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Nothing is in walking distance

By Lorenzo

I recently moved moved house from inner Western Melbourne (Seddon) to outer Western Melbourne (Truganina), hence my absence from blogging. The most direct way to the nice new house (and it is a nice new house, a vast improvement on the decrepit dump my housemate and I were previously renting) is along a road which has newly constructed, and to-be-constructed, suburbs on one side and dusty paddocks with sheep grazing on the other. (The dusty paddocks are, of course, every bit as much the result of human action as the new suburbs but the former have less biodiversity.)

Since I lived in Canberra for 11 years, the made-for-cars layout of the new suburbs is familiar. What is less familiar is how less well-designed they are. First, in Canberra, the linking streets between suburbs were mostly  dual carriageway as a matter of course. The linking streets where I now am are often single carriageway and so easily clog up in peak hour.

Secondly, nothing is in walking distance (and I count something up to 30 minutes walk away as walking distance). Both because, despite the single-carriageway streets, things are more spread out and because there is no shopping centre at the heart of each suburb. Instead, it is the land of streets of franchised megastores and drive-to-malls.

I realise that the push to have developers’ pay for infrastructure upfront, so it is included in house purchase prices, is likely to lead to under-provision of infrastructure.  Upfront payment for infrastructure is a pretty silly way to pay for something that will be providing benefits for decades, that is what government debt should be for.

Same spot, different direction

But the point is not to rationally provide infrastructure, it is to maximise the value of land allocated to housing — so incumbents get wealth effects from rising prices, so tax revenues from land are maximised and so government land corporations can maximise their return from the power to compulsorily purchase and control usage. The combined effect of which is to raise the cost of future infrastructure, because the land value is pushed up so much, and lower the benefit to government of providing infrastructure through higher taxes since it is cheaper and easier to raise the tax value of land by restricting its use.

There was an old joke that, if the Soviet Union took over the Sahara Desert, in five years there would be a shortage of sand. The joke seems much less funny as government ensures that land-rich Australia has the most expensive housing land in the Anglosphere (apart from Hong Kong; rather a special case). Watching designed dysfunction in operation makes it much less funny too.

8 Comments

  1. Andrew Reynolds
    Posted December 11, 2012 at 7:38 pm | Permalink

    Lorenzo,
    There is a reason why Canberra has such good infrastructure. It the same reason why Canberrans are the best paid in the country.

    It’s because the rest of us pay for it.

  2. Movius
    Posted December 11, 2012 at 11:23 pm | Permalink

    Canberra? Infrastructure?

    The streets are only dual carriageway in Canberra if they get no use. You can be certain any high-traffic routes have no such superfluous bitumen.

  3. Liam
    Posted December 12, 2012 at 5:32 am | Permalink

    Great post, L. (Except that most of the genuine tax on land itself isn’t to the State Government, but to local government, which has little if any infrastructure role, in the form of rates. But that’s another argument).

    Upfront payment for infrastructure is a pretty silly way to pay for something that will be providing benefits for decades, that is what government debt should be for.

    [Stands, applauds]

  4. CatMack
    Posted December 12, 2012 at 5:45 am | Permalink

    Actually, I don’t think it can be correct that local government has little role in the construction of infrastructure. Most of the things related to ‘livability’ – parks, bike tracks, etc are largely funded by local government precisely because state governments refuse to do these things. Surely the bigger question in respect to government investment in places like Truganina, is 1) why are housing development allowed to continue to expand out this way 2) why is there no decent public transport.

  5. derrida derider
    Posted December 12, 2012 at 7:24 am | Permalink

    Lorenzo, nice as it would be to have other people paying for your house’s infrastructure costs why shouldn’t we enforce user pays here? The infrastructure is certainly being funded by long-term debt – initially the developer’s then, when the land is sold, the owner’s.

    Unlike the roads between suburbs the local infrastructure of a greenfields development is a private, not public, good and so is rightly funded by private rather than public debt. Its not fair to ask other people to pay for your personal amenities.

    The much more interesting question is why Australians opt for greenfield development anyway. It’s the barriers to urban redevelopment (or more precisely, the poor planning that makes urban life undesired) rather than barriers to suburban sprawl that are the problem.

  6. Chris
    Posted December 12, 2012 at 8:51 am | Permalink

    There is a reason why Canberra has such good infrastructure. It the same reason why Canberrans are the best paid in the country.

    The reason the average salary in Canberra is so high is because of the nature of the work that is done in Canberra (a lot fewer lower paid jobs). And with the exception of the parliamentary triangle where only a small minority of Canberrans live, since self-government the Canberra population has to pay for the rest of the infrastructure.

    If you look at the newer suburbs in Canberra they suffer from very similar problems – very narrow streets which in future will make it impossible for buses to run down. There was one that was made so narrow by a developer the garbage trucks can’t get in!

    I live in what a few decades ago would have been considered more an outer suburb of Adelaide (its good vegetable growing land!). But I have a mid-sized supermarket and a couple of butchers (in different directions) within a 10 minute walk. And a major supermarket within a 30 minute walk away.

    Its the developments from the last couple of decades that have been the worst. For example to save on development costs and maximise land use its common to have only one road exit from new developments. Which not surprisingly leads to traffic jams when the development fills and makes walking routes a lot longer than they need to be.

    Unlike the roads between suburbs the local infrastructure of a greenfields development is a private, not public, good and so is rightly funded by private rather than public debt. Its not fair to ask other people to pay for your personal amenities.

    I think part of the problem is that its a trade off between lower short term costs and higher long term ones. Lack of walkability, ability for public transport to service the suburb leads to higher costs for the rest of the community, not just those who live in the suburb. Also the way developers cut up developments to maximise profit leads to house orientations which lead to higher energy usage requirements. And since new house buyers often are simply not aware of the impact of this the cost gets silently passed to them (as well as downstream infrastructure requirements carried by the rest of the community) by the developer.

    The much more interesting question is why Australians opt for greenfield development anyway. It’s the barriers to urban redevelopment (or more precisely, the poor planning that makes urban life undesired) rather than barriers to suburban sprawl that are the problem.

    The much more interesting question is why Australians opt for greenfield development anyway. It’s the barriers to urban redevelopment (or more precisely, the poor planning that makes urban life undesired) rather than barriers to suburban sprawl that are the problem.

    I agree with that! Too many barriers to older sites closer to the city being redeveloped as medium or high density housing.

  7. Posted December 12, 2012 at 1:31 pm | Permalink

    AR@2 I was living in a Canberra suburb developed in the early 80s. Given the growth in per capita GDP since, and Victoria’s AAA rating, we should be able to manage better.

    L@4 Thanks, but stamp duty is very much a tax on land, given how much is collected from housing and commercial sales.

    CM@5 People like houses with gardens, we are running a high immigration policy. and low density makes public transport somewhat problematic (as do high land costs).

    DD@6 The connecting-suburb streets are not just used by local residents, that is the problem. Those are precisely the roads I am talking about, not within the suburbs.

    As is the human norm, most Australians want a garden, hence spreading out. Only about 15% of people will opt for apartments if given a choice. As for the barriers to inner city development they are driven by exactly the same imperatives that encourage land rationing — defending the amenity and rising house price of the politically well-connected.

    C@7 The new developments have worse features precisely because of the cumulative effect of land rationing making economising on land use the primary imperative because of the cost of same.

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