Expanding urban sprawl: Melbourne is getting the mix wrong

By David Donaldson

Monday February 18, 2019

Victoria’s obsession with urban sprawl means a constant supply of cheap new housing without angering existing residents. But while it’s politically easy, there are big hidden costs.

More than 50,000 new homes will be built on newly released land on Melbourne’s urban fringe, the Victorian government announced on Friday.

Allotments in these 12 new suburbs will be released over the next four years.

The aim is to provide cheap new housing — with the added bonus that building over paddocks will produce few objectors.

But what’s politically easy for the Victorian government isn’t necessarily the best option.

The hidden costs

Melbourne is already huge, with low-density housing estates spreading out 50-60km from the city, in many places embedding cars as the only viable transit option and leaving residents with congestion and poor access to services.

The new suburbs mostly lie beyond the suburban rail network, and many worry proper government investment will only follow years after residents move in, as has occurred in other estates. Adjacent suburbs already suffer from significant road and rail congestion.

While extra supply should improve affordability, the urban fringe is not where it’s needed, argues Grattan Institute fellow Brendan Coates.

“On the whole more housing is welcome as it should put more downward pressure on prices and rents in the long-term. But … the main problems with housing affordability in Melbourne aren’t in the outer suburbs, but rather in the inner and middle ring where demand for housing is highest and supply is most constrained.”

“We need to fill in the ‘missing middle’. That means the state government will have to make it easier to build and redevelop in Melbourne’s inner and middle-ring suburbs.”

There’s a reason why housing is so expensive in suburbs with ready access to jobs and convenient public transport — there’s nowhere near enough of it.

And despite what many assume, more large houses in far-flung suburbia is not even what Melburnians want.

“It is a myth that all new home-owners are only interested in the quarter-acre block,” says Coates, who who co-wrote a report on housing affordability last year.

“Often new home-owners buy a detached house on the city fringe simply because that is the cheapest dwelling available.”

Grattan Institute research shows that after accounting for trade-offs in price, location, and size, rather than a house on the city fringe, many people would prefer a townhouse, semi-detached dwelling or apartment in a middle or outer suburb.

“Semidetached dwellings, townhouses, units and apartments made up 33% of Melbourne’s dwelling stock as of 2016, up from about 28% in 2006. But this is still well short of the 52% that residents say they want,” Coates explains.

Building more in the middle ring of suburbs would mean residents would have immediate access to existing services and live closer to more jobs. It would also save the Treasury having to dole out to build completely new roads, railway extensions, hospitals and schools.

It’s harder for government to recoup the costs of providing transport to the outer suburbs, which often leads to under-investment in infrastructure and frequency of services.

Indeed, many of the people choosing to live in poorly served outer suburbs are there because they can’t afford anything else. Poor infrastructure and high car-related costs can entrench disadvantage.

“Public transport disadvantage in outer suburbs [across Australia] is significant,” found an Infrastructure Australia report published in October.

“Public transport use is lower for people living and working in the outer suburbs. Fewer people use public transport in outer suburbs than other areas, and those who do are more likely to drive to reach local services.”

“As a result, car operating costs are higher in the outer suburbs.”

“The traditional low-density, suburban-sprawl model of Australian cities is having a negative impact on the health of both residents and the environment.”

Although the government’s announcement shows they are thinking about jobs, stating “the new communities could support up to 50,000 jobs when complete”, people living in outer suburbs typically live within commuting distance of far fewer jobs — especially well-paying jobs — and commute longer to get to work.

Oversized houses and car dependency also lock in a large carbon footprint, and greenfields construction leads to the destruction of agricultural land and native habitat.

We also know that people living in low density areas walk less. The Heart Foundation is concerned about the long-term health implications of urban sprawl:

“Our concern is that the traditional low-density, suburban-sprawl model of Australian cities is having a negative impact on the health of both residents and the environment,” they argue.

“People living in low-density car-dependent neighbourhoods engage in less physical activity (including reduced walking and active travel) and increased sedentary behaviours, such as sitting in the car, both of which contribute to the prevalence of obesity and chronic diseases.”

One study calculated that every additional hour a day in a car translated to a 6% increase in obesity risk, while every additional kilometre walked translated into a 4.8% reduction in the likelihood of being obese.

The missing middle

Despite the clear problems with the low density model of urban development — and its corollary, extreme density in the heart of the city — the Victorian government appears to be unwilling to pursue the obvious alternative: Melbourne’s ‘missing middle’.

Many Australians are understandably sceptical of the appeal of higher density living, with a disproportionate number of apartments under construction in Melbourne being located in tightly packed towers in or next to the CBD. While offering convenience, many of these apartments are small, dark and poorly designed.

Indeed, this extreme density is the flipside of locking up vast amounts of the desirable middle ring with restrictive zoning: all that demand for new housing has to go somewhere. Cities like Tokyo have figured this out, allowing higher density across much larger areas, which has led to many well-connected, pleasant, medium-density areas and few soaring glass towers. This more permissive approach has also allowed construction to keep up with supply and kept house prices firmly under control.

“Urban infill could supply a lot of the new housing needed for a growing population.”

Comparatively few of Melbourne’s new dwellings are in the types of developments recognised by many urbanists as options with the best balance between liveability and density: 4-8 storey apartment blocks within walking distance of reliable public transport. This approach is what makes cities like Paris, Barcelona or Tokyo so popular with tourists and locals alike.

Making it easier to build like this offers significant opportunity: Melbourne could fit between 1 and 2.5 million more residents primarily by building 4-8 storey buildings along major transport corridors, a 2010 study estimated.

You can still fit a lot of people in two-storey townhouses, but supply of these is also lagging.

“Urban infill could supply a lot of the new housing needed for a growing population. Higher density is easy to imagine. Australian capital cities are more sparsely populated than cities of similar size in other developed economies,” says Coates.

“But only 25,000 new apartments were built in Melbourne’s middle-ring suburbs over the past four years. Melbourne is getting the mix wrong. Too much of the new housing is CBD high-rises of 20 storeys or more. Population density in the middle rings of Melbourne has barely changed in 30 years.

“We need to fill in the ‘missing middle’. That means the state government will have to make it easier to build and redevelop in Melbourne’s inner and middle-ring suburbs.”

Sydney isn’t often held up as an example of good urban design, but Coates believes they have it right when it comes to infill.

“Melbourne should follow Sydney’s lead by reforming planning rules to encourage home building in middle suburbs already well serviced by infrastructure and with good access to the city and its jobs,” he argues.

“Sydney has added 60,000 new apartments in middle-ring suburbs in the past four years, mostly in buildings of four-to-nine-storeys.”

Of course, residents’ groups make this difficult. The spectres of increased congestion and poor amenity are behind many objections. Investing in better public services can go some way to addressing these fears.

Governments need to find a more sustainable path to urban development. As Grattan Institute CEO John Daley told The Mandarin last year:

“The root cause of our housing affordability woes, the root cause of essentially whether cities in today’s global economy succeed or not, is about how many people have access to jobs in a reasonable commute,” he said.

“Nobody likes lots of development in their own backyard. The issue is, if there’s not more development in your suburb, then your children will not be able to buy a home.”

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