Transit oriented development is set to make an enormous impact on Australia’s urban landscape over the next 50 years, as governments seek to tackle social and economic pressures in large cities.

TODs are high density residential buildings located either over or adjacent to public transport hubs. This encourages residents to rely on public transport instead of cars, with the high density making way for population growth.

A new report by CBRE Research Centre says a range of factors are converging to create TOD projects, which will help solve urgent development needs in cities like Melbourne and Sydney.

The following statistics in the report describe the challenges Australia is facing:

“Australia’s population is projected to reach 35 to 42 million by 2040. An additional 11 to 18 million people in Australia will require over 4.4 to 7.1 million more homes by 2040. At the lower range of the forecast, this is equivalent to needing 170,000 new dwellings per annum to 2040, which is significantly higher than 150,000 homes completed per year on average over the last 10 years. Household size is also reducing, thereby contributing to the need for more housing stock.”

CBRE regional director of structured transitions and advisory services Wayne Redman said Australian cities had developed like American cities – a large central business district with residential areas spread around it.

Mr Redman said this model of urban development was not cost effective and it was far better to “in-fill” and capitalise on existing infrastructure.

“All the major cities are examining opportunities to develop adjacent to railways stations,” Mr Redman said.

He said the scale of development in inner city transport hubs would be different to outer suburban areas.

“Not every railway station is going to have 30-storey buildings,” Mr Redman said.

“It can just be medium density.”

Mr Redman said TODs could be the most significant change to Australian cities in the next 50 years.

“We can’t have cities that are growing horizontally to accommodate population growth,” he said.

“Policy makers, developers and the community will become aligned on this, I believe.”

The CBRE report draws on 16 TOD developments in Australia and eight overseas to evidence their success and argue for broader take up.

These include Perth City Link in Western Australia, the King’s Cross regeneration project in London, the Hong Kong Station redevelopment, Transbay Transit Centre in San Francisco and One North Precinct in Singapore.

The report highlights a range of factors that are converging to create TOD projects across the world:

  • Increasing rates of urbanisation and size of cities, leading to increased vehicular traffic congestion
  • Declining productivity with increasing time spent travelling to work, which erodes lifestyle and standard of living
  • Government focus on public transport and decentralisation of economic activity to reduce and disperse traffic congestion
  • Government policy shift to encourage densification in proximity to rail transit corridors and stations
  • Business and consumer preferences to have access to public transport services, diverse amenity and high quality work and living environments
  • Development industry expertise in mixed-use development and creation of places
  • Greater sophistication in project and infrastructure funding which recognises the benefits of integrated TOD projects

Key findings include the critical role government bodies play in successful TOD projects and the appeal these developments have for both residents and the business community.

The report says TODs may encourage business owners to rent office space outside the central business district, where prices are cheaper. This solves an office space affordability problem and reduces congestion in city centres.

The retail sector stands to benefit from new residential and business hubs, and gives the example of Bondi Junction Station in Sydney as a hub that offers a large number of retail outlets.

The report asserts that government vision and sponsorship is crucial in facilitating TOD projects because of the role public transport plays in addressing the long-term sustainability of major cities.

“Government facilitation is critical and can take a number of forms, including the provision and rezoning of appropriate sites, providing development certainty, directly funding transport infrastructure and coordinating issues with the relevant authorities,” Mr Redman said.

The report cites the Perth City Link TOD project as a prime example of federal, state and local government funding for rail and bus infrastructure.

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