A few weeks back, I received a document from the Boroondara Council in Melbourne highlighting changes under Plan Melbourne – Melbourne’s new metropolitan planning strategy. The documents explained how Melbourne’s urban growth boundary (UGB) would be fixed, effectively turning it into a greenbelt (because that has worked so well in the UK…not!) and how the leafy desirable eastern suburbs will be protected from development, helping to maintain the area’s character and amenity.
Of particular note, the document explained how subdivision’s would be limited to two homes per block. Many of the lots around Boroondara are fairly large (over 600sqm), and there has been quite a few triple sub-divisions close by to my house, so the planning changes could work to restrict urban consolidation.
While the changes in Boroondara are beneficial to me – I own a detached house in the area and my amenity and land values will be protected – you have to wonder whether Melbourne is indeed “planning to fail”, as David Collyer eloquently put it last month.
Advertisement
The way I see it, the changes under Plan Melbourne are likely to exacerbate urban sprawl in Melbourne, rather than reduce it, thus eliminating many of the purported benefits from the plan such as “20-minute neighbourhoods”.
These perverse outcomes will occur because the measures aimed at excluding growth from one part of Melbourne – e.g. Boroondara and other established areas as well as via the fixed UGB – will naturally generates pressure to accommodate it elsewhere, leading to intensified development either on the fringe or in exurban and underdeveloped jurisdictions well beyond the metropolitan limits.
As argued last week, the fixing of Melbourne’s UGB will likely encourage many lower income households to ‘leapfrog’ the boundary and settle in far flung commuter towns where developable land is available and housing is more affordable. In such instances, urban sprawl will be exacerbated and reliance on cars and energy use will be increased. Since Melbourne’s UGB was first introduced in the early-2000s, we have already seen widespread development in communities well beyond the UGB in places like Wallan, Drouin, Warragul, Bacchus Marsh and Gisborne (see here for details), and this trend is likely to intensify as then changes under Plan Melbourne bite.
Advertisement
A related unintended consequence of Plan Melbourne is that ‘densification’ will also be pushed away from the inner and middle suburbs and onto the fringe, where there is less access to employment and amenities. The reason for this is that the price of land will be forced up so much by the growth constraints that households will be less able to afford the ‘premium’ price commanded by the inner areas, and will instead be forced to locate at ‘less unaffordable’ but also less efficient locations. Essentially, budgets will be squeezed so hard by the higher land prices that households will be forced to trade-off both space (smaller homes) and location efficiency (i.e. living further out).
This phenomenon will likely be reflected in denser fringe suburban developments, whereby postage stamp sections will be crammed even tighter together, complete with narrow streets and and minimal public green space.
To see what might be in store for Melbourne, one only needs to look at Portland, Oregon – often cited as a model for “smart growth” (urban consolidation). There, urban consolidation policies have driven increased density at the fringe of the city but not nearer to the CBD, as revealed by Alain Bertaud, senior research scholar at the NYU Stern Urbanization Project:
Advertisement
Market forces would normally increase population density around the CBD and decrease it progressively toward the suburbs…
Portland developed the concept of an Urban Growth Boundary (UGB), which limits for 20 years the area within which the city may develop…
Most neighborhoods resist any attempt at increasing significantly the current density and developers are uncertain about demand for higher density residential areas close to the center. As predicted, land prices are going up because of the supply constraint imposed by the UGB, developers respond by developing higher density housing in the vacant areas between the limits of the current built-up area and the UGB…
In the long run, the higher density which is built-up on the vacant land along the UGB will increase the accessibility of suburban shopping malls at the expense of the relative accessibility of the CBD. This is not the outcome that the planners intended.
In short, Melbourne’s new planning blueprint is indeed planning to fail, with the end result likely to be: 1) higher land prices and less affordable housing; and 2) increased sprawl as the population is increasingly forced to live on the fringe or in far flung exurban commuter towns. The changes will also have particularly pernicious distributional impacts on lower socio-economic groups.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
