view of urban development rather than a forward looking one.

Footnote: If you or your organization is interested in exploring what this means in more detail, or for specific regions, please just drop me an email. I’d be very interested to discuss this with you. I’ve got a useful presentation which runs through all this in a bit more detail which I’d be happy to share. You can download the entire report prepared for The Suburban Alliance here.

The pain with trains lies mainly in the brains (or lack of them)

Unless you’ve been on holidays in some remote place over Christmas you’d have noticed that trains have been making the news a lot lately in south east Queensland. Mainly it’s because of the lack of them running, which it seems in turn is because there are not enough people to drive them. Much of which was triggered by the opening on one extra line of just 12 kilometres in length, which has been talked about for close to 130 years and which has been in detailed planning or under construction for the past decade. Kind of snuck up on them all I guess.

Having so many scheduled services pulled at no notice has given the hapless Queensland Rail every appearance of being utterly unable to organise a round of drinks at a brewery. Steeped in olde worlde tradition, it’s not hard to imagine the departmental mandarins enjoying a regular cup of tea at work delivered by a tea lady, her trolley complete with lace doilies as it rattles along the corridors of rail power. 

It’s not just management which gives the sense of something scripted around Reg Varney in “On the buses” (a British sitcom of the early 1970s) but the Rail Tram and Bus Union too seems rooted in a bygone era. According to the Union’s website “The RTBU was formed 1 March 1993 through the historic amalgamation of three railway unions and one tram and bus union... These unions have a strong tradition dating back to the nineteenth century.” It seems that’s a tradition they are intent on keeping alive and well in the 21^st century.

There are always more accurate back stories than sensationalist headlines, and no doubt there have been many contributing factors behind the latest embarrassments. Some of these date back many years, some date back only a few years, and others just a few months. Not all have been due to decisions of QR Management either. However, as generous as we taxpayers can be, it is hard to have confidence given the opening of the new $1.2 billion Redcliffe line seems to have been quite predictable, while there was no heads up that services could be impacted in the slightest way.

The Redcliffe line came in at $100 million per kilometre, which is hardly small change for the taxpayer. We are entitled to question how well our taxes are being spent.

With this in mind, it’s very hard to have much confidence in the proposed $5.4 billion cost proposed for the 10.2 kilometre cross river rail link. This one’s $530 million per kilometre – five times as costly as the new Redcliffe link (going underground a large part of the reason). But here’s the rub: we are being asked to trust the same crowd who seemingly can’t staff the trains we already have, and who insist that without this extra $5.4 billion of our money (that’s us, the taxpayers) that the whole network will choke and congestion costs will escalate.

The cross river rail is not a new proposal and dates back many years. Successive governments have been told the same story: that without an additional crossing, the network will reach capacity. The date for that capacity breaking point keeps getting extended and the project delayed. The fact that Brisbane has only one river crossing is a real issue. But what’s at stake here is a question of trust and given the latest series of debacles, can we trust that an extra $5.4 billion is going to be well spent and well managed?

If you look for details on the business case you can find a five page PR document which calls itself a ‘cost benefit analysis summary’ but which is preciously short on evidence and long on promise. Have a look for yourself. It’s not much given the sums of money we are being asked to part with. There’s an older business case by Deloitte in 2011 which assumed a 50% increase in public transport mode share from 2009 to 2031 (from 8% to 12%); a 23% increase in rail patronage by 2031 with cross river rail, and which attributed 39% of the project financial benefit to “perceived” public transport benefits. Would you call these heroic or conservative assumptions?

All of which prompted me to check on the actual numbers of people across Greater Brisbane – an area with a population of around 1.8 million – that actually use rail. Based on the last Census, the number of people who used rail – either in whole or in conjunction with some other form of transport – was 65,212. Not a big number. That’s 65,212 out of the 925,385 employed persons in the region of 1.8 million people. The number correlates with QR’s ‘Passenger Load Survey’ (the most recent one of which was in 2009). It showed that the network carried 65,752 people in the morning peak and 57,286 people in the afternoon peak.  Which however you cut it is a small number and less than 5% of the population.

What’s more, the rail network is mainly designed around servicing inner city employment. There are around 180,000 jobs in total in the inner city – one in ten jobs of the broader metro region. Nine out of ten of us work in suburban areas which are largely not serviced by train. The same QR survey shows that, of 65,231 total boardings and alightings in the AM peak, 33,738 (52% of the network total) were at Central Station. Roma Street came next with 9,319 followed by Fortitude Valley (4,757), Bowen Hills (2,116), South Bank (2,790) and South Brisbane (1,751). Put these together and you have 84% of passenger movements across the network being at these six inner city stations.

But we are told by the rail experts that unless we spend another $5.4 billion on a transit service that moves less than 5% of the population - almost all of whom are travelling to six inner city stations to access the 10% of metro jobs that are in the inner city – then we are facing a transport meltdown.

I know it’s not fair to divide the proposed $5.4 billion for the Cross River Rail by the 65,000 users (but if you did, the answer would be $83,000 per user) or to add the $1.2 billion cost of the Redcliffe Line (which would bring the answer to over $100,000 per user) because these investments have network wide implications that benefit both public and private transport, as well as freight. It would be equally unfair to divide the project cost by just the additional number of people projected to be carried as a result of the extra investment, because that’s the sort of number crunching business people do; it’s not meant for transport businesses. It would also be wrong to point out that these are just the capital costs and that each trip – per person per direction on a CityRail train – is subsidised by the taxpayer to the tune of $10, or $20 for a round trip.

I am not suggesting an additional river crossing is not a good idea. But based on recent performance, and given the very large sums involved – all of which is taxpayer money not privately funded – then you’d hope for a bit more detail than what’s in a five page PR document for a project promoted by a government agency which seems incapable of managing the existing network.

Maybe management of the project and the network should be given to someone else? How about the aviation sector? Our airports were privatised in the late 1990s, as was our airline Qantas. Both the airline and the airports are now vastly more modern and efficient, and serve the travelling public far better than when they were basically government organisations. Plus they aren’t going cap in hand to the taxpayer on a regular basis to keep them afloat. (The privatisation of airports and Qantas, by the way, were originally decisions of the Keating Labor Government). Aviation is a type of public transport and freight business, as is rail. So why not drag some aviation experience into the rail sector?

Queensland Fail (aka QR) and the government’s insistence that we need to spend a further $5.4 billion on a network managed by the same people behind the recent debacles is just not confidence inspiring. It leaves you with the sinking feeling that they’ve based their business case and management model on an episode of the ABC’s satirical ‘Utopia’ – a “multi award-winning satirical comedy about a group of people charged with building this nation – one white elephant at a time.” 

Public transport’s biggest problem… the public (that’s us).

When’s the last time you heard some futurist or management guru suggest that in the future more of us will be working at the same desk doing routine tasks on a predictable working week schedule? No? That’s just one of many problems that advocates of limitless spending on public transport need to keep in mind in dealing with the issue of urban congestion.

Increasing urban congestion is said to cost the economy dearly and if Infrastructure Australia is to be believed, it will cost even more in the future unless something is done now. They warn the current estimate of a $13.7 billion annual cost will balloon to $53 billion by 2031.

Congestion is without dispute a handbrake on economic productivity but the range of solutions for reducing congestion range from the outright zany (see Elizabeth Farrelly’s suggestions for Prime Minister Turnbull as one example) to milder versions of zany. They all tend to be very expensive and many impose unacceptable compromises on our basic freedoms (such as proposals to ban cars from cities).

Increased investment in public transport is a feature of many proposed solutions for alleviating congestion. It is true that we have under-invested in public transport systems in past decades and it’s equally true that we’ve under-invested in private transport. Basically, we’ve cheered a rising population while passing the buck for funding and delivering the infrastructure needed to support that growth to future generations. Rising congestion levels are making it feel like crunch time now.

But there are valid questions about the capacity of public transport to alleviate congestion which are rarely getting asked. Rather than a magical silver bullet, there are a few things to keep in mind before you climb aboard the merry bandwagon of limitless investment in public transport…

The nature of work is changing. Public transport systems work best on a hub and spoke model of employment and commuting, built on predictable schedules designed around predictable commuter needs. Central business districts of very high employment concentrations, where people work in the same workplace from day to day and for the same hours each day, are ideal candidates for public transport.  But increasingly this is looking like a 20^th century model of work. Technology has been the primary driver of change, allowing more workplace flexibility and providing for increased location diversity. ‘Standard hours’ of work are being diluted and at the same time companies increasingly realise the high costs of ‘paper factories’ for administrative staff in costly CBD locations makes little sense. With this, the centralised nature of work is also being diluted and this is working against the centralised economic model that makes fixed public transport systems (especially rail) effective.

Society is changing. There was a time when commuting trips to work in central locations were mainly a case of getting there and getting home.  Much has changed. A rising proportion of women in the workforce and how this has changed family responsibilities means that commutes to and from work are also often tied in with other objectives: dropping off or picking up school kids or children in child care is only a part of this (but one which is said to contribute to 20% of private vehicle traffic on the roads in peak periods during school terms).  Add in to this the increasing propensity to shop less but more frequently (who owns a chest freezer anymore?) and to mix in pre and post work social or recreational appointments, and you have a very different pattern of commuting which public transport will struggle to service.

The suburban economy. A telling reality for proponents of increased public transport investment is that employment remains – and in some cases is increasingly – suburban by nature. Between 8 and 9 out of 10 of all jobs in metropolitan regions are suburban by location, and when you consider that the same proportion of residents in any metropolitan location are also suburban by residence, the problem of servicing this reality through public transport is apparent. In the last inter censal period, the proportion of metropolitan wide jobs located in the CBD actually fell in Brisbane (to 12.5%), while in Melbourne it remain unchanged (at 10%) and Sydney recorded a small rise (to 13.5%). The raw numbers of jobs in suburban locations are growing faster, as a rule, than those in CBDs.  The cost of creating a public transport system designed around suburban home to suburban workplace commutes is beyond calculation. In Australia, we will be in flying cars like the Jetsons long before this happens.

The new and emerging economy. The way cities were designed – with concentrations of white collar workers in CBDs and with discrete areas set aside for industrial, retail or other specified activities – is no longer as important for new or emerging economies. Technology in particular means that physical place is less essential for connectivity to markets. Communication is less dependent on physical proximity. This doesn't mean CBDs will lose their higher order function but it does mean that disruptive or emerging businesses, for which new technologies are more than just a novelty but a foundation, will have less need for the types of places offered by centralised business districts. They can locate in lower cost areas of the metropolitan area, and make use of the central business districts on occasion, rather than routine. Attracting and retaining these emerging types of businesses will also put the onus on suburban business centres to lift their game, but in many cases this isn’t difficult. Just think of any number of start ups or tech based companies you’ve read of recently and think about how many of these have been in non-traditional locations. Even when these businesses mature, their lack of interest in a CBD style presence doesn’t seem to change. Witness the many technologically innovative businesses in the USA or Europe, by way of example.

Where does this leave us with solutions for congestion? Ironically, increasing public transport investment designed to ferry people into and out of central business areas is unlikely to make much difference to metropolitan wide congestion. It can’t – simply because only a minority of jobs (between 10% and 15% in the case of Australia’s major cities) are in these locations. People with jobs in these locations may currently have relatively high rates of public transport usage already (often 40% plus) but imagine the cost of increasing this to 80%? The cost of getting there is incalculable for cities of our size, and in any way, it would only benefit 10% to 15% of the urban workforce. Ironically, the people most likely to benefit from this type of public transport prescription tend be much higher wage earners, living close to the inner city in highly valued real estate. (Have a look at this analysis from The Pulse a couple of years ago). Yet their higher capacity to pay is not reflected in most policy debate.

The reality is that public transport can only go so far in alleviating congestion. Social and economic change to the nature of work is changing the shape of employment decisions and has forever changed the nature of the commute. Public policy officials, urbanists and politicians who pretend that all that’s needed to ‘solve congestion’ is massively increased investment in heavy rail, light rail or dedicated busway networks are deluded: this thinking is rooted in nostalgic notions of work, unrelated to the future of work.

And as if to demonstrate the fact we should not expect better from our various governments, when a technological innovation comes along that promises to realize the long held dream of ride sharing and increased persons per vehicle - which if widely embraced would go a long way to solving congestion at no cost to taxpayers -  governments stand in the way. It’s called Uber. Go figure.