No, the CBD is not the driver of jobs (part 4)

ScreenHunter_12 Mar. 26 20.39

By Leith van Onselen

Much of Australia’s planning policies are based on the presumption that the bulk of the population commutes to the central core for employment. As such there is the desire by planners to limit urban sprawl, which is believed to reduce overall commuting times, resource use and pollution, and the need for costly infrastructure improvements, such as new rail lines. Similarly, there has been a growing desire by planners to increase the proportion of housing located along transit nodes, such as train stations, again based on the assumption that most citizens commute to the central core for work.

In February, Ross Elliott, author of The Pulse, wrote a a great primer questioning this notion. In association with Urban Economics, Elliott undertook a detailed examination of ABS Census data to determine where jobs in Australia are located. And contrary to popular belief, they uncovered that the lion’s share of jobs in Australia’s capital cities – at least four out of every five (if not more) – were located in the suburbs.

In March, Elliott published the second installment of his research, which looked at where these conglomerations of jobs are and the implications for urban policy. Elliott uncovered that there are big agglomerations of employment, spread over larger areas than the density found in the inner city. The results suggested that further housing growth is needed on the outskirts of our cities to provide additional housing choice for people working in these areas, and in order to reduce average commuting times.

Then in April, Elliott published the third installment of his research, which looked at the different income profiles of city centre and suburban workers in Brisbane, Sydney and Melbourne. The results showed some marked disparities based on geography, with the average CBD worker earning a quarter to a third more their average suburban counterpart. Given that suburban workers outnumber inner workers by 7 or 8 to one, Elliott questioned whether calls to dramatically increase funding to the heavily subsidised public transport networks that are mainly designed to get inner city workers to and from their higher paying jobs were equitable to the overwhelming majority of lower paid workers that work and live in the suburbs.

Yesterday, Elliott published the fourth installment of his research, which he has kindly allowed me to cross-post on MacroBusiness.

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Parts one to three of this series looked at the spatial distribution of work in our major metropolitan centres, and the income profiles of employment based on geography. The findings, simply put, are that between 8 and 9 out of ten of all metropolitan region jobs are in suburban locations (not CBDs). This tends to be widely dispersed at densities up to around 500 jobs per square kilometre, rising to over 2,000 and 3,000 per square kilometre and more in some areas. While the suburbs represent the overwhelming majority of jobs, they also tend to be lower paid than the jobs found in CBDs and inner city areas which can earn on average between 50% and 100% more than suburban jobs. So while the CBDs and inner cities are minority employers, they are employment locations of relative financial privilege, concentrated in small geographic areas.

This instalment looks at how the demography of employment influences the commute. I am again indebted to Urban Economics for their research assistance in pulling these figures together. There aren’t too many questions this company can’t answer, so if these articles raise any particular questions in your mind, please contact Kerriane Bonwick on [email protected] or phone them on (07) 3839 1400.

The top 10 locations Australia-wide for public transport commutes to work are all CBD and inner city locations. Topping the list is the Sydney CBD, Haymarket and the Rocks, with 67.7% of workers there using public transport. Next are workers in the Melbourne CBD, with 57.8% using public transport, followed by workers in Brisbane CBD, with 56.1% of workers there using public transport.

Reading on through the top 10 reads like a list of some of the more privileged or rapidly gentrifying workplace locations in the country: North Sydney/Lavendar Bay (52.6%), Surry Hills (49.2%), Docklands Melbourne (47.9%), East Melbourne (41.3%), Pyrmont-Ultimo (40.6%), Perth City (39.6%) and Redfern-Chippendale (37.2%).

The top 25 employment locations for public transport use paint a similar picture:
ScreenHunter_50 May. 31 07.38

By and large, these are all mainly inner city locations. While the proportions making use of public transport to work in these areas is high, the same areas represent only a minority of 10% to 15% of metropolitan wide jobs. Plus, these are jobs which earn, on average, a great deal more than suburban employment. In short, the highest rates of public transport use are found amongst the minority of workers who earn the most money.

The converse is also true. Suburban employment centres, where the vast majority of jobs are located, are reliant on private vehicle. Here’s a selection: North Parramatta – 10% by public transport, 74% by private vehicle; Carindale (Brisbane) – 9.6% by public transport, 60.4% by private vehicle; Maribyrnong (Melbourne) – 8.5% by public transport, 68% by private vehicle. These are typically locations where public transport options are limited: it’s simply too expensive to contemplate servicing lower density suburban employment this way. Workers with jobs in these locations are not choosing the private car, they are relying on it. It’s not a ‘love affair’ but a necessity.

Visually, the picture is stark. The illustration below (taken from a site called ‘Charting Transport’ which is full of useful analysis – this particular illustration is from this article) shows clearly that public transport is typically a mode of choice for CBD and inner city workers and almost of no use to workers in middle or outer suburbs.

ScreenHunter_51 May. 31 07.41

It’s the same pattern repeated across other metropolitan regions. The parts in red or orange are where the majority of workers are, the parts in green where a minority of higher paid workers are.

This point doesn’t need labouring but the implications take some explaining. Public transport systems are heavily subsidised by taxpayers. Yet the highest patronage is amongst the minority of workers who earn the most money. Private transport receives no such subsidy and, as motoring bodies point out, it raises more money through registration fees and fuel taxes than is spent on it. Private transport –namely the car – is the only practical mode of choice for the majority of workers in suburban economies, where they tend to earn less. The reality is that suburban workers on lower incomes with limited access to public transport as an option are subsidising the public transport systems used by inner city workers on higher incomes.

The irony is that governments are under almost relentless pressure to spend more taxpayer dollars on improvements to public transport for the benefit of a higher income minority, and also to keep fares low (and hence maintain or even increase the level of subsidies). The level of policy support for taxpayer funded improvements to metropolitan road networks hasn’t been as generous, with extensions and improvements to metropolitan road systems largely approved on the basis of PPPs where investors believe they can mount a business case (with mixed results).  This is despite the reality that the majority of employment is in suburban locations and that arguably private transport users already pay more in taxes than the road network receives in spending.

Australia is not unique in this regard. Many western economies adopt similar subsidy arrangements. (Many eastern economies have such vastly different levels of population and population density that comparisons aren’t really meaningful). But what is missing in Australia seems to be an awareness of how this subsidy plays out. Public transport users with high paying jobs in inner cities are often the first to complain about incremental increases in fare costs. Private car users with lower paying jobs in suburban locations where public transport is simply not an option, are asked to shoulder rising fuel prices, fuel taxes, registration fees – and even, lately, parking costs in some suburban shopping centres – without much public policy sympathy.

None of this should be taken as a pejorative attack on public transport. This is simply the reality of how people across our metropolitan areas commute to work, and the costs – taxpayer and private funded – involved in making this happen. No one, me included, is seriously proposing a divestment in public transport systems in favour of private. The public transport network is an essential element of our transport system. Without it, our urban workforce mobility collapses. Witness any number of occasions when train or bus networks fail, for whatever reason. Plus, public transport has an important social function by providing low cost transport for work and non-work trips for financially disadvantaged members of society who don’t have access to a private care, elements of our aged population, and for students.

But given the way employment is distributed through our metropolitan areas, is it sensible to suggest that spending even more taxpayer money on public transport is capable of making much difference, without also dealing with the realities of where the jobs are? This will tell us more about the realities of how much of the work related commute can be provided for by public versus private transport. We need to understand the economic and geographic realities better, and hope that the media, the community at large and transport policy groups base their arguments closer to the existing and future patterns of employment distribution.

For example, proposals to increase public transport patronage by imposing congestion charging regimes to punish suburban car commuters are, based on the evidence, entirely doomed to fail. Only a minority of the metropolitan workforce can realistically make use of public transport (mainly those with jobs in CBDs or inner city areas). For the majority of commuters with suburban employment, public transport isn’t an option (and making it one would be even more prohibitive that the costs of the present system). Penalising suburban car commuters thus imposes tax penalties on those least able to afford it for no policy gain. Then there are the proponents of ‘free’ public transport, who might need to explain how providing this service to the highest paid workers in our economy, at the expense of the lowest, stands the test of social equity.

The reality of where jobs are located throughout our metropolitan economies, and the nature of those jobs, should be a starting point for discussions about how to more efficiently manage our transport networks. Unleashing further economic potential in our cities won’t be achieved if the policy discussion is removed from the realities of workplace geography.

This series began with the suggestion that public policy and urban planning has become preoccupied with where we live, and with types of housing choice and form. Little discussion seems to take place about where we work. But where we work, and the nature of those jobs and the demands they make of our urban infrastructure arguably have a larger bearing on urban economic efficiency than housing. I hope these articles have made a few observations about the demography of employment that will promote further thought and discussion – based on realities rather than myth or presumption.

Next and final: the future of employment and how this could re-shape cities.

Comments

  1. drsmithyMEMBER

    The results showed some marked disparities based on geography, with the average CBD worker earning a quarter to a third more their average suburban counterpart.
    I hope appropriate care is being taken when using “averages” here.

    I imagine there are a lot of baristas, shop assistants and secretaries in the CBD whose “average” wage is being dragged up by a handful of investment bankers, lawyers and CEOs you wouldn’t catch dead on a train or bus.

    Excellent articles, however. I’m fully onboard with encouraging decentralised employment centres, or, even better, normalising remote workers.

    • reusachtigeMEMBER

      Always use the median! … (unless you’re spruiking of course, then use average)

      • Average should be removed from any economic analysis, because says nothing. It was of some value many decades ago, today is just “spruiking” and hiding the much inconvenient reality.

  2. drsmithyMEMBER

    For example, proposals to increase public transport patronage by imposing congestion charging regimes to punish suburban car commuters are, based on the evidence, entirely doomed to fail.
    Don’t congestion charge regimes generally limit themselves to the CBD and immediate inner-city suburbs ? Who is advocating congestion charges encompassing entire cities ?

  3. Ronin8317MEMBER

    Both the public rail network and the bus network for Sydney is a ‘star’ configuration, with the city center in the middle. To cater for the suburbs, it needs to be configured in a series of ‘rings’ (see Tokyo, HK, etc). While urban planners are aware of the problem, the pace of change is very slow, and we should get there in about 100 years. >_<

    • In Tokyo one cannot embark on the train if not having paid the ticket. Here the train transport revenue comes mostly from middle class professionals, who pay their tickets.

      Every time I take the train from far distant suburbs, there are always a bunch of free riders, but they wisely disappear before coming closer to the CBD.

  4. CBD-centric urban planning and transport planning is one of the biggest rent-seeking rackets in economic history.

    I have seen a calculation that if a special levy was applied to CBD property owners to pay for the extra “investments” in radial commuter rail systems over the years, it would come to about $100,000 per worker. I’ll try and find the url. It related to Seattle.

    The share of the $100,000 per worker that CBD property owners are NOT paying, is mostly dead weight loss to the economy, and some small portion is wealth transfer. I have said before and I will say it again: CBD property owners do not care if the cost of public “investment” in infrastructure that props up the pre-eminence of their location in the urban economy is $10 versus $1 of “benefit”, as long as THEY are reaping around 80 cents of the $1 of benefit and only paying in around 20 cents of the $10 of cost – with the other $9.80 falling on petrol taxes paid by motorists, local taxes paid by all suburban property owners, etc.

  5. Good article this one, but most of this was covered in the Government’s 2012 State of Australian Cities Report

  6. Rumplestatskin

    Some debatable claims in there.

    1. That private vehicle users ‘pay their way’ through registration fees. Well, that all depends on what you include. It is easy enough to find analysis that says different

    http://www.ptua.org.au/myths/petroltax.shtml

    2. As drsmithy says, no one has proposed a suburban congestion charge, ever. It is always CBD charge and would ‘punish’ those high income people who work there (and drive – who I imagine to be the highest incomes).

    3. Again, no mention of the actual proportion of area in the CBD and those outer suburbs. Quite simply Ross’s own figures show that the job density in terms of jobs/sqm is off the chart. He says “for every CB worker there are 7-8 suburban workers”. Yes, but >100 times the land area!

    Say the Brisbane CBD is 2 square kilometres, and 150,000 jobs. The next best are CBD fringe anyway (all walking distance). After that the job density is a factor of 20 lower (Chermside, St Lucia). How do you have a workable suburban public transit system with just a few hundred jobs per sqKm or less?

    http://www.macrobusiness.com.au/wp-content/uploads/2013/03/ScreenHunter_16-Mar.-26-20.53.gif

    4. I’d be interested in Ross’s funding for this work. Seems like a lot of effort for a casual blog. If I was a cynical bastard I might suggest that Ross’s consulting clients would all greatly benefits from suburban road improvements in those outer suburbs where they own a lot of developable land.

    5. Again, no mention of other commutes. Employees are one type of commute, but customers also commute. The CBD location has the largest catchment for both customers and workers.

    6. I have nothing against ring-roads or public transport corridors that traverse the city rather than go into the core. But really, what is the policy lesson in all this? Build more roads and less public transit? Build more roads in the outer suburbs? Or increase density so that more people can use public transit? It is not at all clear what Ross is trying to say.

    If I read his conclusions from here

    http://www.macrobusiness.com.au/2013/04/no-the-cbd-is-not-the-driver-of-jobs-part-3/

    It sounds like he want more public investment in the outer fingers. Again, refer to point 4.

    • reusachtigeMEMBER

      Good points, and thanks for shaking things up a little, as expected. The density IS the CBD. Both jobs and people. And contrary to a few on here that are extremely anti-apartment/brownfields, it’s also where young people actually WANT to be, rather than in no-mans land. That is all.

    • What I gain from this as a telecommunications network planner is that we need to better identify the key pockets of workers and allocate more resources there to encourage decentralisation.

      Take the NBN for example. I agree with the policy wholeheartedly, but some people are expecting an huge renaissance in working from home due to the high speed of the connection. Personally, I doubt it. Sure, it will increase, but I think it will be limited to a couple of days a week. I think long term isolation from their colleagues will drive them nuts. I expect 5-6 business hubs in each capital city to develop over time as the NBN rolls out. They will typically be a branch-office of a smaller head office with daily-weekly management level teleconferences, and monthly face-to-face meetings.

      What would be great from a network (any type) planning point of view is a list of the top 10 urban “business parks” in each city and broader council/state government support for these distinct mini-CBDs.

      Given this data and government support, network planners of all kinds, be they rail, road, electrical, or communications would be able to proactively allocation of resources to these areas rather than reactively scrambling to augment existing networks.

      I’m sure some of this data shows up clearly in our customer databases, but there is no clear direction or leadership. It’s all ad-hoc. Perhaps this is good for many human endeavours, but it’s terrible for natural monopoly infrastructure networks.

      Is there anyone here who can comment on council/government long-term zone planning? Are there plans for secondary and tertiary business zones of signifcant density within our metropolitan areas?
      Can natural monopoly network providers and councils/governments work closer together to provide some form of cohesive zoning and network framework towards decentralisation?

      Can we realistically develop a rail network that can deliver a worker from their home 25km out from the GPO, to a workplace 15km out but say 90* offset in a reasonable 30 minute timeframe? Can we develop communications, transport and power networks that actually cause secondary CBDs to coalesce?

      Or are we stuck with a defacto ‘they built it so we augmented the hell out our existing networks to make it work’ model of growth?

      • Excellent questions, Myne.

        BTW, do you follow my “economic land rent” assessment below?

        But re your questions:

        “….Can we realistically develop a rail network that can deliver a worker from their home 25km out from the GPO, to a workplace 15km out but say 90* offset in a reasonable 30 minute timeframe?….”

        No. Paul Mees has long been advocating a grid network of bus routes with transfers at the 90* points, that hopefully would come not too far short of car trip times. Trying to do it with rails would be prohibitively expensive in capital costs, and the rail “vehicle” utilisation rates would plummet. Downsizing of rail “vehicle” size, is not the easy, cost effective option it is with buses and vans.

        One of the most horrendously ignored points in this whole analysis, is that the smallest most efficient cars are already more efficient than all mass public transport systems per rider kilometer, with the rare exceptions of the world’s most intensively patronised systems.

        “…..Can we develop communications, transport and power networks that actually cause secondary CBDs to coalesce?….”

        Absolutely: this is exactly what does happen when we let it. I strongly recommend the paper by Prof. Robert Fishman, entitled “Megalopolis Unbound”. An online accessible Word-doc copy comes up if you Google it.

      • I can see your point on the land-rents, but I suspect it is more nuanced than black and white.

        Melbourne for example has grown the way it has, like most cities due to its proximity to fresh water a sea-port. Wealth always flows from ports.

        Whether current CBD occupants are being subsidised, I have to wonder how much of the subsidy is simply historical and therefore of no cost today. The 100 year old tram tracks were replaced on Elizabeth street a year ago for example. 100 years old! How much of this subsidy is due to the age and endurance of what has been there for a very long time?

        I have to wonder how much of it is due to its proximity to the ports, how much of the overall business, land, and other taxes are made or originated within the city and ports compared to elsewhere, and the cost differences. I can say from a networking point of view, the CBDs are the cheapest to supply (due to patronage) and therefore their cost-parity is subsidising the less dense areas.

        There are also lesser known costs/taxes/incomes from CBDs. Can Werribee council or a private operator charge for parking? I doubt it! The City of Melbourne and u-park can.

        There’s always more to consider even if I do advocate a more distributed arrangement.

        It will be interesting to see what happens in Fisherman’s bend over the next decade or two. I suspect it has the potential to become a new CBD, but that without a new cohesive train service (to replace the two that were decommissioned and turned into trams), the area will struggle with transport issues and end up a struggling backwater like the Docklands.

        What it would probably require is a very expensive subway loop connecting it roughly via the westgate freeway, under St Kilda road, the park and the river, emerging roughly to Batman avenue. It could also be linked to Spotswood/Newport under the Yarra again.

        Given the expense, it would probably be ideal to hook up much of St Kilda and South Melbourne (again) too. But this would require enormous costs up-front before real development took place.

    • Rumplestatskin; mandating a smaller urban footprint and “investing” in transport systems that only serve a limited amount of land area, concentrates economic land rent.

      Freedom to convert rural land to urban use, and investing in transport systems that maximise the coverage of land area achievable by the participants in the urban economy, disperses economic land rent and dilutes the amount of it present at any one location.

      Under conditions as near as possible to market freedom, the “rent” captured by anyone involved in spatial growth of the urban economy is in fact minimal. This is why sections in those non-growth-constrained cities in the USA, do literally sell for the value of rural land, plus cost of development, plus an honest profit. Yes, $40,000 sections of a quarter acre do exist.

      This is also why the land rent curve is so shallow in these non-growth-constrained cities; land at the CBD is literally cheaper than zoned land at the fringe in the “racket” cities. This is why Cheshire and Mills say in their introduction to “The Handbook of Regional and Urban Economics” Volume 3 (1999):

      “…….If we compare communities in the US and UK that are as comparable as possible except for the constraints their systems of land use regulation place on the supply of land, we observe that the price of retail land is up to 100,000 times higher in the most constrained community……”

      And you can bet that the entire finance sector will be opposing any reforms that will hurt the loan security that depends on the price of land per square foot. Britain is a doomed Mexican standoff hostage. See my comment here:

      http://www.macrobusiness.com.au/2013/04/comment-of-the-year/#comment-232968

      Another interesting piece of evidence that powerful vested interests fingerprints are all over this, is that in California in the early 1970′s, as “land conservation” activism got going, certain Rockefellers were in it up to their eyeballs. Check out “Your Home” by Gary Allen.

      Not to mention the Tory land owner club vested interests that succeeded, in 1947 in the UK, of having “compulsory acquisition” omitted from the “Town and Country Planning System” – the devisers of which were not fools, and had included compulsory acquisition of urban fringe land for development, for a good reason.

      It is utterly abominable that all the attention being given to “vested interests” is in the direction you are arguing – “suburban property developers” etc – when in fact incumbent property owners reap zero-sum gains for doing precisely nothing but sit on their backsides as the planners “restrain urban growth”, which zero sum gains are orders of magnitude greater than anything ever capturable by “suburban developers”.

      I have talked to several “suburban developers” and not one of them – not one – wants to get involved in advocacy work for liberalisation of land supply.

      Every one of them is a hostage to the racket that is the status quo. Just to stay in business, they have been forced to pay through the nose for “land banks”, and liberalisation of regulations would bankrupt each and every one of them.

      Hugh Pavletich claims to be the only property developer in the world who has quit the business and gone lobbying in disgust at what is going on, and I believe him.

      • reusachtigeMEMBER

        There should also be freedom to convert any existing land-use into new dwellings. Many people actually want to be in the dense CBDs and hubs, they really do. But it’s expensive because it’s difficult to get approval and the extremely restricted approvals are, hence, valuable. If there’s demand for a 50 storey tower in a “3 storey” zone then so it should be!! Sadly, the 50 storeys becomes 3 and are priced accordingly. “We gotta protect the views and amenity” = “we gotta protect the farms”. You lot ignore this fact and concentrate on the farms. The young don’t want the farms, they want “the vibe”. Move along …

      • drsmithyMEMBER

        The young don’t want the farms, they want “the vibe”.
        There’s plenty of “vibe” in Paris, but they manage to do it without a city of high-rises.

      • Houston recently won a “coolest city” award. No lack of “vibe” there, and accommodation in the CBD area is a fraction of the cost associated with some of the “exclusionary” “cool” cities like London and NYC and Vancouver and Melbourne…..

    • Rumple I disagree with point 1. Look at the states budgets who do the most of the road spending particuarily NSW and Victoria. Car taxes and motor fines (which mostly are revenue raising anyway) generate a good contribution to state revenue to the point where the revenue is now relied upon. They definitely do more than just roads; in fact state governments still shoulder most of the responsibilities in delivering services.

      Infrastructure spending on roads is a capital investment which gives me a road. Taxes are received every year (an income).

      Some of the costs outlined above are either not incurred directly by the state or are debatable (i.e road trauma). In the end while it may cost the economy more for the government not so much.

  7. I think some might be forgetting that every litre of fuel put into a car’s tank generates 40c in tax.

    This story is one of many on the subject of more revenue raised than spent…

    MOTORISTS are being milked to help the Government get its Budget to surplus, according to an analysis of petrol excise revenue.
    Drivers taxed almost 40 cents on a litre of fuel will get less than nine cents back in the form of spending on roads next financial year, according to calculations by the national motorists’ umbrella group.
    The rest of the tax revenue – worth close to $10 billion – will go towards helping the Government reach the $1.5 billion surplus it has promised for 2012-13.
    The Australian Automobile Association has told the Government it is concerned that funding for road building and improvements will be cut by 38 per cent, or more than $2.6 billion in the coming Budget year.
    This was based on calculations using the Government’s own forward spending projections.
    “Over a four-year period it is projected that there will be a $36 billion shortfall between the amount of fuel tax paid by motorists and investment in land transport infrastructure,” the AAA said in its Budget submission to Treasurer Wayne Swan.

    Read more: http://www.news.com.au/money/cost-of-living/under-the-pump-where-your-petrol-taxes-are-really-going/story-fnagkbpv-1226298533026#ixzz2UpJsIGb2

      • Not a lot different to the perverse disincentive to invest in public telephone boxes versus cellphone towers……..

  8. Rather than add to a skinny argument thread up above:

    I am drawing my conclusions re the actual under-performance of public transport on energy and emissions, from a number of sources.

    Lowson: Energy Use and Sustainability of Transport Systems

    http://www.cybercars.org/docs/Energy%20report1.pdf

    Particularly from page 11 onward

    Sorenson: Assessing Current Vehicle Performance…..

    http://energy.ruc.dk/ZaragozaVehicle.pdf

    Note the graph at the top of page 9, and note that the scale is logarithmic……!

    The Annual Transportation Energy Data Book:

    http://cta.ornl.gov/data/index.shtml

    Requires a lot of digging and calculations – as this guy has done:

    http://www.debunkingportland.com/top10bus.html

    http://www.debunkingportland.com/transit/busvscartedb.htm

    http://www.debunkingportland.com/carenergy.html

    I am also bearing in mind the rule of thumb that comparative dollar costs in complex systems are a prima facie measurement of resource use. It is not just a matter of measuring energy consumption of a vehicle underway.
    Comparing the dollar cost per passenger mile on a commuter rail system with the dollar cost per mile over the life of a car is a fair prima facie approach in the absence of thorough life-cycle, whole-system studies.

    http://www.debunkingportland.com/transit/cost-cars-transit%282005%29b.htm

    Most comparisons just use “averages”. This is unfair both to the most efficient commuter rail systems (such as NYC’s subway system) AND the most efficient cars.

    The average for the former is dragged down by the many grossly under-utilised commuter rail systems, and the latter is dragged down by all the large SUV’s, luxury cars and high performance cars.

    But the evidence is overwhelming that in most cities, most of the time, mass transit is NOT going to save either energy or emissions or money, compared to modest changes in the vehicle fleet, and certainly not compared to a bit of intelligent utilisation of empty car seats with private para-transit type systems such as “Avego”.

    • Ronin8317MEMBER

      Energy cost is not everything. The bigger issue issue is congestion and parking.

      Public Transport does not mean mass transit, and there are other alternative. In HK, they use 16 seat minibus that operates like a shared taxi. Unlike traditional buses, the driver have discretion over the routes and stops, allowing for more flexibility and frequent service. A fleet of them will serve most of Sydney much better than buses right now, especially in the west. Unfortunately, the taxi industry will never allow it, so good public policy is held hostage by rent seekers.

      • drsmithyMEMBER

        Energy cost is not everything. The bigger issue issue is congestion and parking.

        +1

        You get a taste of this on rainy days, when lots of people who would normally catch public transport decide to drive. More congestion, more accidents, longer trips, fewer car parks.

        There’s also a factor of “useful time”.

        If I drive to work, my time in transit is basically completely wasted.

        If I catch a bus or train, I can spend that time reading MB, or doing something else “useful”.

      • “There’s also the factor of “useful time””
        Agree. Public transport allows people to be more productive, by doing work on electronic devices, or entertain themselves with books, electronic devices, or others, and get exercise, both of which are proven to increase productivity.
        Widespread car usage is a drain on the economy.

      • If you think car use is a “drain on the economy”, you don’t understand “consumer surplus” or “demand enabling”.

        There are perfectly good reasons why “automobility” as a system is highly popular even though it is only “subsidised” around 5 – 15%; while public transport is subsidised 60 – 95%, and everyone would stop using it if the fares were put up.

        There are perfectly good reasons why, in Germany and the UK and other European countries, the majority of people still use cars even though automobility is not subsidised AT ALL – car drivers are a massive source of net revenue to the State and the public.

        Congestion and parking are a self-balancing problem in cities where the market is allowed to do the balancing. This is why many non-centrally-planned US cities now have less than 10% of employment in the CBD.

        Even in Aussie cities, “automobility” is absurdly judged by the small fraction of “driving” that is commuting into the CBD, when 80% of commuting and more like 90% of total travel, is not to the CBD at all. That 90% of total travel is an unacknowledged success story. There is NO WAY public transport could have achieved what that 90% of non-CBD-related travel has for society and the economy.

        The “CBD” now just happens to be a rent-seeking sector still occupying the space that 100 years ago was occupied by most kinds of economic activity, but which have now perfectly logically decentralised. Back then, well over 50% of the population was still “rural”; and there is no way these people would have become participants in an “urban” economy without “suburbanisation” and “automobility” and the dilution of economic land rent.

        In developing countries that lack the process of “suburbanisation” and “automobile based development” and the dilution of economic land rent, rural populations are locked either into continued rural poverty, or if they migrate to “the city”, are condemned to existence in fringe slums; their “informal” substitute for formal and decent “suburban” housing.

        The fact that the higher income earners who get subsidised travel into the CBD, get to spend “useful time” in the process, is all the more reason to expect them to pay a fare that more like covers the actual cost of providing them the service.

      • “If you think car use is a “drain on the economy”, you don’t understand “consumer surplus” or “demand enabling”.”
        The costs of cars only serve to stifle those concepts.

        “There are perfectly good reasons why “automobility” as a system is highly popular even though it is only “subsidised” around 5 – 15%; while public transport is subsidised 60 – 95%, and everyone would stop using it if the fares were put up.”
        Houses and Holes has already addressed this.

        “There are perfectly good reasons why, in Germany and the UK and other European countries, the majority of people still use cars even though automobility is not subsidised AT ALL – car drivers are a massive source of net revenue to the State and the public.”
        Influence from motorised countries. Specific to Germany, the Nazis constructed many autobahns, and the government subsidises car manufacturing. Specific to the UK, “A man who, beyond the age of 26, finds himself on a bus can count himself as a failure.”

        “Congestion and parking are a self-balancing problem in cities where the market is allowed to do the balancing.”
        Please elaborate. Roads are such a low capacity form of transport that they are less viable for the private sector to provide than public transport, as they get less customers and hence less money.
        If you mean that development will naturally spread out, how is that a good thing? Your road-based transport system has just increased the time and distance required in travel.

        “Even in Aussie cities, “automobility” is absurdly judged by the small fraction of “driving” that is commuting into the CBD, when 80% of commuting and more like 90% of total travel, is not to the CBD at all. That 90% of total travel is an unacknowledged success story. There is NO WAY public transport could have achieved what that 90% of non-CBD-related travel has for society and the economy. ”
        It could. A perfectly frequent bus running every 10 minutes with 30 passengers represents only 180 passengers per hour. This requires only a fraction of a lane of traffic, yet should break even if run efficiently. (the maximum capacity of buses is much higher, in excess of buses every 20 seconds carrying 50 people, or 9000 people per hour). Have a grid of these buses, and you have good suburban mobility through public transport.
        There is also no proof that wasteful suburban lifestyles have improved the economy in any manner, compared to what could be achieved in a more urban Australia, with lower transport costs.

        “The “CBD” now just happens to be a rent-seeking sector still occupying the space that 100 years ago was occupied by most kinds of economic activity, but which have now perfectly logically decentralised. Back then, well over 50% of the population was still “rural”; and there is no way these people would have become participants in an “urban” economy without “suburbanisation” and “automobility” and the dilution of economic land rent.”
        Clustering in the CBD reduces transport costs and increases communication, resulting in greater productivity and innovation. This has not changed through the decades.

        “In developing countries that lack the process of “suburbanisation” and “automobile based development” and the dilution of economic land rent, rural populations are locked either into continued rural poverty, or if they migrate to “the city”, are condemned to existence in fringe slums; their “informal” substitute for formal and decent “suburban” housing.”
        Suburban housing is far too inefficient and expensive to be built to a reasonable quality at a price the rural poor can afford. If good jobs are accessible from slums, then people can quickly exit slums into more substantial accommodation.
        In Mumbai, slums are enforced by a strict 3 storey height limit, making it impossible to make dwellings larger without reducing supply and increasing prices.
        In other cases, slums are suburban, and as a result are far from employment, and remain in poverty. The solutions are probably to increase housing supply in the CBD, or to spread secondary CBDs, which are still dense clusters.

        “The fact that the higher income earners who get subsidised travel into the CBD, get to spend “useful time” in the process, is all the more reason to expect them to pay a fare that more like covers the actual cost of providing them the service.”
        This raises a big problem, which can be solved. Your idea that dwellings on expensive land must be expensive – a perfectly normal mistake, is stopping you from solving this. Due to the restriction of density, the cost of housing around public transport is artificially high, and only the rich can live there. If you increase density, and increase supply near public transport, you get to share around the benefits of public transport to everyone. Low-income people are not forced to maintain a car, and lose time operating it, and can instead improve their economic situation by utilising ‘useful time’ to be more productive, and earn more.”
        Most developers would jump at the opportunity to develop valuable land, so what is needed is less planning action (although it can help if well targeted), more freedom to develop land. The selling of land should unlock large amounts of money and put it into circulation, helping the economy. A land value tax should address rent-seeking – dispersion is a very indirect way of eliminating rent-seeking and is more trouble than it’s worth.

      • Frederick, the “cost of cars” is far lower than the cost of zero-sum economic land rent that occurs when urban growth is constrained. The UK is closer to the utopia you describe, and it’s economic productivity lags its main trading partners by a wide margin. If London was not by historical accident the world’s major financial centre, the whole UK economy would be even more stuffed than it is – BECAUSE OF mandated “compact cities”.

        “Clustering in the CBD” is NOT an option for all economic sectors. You might as well insist farming is done in skyscrapers. “Land” and “space” raise productivity in most sectors of the economy. Sectors in which “space” is less important, and incomes high regardless, such as finance, end up clustered in CBD’s. DO read the references I provided. If you think nothing has changed through the decades, you actually don’t know much. The real cost of transportation has fallen by orders of magnitude, and the cost of communications even more so. It is perfectly logical for falling real costs of transport and communications, to result in transport and communications being substituted for “proximity”, with massive net savings being made due to minimising of economic land rent and congestion.

        Going by the UK economy again, mandating a more compact city does not mean that you keep all the sweatshop manufacturing etc in CBD’s, (with of course improvements in conditions for workers as technology and health improves). It means that your national economy loses these sectors altogether. The USA’s non-constrained, cities, however, retain a significant level of primary-income creating, land-intensive sectors IN THEIR SUBURBS.

        Your arguments about land taxes and bus networks are streets ahead of the average anti-sprawl arguments I encounter. I would be all for land taxes, and for “public transport” budgets to be spent far more wisely, but with a lot more “market” efficiencies being captured than what are allowed under the status quo “monopoly provider” model. Quite frankly, if people were going to put up with travelling primarily by riding on a grid network of buses, they would willingly “ride share”. Systems like “Avego”, in this day and age of GPS and I-pods, are a no-brainer.

        Monopoly mass transit could not compete, in the 1920’s, with private drivers of early automobiles picking up fare-paying passengers going their way – which practice was therefore banned way back then. The shifts in efficiency of the respective transport modes that have occurred since then, have all been in favour of the small, flexible unit, and against the large, fixed-route one.

        I would be the first to argue that land taxes and “properly priced transport” and “properly priced infrastructure” OF ALL KINDS would in fact “restrain urban growth” from the level that occurs when land is not taxed and travel and infrastructure is not properly priced; so I would say, get the pricing right. But there is NO justification for bluntly banning development altogether anywhere, or for subsidising public transport 75% plus while subsidising private vehicle travel only minimally or not at all.

        There is simply no example anywhere in the developed world, that mandated high density urban form has resulted in greater affordability of “housing” for anyone. I agree with you that it could be made a lot easier and cheaper to develop to higher density at locations where this makes sense, but good luck getting the regulatory and fiscal mechanisms accepted. Are you aware that “intensification” and “transit oriented development” is far more successful in Houston and Atlanta than in Portland, because the land is so cheap to start with (due to the absence of fringe growth constraints).

        A policy of getting people out of slums and into formal housing, would stand a much greater chance under a model like the affordable non-growth-constrained cities of the USA, than under the strictly planned growth containment model. In fact this is precisely how the West did it. I do not believe anyone is going to do it any other way. A separate family home in an affordable US city is literally half the price of a one-bedroom flat in Vancouver. Look at the RE sites. I will post a comparo at the end of this thread.

        Basing cities on roads and automobiles has NOT led to more time being spent travelling. Check out Peter Gordon’s papers on “decentralisation and the stability of travel time”. There is no data anywhere that supports the assertion that average commute times are lower in more compact cities, and certainly NOT when there is more centralised employment. The UK’s cities average commute to work times are a disgrace, given that they pay so much more for housing of much smaller size and lower quality, and put up with less opportunity for marriage and child bearing. They have no advantage over Houston or even LA (the USA’s densest urban area, BTW), to show for it.

        I mention marriage and child bearing particularly because lower rates of these should be an advantage when it comes to a city’s commute to work times – because fewer households need to compromise on location relative to two jobs and one or more schools. But no such “advantage” shows up in the data as a consequence of making housing so unaffordable as to deprive people of life choices.

      • (sorry If I took a while to reply)
        As I said in my post, what is important to foster density is less regulation (urban containment), more allowing to be built units where there is demand for them.
        ““Clustering in the CBD” is NOT an option for all economic sectors. You might as well insist farming is done in skyscrapers.”
        Yes, CBDs are not an option for all economic sectors, but it is a good option for high-tech and innovative sectors of the economy. We do not need farming in skyscrapers because we’ve farmed for thousands of years and are already pretty good at it. That said farming still can and is done on rooftops of urban buildings, as it is a good use of otherwise wasted space, and reduces food miles. However, innovation requires the exchange of ideas, which is easier in CBDs. Without density you stifle innovation and your economy stagnates. UK’s problems are caused by regulation in many areas of the economy, not just land.
        Transport and communication may be cheaper, but they still have a positive cost. Walking across the street or talking face-to-face still have ZERO costs, which is important in a more and more competitive economy. Money is still saved in concentration, which means more innovation and better technology.In addition, the environmental impacts of transport and communication have increased, and useful time has decreased (at the same time the technology for utilising useful time has increased – painfully ironic) – are these costs included?
        Industry is not even allowed in cities anymore, due to zoning. If the zoning allowed it, I’m sure small scale industry (more ‘handicraft’ than ‘smokestack’) would exist in dense areas. In addition, in the absence of forced removal of industry from centres, anti-pollution technology would have advance massively, and the impact of industry would be lower. Industry would also be more space efficient, as uses tend to expand to fill the land given to them, and technology can reduce the amount of land ‘land-intensive sectors’ use.
        “I would be all for land taxes, and for “public transport” budgets to be spent far more wisely, but with a lot more “market” efficiencies being captured than what are allowed under the status quo “monopoly provider” model.” I could probably agree somewhat. Different companies could run bus routes and build rail using the uplift in land values, with land developed into higher densities to fund public transport. To simplify matters, fares should be co-ordinated and valid across many providers, but companies can still compete on quality.
        “Quite frankly, if people were going to put up with travelling primarily by riding on a grid network of buses, they would willingly “ride share”.”
        Doesn’t allow for the spontaneity of just hopping on the next bus. Ride share requires pre-coordination, probably with trips booked a few hours beforehand. This kills economic activity, as people can’t just spontaneously go and spend money in a particular area.
        “Monopoly mass transit could not compete, in the 1920′s, with private drivers of early automobiles picking up fare-paying passengers going their way – which practice was therefore banned way back then. The shifts in efficiency of the respective transport modes that have occurred since then, have all been in favour of the small, flexible unit, and against the large, fixed-route one.”
        1) Mass transit was not monopolised
        2) Labour costs are much higher now, so the sharing of a driver between many riders that mass transit allows are much more important
        3) Shifts in efficiency only occurred towards cars because of government subsidy. Ignoring current subsidies, the US Interstate network was 95% subsidised by the Federal Government, with the rest covered by other layers of government, and any new roads could not be tolled. (Think of the rent-seeking that occurred around those Interstates!). These shifts in mechanical efficiency are also outweighed by the higher value of labour, see above.
        “But there is NO justification for bluntly banning development altogether anywhere”
        I don’t want to ban development everywhere. Firstly you ignore that density is development, where people actually want it, rather than in out the sticks where nobody wants to live. Secondly, I probably would permit ‘sprawl’, although since there is more demand for density, very little sprawl should occur.
        “subsidising public transport 75% plus while subsidising private vehicle travel only minimally or not at all.”
        The great mass transit networks of East Asia all run at a profit, whereas the terrible networks that don’t attract riders have the highest percentage of subsidy.
        “There is simply no example anywhere in the developed world, that mandated high density urban form has resulted in greater affordability of “housing” for anyone.” This is because there is a great pent-up demand for dense living. If zoning density limits are abolished, this demand can be satisfied, and housing can become affordable. At this stage, dense urban forms simply exhibit signs of a Giffen good that has been artificially constrained in supply.
        “Are you aware that “intensification” and “transit oriented development” is far more successful in Houston and Atlanta than in Portland”
        Good for them. The more cities offering urban lifestyles, the better, and the closer we will be to satisfying pent-up demand and getting affordable living in prized locations. It’s supply and demand, simple economics. Portland has quite strict height limits, so with restrictions on all three dimensions on growth, housing should be expected to be unaffordable. it’s a sad reflection on the US that it passes as ‘urban’.
        The West got people out of slums and into formal housing by building streetcar lines, increasing land supply while still allowing people to live without private transport. These days, we could do that too in developing countries, by building rail to outer areas, or take advantage of the fact that technology in building skyscrapers has developed more, and higher buildings can be built at lower costs. There’s no way the poor could afford to buy a car, fill it with petrol, and wait in congestion. They need useful time on public transport, so they can be more productive, earn more money, and get out of poverty.
        “A separate family home in an affordable US city is literally half the price of a one-bedroom flat in Vancouver.”
        Pent-up demand.
        “There is no data anywhere that supports the assertion that average commute times are lower in more compact cities, and certainly NOT when there is more centralised employment.”
        Maybe, but there would be more useful time, and the more opportunities to get to work for free (walking). If someone lived in an apartment building with shops on the ground floor, they could work in those shops, or shops next door or in the neighbourhood.

  9. From my perspective (and I have not worked in Sydney for about 30 years) Sydney has done a very poor job of properly enabling secondary employment hubs like Paramatta and Chatswood. Sure you can get to both of these places by train BUT if you dont happen to live on the appropriate train line you are likely to need to go to the CBD first. I think a lot more could of been done.

    IMHO Another major failing was the unwillingness to create other secondary employment focus points away from teh city. Probably the best example of this failure is the continued EXCLUSIVE use of Sydney Airport instead of developing either Baggery’s creek or maybe Newcastle. as major air transport hubs.

    In other countries where major airports have relocated away from the CBD you often find businesses (where the employees travel a lot) colocating around the airports (Munich comes to mind (lot of high tech stuff out around Frising), Shanghai also had lots of businesses relocating to Pudong New areas. Dallas DFW airport opened up the whole North Dallas corridor, so you have lots of corporate offices along 635 with easy access to both airports.

    I’d also go so far as to say the failure to create these NEW employment focus areas is a large part of the problem with insane RE prices especially in Sydney.

    • Yes, but there ARE focal areas of employment outside the Sydney CBD, that have come about IN SPITE of any real effort to plan for decentralisation.

      I say the people who constantly look for “subsidies” as the explanation for “sprawl”, have it back to front. What we need to look for, are the regulatory OBSTACLES that have kept SOME cities relatively centralised, higher density, and land rents high.

      What we are missing, is the way real estate markets “price” location, and the way economic land rent “rations” locations in the urban economy according to the ability of each economic sector to pay for land at each location, as the economy develops and incomes rise. The garment manufacturers left Manhattan decades ago.

      If you “plan” for a more compact city and force up the cost of all land in the urban economy, all you do, like the Poms have done, is drive all “more land intensive” non-rural industries offshore all the faster. And grossly reduce the productivity in the ones that can’t “offshore”; such as car dealers, furniture retailers, recyclers, warehousing and distributing, etc.

      And if you are going to allow businesses to locate where it is actually economically efficient, you might as well allow their workforces to do so to.

      I recommend a short book by Richard Mudge and Eric Beshers, “Business Location in the Modern Economy” (1999). BTW, Robert Murray Haig’s 1926 “Towards an Understanding of the Metropolis” is still pretty helpful. Unfortunately, “planners” education does not seem to ever include any of this stuff, which does make one wonder just how dedicated the people who control the “planning” profession these days, are to objectivity rather than ideology. (There was a golden age where “urban planning” was done better by architects and engineers and economists, but environmental activists made an end run around them by creating a so-called dedicated new discipline of “urban planning”. Check out the backgrounds of the first Professors at “urban planning” schools…..).

  10. Stephen Morris

    “. . . with the average CBD worker earning a quarter to a third more their average suburban counterpart.”

    Although the article refers to “CBD” as if it were a generic CBD, it is in fact referring to the CBDs of State capital cities.

    The CBD workers referred to are those who work within “lunching distance” of the Cabinet, the fountainhead of economic rents under the Westminster system.

    Having worked myself at the interface between government and business (as an investment banker involved in privatisation and private infrastructure) I never cease to be amazed at how economists ignore or vastly underestimate the way in which Executive decisions transfer billions – literally billions – of dollars to the favoured few.

    Proximity to the Cabinet (and to senior public servants who have some influence over Cabinet) is a positional good.

    That’s what drives urban geography in Australia.

    • Your point is interesting – Australia is especially bad in this respect.

      The USA probably has a very high proportion of its total number of cities that are NOT State capitals, and even many of those that are State capitals, do not have a marked land rent problem, and possibly not even much of an economic rent problem, period.

      Look at the capitals of Texas, Oklahoma, Kansas, the Carolinas, Georgia, etc etc.

    • Alex Heyworth

      Interesting though, that the US state capitals are often not the largest city. Probably gets back to the issue that Phil Best always raises of availability of cheap land. The lobbyists need to be in the capital, the bosses and their factories don’t.

      • Mind you, in Texas, where you have a State government that sits for 2 weeks per year, why bother to have a lobbying industry located in Austin? Want to see your representative about something, you’ll catch him at home, wherever in Texas that is……..or better still, wherever his REAL JOB is…….

  11. I’d just like to point out the fact that the Parramatta-Epping (and by extension to Chatswood) rail link that was prioritized recently in the face of the NSW govt’s contrary plans to build in a different direction would slot right into the non-CBD oriented transport plans.

    • The Epping to Chatswood link was to ease congestion on the CBD bound lines from the west. It was cheaper to divert trains from the upper Hornsby line to Chatswood rather than have them continue through Strathfield and have to build additional lines from Strathfield to the City. I understand that the tunnels from Central to the Harbour Bridge are now the limiting factor in through CBD train lines, although signalling was also a choke, resulting in 2 minute minimum gaps rather than 30 seconds. Apparently there are also problems with line crossovers at grade – the spaghetti needed unravelling. It did also have the advantage of servicing the Macquarie uni and North Ryde corporate parks from both the North Shore and the Northern line. The Parramatta to Epping link via the existing single line from Clyde to Carlingford was deferred. A link was put into the area around the Church St and Parramatta Road intersection to allow Liverpool/Campbelltown trains to go to Parramatta and on to Blacktown. Thee is huge opportunity for growth around railway stations between Liverpool and Richmond. Zoning and an ability for government to force sale to developers is all that is needed. After some Parramatta landowners won in the high court against compulsory acquisition that would have lead to a sale to developers under some sort of private/public partnership the state government changed the laws so I think there is now scope for forced acquisition if done in the right form. Rezoning of up to 800 metres (from memory) around the stations at Macquarie Park led to change to high density.

      There is ample land around railways for high density employment and living centres, just a need to rezone and facilitate developers getting large blocks.

  12. “None of this should be taken as a pejorative attack on public transport.”

    Indeed, it simply demonstrates how unevenly and how unfairly the benefits of public transport are shared. A lot of this benefit was captured and retained by the owners of nearby land (mainly in inner suburbs and to a lesser degree further out along railway lines) when the public transport infrastructure was being developed.

    As a further insult to people owning dwellings a long way from CBDs, they are usually required to pay more to use trains to get from their nearest station to the CBD than those from inner suburbs. This issue was taken up by Gavin Putland: http://blog.lvrg.org.au/2012/01/if-bligh-ran-body-corporate.html

  13. Sure – there are plenty of people arguing for greater public transport, but are there any of them specifically arguing that it is only public transport to the CBD that need increasing?

    And sure – there are plenty of people arguing that we need to limit sprawl at the edges of cities, but are there any asserting that inner city towers are the solution to that ‘problem’

    And finally it cannot be a surprise to anyone that the majority of jobs are now located away from the cbd. But just because the jobs are not in the cbd does not mean they are at the city fringe and would be best service by increasing the availability of housing at the city fringe.

    In Brisbane, for example, there are many large employment centres scattered around 5 – 10k from the CBD mark which are well served by public transport and are being redeveloped from standard quarter acre blocks into a variety of new housing types. 6-8 storey apartment blocks, low rise flat and townhouses are all appearing around these centres giving lots of people walking access to jobs, shops, parks and public transport.

    Perhaps your CBD working investment banks might live on the top floor of some of these buildings with city views but below there are usually a good range of ‘affordable’ housing too.

    I think that this is the kind of densification and public transport model being advocated rather than the simplistic model assumed by many above.

  14. In Austin: decent suburban house: $185,000

    http://www.trulia.com/property/3116284850-4501-Dorsett-Oaks-Cir-Austin-TX-78727

    Absolutely HAVE to live downtown on a budget? See what less than $100,000 gets you:

    http://www.trulia.com/property/3039999946-1800-Lavaca-St-205-Austin-TX-78701

    Bottom end of the market: would you rather be a poor person in Vancouver, or HERE?
    Look for yourself at what you get for WELL UNDER $100,000……..

    http://www.trulia.com/property/3110047250-5914-Hidden-Valley-Trl-Austin-TX-78744

    http://www.trulia.com/property/3113538430-2318-Deadwood-Dr-Austin-TX-78744

    http://www.trulia.com/property/1093930854-6812-Pondsdale-Ln-Austin-TX-78724

    If you can only afford $28,500:

    http://www.trulia.com/property/3113382458-Branch-Creek-12609-Dessau-Rd-469-Austin-TX-78754

    Now look at Vancouver: cheapest RE advertised: just under $200,000 for a one bedroom apartment:

    http://www.point2homes.com/CA/Home-For-Sale/British-Columbia/Vancouver-Coast-Mountains/Vancouver/-PH3-1503-W-65TH-AV-Vancouver-BC-CA/31162500.html

    Using the “sort by price” function, see what you get for your money. EVERYTHING UNDER $500,000 IS A B—–Y APARTMENT….!!!!

    TWO bedroom Condo: over HALF A MILLION

    http://www.point2homes.com/CA/Condo-For-Sale/British-Columbia/Vancouver-Coast-Mountains/Vancouver/Quilchena/2101-Mcmullen-Avenue/32148678.html

    2 BEDROOM CORNER UNIT: $400,000

    http://www.point2homes.com/CA/Home-For-Sale/British-Columbia/Vancouver-Coast-Mountains/Vancouver/-71-3437-E-49TH-AV-Vancouver-BC-CA/32097174.html

    Oh great, found a separate home at last: $700,000 – with TWO bedrooms, ONE bathroom, “needs renovating”:

    http://www.point2homes.com/CA/Home-For-Sale/British-Columbia/Vancouver-Coast-Mountains/Surrey/6111-King-George-Bv/31652105.html

    I give up. So should you, if you are arguing that there are “benefits” to urban growth containment regulations. Yeah, “benefits” that claw back a disadvantage to a household, of half a million dollars plus in cost of a home? But as I was saying above, even the alleged “benefits” are B.S. anyway.

  15. This is worth a look too:

    “The Cities that are stealing Finance Jobs from Wall street”

    http://www.newgeography.com/content/003753-the-cities-that-are-stealing-finance-jobs-from-wall-street

    As I say in my comment there:

    http://www.newgeography.com/content/003753-the-cities-that-are-stealing-finance-jobs-from-wall-street#comment-19394

    “……This is an amazing phenomenon, that exceeds any predictions made by those of us like myself, who argue that MOST cities, MOST of the time, need to focus on policy “basics” – in contrast to “cargo-cult-planning” faddists who seem to think every city can be Manhattan or London. The reality as I have long perceived it, is that some lucky “Superstar Cities” (as described by Gyourko, Mayer and Sinai in a paper of that name) whose path-dependent economic evolution has endowed them with high-income, low-land-requirement primary income sectors, can enact “exclusionary” policies that force up the cost of land and housing and create “amenity” for the elite local workforces – and get away with it. The “cargo-cult-planning” faddists everywhere around the world then insist that every other city must adopt the same exclusionary policies and this will make them as successful. DUH.

    However, it is becoming evident that the cities that get the basics right and hence do not destroy what they MIGHT reasonably expect to get, i.e. lower income, higher-land-requirement sectors such as manufacturing and distribution and transport and energy; end up gaining in higher-income, lower-land-requirement sectors AS WELL. The “cargo-cult-planning” faddists are in the process of having their Dogma run over by their Karma; us Hayek devotees are wryly amused. However, as with previous experiments in ideological utopianism, the cost to innocent and deceived humanity – the subject of the totalitarians and crypto-totalitarians experiments – is no subject for amusement……

    “…..The “masters of the universe” finance sector function is being taken over by computer algorithms; and the future for “finance” jobs, is in the “handmaiden to industry” function that it always should have been. And now it looks as though the finance sector jobs are following the “industry” to the non-exclusionary, heavily-suburban cities, which is also as it should be.

    One can only hope that the lesson can be learned by nations like Australia and NZ, which are destroying their futures with “cargo-cult-planning” urban policy strangling every city – just as the UK has done long since…..”

  16. “Much of Australia’s planning policies are based on the presumption that the bulk of the population commutes to the central core for employment.”

    Is that so? I suggest that some of those policies are so based, but by no means exclusively, and not even the majority perhaps. Most of the policies I have seen are based on the presumption that people want to live as low density as possible, however, what IS understood in the planning community is that people do not want to pay the infrastructure costs associated with that. The former is often explicitly stated, the latter not. Encouragement of higher density housing is part of that second issue. It is easier for politicians and senior planners to say that having one’s own home in the burbs is good, but so is high density inner metropolitan living, rather than for them to say, ‘by all means live in the burbs, but it is going to cost you for all infrastructure, and a lot of money’.

    “As such there is the desire by planners to limit urban sprawl, which is believed to reduce overall commuting times, resource use and pollution, and the need for costly infrastructure improvements, such as new rail lines.”

    Actually, commuting times is a small part of the overall. Just about every single bit of infrastructure capital has costs inversely related to density. No matter where people commute to or from, the last mile of infrastructure to their home is the most costly. Water, drainage, sewer, power, transport and telecommunication all fall into this category. That infrastructure has to be paid for, and one way or another, there is a greater ‘ouch’ moment when the bills come in for low densities of housing than for higher. Of course, those bills are then ascribed to the wishes of the utilities to gold plate everything…except as in cases in Darwin and Auckland where the [email protected] hit the fan, where the utilities were accused of recklessly underspending (and in Darwin now, having spent the money to upgrade the system where those same utilities have been gold plating). The deadly serious point being that people wish to be told that they can have low density housing and pay high density infrastructure costs, and so politicians do tell them that.

    The real issue for CBDs is that of congestion. If people from a less dense area have a desire to get into a smaller
    area, then how is it to be done without using public transport to take a fair proportion of the load? The options are to do nothing and watch the city self regulate as it chokes, to subsidise public transport, or to charge the full cost. The experience of various cities round the world is that if you don’t subsidise public transport, cities choke and die. That may or may not be a good thing, but it is a political argument more than anything else.

    • emess,
      Without doubt having families living on 1/2 acre or 1/4 acres instead of apartments will require greater infrastructure costs per home. When planning a new (greenfield) suburb, engineers can easily figure out the extra cost. My guess is it would cost less than $5000 extra per house. The planning elites within the government do in fact know the real figure and have never released it to the public. I WONDER WHY?

      Sadly, the smart growth policies that you espouse have driven up the cost of basic housing by hundreds of thousands of dollars per dwelling -via shortage and competitive bidding.

      I have nothing against people living in apartments and I am happy to pay the extra cost of infrastructure that I cause through my housing choice. However I am not happy to pay the shortage premium caused by your elitist clap-trap.

      • Hi the claw and Philbest.

        If you read what I said, you would have noted that I am not advocating any position. So, please exit ‘Sheldon Cooper Mode’.

        All I am saying is that there is a higher cost to lower density living, and it is substantial. Construction costs for most suburban services run at about $700 per metre of frontage all up. You can do the arithmetic yourself.

        I am further saying that people do want to live in lower density accommodation, but that at the moment, they are not told of the real costs. So, I quite agree with your point about people needing to know what the real figures are – not least of which being that they can budget for those costs, let alone making a decision about density.

        Having said all that, I hope you can see why focusing on one aspect (such as transport to the CBD) while ignoring the other major factors in the density debate is foolish.

        You would have noted, had you read my post, that I did make the point that the final decision about CBDs and subsidised transport is probably political.

        Phil, about the congestion issue. I could write a bloody book on it, but I will just give one example – as more and more cars come into a city, more and more parking spaces are required. It does not take a degree in town planning to work out that at some point, the preponderance of car parking buildings and the physical space required on roads impacts on the actual work being done in the CBD. At some point, the democratic process takes over, and governments are told to ‘fix it’. The real choices are limited. If you have some ideas outside that limited set of choices, then you can give up your day job, and make your fortune. I was not advocating a particular position, despite your accusations (which I take are due to your not having read what I said). I have no argument particularly with your economics. However, the economics actually collides with politics – THAT is one of the points I was making.

    • Rubbish, emess, cities will not “choke to death” just because local taxpayers refuse to subsidise the commuting of wealthy CBD workers, to the benefit of CBD property owners.

      There is absolutely no reason that if the CBD is so important to the urban economy, it cannot be made to pay its own way for transport costs. In fact the sectors based in CBD’s are mostly based on rent-seeking, wealth transfers and consumption anyway, while it is the SUBURBAN employment sectors where the “primary income creation” in the urban economy mostly occurs.

      Refer William Fruth: “The Flow of Money and Its Impact on Local Economies”.

      http://www.policom.com/PDFs/FLOW%20OF%20MONEY%202013.pdf

      “…..The Flow of Money is a 24 page booklet written to assist community leaders in understanding the nature of their local economy. It presents the “basics” on what every community needs to do to cause a growing economy or to stop decline.

      The booklet explains how money flows into and out of a community, how primary industries create wealth for an area, and which industries a community should focus upon to cause economic growth. It is in essence “Economic Development 101.”….

      Note that the great majority of cities in the USA have weak CBD’s, and this is one of the reasons WHY the US economy is the world’s most productive large economy. You can almost guarantee that any country with a high level of successful rent seeking in urban land, will have a moribund and less productive economy overall.