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OPINION: The recent debate on the Greater Sydney Commission’s policy on the management of Sydney’s industrially-zoned lands is welcome as it means an important but neglected strategic planning issue is finally getting the attention it deserves. 

In the 2018 paper, A Metropolis that Works, the Greater Sydney Commission acknowledges that industrial precincts have long been considered “land in waiting” for residential development in Sydney.

This has been done without truly understanding the role these varied precincts play in the functioning of the urban economy. The GSC has taken the lead in developing an evidence base so that more informed decisions can be made to guide the long-term shape of Greater Sydney.

The release of A Metropolis of Three Cities – and the GSC’s position on how Sydney manages its industrially-zoned land – provides an important point of reflection as we consider whether the “business as usual” approach to industrial land management applied in the past is the most effective means of delivering the type of metropolis we want Sydney to be in the future.

Delivering new homes to meet a growing population by consuming the places that provide a diverse range of services for Sydney’s future population is a sort of planning equivalent of a pyrrhic victory. Sydney residents may get new homes, but in so doing, we significantly compromise the ability for the city to provide the breadth of services needed to support these future residents.

Perhaps this sounds alarmist. However, while strategic planning must constantly look forward towards an aspirational future it must do this through the lens of the public interest.

The ongoing conversion of industrial areas to residential or mixed use places displaces currently functional land uses that will almost certainly not reappear in established areas. While these may be “low value” compared with “high value” residential uses, they often serve a local population or business network.

The onus on strategic planning then is to interrogate whether the loss of one type of land use (industrial precincts) to provide for another (residential and other mixed use developments) represents a true net community benefit.

The GSC’s policy on industrial lands has come at a critical juncture in Sydney’s planning timeline. This period of reflection and debate provides us with an invaluable opportunity to truly understand the costs and benefits of business as usual development.

Those opposed to the GSC policy position often use the reductive argument that “jobs are changing” to argue why industrial precincts free of residential encroachment should change. This, however, demonstrates a continued failure to understand the complex ecosystem of an urban economy – a failure that the GSC has been actively committed to redressing through their evidence-led approach.

Jobs might be changing but we’ll still need industrial and urban services land

No city in the world comprises solely of office jobs. The knowledge economy still requires services that cannot locate in the CBD. Or a retail centre.

Should industrial precincts be relegated to the city’s periphery simply because they don’t fit into this binary understanding of the urban economy? Even if customers in central areas or areas with high population increasingly rely on “just in time” deliveries?

This increasing reliance on “last mile” deliveries requires these other places – these industrially-zoned or urban services precincts – to be close by, to realise their potential.

The same argument can be applied for why a distributed network of urban services precincts is required to maximise travel efficiency on an already congested transport network.

Bus services or council maintenance services, for instance, minimise the “dead running” of vehicles by having depots distributed throughout the city. This ensures heavy vehicles are not travelling long distances to points of service from the city fringe, which reduces congestion and running costs of service fleets.

This argument, however, goes beyond the question of convenience and efficiency. These precincts, in whatever mix of industries they support in the future, are critical in supporting the knowledge economy.

Industrial precincts don’t exist in a vacuum and neither do CBDs. Industrial precincts accommodate businesses that play various roles along the spectrum of many value chains.

Put simply, the value chain is a series of interdependent activities that add increasing value to goods or services. What is noted in analysis of the value chain process (see, for example, the concept of the “Smiling Curve”), is that higher value-adding components of the value chain tend to be at the beginning (research and development and design) and end (sales, after-sales service) of the value chain. The manufacturing process itself is often relatively lower in value.

However, this manufacturing process is a critical phase in the value chain. It is where high value pre-production activities metamorphosise into high value post-production activities. This process is likely to take place in areas that accommodate industrial processes.

Proximity helps advanced manufacturing 

In Australia, advanced manufacturing is starting to be adopted and this concept has increasing relevance to Sydney’s eastern and central industrial precincts.

Advanced manufacturing does not mirror the functions and processes of traditional manufacturing. Traditional manufacturing benefitted from separation from other uses, whereas advanced manufacturing industries benefit from proximity to the upstream and downstream value chain activities.

This is because they are intrinsically linked to the intellectual property developed in universities and concentrations of office-based knowledge intensive jobs.

In the future, these precincts, close to hospitals and universities, will drive advancements in bio and med-tech. They not only benefit from but require proximity to ensure collaboration across research, product development, prototyping and manufacturing is seamless.

The jobs of the future in advanced manufacturing and allied industries will require high degrees of skill, and attract talent from across the city. Job accessibility and access to a deep and skilled labour market is therefore critical and will be defined by areas with high levels of transport accessibility.

Pushing these uses to the fringe, or removing the land they can operate on, inhibits the city from realising this huge economic and intellectual potential.

Some mixed use works

The counter-argument often put forward is that these uses can co-exist in mixed-use communities, as that is what people are seeking. Examples cited identify precincts globally that are mixing residential, retail, commercial and light industrial.

Indeed, a range of industries found in industrial precincts are able to co-exist with residential. Car show rooms and even mechanics can, if well designed, be part of a mixed use development. Microbreweries can exist in local centres.

Many of these uses are already supported under mixed use zonings and it is often down to design controls to ensure that ground floor uses provide flexible formats to encourage uses beyond retail.

But mixed use is not a panacea

But while a rethink on what mixed use means is a welcome discussion in strategic planning, it is not a panacea to the industrial land development question. While certain light industrial uses are suited to co-locating with other uses such as residential, others aren’t.

A number of industrial uses require separation from other land uses that either create a conflict that affects their operability or impact land values which prices them out.

This applies to local industrial uses that may be noisy or have high truck movements, such as concrete batching plants or local distribution centres requiring 24-hour access by heavy vehicles. These do not sit well in a mixed use precinct.

It also applies to the emerging advanced manufacturing industries that may require larger floorplates, use chemicals, make noise or have significant potential to grow. Both these industrial types can’t be relegated to the urban fringe, yet do not suit mixed use development.

Reducing the land that they can operate on, or not providing sufficient space to grow, presents a significant opportunity cost that must be considered.

So the GSC’s position on industrial lands is not a policy focused on protecting the past. In fact, it is far from it.

It is a policy that demonstrates its understanding of the inherent complexities in planning for Sydney’s long term economic and social sustainability. It is a policy that at the same time supports the sustainable growth of local communities while acknowledging what is needed to support a knowledge economy.

If Sydney is to truly mature as a global city in the knowledge economy, and support intelligent density, we need to ensure that the jobs and services of tomorrow are truly catered for.

The jobs of tomorrow will be like the jobs of today – diverse – and will require diverse places and networks to support them. Is it worth the risk of compromising this future, without understanding what will be lost in the process?

Jeremy Gill is senior associate and partner at SGS. 

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  1. The GSC paper, A Metropolis that Works, according to Jeremy is “evidence-led” but the evidence seems to mainly come from reports by SGS where Jeremy is a Director. So I would expect SGS to back up the GSC report. I am also surprised that both SGS and the GSC seem to see the only option to industrial uses as being residential when Tim Williams and myself have argued for a mixed use approach where the same number of existing jobs can be retained through Light Industrial uses that are compatible with residential.

    Jeremy states that some light industrial uses are not suitable for co-locating with residential but the definition of Light Industrial uses says they are activities “that does not interfere with the amenity of the neighbourhood by reason of noise, vibration, smell….”(and a long list follows). The changing nature of work means activities that were once noisy,smelly etc are now compatible with residential. The GSC / SGS approach is to imply all industrial land will be smelly and noisy so it must be kept away from residential uses. This is not the case and a more nuanced understanding of uses can make mixed use precincts like those Jane Jacobs called for so many decades ago a reality. And younger generations want the dynamics of a bustling mixture of uses rather than the old single use zoning approach.

  2. Having kicked off the debate – or row ,depending on one’s mood – around the future of ’employment’ or ‘industrial lands – and the GSC’s ‘thought leadership’ paper on this called a Metropolis That Works, I am delighted that my friends in SGS have produced a thoughtful, nuanced,piece. I would have expected nothing less. I know that SGS – like other firms – have advised the GSC previously on economic and land use matters but I think a Metropolis that Works would have benfited from more of this fine grain advice.Part of the reason why there is concern about the GSC paper – and how quickly it was progressed to planning policy – is that it is a ‘one-size fits all’ approach. This is not the approach to ‘strategic employment land’ in a place like London where a difference is drawn between all land with employment uses currently on it and more ‘strategic sites’. Added to this problem is essentially a permanent ban via something the GSC policy calls a ‘no regrets’ policy on land-use change. I think this freezing of current use sine die , without tests for whether specific lands qualify for re-zoning over time, is quite at variance with previous Anglo-Australian planning practice. Whilst I prefer the public sector to make area plans – and am against promiscuous spot-rezoning claims by the private sector – public planmaking has to be flexible to allow changes over time as demands and needs change. On this point I support what SGS wrote for the council in 2014 about Carrington Road ‘industrial site’ in the ‘Eastern City’cited half a dozen times in the GSC report:-

    ‘Strategy 4 Consider residential conversion opportunities
    Action 4.1 Consider the …..precinct as an opportunity for Urban Renewal
    The precinct currently has around 106,219 sqm GFA of occupied
    industrial floorspace and has been highlighted as an area that might be considered for rezoning for residential use. The ….precinct is a good rezoning prospect. The precinct is not ANEF constrained and although it is flood affected this could be managed by development. The southern part of the precinct is also close to ….train station. Rezoning for
    some combination of residential, and light industrial would be appropriate.
    Action 4.3 Consider rezoning of select residential interface sites to B4 Mixed Use Some industrial sites that are peripheral to the main industrial precincts, or are fragmented, but have good public transport accessibility and are not constrained may be appropriate for mixed use zoning’.

    Apart from including the need for a deeper economic review of the future of employment and where jobs are locating in the modern city, I wouldn’t amend or edit this.I would add actually that we all need to find ways to deliver the promise of mixed use and that, yes,’mixed use’ can be difficult to deliver and is often cynically used as a temporary stopping off point on the way to a wholly residential development. I also add: I said in my first piece I was working on a site that was deemed industrial.This was in the Carrington Road area. Like all consientious advisors, I don’t bend my views to be convenient. The civic debate gets poisoned at source when doubts are cast :it should be pretty clear by now that , with me, what you see is what you get.It doesn’t always make me popular or indeed successful! My near-career death experience opposing WestConnex was a case in point.I have held a sceptical view on freezing employment lands in areas and times of change since the councils in East London I worked with 20 years ago tried to get the then new Greater London Council to be more flexible on Protected Wharves, which we felt they seemed to imagine all needed to be preserved in aspic awaiting the return of heavy industry. Time moves on. So must planning . ‘No regrets’? We all have a few. The GSC does invaluable and often compelling work. In saying this is not up to their usual standard and that a broader debate is required,I believe I am judging them by the high standards they have set elsewhere.