Western Australia’s City of Melville explores putting a price on placemaking
Perry Lakes, photo: RobertsDay

How can you prove that a walkable community is beneficial, even financially? A new planning tool developed in the US and trialled in Perth could be the answer.

Many local governments recognise the social and environmental benefits of walkable mixed-use development, but the economic potential of this may not be well understood.

In order to unlock understanding of the benefits urban planning firm RobertsDay Perth partnered with US urban economics company Urban3, which created a tool to bring an economic perspective into city planning.

The tool helps councils understand the productivity of the land. The 3D modelling software allows people to see what’s going on geospatially to better understand long term financial impacts of planning interventions. 

The software can predict the financial implications of development options for individual parcels of land, but also scale up to entire precincts and communities.

It’s recently been put to use in a Western Australian suburb south west of Perth. RobertsDay director Duane Cole says the City of Melville is using the tool to assess the financial health of its community.

The next phase of work will involve looking at planning and urban design interventions and measuring their ability to generate revenue.

The data compared the cost of land with actual rate income and was able to identify areas that cost the city more in services and infrastructure than they returned in revenue, as well those areas that were profitable compared to the cost to run.

“By identifying the profitability of particular developments to communities, local governments can apply more considered and responsible placemaking, such as mixed-use development ahead of single-use development, where appropriate,” Cole says.

“The resultant revenue can then be re-invested into the community.”

After a promising start in WA the plan is to take the tool national, but it’s still early days. Cole says there’s an education piece to get local governments to understand how it works.

“But slowly they are embracing it so we’re hopeful.”

Western Australia needs consolidation

He says consolidation is still a “relatively new” addition to Western Australia’s urban planning agenda.

“We’ve got to the point that urban sprawl can no longer continue like it has done in the past, so policy has changed and industry is having to respond to that now.

“But we don’t necessarily have the tools or the political will to adjust quickly to address the changes we need.”

This tool makes it easier to build the case for density, both internally and to the community.

It will help that as councils become more financially sustainable, they won’t have to keep increasing rates – something that’s an annual source of tension, especially when rate hikes don’t translate into better services.

With more money coming in, councils are better placed to provide the necessary infrastructure and services to meet the needs of the community.

It also unshackles local governments from dependence on federal and state government funding.

“Particularly for the funding of infrastructure, local governments are relying on development contributions from both property developers and the broader community, in addition to other government funding.

“There are alternatives, including the use of urban economics, to understand how local governments can become more self-reliant from an economic perspective.”

Long term economic viability the missing piece in the planning puzzle

Cole says that planners are generally good at prosecuting the case for new development from a social and environmental perspective.

“But what gets overlooked is the economic decision making.

“There’s no regard for impact on revenue going forward, and they rely heavily on that.”

It’s not just about “bigger is better”

Cole says that although the tool consistently shows that walkable mixed-use development is a financially sustainable urban pattern, it’s not as simple a case of “biggest is always best.”

The tool is “not the panacea” but another factor to consider as part of the planning process.

In many cases, the best use of land is no development, such as parks or conservation sites. As well as its social and environmental value, when the public realm becomes a destination the surrounding property will generate an increase in rate revenue.

He says Kings Park in Perth is a good example of real estate worth more environmentally, socially and financially as a conservation parkland.

“It’s always a balancing act.”

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  1. ….Western Australia needs consolidation..NO it does not WA and all Australia needs a stable population

    1. well that’s going to be difficult with the 18 million climate refugees that will be arriving on our doorstep soon, according to Defence…. just a thought to consider when we say we should shut the borders…