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. 

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 we lit the fuse on the population bomb

We’ve been here before – concerns about our capacity to house a large population are not new. But lately, hostility to rapid rates of population growth is gaining traction. There have been calls for a population enquiry and former PM Abbott has called for immigration (and hence population growth) to be slashed. He joins a chorus of other voices, from business to community groups. Voters are pushing back against growth and political leaders are feeling the pressure.

But these pressures are confined to mostly two cities: Melbourne and Sydney (and perhaps to a lesser extent Brisbane). There are other capitals and countless regional cities who covet growth but who find it eludes them. Instead, stupidly (it has to be said) we continue to cram accelerating population numbers – mostly driven by immigration – into a couple of urban centres. 

Melbourne was first settled by whites in 1835 and took 165 years to reach 2.5 million people (by the year 2000). Bernard Salt predicts the next 2.5 million will be added in just 21 years with the city reaching five million by 2021. He thinks it will sail past eight million by 2050. Sydney has a similar story.

According to the Productivity Commission’s 2016 Migrant Intake into Australia report, 86% of migrants settled in major capitals, compared with 65% of the Australian born population. More recent information suggests the trend has grown, with only 6% of recent migrants now settling in regions.

The Government has toyed with the idea of insisting that migrants settle regional areas where there are genuine labour shortages but there seems little determination to back the threats with action, which in itself could be difficult (and possibly illegal) to police.

Outsiders observing Australia’s handling of growth must be incredulous to learn that much of the concentration of growth has not occurred by accident, but is widely endorsed policy. Higher urban densities have since the late 1990s been at the core of urban development policy to handle population growth in the very cities now feeling the most resistance to growth. The benefits promised as a result of increased density were many and the public were assured that they would share in an improved quality of life as a result of these policies. Take this example from the 2013 Draft Metropolitan Strategy for Sydney to 2031:

“A home I can afford. Great transport connections. More jobs closer to where I live. Shorter commutes. The right type of home for my family. A park for the kids. Local schools, shops and hospitals. Livable neighbourhoods.”

And the result? For Sydney and Melbourne especially, housing affordability is as bad as the worst in the world with entire generations locked out of housing. Congestion is chronic. Private and public transport systems are under more pressure than ever. Commutes take longer and housing choice has been compromised. Is this livable? Talk about over promise and under deliver. If these promises had been borne out by the day to day experience of average Australians living in these cities, there wouldn’t be the push back politicians are feeling now.

Even more incredulous is that, confronted with the political challenge of an increasingly hostile public, some suggest (from the comfort of their high priced inner urban enclaves no doubt) that what’s needed is not change, but more of the same. The Planning Institute of Australia recently suggested as much, responding to a challenge from ABC interviewer Ellen Fanning on the 7.30 program that we are ill prepared to cope with “stuff(ing) another three and a half million people into Melbourne and Sydney both”.

The PIA responded that “We’ve got a great challenge to ensure that we don’t end with megacities like Lagos or Manila. We want Tokyos, Parises, and New Yorks – and we can do that by planning well.” (emphasis added).

Really? Tokyo, Paris and New York might be on our bucket list of cities to visit, but how many average Melbourne or Sydney residents would live in hope they’d one day see their own city turn into a version of Tokyo or New York? I can think of no public opinion poll where we Aussies have put up our hands to using Tokyo as a business model for urban development. Any politician suggesting as much would last a nano second before being turfed out.

It serves to illustrate how wide the disconnect has become between public policy makers and the wider community. The “we” word is used when the “I” pronoun is what’s really meant.

Maybe it’s time for a genuine reality check? I’ve always held the view Australia can readily support a larger population but in getting there, infrastructure standards need to keep up with growth, not continuously lag it. Housing and lifestyle choices don’t have to be further compromised to serve a model of urban development which is at odds with broader public opinion. The idea that much of this growth should continue to be concentrated in just a handful of cities already feeling considerable strain while other centres with infrastructure capacity and abundant, affordable housing find growth eluding them is plain crazy.

The answer I suspect is not in forcing people to settle cities and regions that are capable of absorbing growth but in making these cities and regions even more attractive as places to settle. Jobs, industry and economic growth lie at the centre of this. Positive economic attraction strategies, reduced tax or red tape burdens, abundant and low cost utilities (power, gas, water), ‘special economic zones’ – all are elements capable of attracting employers and industries, and with them jobs for workers and their families. And if regional employment was further supported by the type of place making and related infrastructure support more typically only on offer in the centres of major capital cities, there’s no reason at all that centres like Mackay, Armidale, Wagga Wagga, Orange, Casino, Bendigo and plenty of others can’t enjoy growth without the accompanying political pain.

Sadly, even this rather obvious policy option isn’t being explored. According to a recent report in the Sydney Morning Herald: “Inner-city centres on the east coast have amassed the greatest share of Australia's new public service jobs under the Coalition government as outer suburbs, bush towns and Canberra took cuts to their ranks of bureaucrats.” So we not only concentrate our population into a few centres but government jobs as well. This is hardly spreading the load or sharing the benefits.

Stopping growth by rapidly closing down immigration would be disastrous for industries which have come to rely on it but this is increasingly looking like it’s possible. But equally, persisting with our current approach will only further aggravate hostile electorates in the major cities, while electorates in centres with little growth could be equally cranky with governments for failing to produce growth where it’s wanted.  

The fuse on the population debate has been lit. And maybe we are the ones that lit it. 

Net interstate migration to Queensland is on the rise. Does this mean we are about to boom?

Positive net interstate migration to Queensland has in the past been a driver of growth for the Queensland economy. This is mainly because (contrary to popular opinion at the time) interstate migrants were not retirees but the average age was in fact around 35 – prime family stage of life, which is where household spending peaks. Many also arrived with ‘surplus’ capital (the arbitrage between higher house prices in places like Sydney and Melbourne compared with many Queensland locations) and they had well paid full time jobs to come to in Queensland. They were cashed up, fully employed and at peak spending stage of life. Happy days.

So is this about to happen again? Let’s hope so but before we get too carried away with some of the real estate marketing hype, here are some things to keep in mind...

The actual numbers are relative. 

Net interstate migration is now close to 20,000 per annum, almost double the prior year. That’s big growth in the short term. But it’s also a long way from the peak. In 1989 and again in 1993, that number nudged close to 50,000 per annum – or close to 1,000 people a week. Our population ticked over to 3 million in the early 1990s, so interstate migration back then was adding some 1.7% per annum to our population. 

But there are now 5 million Queenslanders. For net interstate migration to have a similar economic impact relative to the existing population, that 1.7% would today need to equate to 85,000 people per annum, or 1,600 people per week. So not only are we a long way from historic records, but to have the same impact, the growth bar has been lifted. The latest numbers that are being sold as good news are in fact less than a quarter of what they’d need to be to have a similar economic impact as it did in the early 1990s. 

The graph below shows the same thing but using the actual quarterly numbers from the ABS. This is what has people excited.

And the graph below shows those same quarterly numbers relative to the population at the time. Somewhat less exciting. 

Jobs. 

Growth in full time employment has a strong correlation with periods of high and growing net interstate migration, and periods of weakness in the full time jobs market has a similar relationship with periods of falling or weak net interstate migration to Queensland. 

The graph below selects periods of rising and high net interstate migration and periods of falling and weak interstate migration, and relates these to what was happening in the full time jobs market. I emphasise full time jobs as these are needed to fund things like mortgages or to have a substantial economic impact. Part time and casual jobs are counted in total employment data but for the purpose of this comparison, excluded. 

As the graph shows, in periods when Queensland’s full time jobs growth was stronger than or equal to rival states NSW and Victoria, net interstate migration was strong. It’s no coincidence that the strongest period of net interstate migration in both raw and relative terms was in that period of broadly 1983 to 1993, when Queensland was powering well ahead of NSW and Victoria on the full time jobs front. The next strongest period of net interstate migration (say 1998 to around 2003) also saw Queensland slightly outperform those states. Likewise, the weakest period of net interstate migration – say from roughly 2007 to now – also coincides with a period when NSW and Victoria have been outgunning Queensland on the full time jobs front. 

This seems to be convincing evidence that the relationship between full time jobs growth and net interstate migration is a strong one.   

What about house prices then?

My suggestion is simple: when you have a growing economy with growing full time jobs you are more likely to witness rising house prices due to demand side pressure (along with many other supply side factors having a bearing). Hence why prices have risen so much faster in places like Sydney and Melbourne in recent years, compared with Brisbane. 

The question is whether this gap in house prices will now become a trigger for large movements in interstate migration? Is the current increase in net interstate migration in response to this widening gap? The gap in median house prices has certainly widened to its widest point in some 15 years. 

It is tempting to think this is the case and for those who have bought into the Queensland property market it is hard to resist the idea that cashed up southerners will begin to flood north, underpinning Queensland markets and driving price growth even when southern markets are softening. 

However, the historic evidence seems to suggest that this is unlikely until Queensland’s relative strength in full time jobs is at least aligned with or ahead of full time jobs growth in NSW and Victoria. When that happens, and if the gap in house prices still remains, then it might be time to get excited. 

A new geography of urban wealth?

US based urbanist Richard Florida - once described as an “intellectual Rockstar” – shot to fame with his 2002 book The Creative Class. He was on a global speaking tour that took in many Australian cities, arguing that the secrets to economic development lay in attracting legions of creatively motivated progressives working in new economy professions. This was best done by enhancing inner urban “hipsterness” measured by a “bohemian index” with investments in public space, recreation, culture, and various other “urban chic” accoutrements. Many city leaders rushed for the Florida gospel, applying its preaching in the hope of out-hipping competing urban centres for precious jobs in the new economy. 

But Florida has since re-canted, admitting that the focus on inner urban “cool” may have worked for the wealthy and privileged but at the same time created city wide disadvantage. His latest book The New Urban Crisis suggests an alarming wealth divide is opening up between inner urban and suburban landscapes.

“Across nearly every metro area, middle-class neighborhoods are disappearing. Our cities and suburbs are being replaced by a patchwork metropolis, in which small areas of privilege are surrounded by vast swaths of poverty and disadvantage.  The rise of a winner-take-all-urbanism, with a small group of winners and a much larger span of losers, signals a profound crisis of today’s urbanized knowledge economy that threatens our economic future and way of life,” he now says. Talk about a change of heart.

While much of this may be true for major cities in the USA (where hipster havens like San Francisco or New York are losing millennials to lower cost of living centres in flyover country) is it also true for Australian cities? Are we seeing a concentration of wealth in inner urban suburbs while suburban areas languish? Certainly, the infrastructure and policy focus in most Australian cities has, for the past 15 years, been very much on enhanced inner urban amenity. But has this been enough to draw more high-income residents to the inner city and cause professionals to abandon the suburbs?

The evidence is revealing. Here’s a quick wrap of the picture across Australia’s capitals as of the 2016 Census.

Brisbane.

The household income difference between inner urban residents of Brisbane and those of the wider metro area have widened in the 2006-2016 period. Over that ten years, inner city residents (roughly within a 5 kilometre radius) have gone from enjoying incomes that were on average 13% higher than the wider metro average to now 23% more than the metro average. In dollar terms, inner Brisbane households earn on average $357 a week more than the metro average for the city.

However, the traditional patchwork quilt of high and low income suburbs remains a dominant feature. The suburb you live in still tends to define your household wealth status – be it high or low. Brisbane’s western suburbs (Fig Tree Pocket, Pinjarra Hills, Brookfield etc) are still among the highest income earners. South eastern suburbs (Carindale, Wakerley, Rochedale) are fast catching up. There are inner suburbs on the high income list (Bardon, Paddington, Bulimba etc) but there are others (like Kelvin Grove or Herston) which are well below the city wide average.

So while it is true the inner city is gentrifying, the preference among many high income households still appears to be for traditional suburban neighborhoods, many in middle to outer urban areas.

Sydney

Sydney is different. In 2006, household incomes in the Sydney city and inner south region were roughly the same as the wider metro average. By 2016 they were only 8% more. The North Sydney-Mossman inner city region actually went from being 56% more than the metro average to 37% more by 2016, while the Eastern suburbs north region stayed roughly the same – from 37% more to 38% more ten years later.

In dollar terms however, the differences are more stark: the average North Sydney-Mossman household in 2016 was pulling in $642 a week more than the metro average; and it was $667 a week more in the Eastern suburbs North.

So inner city residents of Sydney earn a lot more than the metro average in both dollar and percentage terms but it’s been that way for some time – hardly any surprise. This is entirely consistent with Sydney’s long term role as financial and business centre for Australia, which has arguably been the case for some decades now. Research would need to look back to the 1990s or earlier to find a turning point where inner urban income disparity began to widen significantly from the metro wide average – if indeed it did (or has it been so since the 1960s?)

However, proximity to the core does not preclude a number of middle and outer suburbs from joining the high income household list. Rouse Hill to the north west or Port Hacking to the south are two of several examples. In Sydney’s case, proximity to the core appears to have a significant relationship to high income households, but this has probably been the case since long before Florida published his first book.

Melbourne.

The household income gap in inner Melbourne compared with the greater Melbourne average widened from 5% more in 2006 to 10% more in 2016. The difference was greater in the Melbourne inner east area (14% more in 2016) but this was unchanged since 2006 (when it was 15%). In dollar terms, inner Melbourne households earn $155 more than the metro wide average and this rises to $213 a week more for the smaller Melbourne inner east area.

Overall, despite a widely reported acceleration of urban density programs in inner Melbourne over the past decade, this appears to have little impact on widening income disparity. In fact, it is possible to argue that Melbourne is more equitable in terms of inner urban versus wider metro household incomes than any other capital.

Melbourne also continues to exhibit a preference among high income households for a large number of middle and outer suburban areas. Any suggestion that high income professionals in Melbourne have abandoned the burbs for the inner city is not supported by the evidence.

Adelaide.

Households in Adelaide’s inner city (essentially its CBD) earned roughly 1% less than the metro average for the city in 2016 – which was down from 11% more in 2006. However, inner urban pockets such as Burnside inner (36% more in 2016) or Prospect-Walkerville (27% more in 2016) showed more disparity - but these differences seem for the most part unchanged since 2006 (when Burnside inner was 32% higher than the metro average and Prospect-Walkerville 19%).

So suburbs immediately adjoining the inner urban core of Adelaide appear to show more income differential compared with the metro average than the core itself, and these differences – 36% more in the case of Burnside – are substantial. But like Sydney, it would seem that this has been the case for at least the period since 2006 and there is no strong evidence of a widening income gap between inner and broader metro Adelaide - where the Adelaide Hills and foothills continue to be the preferred (suburban) environment for higher income households.

Perth

The gap between inner city household incomes and the wider metro area in Perth are widening – rising from 13% more in inner Perth in 2006 to 24% more in 2016. In dollar terms, inner city Perth households are now earning on average $386 a week more than the metro average for the city. At the time of the Census (August 2016) Perth was in the midst of a downturn in economic fortunes linked to the slowing resources sector.

You could speculate whether this had greater financial impact on inner urban or middle and outer urban households but without further study, this remains a topic of conjecture. For now at least, it remains the beachside suburbs north of the city that are home to the higher income households, much as it has long been.

So, what’s this all mean?

First, the Australian evidence runs contrary to suggestions that higher income professionals are abandoning the suburbs for “cooler, inner urban hipster” markets. Indeed, middle and suburban locations are where you are just as likely to find pockets of high income earning households (with the possible exception of Sydney where wealth does some more concentrated). The same, of course also applies to low income households but the point being that proximity to the core is not yet a key determinant for most cities – at least on the evidence. Larger homes and leafier environs remain for many a more powerful lure than higher density inner urban environments. There is evidence this may be changing and the gap widening, but the pace of change is not what some boosters have suggested. The suburbs have certainly not fallen from favour and remain very much desirable in the eyes of the higher income households that many inner urban markets covet.

It’s also fair to suggest that the income and wealth disparity Florida is now alerted to in cities like San Francisco and New York is of a scale that we are yet to see in Australian cities (again with the possible exception of Sydney). The enhancement of urban cores in many Australian city centres as so far mostly been insufficient to lure legions of high income creative class workers into those cores as places to live. Some will argue by pointing to anecdotal evidence (much of it owed to gushy headlines manufactured by eager boosters) but on the whole, Australian cities have avoided the problems that Florida now warns about.

For the time being at least.

Footnote: The maps used in this story came from a handy online tool published by The Guardian. You can have your own fun via this link.

Why we need more Springfields

Australia’s worsening housing affordability problem is a largely self-inflicted: we first restrict and then tax the supply of new land needed to accommodate people, while at the same time accelerating population growth and then compounding the problem by applauding as most of that growth is focussed on just two or three cities. There are official policies in many States that encourage a concentration of both jobs and housing in finite inner city areas – which can only exacerbate an already chronic problem.

It’s not just housing affordability that is the problem, although this gets much of the attention. The entire point of inner urban renewal in the first place – dating back to the Better Cities program of the Hawke-Keating Government – was to harness spare capacity in inner urban areas through selective infrastructure upgrades.  We wanted to avoid the ‘donut effect’ common in US cities at the time, where inner urban areas were hollowed out leaving behind empty schools and other underutilized community assets. The opposite is now the reality: urban infrastructure is not keeping pace with population growth. We are in the throes of committing tens of billions more of taxpayer dollars to invest in inner urban infrastructure from schools to public transport in the Sisyphean belief that this can be fixed, while we continue to pump yet more people into limited spaces.

You wonder why we are so slow to identify problems and grasp solutions in this country. As Donald Horne wryly observed way back in 1964, “'Australia is a lucky country, run by second-rate people who share its luck." Those second rate people are still there driving public policy but our luck may be running out in terms of housing affordability and urban infrastructure unless there is some change of direction.

Part of the answer is, as always, under our noses even if we refuse to acknowledge it. The Springfield master planned community in South East Queensland this year celebrates a 25 year anniversary since its first humble housing lots were released. Occupying over 7,000 acres (2,860 hectares) it has clocked up some $13.6 billion in project investment to date, from housing for some 34,000 residents to education (including a University) to health (including a new hospital) to recreation, shops, aged care, industrial, offices, private and public transport connections.  That $13.6 billion investment to date is predicted to reach $85 billion on completion, by which stage there will be over 2 million square metres of mixed use space in its town centre and a population of 138,000 people.

Of critical importance is that the $13.6 billion investment to date is a multiple of many times the amount of Government support the project has received. In an era where ‘nation building’ or ‘city transforming’ infrastructure projects struggle to achieve much better than a 1:1 cost benefit ratio (and where massive leaps of faith in expert predictions are usually required to get them there) the Springfield example needs no such empirical gymnastics. The evidence in this project is that every dollar of government support spent there generates many multiples in private investment, and builds a complete community in the process. This is not just a dormitory development, but one which aims at generating its own employment from trades to highly skilled technical workers and everything in between.

Springfield is also a model of community development that has been quietly (and sometimes publicly) derided by advocates of increasing inner urban concentration.  It fits what some would pejoratively denounce as ‘sprawl’.  Everything here is new. Though obviously very popular with residents (otherwise they wouldn’t be living here) it doesn’t conform with the approved group-think which attaches great virtue to old world urban models reliant on foreign cities like Copenhagen or Paris for their inspiration – many of them first laid out in the medieval period.  Being new and suburban is heresy to much of the new urbanist and smart growth faiths that seek to recycle established communities into ever higher density communities.

Density for some has become the end in itself, not the means to an end. Despite the mounting evidence of worsening affordability, increasing congestion, a growing wealth divide between inner urban residents and the rest, the problems of lagging and prohibitively expensive infrastructure to support higher inner urban densities, mounting lists of projects which struggle to achieve even a marginally credible 1:1 cost benefit ratio – proponents continue to defy the evidence in pursuit of their faith.

Yet Springfield offers more than a solution to our emerging urban crisis: it also offers the business model. The experience gained in developing this community to this stage should, logically, be embraced by policy makers the country over. We should apply our minds to how this was achieved with only equivocal public policy support (at the time) and limited public funds, and imagine what could be achieved with just a little more of both. Interpreting, studying and then applying this model of urban development as part of a solution designed to alleviate excess pressure on just a few urban centres isn’t just an idea, it’s a hugely compelling one.

Much of what has been achieved in the name of “urban renewal” in Australia has been exemplary but increasingly the signs are that excessive concentrations of employment and housing in narrowly demarcated inner city areas are counterproductive. The opportunity to use the Springfield model of urban development to house an increasingly bigger Australia is one that deserves to be explored, and sites identified for many more Springfields to emerge in the future. The peripheries of those cities where worsening affordability and excessive congestion are just two painfully obvious signs of policy and market lag are the places to start looking. 

Why it’s way too early to write off retail

The bears are out in force again, this time predicting the demise of bricks and mortar retail centres due largely to the forecast impact of online retailer Amazon. How’s this for an example: “We think the magnitude of this short could be bigger than subprime," says Stephen Ketchum, the head of Sound Point Capital, a US hedge fund that manages more than $13bn in assets. That was from a story run in the AFR (17 July).

The US retail property market has been affected both by overbuilding and the accelerating impact of online. But to suggest the same impacts in Australia might be taking things too far.

There’s one very telling difference between ourselves and most US markets: overbuilding here is virtually impossible due to the “blue dot” factor. What’s the blue dot? For decades, planning schemes have enshrined restrictive land uses through rigid zoning laws. In the case of retail centres, these extended to creating a legislated “retail hierarchy” of centres with various overlaps of trade areas (based mostly but not exclusively on centre size and nature of retail offer). The hierarchy, happily supported by shopping centre owners and major retail tenants, had to be protected to avoid overbuilding or encroachment of retail uses into residential areas (so the official line went). This meant that prospects of developing a competing retail centre within the trade area of an existing centre, were very limited if not impossible.

This also led to the delicious irony of the generally pro-free enterprise shopping centre and major retail industry campaigning for more competition when it suited them (less restrictive trading hours, for example) but opposing competition when it didn’t (objecting to any new retail centres and frequently even objecting to tenancy changes or extensions in competing centres). The anti-competitive nature of our retail planning was wryly observed by retailer Gerry Harvey as posing a significant barrier to entry for the likes of Amazon. According to Harvey, quoted in Fairfax media: "Let's assume I buy a block of land tomorrow. I've got to buy it, pay for it, put in a development application. If that happens within three years, that's very quick… And I read that Amazon is going to be fully operational in late 2018."

Amazon will need more than one major distribution centre to service Australia. Finding the sites and getting the approvals will not be as easy as it might in the US. Plus, we have a particular tyranny of distance which any online retailer must confront when it comes to delivery: as customers, we are more spread out than in major US population centres.

The same hurdles faced the arrival of other retail competitors like Aldi and Costco. Both faced difficulties in finding enough sites to build a viable network – Aldi is getting there but Costco has a way to go. Both faced legal and planning objections from those invested in existing “blue dots” who did not want more blue dots on their trade area maps.

The downside of this has been that some parts of Australia’s retail property sector are vulnerable to competition not mostly because of online retailers like Amazon, but due to the lack of competition which has encouraged a laziness towards the asset. Many centres (too many to name) are little changed from their original design which could be 30 years old: a big box containing a supermarket, supported with a mix of specialty stores and a large on-grade (rarely shaded) car park. The enshrined lack of competition, described as a virtue of the planning system, has shielded these assets from the need to remain competitive and denied consumers access to a higher quality retail offer in the process.

The opportunity to anticipate some fairly obvious changes in consumer appetites and redesign these centres seems, to date, to have been largely overlooked. Leading centres are ahead of the curve, reinventing themselves as food, entertainment and community centres while other retail centres languish. The leading centres that are getting prepared for the future are typically held in institutional hands or in REIT structures so it’s ironic that these are the funds being shorted.  But the opportunities for the sector as a whole are significant, irrespective of private or institutional ownership. Health and social welfare will be the fastest growing industry by employment by a country mile in coming decades. Education is not far behind. A suburbanizing economy, enabled by advances in digital technology, means workplaces closer to home will become much more feasible. The advent of driverless cars (probably some time off) also has the potential to liberate a lot of on grade carparking from occasional to more permanent use (for something else besides a carpark). 

These and other factors present a host of mixed use offers that many shopping centres are well suited for. Nestled in amongst established urban communities with usually good transport connections, the opportunity is there to transition the land use from a purely retail use to one that combines retail with office, professional and medical suites, training and education facilities, health and wellness centres, short term accommodation, retirement living, and community uses. 

But first, the planning system has to allow it and centre owners need to want it. In the meantime, no doubt market analysts who don’t appreciate the significance of our “blue dots” and our various other barriers to entry will exaggerate the short term impact of Amazon, while the real problem – outmoded design and strategy  – poses greater long term risks (or opportunities for those smart enough to identify them).