Block sizes shrinking. Blame government policy

You have heard it before. One of the reasons why Australian home prices are high is because our new houses are supposedly the largest in the world.

For example, consider this slide from last year’s infamous CBA investor presentation:

Or this explanation from HSBC’s Paul Bloxham:

…the quality of the housing stock is high. Australia has the largest dwellings in the world, and they are of high quality. Estimates suggest that the average Australian dwelling is 214 square metres, and real expenditure on new dwellings is now 60 per cent higher than it was 15 years ago, reflecting the increase in both the size and quality of dwellings.

An inconvenient truth that the ‘no bubble crew’ often fail to mention when defending Australian home valuations is the shrinking of block sizes, which has more than compensated for the increase in building size.

An article published today by News Limited, Great Aussie Dream downsizes as house block areas slashed, provides some interesting facts on the shrinkage of new block sizes in Australia; although it completely misses the key reasons why. According to this article, average block sizes have fallen as follows:

  • 1950s: 32-36 perches (810sq m-910sq m);
  • 1980-90s: 600sq m;
  • 2000s: 350 – 450sq m
  • 2012: 200sq m – 350sq m

So new block sizes are currently around one-third to one-quarter the size of the 1950s, with most of the shrinkage occurring within the last decade. Of course, average pre-existing blocks are also shrinking in size as urban consolidation takes place and lots are sub-divided.

The article places the blame for the shrinkage on changing household preferences. Apparently, Australian households are now demanding lower maintenance homes and developers are simply ‘meeting the market’.

Unfortunately, the core reason behind the shrinkage – government urban consolidation policies since the early-2000s, including: the implementation of urban growth boundaries (UGBs) around Australia’s cities; minimum density ratios; up-front infrastructure/development charges; and more restrictive zoning – have been completely left out of the article.

These policies have dramatically pushed-up the cost of fringe land, both necessitating the move to smaller block sizes (in order to maintain some semblence of affordability) as well as forcing-up the cost of new and pre-existing homes.

This price escalation can be seen by the following charts from the UDIA, showing block sizes simultaneously shrinking in size and rising in cost – i.e. we are paying more but receiving less in return:

Government planners and green groups would argue that the shrinkage of block size is desirable as it enables a more efficient use of ‘scarce’ land resources and will some how make households less reliant on their cars via more intensive use of public transport. What these groups often fail to concede is the pernicious effects that urban consolidation policies have on housing affordability as well as the perverse outcomes caused by the urban growth constraints themselves.

For example, the building of large houses on tiny blocks, with narrow footpaths and roads (because of the excessive land prices), allows little room to plant trees or veggie gardens. It also means that homes are so close together that many do not contain roof eves or verandas and have poor air flow, thereby requiring greater air conditioning in the summer. The lack of backyards and open space also encourages children to remain inside playing video games and watching TV, which of course uses more energy.

Moreover, the imposition of UGBs often leads to lower income households ‘leapfroging’ the UGB and settling in far flung exurban towns where housing is more affordable. UGBs, therefore, can act to exacerbate urban ‘sprawl’ and increase car reliance and energy usage, which has detrimental distributional impacts in particular on lower socio-economic groups.

I have no problem with the shift to smaller block sizes if this is what new home buyers desire and the shift has been caused by changing preferences. What I do take issue with is spurious planning policies imposed by ignorant governments pushing-up the cost of land/housing, thereby leaving households with little choice in the matter.

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Comments

  1. Sandgroper Sceptic

    At a BBQ this afternoon a friend told me he is close to completing his new house…4 bed+study closet, 2 bath+ toilet, 2 storey, double garage on a 290 square metre block (old industrial land that has been cleaned up and rezoned). It is within the UGB radius and near a train station and about 20-25 minutes commute to CBD. I was somewhat taken aback as my view is that you want land value to be at least 65+% of your land+house price. The interesting thing was no one else even batted an eyelid about block size, it was all bravo, bravo no lawns, garden or “maintenance!” The cost is still extortionate so I guess this example is a combination of both government and changing preferences.

  2. michael francis

    Next move is to subdivide the McMansions in two and rent out the other half.

  3. Thank you for an excellent article, illustrating clearly how planners are seriously degrading the quality of our urban environment…….unnecessarily.

    Only about 0.13% of Australia is urbanised – about 0.70% in New Zealand.

    The amusing thing about this unnecessary median density, is that it is effectively banning the growing of trees within residential areas. One would think the Greeens would be hopping mad about this……but hey…..they are more interested in power and control.

    The other important point is that we simply do not know what peoples housing needs will be 20, 40 and more years down the track. So to allow for this, it is far better to build houses on larger lots, so that they can be added to and modified over time.

    The sad aspect to all this, is that the father of the modern production housing industry we know today, the entrepreneurial genius William (Bill) J Levitt had all this figured out in the late 1940’s.

    It is well worthwhile google searching “William J Levitt” and learning the importance this man attached to “future proofing” residential development, by allowing flexibility with the larger lot sizes. They have been modified and added to over these past six decades. Its now difficult to find an orginal Levitt Cape Cod house.

    Levitt had “sustainability” all figured out, before the planners, while preaching it, were in reality doing the exact opposite.

  4. My experience is seeing disappointed young families being outbid on blocks > 600m2 to developers time & time again.

    Imagine analyzing the price of land (per m2) as block sizes have been reducing so much in size yet prices skyrocketing at the same time – a steep exponential curve would not surprise me in the least.

    Great post.

  5. It’s not just the size of blocks that go down. The building quality to me seems to have gone down considerably compared to double brick 50’s homes.

    What are your views on the quality of properties?

    • I agree that quality has been eroded. I put this down to higher land costs, which have caused builders to cut-back on build quality (e.g. roof eves) to save on costs in an attempt to maintain affordability.

      • Poorer qaulity housing on smaller blocks on average…so really the affordability is even worse – A LOT WORSE!

        Great Article UE…!!!

  6. > Government planners and green groups
    > would argue that the shrinkage of block
    > size is desirable as it enables a more
    > efficient use of ‘scarce’ land resources
    > and will some how make households less
    > reliant on their cars via more intensive
    > use of public transport.

    The trouble though is that public transport infrastructure has not been really improving in well established areas closer to CBDs and is practically non-existent on metropolitan fringes. There are many new estates built on the fringes with houses on small blocks with narrow internal roads and not much wider very often just one road out that gets congested in the morning. It’s a complete mess. However, with the structure of our cities and very fragmented land ownership it’s very hard to build proper high density housing closer to the city centres. Building efficient underground metro train transport is way too expensive due to the urban sprawl. Even getting rid of level crossings for metropolitan trains is too hard. If the price of petrol keeps growing due to shrinking supply and increased demand out of Asia our urban populations will be in big, big trouble.
    Probably the only way to fix the problem in the long run is to start building new properly designed satellite cities linked by fast, modern railways and encourage people to gradually move there inducing attrition of the old areas that could be properly redeveloped. If the cost of medium to high density housing is much lower in the new cities and there is proper metropolitan infrastructure with shops, restaurants, childcare centres, schools etc. people will move there. Is it likely to happen? Not in our lifetime.

    • I am a strong believer in Peak Oil. But I think that as energy prices rise, cities will become more decentralised as jobs move to where the people are living or more people ‘telecommute’ (work from home). Over the past 50 years, cities all over the world have been decentralising, with smaller and smaller proportions of people working in the CBD (only around 10% of Australian urban dwellers work in the CBD). And with this shift, public transport has become both less viable and less practical.

      The planners continue to grasp at a monocentric urban model that existed 50 years ago, whereby everyone commutes into the CBD for employment. But cities nowadays are pluricentric and decentralised. It’s time they woke up…

      • I am not sure about cities all over the world de-centralising in the last 50 years…. if I think about the traffic going into London every morning, or Rome, or Paris, or New York… basically forget the car there. Metro or public buses only. No parking anywhere.

        But in Australia we have to find a middle way. We can’t expect living on 600 sqm single store blocks close to the CBD, having population grow, and house prices not rising as a consequence. Land within the cities is too valuable for 600 sqm blocks.

      • “I am not sure about cities all over the world de-centralising in the last 50 years” – Totally agree. If we are truly decentrlised in any significant way why is all the traffic still funnelling into the CBD’s?

        “Land within the cities is too valuable for 600 sqm blocks” – Again I agree. As a point of interest the Brisbane City Council is currently taking submissions for its new town plan due out in the next 2 years. Interstingly, the overwhelming response from public submitters is that (in order to help address housing affordability) Brisbane needs greater density in the public transport corridors and the Medium and High density areas around Regional Activity Centres should be increased by relaxing building heights and increasing the size of the aforementioned areas. These submitters overwhelmingly see the pracicality in this, however, almost without fail don’t feel it is necessary in their local area…..

      • > I am a strong believer in Peak Oil. But I think
        > that as energy prices rise, cities will become
        > more decentralised as jobs move to where the
        > people are living or more people ‘telecommute’

        When Peak Oil finally arrives in full force it will probably be too late to decentralise our cities which would effectively require implementing new distributed infrastructure to accommodate business and residential areas in close proximity. The problem is that such a project will require a lot of energy which will be very expensive. The cost of living will go up across the board due to higher cost of transport, food, materials derived from oil etc. etc. I am not sure if the decentralised model is more energy efficient than properly executed centralised one. I know that the Germans use about 20% less energy per capita than we do despite being much more industrialised. Their population model is based on a large number of medium cities. They have a lot of medium and high density far more energy efficient than ours houses and better public transport. They also drive smaller cars. The Japanese use even less per capita energy than the Germans and Japan’s population is highly centralised.

      • What do you mean “too late to decentralise”? It is FAR too late to attempt to “compact” urban form. But decentralisation is already here, in most cities, especially Australian ones. All that is needed is a RELAXATION of zoning, and you would see MASSIVE shrinkage of commuting distances – zoning currently works against urban efficiency, and monocentric zoning is the worst option of the lot.

        And Germany’s “urban economies” are incredibly decentralised, they’ve been pursuing decentralisation of employment as a deliberate efficiency tool, for decades. The German countryside is dotted with businesses surrounded by houses, in which most of the workers live.

        There is actually enormous resilience in “automobility” yet – long before people can be persuaded to give up their cars, they can downsize their car many times. The sheer number of new V8’s still sold in Australia is testimony to the amount of “fat” that still can be trimmed from “automobility” as a paradigm. Meanwhile, nobody has benefitted more from the lower and lower cost “automobility” provided by still-reliable 12 year old 4 cylinder cars.

        One of the endemic dishonesties in the “cost of cars versus cost of public transport” racket, is that the “best case” cost of automobility is never considered – instead, “automobility” is made to look bad by aggregate statistics that include “new car” and “luxury car” depreciation, and V8 and SUV running costs.

      • > What do you mean “too late to decentralise”?

        > And Germany’s “urban economies” are incredibly decentralised, they’ve been pursuing decentralisation of employment as a deliberate efficiency tool, for decades.

        I think that you answered your own question. The Germans built their massive decentralised capital structure for decades when the cost of energy was much lower. We should have done it a long time ago rather than allowing our cities to grow to the extent they did. As for the decentralisation of Australia I don’t see it happening. Our biggest cities keep growing while small regional in-land centres decline.

      • Alex Heyworth

        @PhilBest “The German countryside is dotted with businesses surrounded by houses, in which most of the workers live.” This is also facilitated by the low levels of home ownership, which make it much easier for people to obtain housing close to where they work, without the hassle of selling and repurchasing.

      • This is an extremely interesting point. The Germans are very intelligent people. I am guessing they worked out decades ago, that decentralised urban form is the most efficient, and let other factors like “owning versus renting” arguments fall into place around that understanding. But many US cities are highly decentralised, have VERY low house prices, and high rates of home ownership. I am guessing that the German preference for renting gives them an efficiency edge over this; however, the decentralised urban economy in both cases has a considerable efficiency edge over a “planned centralised” urban economy.

      • Also, Germans tend to marry and have families, less. This is not good for their demographic sustainability in the longer term.

      • “The Germans are very intelligent people.”

        Gaaaaaawd… that’s it. I can take a lot but as a Dutchman I just can’t stand by idle while you call Germans ‘intelligent’. 😛

        30 years of abuse on the soccerfield down the drain. 😛

  7. Thanks yet again for a very interesting analysis Leith. I’ve long been against this silly increased density school of thought mostly because there isn’t any chance of being able to enjoy a garden or personal space that should come with a slice of suburbia. Not to mention the fact that decreased block size means no reduction in price… I was astonished to hear the average block out west in Caroline Springs (for example) is around $200K even before you can put a house on it. Added to that are caveats that will only allow you to select from a limited number of designs/builders anyway.

    I’ve just had a weekend away in a small town outside Ballarat and my retired friends who live there really love it… they only paid a shade over $200K for a 3br/2bath modern house on a HUGE block and they have enough space to grow lots of their own food (fresh broccoli is nothing like the supermarket stuff!). I’m starting to come around to the idea of going bush despite the lack of services and jobs. At least in a big country like Australia we still have lots of choices.

    • Ballarat is an “outlier” on the Demographia Reports, I notice. Someone should check out whether the local Council there deserves a citation – maybe they don’t run a racket in urban land?

  8. You can still pick up acreage pretty cheap these days, but it is away from the jobs (unless you telecommute, which I do).

    I can’t wait to move into our new place – well over an acre (thats 4000+ sqm) with a rainforest at the back.

    I can’t see how anyone in a suburban house can live on less than a quarter acre – I’d rather just buy an apartment.

    Makes more sense, and its better living quality, IMO.

  9. Australia is also the 6th largest country by land mass, with a population density at roughly 2.8/sq km.

  10. If you want to compare house prices across countries, do it as price per square meter: otherwise you compare a 300 sqm villa Sydney with a 50 sqm apartment in Paris.

    • Where is this “Sydney Villa” located? Because there would not be many suburbs that would compare quality-wise to anywhere in Metro Paris…

      • Paris, ironically, is surrounded by some of the biggest “sprawl” anywhere in the world; reaching from the English Channel to Burgundy. The reason for this, is the ancient French tradition of splitting up farm land holdings between sons, which has resulted over the centuries in smaller and smaller “farms”. As these “farms” all have houses on them, there has not been the same mania to “halt sprawl” and “preserve green space” as there has been in countries with large farms. Someone wants a “fringe home”, they just buy a tiny farm, end of story.

    • Why do you compare price per square metre in two different markets?

      The desired commodity is a residential dwelling, not ‘a bigger’ OR ‘a smaller dwelling’.

      People will shift locations based on prevailing dwelling size, but these measures are more hedonic than economic.

      Places like singapore will have smaller dwellings based on the availablibility of land to be sourced (ie. non-existant).

      The point here is the ability of the market to make available to product of a residential dwelling. The ability to put forward a dwelling with greater land content for the same price as other markets is self-evident, (well should be, and the fact that it isn’t point to market failure, and much of this blog is about the examining the causes of this market failure.)

      • Britain has approximately one-sixteenth the housing floor space per person that Australia does, not because they have Singapore’s “land per person”, but because they have had the Town and Country Planning Act since 1947. You need to read the papers of Paul Cheshire and Stephen Sheppard; or of Alan Evans and Oliver Hartwich; on the consequences of this urban growth constraint. One consequence is that the “inequality” effect of inflated land prices, “multiplies” income disparities with an effect on outcomes that is greater than the initial income disparity. Another consequence is reduced labour productivity and the loss of industry offshore.
        One would have thought that political parties who claim to represent “the worker” and “the poor” would not be supporters of urban planning that has these effects. One would be mistaken.

      • “Britain has approximately one-sixteenth the housing floor space per person that Australia does, not because they have Singapore’s “land per person”, but because they have had the Town and Country Planning Act since 1947. You need to read the papers of Paul Cheshire and Stephen Sheppard; or of Alan Evans and Oliver”

        Well I haven’t read Cheshire & Sheppard, or Evans & Oliver, and I’m not likely to as I can only view it’s contents applicable to my acitivity on MB.

        Can I ask what degree of this floor space do they assign to legacy dwellings? It is my observation of Paris, that the occupation of 18th and 19th century dwellings continue to attrit and present themselves as new supply. As long as they continue to continue to remain contemporary supply, as well as forming normative conditioning of what a dwelling constitutes, I can’t be convinced that it is solely downto planning.

      • That is a point and I don’t have the answer specifically relating to the proportions involved; however, the broader issue of low build rates, reduced social mobility, reduced discretionary incomes, and health outcomes, is still true.
        I wasn’t criticising Paris like I was criticising Britain’s 5 decades of urban planning. France’s superior outcomes on all the points I am discussing is due to the fact that they have NOT restricted “sprawl” anything like the British have.
        The British academics I refer to, compare Britain’s outcomes with those of France and Germany and Switzerland and Holland and Scandinavian countries as well as the USA. Ironically, Holland with even less land per person than Britain, has managed to keep their urban land prices much lower, with beneficial outcomes for their economy and society.

      • Well, there are places where people want / need to live and places where we do not want to.

        Australia has lots of land available, but where do you want to live? It does not matter how much empty land is available. You need electricity, water, hospitals nearby, cinemas etc, internet.

        It’s already a problem (in my view) that all the main capitals are too far away from each other in Australia.

        Land where people want to live on is scarce, even in Australia. However we all want a 200+ sqm house, and cheap.

      • “Land where people want to live on is scarce, even in Australia. However we all want a 200+ sqm house, and cheap.”

        No, that is not is what is being competed for. if that was the case, then 3br, 120sqm apartments would be cheap.

        This isn’t the case.

        The price/income ratio is for average dwellings, whatever that average dwelling may be, such as small apartments in HK and Singpaore, or “Shrines of Bogan Consumptionist worship” in Australia.

        The hedonics of what is materially offered can and does create desire to immigrate, but the end product is what type of dwelling can be put to market for 3-4 time income.

        When the suppliers decide to put whatever copious dwelling it desires because of overwhelming, and irrational demand, then the market has failed.

      • But it’s also a question of supply…. look what happened to the Gold Coast: there’s now so many apartments that supply has exceeded demand and prices are coming down.

        If we keep building large houses on large blocks of land, single story houses on land where lots of people want to leave, prices will always go up.

        How much do you reckon a 50sqm apartment with view on the tour Eiffel would sell for? What about 200sqm?

      • “But it’s also a question of supply…. look what happened to the Gold Coast: there’s now so many apartments that supply has exceeded demand and prices are coming down.”

        Producers don’t put product to market unless they feel there is a belief there will be demand for it. Unfortunately (or not so) for the developers of their product, there is quite a lag in delivery time. The rampant madness of current development regimes instilled a cycle of ever-increasing prices, until now where it is just no longer affordable.

        You’re decribing a symptom of a bubble.

        “If we keep building large houses on large blocks of land, single story houses on land where lots of people want to leave, prices will always go up.”

        ?? Erhh…

        When greater amouonts of people want to drink milk does that mean the prices will always go up?

        If there is a natural inhibitor for new supply, that is the only reason there is a non-reversable trend for ever increasing real prices.

        “How much do you reckon a 50sqm apartment with view on the tour Eiffel would sell for? What about 200sqm?”

        There is quite a lot of demand is for Paris, that is why the dwellings are smaller. That is what I have stated. That is why for 3 times wages they will deliver a dwelling of less material utility, and considerably less land.

        But as I said, if the market isn’t delivering average dwellings for 3-4 times average wages, then something is creating this market failure.

      • <>

        I agree but land supply is limited naturally. How many Tour Eiffel exist? Or Sydney Harbour? Colosseum? Manhattan? We can’t re-create those. They are unique. That’s land where most people want to live and pay top dollars. We can try to mitigate that uniqueness by creating alternatives, but it won’t replace them. Prices crash on land where there is excess supply compared to demand.

      • “I agree but land supply is limited naturally. How many Tour Eiffel exist? Or Sydney Harbour? Colosseum? Manhattan? We can’t re-create those. They are unique. That’s land where most people want to live and pay top dollars”

        You’re prescribing not a shortage fo land, but a shortage of location. I agree, many, many established areas will incur a location premium, but as you address here;

        “We can try to mitigate that uniqueness by creating alternatives, but it won’t replace them.”

        Im not asking for them to be replaced, but I’m asking for an alternative to be created, and that’s not happening either.

        “Prices crash on land where there is excess supply compared to demand.”

        yes, but ‘demand’ isn’t a one variable outcome of choice.

        Demand as we have seen is facilitated by access to credit and irrational expectation.

        When expectation has become entrenched, we have seen vested interests capture the regulation process, affecting credit regulation and supply side factors of product

  11. “….I do take issue with is spurious planning policies imposed by ignorant governments pushing-up the cost of land/housing, thereby leaving households with little choice in the matter…”

    I am entirely with you on this point. The current development models and dwelling designs are just terrible.

  12. Endrortsonhousing

    Does the theory of larger block sizes explain why a house built in the 1960s (with no renovation) sells for 6 times family income now, more than 3 times what it cost when new?

    • Definitely. The “gain” is ALL in the price of the land. “Structures” are supposed to depreciate in price. This is why cities in the USA that have fringe sections of $30,000 and new houses for $180,000; also have older houses closer to CBD’s for LESS – like $100,000 or even less for dilapidated ones.
      In cities and countries where there is a land racket, the price curve always goes up, and steeply – even a dilapidated house that would have cost $80,000 in Houston or Chicago or Indianapolis, will be at least $700,000 in Sydney.
      This is why these land rackets have the exact opposite effect to what the planners intend – guess where MORE people can live closer to the CBD – where the house is $80,000 or where it is $700,000?

  13. I think here there is too much focus on housing costs and not enough about the cost of living. What is the point of buying a block of land for $50,000 if your living costs are 4 times higher than a block of land worth $100,000? The biggest problem with having a majority of large lots is that it fails at all levels of the triple bottom line measurement.
    The economic issues are that infrastructure costs more to service the lots as it has to travel further to reach the same amount of people, services such as garbage collection, public transport etc. costs significantly more for the same level of service as once again, they have to travel further to reach the same number of people. (An example is that a bus route may have to travel 1km to reach 100 people with 1000sqm lots, whereas you could double the frequency for a similar price if the lots were halved, because not only would you halve the distance to reach those people, the frequency increase would increase the attractiveness therefore seeing higher patronage and higher cost recovery. This is one of the biggest reasons as to why higher density suburbs have greater public transport frequencies (think West End Brisbane, Glebe Sydney, South Yarra Melbourne). You also have to travel further to reach the same services such as shopping areas, workplaces, parks and open space. Every time this distance increases, the cost to reach them increase. This also places a heavier burden on our infrastructure such as roads, again increasing the strain on our taxes.
    The social issues are that if a majority of major cities are lower densities, people spend less time with their families as their commutes are longer, the larger area for central community facilities removes their attractiveness. It is also much more difficult getting children to sporting activities (particularly if you have multiple children). It is interesting in Beijing where in some areas within the city it is very high density (not something I’m promoting here) however public spaces are used more heavily creating greater social cohesion. Our Australian suburbs are dead after about 6 or 7pm. We are using our spaces very inefficiently and cooping ourselves inside as a result of our urban form. Why do higher density suburbs have more life?
    The environmental issues are probably the greatest. It was mentioned by Hugh Pavletich that this higher density housing would be banning growing of trees in residential areas is garbage. I understand that the Pyrmont/Ultimo suburb in inner Sydney has the highest residential density of any suburb in Australia. It also has a very green feel to it with many trees and gardens, more so than some low density suburbs I have been in. Also, the higher density removes the need to clear as much land on the urban fringe. What is more important to see here is the footprint size per building, not the density. The smaller the footprint size, the greater the opportunity for vegetation. As alluded to before, public transport is exponentially more efficient as density increases (one of a few factors). In a simplistic sense, the best way to have improved public transport in our cities is to increase density.
    I am also extremely skeptical that telecommuting will take off. There is a need to meet face to face, otherwise why would we still be flying all over the world for meetings and business activities. There is also an increase in knowledge and productivity if people are physically working together as there are watercooler conversations, the walk and talk situations where decisions can be made, or ideas expanded on the run. This cannot happen if you work from home.

    All in all, It is the design of housing that I think is the biggest issue, not the lot sizes.

    • There are 2 significant flaws in what you say, and one very significant truth.
      Sprawl is usually accompanied by decentralisation of employment. There are good papers on this effect in the USA by Peter Gordon et al, Randal Crane et al, Sarzynski et al, and Anas et al. Cities have sprawled for decades without average commutes getting longer in time, when other factors like rising incomes and 2-worker households are taken into account.
      The costs of infrastructure do NOT automatically rise with size of city; it all depends “where” the water is coming from, “where” the waste is going to, etc, etc. It is usually possible to incorporate a new municipality with far LOWER infrastructure costs and local taxes, on an existing urban fringe; if the law allows.
      Where you are 100% right, is that sprawl and decentralisation is a killer of mass public transport efficiencies. The ONLY argument against urban sprawl and in favour of compact development, that has any legitimacy, is that mass public transport loses efficiencies as populations get less dense and employment becomes less centralised. But the next question has to be, whether public transport outcomes alone, have to be the tail that wags the “regional economy” dog.
      I say, because I have been studying the outcomes (see the references in an earlier posting to analyses of Britain’s 5-decade experiment) that there is no WAY an economy should connect its whole fate with that of its public transport system.

      • You argument stating: It is usually possible to incorporate a new municipality with far LOWER infrastructure costs and local taxes, on an existing urban fringe; if the law allows. usually implies that large subsidies are provided to new developments on the fringe, rather than it being cheaper. If there were no incentives provided by government, and no restrictions, I would argue that you’d see more development closer to major centres.
        On your arguments RE: decentralisation, I am yet to see a single world city that doesn’t have a major commercial centre. The truth is, you need a significant centre before you can start to decentralised in a modern economy. Businesses like to locate with each other. What would be the economic outcome if further development was banned in Sydney CBD, North Sydney, Paramatta and Chatswood? Sydney would struggle to remain the economic frontrunner in Australia. In cities such as Brisbane, Perth, Adelaide, the lack of major employment centres other than the CBD and a major industrial hub is that the criticle mass has not been reached yet, regardless of the sprawl levels.

      • Sure, cities started off with dense centres in the age of rails and horses. But you need to check some actual data about the level of employment in city centres these days. 20% is unusually high. 10% is common. Atlanta is 3%.
        The problem with the “agglomeration” argument, is that there are numerous KINDS of agglomerations and there is no need for them ALL to be in the one place. Back in the horse age, there was such a need. This no longer applies.
        The KIND of agglomeration represented by a CBD is utterly unsuited to businesses of the types that employ something like 60% of the workforce these days. Many businesses simply cannot afford the rents that international legal and financial firms can pay to be downtown.
        The amount of CBD employment is usually determined by the presence of government and international finance and law firms. It is unreasonable to expect ALL cities to have the same form as “capital” cities, for example. Some cities have to be “manufacturing” cities, others have to be “distribution” centres, others have to be the centre of an agricultural district. Some cities and their people have to do the dirty work that creates the wealth that is consumed by the office workers in central Sydney.

      • The Netherlands is an example where de-centralisation is applied daily. Nevertheless, the costs of houses in Amsterdam / Rotterdam is still as expensive as ever. Why? Because you have to spend 1 hour a day on a standing-still motorway every day to go to work if you live outside the big cities. Plus all the attractions and “nice things to do” are in the cities anyway!

      • There’s actually a discussion going on in The Netherlands about whether decentralisation is any good. To those commuters in the infamous traffic jams it doesn’t necessarily make sense to see people at the other side of the freeway in a traffic jam going to work in the city you yourself are trying to get out of. 😛

        Cities will always attract people. I wouldn’t think of living in Rotterdam or Amsterdam but my friends wouldn’t want it any other way.

      • Yes, I lived in the Netherlands part of my life, and I could never understand how people commuting daily and spending 1 hour to go from/to work would do it! I could never do it. And the Netherlands has one of the best transport infrastructure in the world! 🙂

      • There are good academic papers from the USA that find that decentralisation of employment has a correlation with reduced commuting distances. Very few people in a huge city, HAVE to live on one side of it and work on the other. MOST people do not work in the centre, either.
        The most inflexible, inefficient, and socially inequitable urban form, would be an arbitrarily “monocentric” one. Think: if ALL jobs are in the centre, how are households locations “sorted”? Answer: by income. Every move “closer to work” will involve higher cost in land rents.
        But in Houston or Atlanta? Get a new job across the city; change your suburb; cost might be neutral, might be higher, might be lower. This is why the US is the world’s most efficient economy. People look at all the wrong things for answers.

      • @PhilBest.

        US the most efficient economy? By what measure? Also, how would overt decentralisation work for freight costs now that there is no signle area with a concentration of jobs? CBD’s for example have pushbike courier services. How is that going to work in a highly decentralised city with an even spread of jobs? The design and buid of a city to be enjoyable and competetive worldwide is more than just the cost of a house.

    • Exactly; how do you do the following in high density living conditions: use solar panels and passive solar; use natural ventilation; dry clothes outside; recycle grey water; grow your own vegetables and fruit; keep fowls; burn “biomass” for heating; erect a wind turbine; have abundant trees as your personal CO2 sink……

      • That is a massive leap to assume these things occur in low density and not in high density. They are possible in both and depend on the inhabitant much more than the density. I air dry my clothes, have brilliant natural ventilation, grow some herbs watered with my grey water all in a one bed apartment in the cbd which overlooks masses of vegetation. On the other hand, I have friends in houses who run aircon constantly, tumble dry all their clothes and grow no produce.
        We can do better in both cases, the problem with urban sprawl is it limits what we can do to improve quality of life

      • Yes, but in high density, EVERYONE can’t live the “sustainable” way that everyone COULD live in the suburbs. Urban sprawl is NOT a “limiter” of “what we can do to improve quality of life”.
        Almost all the improvements in quality of life that we take for granted today, that occurred over the last 100 years, would have been impossible without urban sprawl and automobility. For a start, Karl Marx was right, under pre-automobility urban conditions, about rising incomes feeding directly into rising land rents, ultimately benefitting no-one but incumbent property owners. For people to escape the trap of the “rentier” class, urban sprawl was essential, and at rates faster than could be captured by incumbent land owning interests.
        Rail based “urban sprawl” COULD be captured; road based urban sprawl could not; the social mobility genie was out of the bottle.
        The lack of a good book on all this is appalling. I might write one.

      • Fantastic in principle that everyone has a small sustainably built house on a block that produces what they need, shame it doesn’t work. Perfect theories with unrealistic assumptions have there place, but lets be realistic. Those people who get a fringe block (even if they weren’t so small) rarely use it to grow produce and they are usually created through land-clearing. Let’s not kid ourselves, there is nothing necessarily more ‘sustainable’ about a new house on a block than a an apartment.

      • It is more about the footprint your dwelling takes up. We used to do it by commons or plots of land away from our dwellings. This is now closer to our communities and we are more likely to live sustainable lives in this ultimate situation also. There have also been a proposal in Brisbane for twin high rise apartment towers that would generate 100% of electricity requirements, 100% of water requirements, use grey water to water vegetation etc. There have also been preliminary plans for high rise farms being envisaged with that utilises natural light and uses grey water.

        You talk about the way people COULD live in sprawling housing developments sustainably, well this also COULD happen in high density environments.

  14. We just purchased a home in a semi inner suburb (Melbourne, Australia) The land area os around 600 square feet so not a small block. the house is about 35 years old. We looked at a heap of more ‘modern’ properties but without exception all the blocks were small and the houses ‘crammed’ onto the block.

  15. The claim that the “quality” of housing in Australia is one reason for high house prices often gets a mention but is little discussed in comparison to other factors. “Quality” is a vague term with a greater subjective element rather than purely objective measurements such as block size and dwelling floor areas.
    I would like to understand a little more what is meant by spruikers and detractors when they refer to housing quality and how they are factoring in its change with time in Australia and how they are comparing quality measurements with other countries.
    In my own experience and perception of quality (separting it from other factors such as size and location), I have found the quality of housing in Germany to be considerably higher than here. I have found housing in the UK often compares favourably too. Particularly in areas such as heating, construction materials (brick versus frequent use of timber framing and cladding in Aus) lack of use of asbestos etc, local amenity.

    • You are right no the money.

      Housing here is often rubbish – lipstick on a pig it seems. Where is the double glazing on the windows and the full and effective insulation in the walls and roof. Hell, half these places here just bleed heat in winter and soak it up in summer. And these *are* new houses.

      • Yeah, but notice in Britain, urban land is so expensive and newbuild rates so low, that ancient, dilapidated housing that should be condemned, stays in use at higher and higher occupant densities, with dire consequences for health, crime, and social mobility. Funny enough, where urban land is a fair price, there will be a LOT more discretionary expenditure on upgrading housing conditions, with superior outcomes at the system-wide level.
        Germany actually has much fairer urban land prices than Britain and even Australia.

  16. Land releases in Canberra are an odd fruit. The land is released by the government to specific developers and interestingly enough, the land is often sold with conditions. eg you have to use a certain builder and the house must be built to a certain ‘style and size’..
    $280,000 in Canberra will get you a 450m block and one of these attached contracts.. And you can’t get away with building a new house in the ACT for under $250k either..

    • Alex Heyworth

      This is of course an astonishing contrast to the way Canberra used to be. In the 1970s, so much land was being released that many blocks were passed in at auction with no bids. Once this had occurred, you could go to the titles office and buy one of these blocks for the cost of processing the paperwork. Many people bought multiple blocks under these arrangements and did extremely well as a consequence (subsidized loans were also available at the time).

      Even when we bought our current home in 1987, the land value was only about $30k. It is over ten times that now.

  17. It is interesting to observe the trend to small lots and think that it is somehow a product of more recent circumstances. But my feeling is that we only notice because the actual design of new homes has changed (larger and appearing more box-like than ever), coupled with the fact there are just so many of them.

    Consider where I live. 270sqm blocks subdivided around 1900 (give or take a decade). Most working class suburbs of the time had small blocks, tiny wooden shacks (workers cottages). My house would have originally been about 45sqm with no internal plumbing (just a four room box). In fact, not until the 1970s did it get a proper internal kitchen and bathroom. Houses in the area are about 1.5m apart.

    The workers cottage has changed in two ways. It is much further away from the city in new estates. And it is much bigger and better. But houses are still 1.5m from the neighbour’s house, and the blocks are still small.

    There are plenty of large blocks of land available; they are just not captured within the boundaries of our capital cities anymore. Why would you expect subdivisions with large lots to still be located relatively close to town? They never have been. They have always been on the outskirts – it is just that the outskirts are now further out.

    While people do comment on the poor quality of typical Australian homes, I’m not sure if that is more of a comment on the design (climate sensitivity etc) than the durability or the specifications. Sure, there is not so much hardwood or solid brick used these days, and pine and plasterboard is relatively fragile, but these are the tradeoffs we make to pay for the size and specifications of the home.

    The shocking quality comparison is with Europe, where homes are built with far more durable materials. But of course, the weather requires it.

    As a final note, comments on the degree of urbanisation are utterly meaningless and give away underlying personal bias towards sprawling suburbs rather than compact cities. Comments like

    “Only about 0.13% of Australia is urbanised – about 0.70% in New Zealand.”

    are a giveaway. You get just as much meaning saying that 0% of the Simpson Desert is urbanised, or that 100% of the CBD is urbanised.

    Remember, cities are a product of market forces bringing traders closer together. In typical style, people usually want both the conflicting goals of a large block of land and the convenience of being close to others. One idea is that perhaps people have a city apartment and a rural block (should they desire) to get the best of both worlds – a city home and a weekender. It’s cheaper than a large suburban block with less commuting and the bonus of land to use as you please.

    That’s enough rambling for today.

    • “There are plenty of large blocks of land available; they are just not captured within the boundaries of our capital cities anymore.”

      Yes, because of government regulations that have set arbitary boundaries and effectively outlawed decent sized blocks.

      “Why would you expect subdivisions with large lots to still be located relatively close to town? They never have been. They have always been on the outskirts – it is just that the outskirts are now further out.”

      I have never expected large blocks to be available close to town. What I do expect is a properly functioning land market whereby block sizes increase in size and land prices fall steadiliy the further one moves out from the core, meaning that traditional suburban-style homes are still available and affordable on the urban fringe. It is perverse that middle-ring suburbs built in the 1980s/1990s contain large blocks but those further out built since the 2000s have blocks that are around half the size and expensive. You can blame government ‘growth management’ policies for this outcome.

      • “Yes, because of government regulations that have set arbitary boundaries and effectively outlawed decent sized blocks.”

        I think the opposite is the case. There are no laws against large blocks of land. A developer could easily buy a farm on the outskirts and subdivide into residential acreage. But they won’t be able to because the next developer will offer more to buy the farm to subdivide into 270sqm block (if that is allowed).

        Only zoning rules (such as minimum lot sizes) can force developers to deliver larger blocks of land on the outskirts.

        “It is perverse that middle-ring suburbs built in the 1980s/1990s contain large blocks but those further out built since the 2000s have blocks that are around half the size and expensive”

        That makes perfect sense, given that you can’t just move old houses out of the way. As I said, it governments maintained there minimum lot sizes you would get larger new lots.

        Leith, I get the feeling you desire a free market outcome that just doesn’t exist in reality.

        More regulation would give you your large block outcomes, not less.

        Brisbane used to have a 400sqm minimum lot size (for about 15 years or so). But now they are relaxing that rule and block are shrinking. Developers will deliver the smallest lots they can sell.

        I have no idea how government policy can be to blame for this, when it clearly delivered the better outcome (if larger lots is what you desire).

      • “Leith, I get the feeling you desire a free market outcome that just doesn’t exist in reality.”

        Leith suffers from confirmation bias: everything supports his thesis that it’s government’s fault.

        For myself, I think it’s obvious that there is a limited supply of suburban land within a resonable commuting distance to urban centres. That means over time, prices will rise, and in response, density will rise to compensate. We’re seeing urban infill developments for the same reason.

      • Way back in the 1960’s, in a book called “Population Growth and Land Use”, one of the most respected economists of the day, Colin Clark, discussed how this phenomenon (rising urban centre land prices, rising congestion, rising density) drove the “decentralisation” of cities (both businesses and households). Time has certainly NOT disproved his thesis.
        The city which has grown multiple times in urban footprint, while everyone still works in the centre, is a IMPOSSIBILITY under even the crudest, intuitive understanding of urban economics.

        This is why Cameron Murray is 100% wrong too – and there are working examples all over the USA to prove it. Anyone who wants a large lot beyond the fringe can get it, it is nonsense to suggest that the land will all be cornered by developers wanting to build high density. Urban fringes are LONG; if there is not development occurring somewhere to suit all tastes, there simply HAS to be “capture” by vested interests enabled by government interference.
        I realise that many cities in the USA DO have large “minimum lot sizes”, but those that do not, such as Houston, completely disprove your argument.

      • C’mon Cameron. You can’t seriously still maintain that government “growth management” regulations – zoning, upfront infrastructure charges, UGBs, etc – are not driving-up the cost of fringe land resulting in smaller blocks (in order to maintain affordability)? Or is the land market in Australia one of the only markets in the world where the supply-side doesn’t matter and prices are set only by demand?

        The free market outcome is the reality in middle America, where homes have remained affordable despite turbo charged credit and other demand-side stimulus.

      • If we really had limited supply, sure, I’d agree that it’s affecting the price due to supply, but there are still hundreds of lots at any time available in each fringe community. Hasn’t MB been arguing that there is no under supply of housing. What it is doing is trying to get some of the massive costs of these developments built into the upfront cost. Not that it even comes close to truly reflecting the cost of poorer health (i know people think the kids play in the backyard, but obesity is higher in low density), higher divorce rates, cost of infrastructure.

      • MissP. I have not yet checked out the ABS link but the newspaper articles that you have linked seem spurious to me. Wouldn’t you think increased house prices caused by inflated land values (via government regulation) are more likely to cause financial stress and divorce than longer commutes? You must also recognise that the overwhelming majority of people do not work in the CBD, so it is wrong to assume that most people living in the outer suburbs travel to the inner core each day and face long commutes.

        As for the infrastructure cost of developing greenfield land, what makes you think that retrofitting pre-existing suburbs to accomodate added population (remember many of these suburbs were never designed to handle high population densities) is any cheaper? Numerous studies (admittedly mostly by developers) claim that greenfield development is far cheaper than infill.

        My point is that the data and research is inconclusive as to the environmental, amenity and cost benefits of higher densities, but it overwhelmingly supports the notion that government “growth management” policies are adding significantly to housing unaffordability.

      • The supply side can be restricted. But it definitely is not in this country. We obviously disagree there.

        If the size of blocks is a concern, people could always buy two or more neighbouring block in a new subdivision and just build on house.

        But no one wants to pay the price, hence it is always better for the developer to reduce the size of the block to what people are willing to accept.

        Also, most large subdivisions have a variety of lot sizes. It’s just that few people are willing to pay the serious $/sqm rate for a little more garden space.

        Essentially, you are arguing that zoning controls are forcing developers to shrink lot sizes. I am arguing that it is the very relaxation of these controls that allows developers to shink lot sizes.

        In a completely unzoned area, if you bought a block of land to subdivide, would you offer 10 x 800sqm lots, or 20 x 400sqm lots? It’s pretty obvious to me. No one is going to pay double for 800sqm (as the marginal benefits of an extra sqm get pretty small).

      • “The supply side can be restricted. But it definitely is not in this country. We obviously disagree there.”

        UGBs are a restriction are they not? What about zoning – the Government tells the market where it can build. How is this not a restriction?

        “If the size of blocks is a concern, people could always buy two or more neighbouring block in a new subdivision and just build on house.”

        Sure. If they have a spare $500k just for the land. Obviously this is unaffordable for most people.

        “But no one wants to pay the price, hence it is always better for the developer to reduce the size of the block to what people are willing to accept.”

        They have to reduce the size because that’s all that people can afford. Why? Because land-use regulations have forced-up the cost of land.

        “Also, most large subdivisions have a variety of lot sizes. It’s just that few people are willing to pay the serious $/sqm rate for a little more garden space.”

        The “serious $/sqm” only exists because of the Government’s planning policies.

        “Essentially, you are arguing that zoning controls are forcing developers to shrink lot sizes. I am arguing that it is the very relaxation of these controls that allows developers to shink lot sizes.”

        Then how do you explain the serious escalation of land prices despite plot sizes shrinking in size?

        “In a completely unzoned area, if you bought a block of land to subdivide, would you offer 10 x 800sqm lots, or 20 x 400sqm lots? It’s pretty obvious to me. No one is going to pay double for 800sqm (as the marginal benefits of an extra sqm get pretty small).”

        Absolutely they would… if it was a free market and land prices were not so ridiculously high. Again, how do you explain the serious escalation of land prices despite plot sizes shrinking in size?

  18. Long time (appreciative) reader, first time commenter.

    Anyone who can say with a straight face that Australian housing is ‘high quality’ is either lying or doesn’t know what they’re talking about. This is a country where many homes are still constructed in brick veneer (brick over a timber frame) – a technique that in Europe is seen as acceptable only in something like a post-war situation where you have to build a lot of housing quickly! As a result, our homes are horrendously energy inefficient – even before you consider the fact that suburban homes now seem to consist of more windows than walls and, as a result, leak even more heat.

    • mate, housing quality is all relative! Come and see our leaky, rotting shockers built here in Auckland from about 1993 to 2005 and Aussie housing will start to look fairly good!

      • And one reason for that, was tiny lot sizes, building-to-lot-size ratios, and the way the permission process treated overhanging eaves…..

    • Absolutely, completely, wholeheartedly agree Michael!

      I will never be able to fork out $100,000’s for what I consider to be sticks and some cardboard. Terribly sorry, but to me even brick has always just been decoration.

      34 cm thick re-inforced concrete, insulation, double glazing AND brick is what property is build of in Europe. Not to mention the superior quality of both wiring (in the walls, insulated in tubing) and heating.

      The argument that ‘we don’t need it because of our climate’ is non-valid. 40C is still 20 degrees removed from your average comfortable temperature… just the other way.

      I’m not looking to be disrespectful but it is just infuriating to see how people in this country are being screwed over in so many different ways. Just because they haven’t got the luxury to peep over the border to see what others are getting for the money…

  19. “Consider where I live. 270sqm blocks subdivided around 1900 (give or take a decade). Most working class suburbs of the time had small blocks, tiny wooden shacks (workers cottages). My house would have originally been about 45sqm with no internal plumbing (just a four room box). In fact, not until the 1970s did it get a proper internal kitchen and bathroom. Houses in the area are about 1.5m apart.”

    So what you’re saying is that in an era where workers were downtroddden and received pitiful remuneration. Remember your timeframe isn’t long after the ‘gilded age’, mostly an American experience but the industrialists here in Australia here made similar returns. An era of 35% dividends, while wages were frequently cut.

    This sort of aggregate demand instabiltiy may (or may not, depending on your school of economic thought) explain 3 global depressions in the space of 35 years.

    However, many progressive battle were fought that lifted the standard of living were 60+ hours a week of backbreaking toil earned more than 45sqm of shelter, while non-labouring rent seekers imbibed themselves on every luxury known to man.

    The peak of this struggle saw living standards for those raised in 45sqm workers cottages peak in the 1960’s.

    What is being debated is an apparent perception that those standards are now being eroded, for the benefit of a surging rentier class.

    “The workers cottage has changed in two ways. It is much further away from the city in new estates. And it is much bigger and better. But houses are still 1.5m from the neighbour’s house, and the blocks are still small.”

    Can we rephrase that to “The workers cottages as always are on the fringe, but are once again REGRESSING to small block sizes.” This regression is an important feature of this discussion.

    “There are plenty of large blocks of land available; they are just not captured within the boundaries of our capital cities anymore. Why would you expect subdivisions with large lots to still be located relatively close to town? They never have been. They have always been on the outskirts – it is just that the outskirts are now further out.”

    Boundaries a re prescriptive laws, not natural laws. However a fringe is a fringe. We know where the fringe is and they are not subject to the same freedom of regulation that existed in even recent memory. Many believe these regulations are impeding any notion of market efficiency.

    “While people do comment on the poor quality of typical Australian homes, I’m not sure if that is more of a comment on the design (climate sensitivity etc) than the durability or the specifications. Sure, there is not so much hardwood or solid brick used these days, and pine and plasterboard is relatively fragile, but these are the tradeoffs we make to pay for the size and specifications of the home.”

    ??

    No, these are feaures currently lost due to them capturing bubble rents.

    I keep making this analogy of the tulip bubble. When tulips cost 3 years wages, say $180k in todays’ terms, do you believe that a seedling farmers sold them for 5 cents, a wholesaler sold them for $1.50, only to see the retailer capture $179,998 dollars? Or is it reasonable to expect many hungry snouts in the trough.

    This is why bubble are so destructuve, because multiple parties can not be convinced to voluntarily lower their prices simultaneously are the same nmarginal rates. Game theory even predicts they won’t. Only economic destruction can lower prices.

    Now I know the pricing here in WA has seen the price of bricks soar by 250%, the labour of bricklayers roughly double, for no other reason they are capturing rents of a housing bubble. Inferior goods will be sought in the construction of homes by developers in an attempt to lower prices.

    “The shocking quality comparison is with Europe, where homes are built with far more durable materials.”

    And?

    Of course you would expect us to compare ourselves with Europe, we have similar wages and we would actually have an easier and less costly method of sourcing the same compariable materials. The aggregate of labour and utility of materials is in our favour, therefore what extends in not just to parity, but beyond, can only be rents or cost of regulation.

    “But of course, the weather requires it.
    As a final note, comments on the degree of urbanisation are utterly meaningless and give away underlying personal bias towards sprawling suburbs rather than compact cities. Comments like
    “Only about 0.13% of Australia is urbanised – about 0.70% in New Zealand.”
    are a giveaway. You get just as much meaning saying that 0% of the Simpson Desert is urbanised, or that 100% of the CBD is urbanised.”

    I do not feel they are meaningless.

    It is an expression to demonstrate that Australia is under absolutely zero pressure of running out of land to offer, as opposed to Singapore, Hong Kong or Tokyo. There can be no built in premium for scarcity of land. The utility for shelter is self evident, and the marginal cost of 350sqm of englobo land to 650sqm of englobo land is negligible. So again we can only point to rents or regulation.

    “Remember, cities are a product of market forces bringing traders closer together. In typical style, people usually want both the conflicting goals of a large block of land and the convenience of being close to others. One idea is that perhaps people have a city apartment and a rural block (should they desire) to get the best of both worlds – a city home and a weekender. It’s cheaper than a large suburban block with less commuting and the bonus of land to use as you please.”

    That would depend on the cost you place on commuting. I am happy to have a fringe large block where i can have a yard for the kids and well as a small produce garden, as well as shared acreage with the parents who raise chicken, goats and more produce. That can be accomplished being only 80 minutes from my fringe location.

    For the sacrifice of 45 minutes to commute one way by train, I am happy for that. That is my idea of happiness that was not readily obtainable in Sydney, that is why I now live to Perth, I view the job market/house market trade of as a lifestyle choice, bordering on a hedonic measure. It was readily obtainable until we had Allanah McTeirnan follow the fetish of other ‘grand planners’ and intervene in the market.

      • Rusty Penny: I thought I had a major disagreement with you recently. But I think you’re pretty right with what you say now.

        Especially: “……rephrase that to “The workers cottages as always are on the fringe, but are once again REGRESSING to small block sizes.” This regression is an important feature of this discussion.

        Hear, hear, amen, amen. That is exactly what I constantly try and point out. The planners are causing, due to inflated land prices, INCREASES in density ON the urban fringe instead of closer to CBD’s. The papers of Alain Bertaud, Jan Breuckner, and Paul Cheshire are very illuminating on this. Alain Bertaud’s graph of what has happened to the “profile” of urban density in Portland, especially revealing. As he says, “not the results the planners intended”.

      • We disagreed about the viability and qualitative value of urban trains.

        You kept referring to studies of sprawl, and I believe you may have anchored that to me being pro-density.

        That was never my argument, and am very big on sprawl on urban fringes.

        What I do believe is well suited is a cluster of high density pockets all linking to each other. Say very high density in Sydney CBD, Parramatta, Hornsby, Liverpool, Blacktown, leaving room for suburbia in between.

        I just happen to believe there is a place for trains, because despite yours and it now seems Leiths views on decentralisation, there will always be centralisation for certain intems of transaction due to critical mass, such as sport stadiums, opera houses, teaching hospitals, etc.

        I don’t believe trains and sprawl are a dichotomy.

      • That’s all fine, we can agree to disagree but we probably agree on a lot else. Your point about centralisation of certain TYPES of land use is really important. Planners tend to view
        “agglomeration efficiency” as something best achieved by a single centre, which is nonsense, because different uses of land have different requirements for land. Forcing them all into one centre merely kills off all the “less able to pay for centrally located land” activities. There is no way “Silicon Valley” would ever have occurred in a CBD.
        If rail based travel can be made to survive under the paradigm of decentralisation, fine; but most planners know jack about decentralisation and what it is doing to the viability and need for public subsidies, of rail (and fixed guideway based) systems.
        Colin Clark was decades ahead on this; he suggested in the 1960’s, “free markets” in public transport, and “level playing field” subsidies. Public monopolies are never a good way to achieve “best practice”. Think of this: if a bum on a seat in a train from A to B is “worth” $5 subsidy, why can’t I or anyone, get paid $5 for giving someone a seat in a car, van, or bus from A to B?
        This is the same as school “vouchers” – let the money follow the pupils; let the money follow the passengers; let the free market come up with the best possible results.

      • Your $5 subsidy is in the provision of the road infrastructure through taxes, same as the train.

  20. I recently moved into a 10 year old townhouse in Sydney, and the build quality is terrible. Cracks all over the place, cheap cornicing, and poor quality door frames. This is why I will never buy a townhouse.

    • I am renting a townhouse at the moment which can’t be more than 5 years old and only one of the six doors shuts properly. It is some of the shoddiest building standards I have ever seen in my life. But even worse are a lot of the insane design decisions. I hounestly think I could have done a better job and the last thing I designed and built was a tree house when I was ten.

  21. Choice is the key as many commentators have noted but that choice should extend to vertical division of land as well as horizontal.

    Let people build up and reduce the land component of the dwelling cost.

    If a developer can’t sell because people prefer a veggie patch a some chooks the units will fall in price and voila we have some affordable housing.

    Walking distance around every railway station – say 2000 metres should have no height restrictions at all. That might encourage some high quality apartments with high ceilings and decent room sizes.

    With 100+ railway stations in Sydney metro that produce low cost units and reduce the cost of the free standing houses for those with kids who want some room to run around.

    • Quite true. The cost of sections SHOULD vary from $40,000 at the fringe, to $200,000 closer to the CBD. This is just typical US city free market stuff. When you have $250,000 fringe sections and million-dollar sections near the CBD, it tends to be a game changer for people’s location options.
      These steep urban land rent curves even effect the cost and viability of apartments near rail transit stations; this is far worse an obstacle to such developments than “Save Our Suburbs” movements. Ultimately this all contributes to the economic destructiveness of the bubble in all urban land.

  22. Great discussion, can I offer a potential solution by way of example.

    I am currently visiting Thimphu in Bhutan, and their efficient land usage puts Australia to shame. The minimum number of levels for houses in the capital is 4 stories. However much of the land has been left as agricultural or forest. Even the royal palace is surrounded by rice paddies!!

    I agree that the small blocks of land in Australia with single story houses crammed cheek by jowl is a disgrace, just as the lawn wastelands that surround them are a complete waste of space and resources.

    Replace duplexes with multistorey buildings and gardens. And remember that peak oil is not just affecting the price of commuting. It is also affecting the price of food. In Australia about one quarter of oil is used in agriculture, another quarter in mining and industry, and the remaining half for general transport. It is time we re-learned how to live a less energy intensive life style.

    • I have common agreeance with this.

      I would personally not be disposed to a 300sqm block of and, what I do despise is the regulation of 6×18 metres of front yard imposed upon me and the cookie cutter houses I have to build on top of it.

      I am compelled to use over 200sqm of this block for the house, and any available land I have to present as a vanity peice for bogans the provide affirmation for their choice of ‘suburban bliss’.

      I’d rather have by front door around 10cm to my boundary and stick the excess land in the back. I’d also prefer 90sqm each over two floors if bound by that.

      • What Bhutan does not have, is “developed nation” income levels and transport systems. But if we do one day need to regress to their urban layout; urban growth boundaries, high land prices, and small urban sections are the wrong way to “future proof” our urban economies. It would be much easier to retrofit Bhutan style urban living onto a US city with one-acre lots, than onto the “dense sprawl” of LA, Sydney, or Auckland.
        I have said before many times to “peak oil” doomsayers, that if they really believe what they are saying, high density prescriptive urban planning is the LAST thing they should be supporting.

  23. John Calhoun’s studies on rats should be made mandatory reading for town planners followed by the viewing of “Soylent Green”.