Attack of the housing BANANAs

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ScreenHunter_24 Apr. 18 12.02

By Leith van Onselen

BANANAs (“Build Absolutely Nothing Anywhere Near Anything”) are a common feature of the urban landscape. They typically comprise people that bought their homes many years on the cheap (helped by governments that were amenible to development) decrying “evil sprawl” and high-rise development.

I witnessed a number of BANANAs in action yesterday when listening to the ABC Radio’s Morning program with Jon Faine, which aired callers’ concerns about the Victorian Government’s new 40-year Metropolitan Planning Strategy.

One by one, callers (mostly baby boomers) rang-up to voice their concerns about urban sprawl and in-fill development across Melbourne’s established suburbs. Jon Faine was mostly sympathetic to their views, seemingly concerned about Melbourne’s declining livability. About the only aspect of the new Strategy that callers seemed to agree with was the crazy proposal to fix Melbourne’s urban growth boundary (UGB), effectively outlawing further expansion of the city’s urban footprint, despite such measures failing badly in the UK.

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Not once in the discussion did I hear anyone make the following point: with Melbourne’s population growing by 2% per year, and destined to hit 5 million by 2025 and potentially 8 million by 2050 (assuming current growth rates are maintained), where are all the new arrivals expected to live?

This type of mutually exclusive thinking – that somehow Melbourne can continue to accomodate increased population without growing the urban footprint and/or higher density – is also on display in planning circles. As an example, so-called RMIT planning expert, Michael Buxton, has spent much of the past decade opposing moves to expand Melbourne’s UGB. Yet Buxton has also regularly rallied against high rise development across the CBD and inner areas, claiming that it is reducing Melbourne’s livability, while also voicing concern about declining housing affordability

Just today, Buxton has presented these contradictory positions in The Age, simultaneously opposing sprawl:

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Melbourne 2030 sought to redirect a large proportion of outer urban growth to the established city through a legislated urban growth boundary…

The 2013 strategy now proposes a fraudulent limit on outer urban sprawl, a fake policy since the Liberal-National parties in 2010 helped destroy the former growth boundary by expanding it by 43,000 hectares, making irrelevant any contrived limits to growth.

A metropolitan plan should begin with a city’s great assets and protect them.

Opposing density:

Large parts of Melbourne are becoming high rise already. The heritage values of the central city, Victorian-era strip centres, commercial and mixed-use areas and their residential environs, and arterial roads will be destroyed by high and medium-rise development.

Whilst crying over affordability:

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This government has no idea about how to promote affordable housing. Melbourne will continue to grow as two city types that entrench unequal access to the best a city can offer. Well-serviced inner and middle-ring areas will become more exclusive, while sprawling new suburbs will condemn many outer residents to the worst standards of infrastructure and facilities.

Unfortunately, BANANAs seem to be winning the battle, with the end result likely to be further appreciation of urban land values, deteriorating housing affordability (despite shrinking home sizes), and worsening levels of congestion. Those lucky enough to be pre-existing land holders will benefit from the rising wealth brought about from higher values, whereas those yet to enter the market (and future generations) will suffer immensely. The overall Melbourne economy would likely also lose competitiveness as escalating land costs feed into the costs of production.

Expecting to achieve a more liveable city by restricting the urban footprint and opposing in-fill development at the same time as Melbourne’s population surges towards 5 million and beyond is a contradiction in terms and mutually exclusive.

Perhaps the situation is best summed up by Matt Cowgill’s quote yesterday on Twitter:

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Gen Ys: when you read a boomer complaining about urban sprawl and/or rising urban density, the subtext is “you should pay more than I did”.

Exactly.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.