Be careful what you wish for

By Tina Perinotto

22 April 2010 –
It started out as a lone voice in the wilderness. Many people on the saner side of planning thought it resembled the howl of a maddened wolf: deregulate zoning, let people build anywhere they like and, hey presto, you will bring the prices down, said the voice.

The voice belonged to Alan Moran of the Institute of Public Affairs, speaking a few years ago in several prominent articles, including in The Australian Financial Review.  Joining him in the campaign was Wendell Cox, from the US, who promotes urban sprawl on the basis that people want it so they should have it, and because it’s too late to go back from our dependence on cars in favour of higher density living.
(His Wikipedia entry lists Cox’s activities including  support for the highway interests and campaigns against public transport.)

Now everything that Moran and Cox wanted seems about to occur. The Productivity Commission, the Council of Australian Governments, the NSW Government, and even the Reserve Bank of Australia, are pointing to competition policy applied to planning and an open slather on zoning.

The announcements of the past  week have come after years of calling on the Federal Government to take a deeper and  more direct, interest in national planning frameworks and our cities.

Be careful what you wish for.

The trouble is that while property industry, planners, architects, and engineers have been conducting civilised and inclusive conversations in Canberra,  happy to be finally sitting at the table with the Feds the supporters of Moran and Cox have been doing their own deals somewhere out the back.

Their argument? That blow-torch of competition policy worked for mobile phones, so why not for land?

Because land and planning is a long-term commitment and not part of the throw-away society. And planning for infrastructure and good environmental outcomes is the antithesis of freestyle zoning and development approvals.

The epicentre of housing stress and land issues is Sydney. Although land has been identified for housing development, virtually none has occurred because landowners refuse to sell.

Many have small market gardens and they either like what they do or they are holding out for higher prices. Other have lifestyle semi-rural blocks that are probably worth more as they are than as redevelopment sites.

In other parts of the state many developers are at a standstill because, the lament goes,   of a morass of development levies, planning constraints, building regulations and local governments wanting for make development approvals subject to outcomes such as banning plastic bags in shopping centres or trans fats in food outlets.

For the free-marketeers and economic rationalists land is probably the last bastion of reform. And it’s a good time for their lobbying action. The population time-bomb is out of the box;  media coverage of housing issues is almost an epidemic and the competition policy case has filtered through to ready-listeners in the departments of treasury at Federal and State level and other centres of economic decision making.

And then there is Aaron Gadiel, chief executive officer of the Urban Task Force, who may turn out to be one of the best lobbyist Australia  has seen, transforming a low key coaltion of  NSW developers into a major political force.

Gadiel is determined to push through the reforms his group wants now that he’s got the nation’s attention.

He comes armed with important connections deep within the NSW Labor Party and superior communications skills that put on the front page of the Sydney Morning Herald so often that it seems odd to be having breakfast without reading at least one comment from him.

Gadiel says one of his major planks is to push hard for a liberalisation of zoning constraints so that land owners will be forced by competitive pressures to sell to any developer at all – whether residential, commercial or retail.

The Taskforce also wants more competition in retail property in order to bring prices down for consumers.
In the retail domain, Planning Institute of Australia president Neil Savery says the argument ignores costs on the community fabric and on environmental outcomes.

In terms of residential property loose zoning rules will probably push down prices for housing – Cox is right about that – but that’s only part of the story. Low prices also signal low demand. People will pay more for highly desirable areas that are usually highly controlled if they can afford them.

Sustainability commentator Peter Newman says that when fuel prices tripled in the US families in loosely zoned “scatter” locations spent more on transport than on their mortgages.

Last year the Sydney Morning Herald interviewed a family in the Hills district of the city. The family ran three cars, costing them about $50,000 a year. So much for the savings they made by buying in the burbs.

RMIT’s Michael Buxton says that outside of Sydney the hysteria about shortage of land supply is plain wrong. Melbourne has 17 years’ worth right now, he says.

And Melbourne City Council’s planner Rob Adams has won accolades for his work showing that Melbourne’s population could be doubled by using just 6 per cent of available sites in the metropolitan area. And all of these confined to sites along tram and bus routes.

Buxton argues that while the arguments pushed by the free marketers are furphies neither the Productivity Commission, nor others in economic units such as treasuries are equipped to analyse and assess the full picture.

In a new report on planning and productivity (published on this site) Newman shows how much more expensive it is to build low-density developments compared with high densities.

But among the strongest arguments for suburban sprawl is that consumers want it, with the assumption being that if people want McMansions they should have them, (much like a spoilt brat must be appeased) regardless of long term cost.

But what people need  is housing. The type of housing they want changes with the fashion. Apartments are now much more in demand with young people. And the demand for huge houses may soon change too.
At Craigieburn, north of Melbourne, Stockland early this year released 10 house-and-land packages that dramatically undercut land size (212.5 square metres), house size (144 sq m) and price of $269,000  – way below the average affordable price of $330,000. The properties sold out in a single day.
Now that’s the voice – and action – of reason.

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