Rethinking urban growth boundaries

ScreenHunter_250 Nov. 12 19.20

By Leith van Onselen

This blog has dedicated significant effort questioning the axioms underpinning Australia’s urban planning system. This system has grown increasingly restrictive as urban growth boundaries (UGBs), minimum targets for ‘brownfield’ development, up-front infrastructure charges, amongst other measures, have been implemented across jurisdictions since the late 1990s/early 2000s.

These urban consolidation planning tools have been adapted from growth management policies first implemented in Britain following passage of the Town and Country Planning Act 1947, as well as across a number of other jurisdictions since the 1960s.

The rationale behind urban consolidation is the concern that excessive suburban sprawl is increasing humanity’s ecological footprint and greenhouse gas emissions, as well as requiring expensive new infrastructure to be built in these new developments. By restricting urban growth, it is claimed that these ‘costs’ can be reduced via less car dependence and energy usage, as well as more efficient (intensive) use of resources.

However, in addition to the pernicious effects that urban consolidation policies have on housing affordability (via dramatic increases in the cost of land) and their facilitation of boom/bust house price cycles, many of the policies implemented by planners to restrict growth and reduce urban sprawl tend to have the opposite effect, thus eliminating many of their purported benefits.

Perverse outcomes occur principally because measures aimed at excluding growth from one jurisdiction – whether via UGBs, greenbelts, or slow land release (restrictive zoning) – naturally generates pressure to accommodate it elsewhere, and exurban, underdeveloped jurisdictions beyond the metropolitan limits tend to be more inviting.

Take, for example, UGBs, which seek to channel new development into built-up areas and exclude it from undeveloped ones. In practice, the imposition of UGBs causes many lower income households to ‘leapfrog’ the boundary and settle 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.

A related unintended consequence of urban consolidation is that ‘densification’ has often ceased to occur at its historically natural locations nearer the urban core and has instead shifted further away into less efficient locations (i.e. far away from employment and amenities). The reason for this is that the price of land is forced up so much by the growth constraint that households are unable to afford the ‘premium’ price commanded by more efficient locations, and are forced to locate instead at ‘less unaffordable’ but also less efficient locations. Essentially, budgets are squeezed so much by high land prices that households are forced to trade-off both space (smaller homes) and location efficiency (i.e. live further out).

This phenomenon is reflected in dense fringe suburban development, whereby postage stamp sections are crammed into cul-de-sacs in patterns that have been mathematically designed to maximise the number of salable properties. They typically also have narrow streets, minimal number of intersections (as it’s a waste of valuable space), and minimal public green space.

Finally, there is the planner’s false assumption that most people commute into a central area for work, thus supporting the view that urban consolidation will reduce car usage and travel distances, all the while increasing the viability of public transport. However, this monocentric view of cities is incorrect. Most modern cities are decentralised with only a small percentage of the population working in the central business district. Moreover, the majority of car trips are not from the suburbs into the core, but rather laterally, thereby making public transport unviable for most people (since public transport tends to be radial in nature).

In fact, research derived using data from the Australian census showed that less than 15% of workers in Australia’s major capitals work in the inner-core – a trend that is only likely to grow as more employees embrace technologies such as telecommuting. It also throws into doubt expensive new rail investment, which can only ever serve a small minority of the population.

In short, urban consolidation policies, while often well-intentioned, are failing to meet their purported goals. At the same time, they are contributing to unaffordable housing and risk boom/bust price cycles since the artificial constraints on land/housing supply causes increases (decreases) in demand to manifest into rising (falling) prices, rather than to dissipate through changes in the level of new home construction.

If you want to see the ultimate end-game of forced urban consolidation, look no further than the United Kingdom, which is arguably the most dysfunctional housing system in the developed world.

Thanks to the Town and Country Planning Act 1946, the right to develop has been virtually nationalised and the UK is ruled by NIMBYs. All of the major cities and towns in the UK are surrounded by “greenbelts” that are off limits to development. And the centralisation of government finances has also led to a situation whereby local governments receive little benefit from increased population and development, but bear most of the costs, making them anti-development.

The end result is a chronic undersupply of homes, driving-up both prices and rents. And the situation has recently been made worse by the implementation of the government’s “Help-to-Buy” shared equity scheme for first home buyers and the Bank of England’s “Funding-for-Lending” program, which have artificially increased demand and pushed against the constipated supply system to further inflate prices.

Yesterday, one of my favourite urban economists, the London School of Economics’ Paul Cheshire, posted a brilliant critique of the United Kingdom’s planning system, focusing on the rigid green belts that preclude development across the major cities and towns. The article touches on many of the perverse consequences of urban consolidation outlined above, and should serve as a warning to Australia’s planners and policy makers, who continue to advocate the use of UGBs:

GREENBELTS combine the qualities of sacred cows and juggernauts. To question their benignly green and fair credentials is to invite abuse: yet the unstoppable damage they do to societal fairness, housing affordability, the economic efficiency of our cities, even the environment, is devastating.

Greenbelts have a mystical quality, in that almost everything we believe about them is untrue. More than half the adult population think 50 per cent or more of England is “built-up”. In fact, the figure is 9.95 per cent. It is claimed we are in danger of “concreting over England”, yet even in the urbanised 9.95 per cent of the country, half the area is gardens; actual houses only cover 1.14 per cent. Greenbelts cover 12.9 per cent. Our cities are strangled by Greenbelts, creating the greatest land scarcity just where it is most needed.

So as people have become richer and sought more space, they have had to jump over the Greenbelt and commute from a distance. A recent Greater London Assembly study showed that highly-skilled workers in central London were travelling daily from as far away as Norwich or the New Forest…

Our new houses are about 40 per cent more expensive per square metre than in the Netherlands – and the Netherlands has about 20 per cent more people per square kilometre than England. Our houses are also the smallest in the developed world. In Denmark, the average new house is almost twice as big as in England…

The age of first house purchase is receding into the late 30s, and owner occupation as a tenure is falling for the first time in a century, now 6 percentage points below its peak. The underlying cause is the constriction on space for new building imposed by ringing our cities with Greenbelts…

It is land we restrict the supply of and, as the policy-created shortage of land bites harder, so houses get smaller…

Surely there must be gains? They are surprisingly hard to find. Research suggests any wider benefits from Greenbelts have always been small relative to, say, parks; and they have been very concentrated indeed. The poor are, in effect, penned into crowded parts of cities and increasingly renting, with Greenbelts far out of reach. The moderately well-off are priced out of a decent home, or have to spend two hours a day rattling through the Greenbelt in crowded trains. That just leaves a lucky few, albeit highly-educated and articulate, as the winners…

The London School of Economics… found the only value Greenbelts created was for people who own houses within them – the very rich indeed in the Home Counties, or equivalent areas around other big cities…

The fact [Greenbelts] create no value for people who do not live in them is not surprising. The commonest land use within the Greenbelt is intensive agriculture – 37 per cent of London’s Greenbelt, 74 per cent of Cambridge’s. As the National Ecosystem assessment of 2011 showed, intensive agricultural land has no environmental benefits at all. It is almost equally devoid of amenity value because access is so limited. Back gardens provide far more valuable habitats for wild life, as well as much more amenity value…

We do need to maintain green areas within reach of people; intelligently-selected green wedges around our cities could be valuable. But that would still leave more land in our Greenbelts ideal for housing than we would need for generations to come. Taking a 1km ring inside the M25 would yield enough land for more than a generation of building at current London rates, and would represent a tenth of 1 per cent of England’s surface.

Hear, hear.

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Comments

  1. When you start digging into the urban planners justifications for their approach, what you find is a paucity of “evidence based research”. What you also find is a resilience to evidence based research from the likes of Cheshire and colleagues at the LSE.

    Their favourite “research” is the famous Newman and Kenworthy correlations between density and energy consumption. This has been comprehensively critiqued by numerous academics, with no effect whatsoever on its appeal to the planners and the planning schools which “educate” them.

    A very, very basic rule of statistics is that correlation is not causation!

    In fact, as we are finding out, expecting there to be a causative effect from FORCED intensification and efficiency per se, is completely erroneous, so far as to be yet another classic illustration of Hayek’s thesis about fatal conceits and unintended consequences. All this gets ideological fists up instantly; the urban policy world is riddled with lefty ideologues who do not want to accept that Hayek et al have been proved right again.

    In so far as forced intensification does reduce energy consumption, it is self evident that this is due to household discretionary income being constrained by increased housing costs, leaving them less to spend on everything else, not just energy. In fact they are squeezed from all directions, because they are robbed of discretionary income even as the urban economy in which they are enmeshed becomes less and less efficient, especially with traffic congestion, and more and more spatially segregated.

    • “Fatal conceits and unintended consequences” work both ways.

      Given the motivations of politicians and their patrons, what is the most likely unintended consequence of increasing the supply of land for housing?

      I suggest it would be a claim that the housing affordability problem is now “solved” and there is no impediment to increasing the population until we’re right back to square one.

      Given the “positional good” nature of Australian state and territory capital cities (i.e. close to the fountainhead of economic rents) that increase in population might come in part from further internal migration from the provincial towns.

      • If we give permission for an extra 2 million houses, then 5 million extra immigrants might come over here.

      • Stop thinking in terms of “permitting X quantities”. We don’t plan food and clothing like this, why plan shelter that way?

  2. The ‘up-front infrastructure’ charge is not about ‘infrastructure’ at all.

    Yesterday, I received a notice from my council about their need to raise council rates, by 50% over the next 5 years, in order to fund new ‘infrastructure’. That got me curious, so I went to their website and took a look at what infrastructure the council is proposing. Most of proposed increase in spending is for buying up lands and turning them into parks, making the acute shortage of available space is made even worse. It is also what 70% of the ‘up-front infrastructure’ charge is paying for. While I like green spaces, I find this totally insane.

    • Ronin, councils all over are calculating resident access to open space and eyeing off which houses to buy and demolish to add parks.

      My thoughts from 2011:
      http://www.prosper.org.au/2011/12/07/a-walk-in-the-park/

      This council activity is pro-cyclical and very poor economics. They provide yet another prop to prices by increasing demand, reducing supply and raising amenity. Adding parkland is a stimulus activity for when land prices are low, not when they are at 70 year highs.

      An army of FHBs awaits revert to mean.

      Don’t Buy Now!

    • It is even more insane because they have left it until the price they have to pay for the land is through the roof. The correct time to buy up land for urban reserves, is when it is farmland 20 k’s outside the existing fringe, in anticipation of the future. Same goes for future road needs and rights of way for other infrastructure.

      It is “leaving it too late” that makes urban growth containment MORE expensive than “sprawl”, NOT LESS expensive as the myth says.

      • I wonder how long it was planned to buy these properties, and who actually owns them now?

        I would hazard a guess it would be family members and close friends of the local councilors. or the associated family trusts…

        So it’s not insane, as such.

        (Sorry – it’s how my local council operates, so I assume most are like that..)

    • Ronin,

      So the council didn’t mention storm water drainage or footpaths. or gosh, roads?

      Strange that the council would have forgotten to mention those items?

      Also, I guess we could have our blocks cheaper if we didn’t want:

      Water supply.

      Sewerage.

      Telecoms. (probably could do away with this if everyone was prepared to go wireless).

      Power. (Could do it cheaper if people were prepared to have overhead wires and poles – and then sign an indemnity that if they wanted underground power they had to pay for 100% of the upgrade).

      Part of the problem is that everyone wants it cheaper when buying, so they readily agree to cheaper infrastructure. However, once having bought, people then start agitating for upgrades at others’ cost. Got a cheap block near an airport or sewage treatment plant – move the airport and sewage treatment plant…at others’ cost. Got overhead power lines – put them underground…at others’ cost.

      • emess. In the late 1990s, we did new (bigger) serviced lots for $50k. Now they cost around $200k. Please explain to me how such inflation is justified? If anything, the quality of the infrastructure is worse (smaller footpaths and narrower roads, less green space).

        Stop being an apologist for this planning farce.

      • UE,

        So, can you tell me how is the cost of a block split up into:

        Cost of infrastructure and developers’ margins.

        My response was to the specific question of Ronin talking about parks only. My point is that of the infrastructure costs, parks are only part of the overall infrastructure charge.

        That was my point to Ronin – what that has got to do with apparently apologising for or condoning the total cost of land is not immediately apparent to me.

        Now my point to you is: if you want a serious debate, something a little higher than the average AFR article (not a high bar surely?), then yes, the rise from $50k to $200k is certainly worth banging on about, BUT you need to look at what the components of that rise are. Then if, the infrastructure charges are higher perhaps we could find out why?

        My position is that I do not apologise for high prices, I prefer a reasoned approach as to what the components of those high prices are, and from that, a forensic attack on those which are unreasonable is more likely to achieve an outcome…for those that want an outcome.

      • Also, I guess we could have our blocks cheaper if we didn’t want:
        Why does the cost of these things need to be accounted for up front ?

      • My response was to the specific question of Ronin talking about parks only. My point is that of the infrastructure costs, parks are only part of the overall infrastructure charge.

        In the OP, Ronin has already addressed why he talked about parks only (as you put it).

        Most of proposed increase in spending is for buying up lands and turning them into parks, making the acute shortage of available space is made even worse. It is also what 70% of the ‘up-front infrastructure’ charge is paying for.

        And your point is?

      • My point is, Mav, that if as UE says, infrastructure has gone up from $50k to $150k, and if as UE also says the standard thereof has not gone up, then maybe, just maybe something a leetle more serious than “its the parks”, or “it’s the infrastructure” or whatever other hand wave is current in the AFR. I have no reason to doubt UE’s word on those points – so if we aren’t getting anything more for our money in terms of infrastructure, who is getting the extra $100k? Parks? Pull the other one. Think, man, think!

        Some serious questions might be:

        What was the effect of changing the monopoly supplier of infrastructure from Government to developers? Is any, or some, or most of that $100k increase due to increased infrastructure requirements? Or is it just monopoly profit due to the way development agreements are made?

        Maybe there are some economists around who might be able to look at industry or sector productivity and give an estimate of what development charge increases should have been between the 1990’s and now. If that were known, then surely the balance of the increase would be due to the monopoly profit to the developer?

        Is the $100k increase in development charges something that all goes to government or council, or is it government charges and cost of local pipes etc? Or is it just a number pulled out of the developers arses when people complain about the cost?

        You might be surprised at the number of people who will believe a developer when told straight faced that it is a government mandated charge that causes the increase and not the poor benighted struggling developer taking monopoly profits.

      • Sigh. That “point” was nowhere to be seen in your response to the OP and has no relationship whatsoever to OP’s circumstances (he even trawled through the boring council website to do his research, for crying out loud).

        Do you now accept that Ronin has a point when he said “While I like green spaces, I find this totally insane.” ?

  3. This blog (and PB and other passionate commenters) have done an excellent job in debunking the greenbelt myth and highlighting the problems with planning.

    I have not seen any reasonable argument presented to counter the view that current planning gives us worse environmental outcomes, worse housing outcomes and actually helps ruin our green suburbs by pushing unnecessary density into them through speculation.

    Alas, this issue looks a lot like tax reform – it is not because of a shortage of good analysis and solutions that we see no reform.

    • Absolutely AJ – Macrobusiness have really help light the torch on this subject and have done a tremendous job at carrying the flame ever since.

      If as an individual you agree with the very logical and increasingly empirically supported arguments that Leith and MB have made on this subject, then you really need to light your own tourch from their flame and help cast light at every opportunity to those who’ve been kept in the dark about the evil outcome that UGB’s are having on land prices, and increasingly, younger Australians.

      Arm yourself with the facts, arm yourself with the evidence and refute the self interest of those who argue for the maintenance of these artificial and absurd policies.

      • Exactly Disco Stu. These urban boundaries and smart growth religions are a fraud.

        As they currently stand they are fraud and should be called as such.

        Indeed there might be some valid concerns behind the ideas. First expose the fraud THEN work on a fair and effective solution to the concerns.

      • That’s exactly it, Claw.

        The debate is so often framed as “affordable housing versus the excessive costs of sprawl”

        There is NOT excessive costs of sprawl at all…!

        This is like a “when did you stop beating your wife” argument.

        We need to sink the whole fraud, not just argue that “the inflation in the cost of housing makes the gains from the planning policies of doubtful merit”. There are NOT gains from the planning policies at all. Not in urban efficiency or productivity, not in congestion, not in improved local fiscal position or local tax burdens.

  4. Ok UE – I think I agree with most of your thesis on remvoing supply side restrictions to the property market. So devils advocate here….

    How unrestricted do you want development? What do you want our cities to look like and feel like? Can we build anything we want next to our neighbours instead of the NIMBYism now?

    Under your model, do we end up with cities that look and feel like the gold coast strip? I personally find the city ugly where you have a 40 story bldg next to a house. Its all concrete, no community feel and road congestion.

    Is there still a roll for planning, and what is it?

    • Role not roll. Dear me.

      Hopefully what Leith is calling for is ‘good planning’ not ‘no planning’.

      A few points:

      – Surely a greenbelt used for Intensive agriculture isn’t wasted space. It provides food for the urban population.

      – Not all public transport systems are 100% radial (although most Australian ones are). Look at a map of the tube. You can get across town quite easily. Combined with the DLR, London Overground and buses you get just about anywhere all using the Oyster Card.

      • As Paul Cheshire says in his article, and I have often said the same, it is possible to “preserve land” without inflating the price of urban land, simply by not making it a continuous “belt” of preserved land. Cheshire suggests “wedges”. I suggest that, or “splatter” reserves.

        In fact the “belt” is the least efficient by all measures, apart from the rentier property owners.

      • Firstly Role/Roll -> blame that on lack of morning coffee and how spellcheck has invaded our lives. Anyone else noticed how bad spelling and grammer has become when typing unaided?

        Anyway -> as for planning. I just think we do need to be careful here where this Texas model is put on a pedestal as the way to go. I havent been to Dallas or Houston (except transiting), but are these great cities, good communities etc?

        I hear all the economic arguements on getting rid of supply constraints, but life is not all economic theory. I cant beleive I am saying this but soft stuff like how a community interacts is important as well. Are there cultural hubs where nightlife exists and live music can thrive as well as quiet neighbourhoods with street cricket? Can we still plan (restrict activity) to create the cities and neighbourhoods we want?

      • “Are there cultural hubs where nightlife exists and live music can thrive as well as quiet neighbourhoods with street cricket? Can we still plan (restrict activity) to create the cities and neighbourhoods we want?”

        The answer is yes, and the private sector will do it because there is demand for it, if they can get the land affordably enough. The Unconventional Economist points out in his post above, why developers cram things in and there is sterility and a lack of amenity – the land costs too much.

        Check out “The Woodlands” near Houston. A private sector development planned by the famous Ian McHarg.

    • MM, what UE presents is quite coherent. Sure, have growth corridors and eco reservations. But make sure the contest is between land vendors for high value residential subdivision, not between new home buyers competing for an artificially constrained number of sites.

      Melbourne’s UGB is huge, but the land available for new homes is confined to a handful of postage stamps – the Precinct Structure Zones. This device inflates the cost of land for 200 km in all directions from Melbourne.

      Double, triple, quadruple the PSZs and let raw land prices reflect amenity.

      • Excellent comment David. By all means have all sorts of restrictions and convenants. But when price and rent rise above norms this must be taken as a sign of failure and choked supply – FIX IT.

  5. The comments on the article are interesting, note the boiler plate denial regurgitated by the London wing of the ‘Council for the Protection of Rural England’.

    When defenders of the status quo issue weasel words like ‘compact’ and ‘sustainable’ they always mean the consequences of which applying to some other poor bugger.

    If the same assessment was applied to their upper middle class lifestyles in central London, they would cry blue murder.

    The CPRE is a ‘charitable’ organisation run for the benefit of large landowners, with a long history of arguing against anything which would see benefits of property ownership going to people who are ‘not like us’.

    Former CPRE presidents like Max Hastings live very comfortable upper class existences in multi million pound manor houses in rural Berkshire.

    Flying the ‘concreting’ over everything scare

    http://www.dailymail.co.uk/debate/article-2293007/How-local-democracy-crushed-jackboot-Governments-Mr-Concrete.html

    on a regular basis to maintain their property values. Supported by establishment worthies who chair the largest land owning organisation in the UK with

    “Sir Simon Jenkins, chairman of the National Trust, said a new generation cannot assume an automatic right to affordable housing in the countryside”

    A tremendous f*ck you to everyone who isn’t a well connected insider.

  6. Having spent two years growing up in the Cambridge green belt, and the rest growing up in suburban Australia, I can say of the claim “It is almost equally devoid of amenity value because access is so limited” that it is simply not true.

    Access isn’t limited. The whole area is criss-crossed by public walkways and bridlepaths (public rights of way dating back to the coronation of Richard I) and other accessible land.

    For us children it was a wonderland of exploration, especially compared with the depressing sterility of Australian suburban sprawl.

    Greenbelts are not like suburban parks. They are a real interface with the countryside.

    The important point is not the amount of greenbelt (area), but the length of interface between the greenbelt and dwelling. (Think fractal geometry.) As long as they preserve their non-urban character, the greenbelt – or greenbelts – need not be very wide.

    Those who advocate corralling us all into endless sprawling suburbia – with the occasional park – because it is more “efficient” might stop to ask themselves what they see as the object and purpose of human existence.

    • Large green spaces for the community is very different then protecting a hobby farming elite at the expense of people’s lives. What is the point of life may be more rightly asked by a kid living in box on a 300sqm box miles from any where and packed in with other rat boxes.

      Our outer regions could be a mix of large block acreage, big parks, hobby farms and urban housing – but it’s not it is endless soul destroying sprawl – this is what the planners have given us

      • I can’t disagree with all of that.

        There are good solutions available. I just fear that the single-minded attack on greenspace – after it has been put through the wringer of profit and politics – will come out the other side as endless, sterile sprawl.

        There are good solutions available: “fractal cities”.

      • I think what you are saying and what I am saying and what Paul Cheshire is saying are similar.

        Low density sprawling US cities do not lack Green space, and it is a darn sight more accessible to most people.

      • There are good solutions available.

        And they are desired, afforded and paid for by consumers if there isn’t a land premium. Sydney’s blue mountains was an exmaple of this up until the 1990’s.

        I just fear that the single-minded attack on greenspace – after it has been put through the wringer of profit and politics – will come out the other side as endless, sterile sprawl.

        There are good solutions available: “fractal cities”.

        Modern sprawl is also a side effect of planning intervention in the first place. Typically with set backs and story limits.

        When blocks started to go below 500sqm in Perth, I pondered the waste of 6metre setbacks at the front, consuming between 90-100sqm of that valuable 500sqm.

        I’d have a house 30cm from the footpath and the rest in the back. I’d also make it two story, or mezzanine allowing sub 150sqm floor space.

        But these are rules planners gave us.

        The funny thing is, the most vibrant urban areas by todays parlance, are those inner city areas designed when there were minimal planning rules.

        So in Sydney where we once had Roselands and Eastwood as the urban fringe, but with the prospect of Hornsby and Milperra as the leap-frog destinations, without the rational expectation of land rationing and extraordinary gain from landbanking, we had affordable land and no one threatening the green amenities of royal national park or kuringai national park and no frenzied land bubble.

        No one is asserting it’s time to pave these two parks to save housing, it’s being said to allow market mechanisms to bypass rentiers whose interests are served by enforcing captive customers.

    • Those who advocate corralling us all into endless highrise suburbia – with the occasional greenbelt – because it is more “efficient” might stop to ask themselves what they see as the object and purpose of human existence.

    • Absolutely correct Mr M.

      If a green belt were say 1km in width before the next wave of suburbia, then at 80km/hr that is less than one minute traverse time through the belt.

      If land was available for development past the green belt, how is that extra forty five seconds of travel forcing up prices? It makes very little sense if one runs the numbers.

      I would suspect that there is some other issue, quite apart from green belts, which is actually the issue, and that the green belts are just being used as a smoke screen.

      In fact, I can easily imagine that a city with circumferential ‘green belts’ which had a service corridor of roads, trunk water supply, power and telecom discreetly down the middle (so there would be 500m either side of a 1 km wide ‘green’ activity), would actually be far cheaper to construct and maintain than trying to get these trunk services down crowded normal road corridors.

      While I am a little dubious as to UE’s analysis about radial vs circumferential transport suggestions, circumferential green belts with road services corridors running through them at 500m inside, would provide a relatively cheap way of doing what he proposes.

      Given that clever use of green belts not only improve public amenity, but could actually make public infrastructure much much cheaper, I wonder about the motives of those behind the anti-green belt issue. The question as always is cui bono?

      • “If a green belt were say 1km in width before the next wave of suburbia, then at 80km/hr that is less than one minute traverse time through the belt.

        If land was available for development past the green belt, how is that extra forty five seconds of travel forcing up prices? It makes very little sense if one runs the numbers.

        I would suspect that there is some other issue, quite apart from green belts, which is actually the issue, and that the green belts are just being used as a smoke screen.

        Your argument would hold some weight if it was the case that the UK’s greenbelts were only 1 km wide, which they clearly are not.

        Stop muddying the waters with fact-less arguments.

      • UE,

        Get out of bed the wrong side today?

        I was making the point that green belts per se are not necessarily a problem, and gave and example contra to the UK position. Yep, the whole point I was making is that by not doing it quite that way they do it in the UK, we could keep the amenity they have there, and make infrastructure cheaper, and have your circumferential roads to avoid the CBD to boot.

        WTF do you want? Blood?

    • Stephen, thanks for the interesting insight into the public access walkways and bridleways. I’ve often heard my UK friends speak very fondly of them.

      What I worry about in Australia is without a similar established tradition we might not end up with the same sort of access. Most of the green belt i see out my side of Melbourne are private horse “farms”.

      • The number one reason for the sterile, amenity-bereft form of “carpet development” we have, is the high cost of the land as incrementally rationed out to developers.

  7. Great article. ‘Tis a pity there is little to no political will to reform in this area. Boundless plains to share.

  8. Some good points. There is plenty of space, would it hurt to use more if done with intelligent planning?
    A few points: major hurdles relate to our collective mindset that worships the car, (ignoring energy/time inefficiency) and land-release/tax policies written by the select few who want to maintain the status quo.
    Cars have eaten cities. The freedom offered by the petrol-horse is basically restricted in direct proportion to population growth. Addiction to car use, seen as some kind of crowning glory of civilisation, is going to be one hard habit to break.
    Then there is population growth (Aus has about x4 times growth of UK) and a tax system heavily skewing property ownership towards investors. If UGB are relaxed, and prices even dropped, does anyone believe investors would stand by idle? And really, would the banks be prepared to lend less than the maximum they now get away with?
    Every time I hear some politician complain about productivity, I think about the cost of land – the biggest handbrake on productivity around – a handbrake that is practically heritage listed.

  9. Leith … great work !

    It is very pleasing to see UK urban economist Paul Cheshire getting a good airing.

    In short … urban strangulation (because Governments have lost control of their costs) is a poverty creation programme.

    Inflation is not wealth creation. It is wealth destruction.

    Hugh Pavletich

  10. Another ugb article, ho hum

    How about you visit Melbourne, now tell me what your ideas on UGB would do and how they would change things?

    Much of the employment is in the CBD and inner city suburbs, a few remnants of of manufacturing past exist in areas like Clayton

    So would changes to the UGB do anything? Melbourne is built up to 40-50kms in the east, 30kms in the north and west

    So how about we remove the boundary altogether and build where? 60kms to the east? What would this actually solve? Would ANZ suddenly decide to move its HQ from the CBD to Drouin? Me thinks not

    And would this solve the commuting problems of those living in the outer areas? No

    Yes I agree that there is a lack of transport options, roads are clogged and postage size lots are being offered in new estates, but I have to say your solution is a empty fail

    Sorry to be harsh

    • I am not so familiar with Melbourne. But Sydney now has a number of employment hubs. CBD’s exist in Sydney, Nth Sydney, Chatswood, Parramatta. Business parks have started opening in areas like Homebush. So you can see how if orbitalal networks were added to the radial transport system you could look a bit more like London over time. Not that I am saying London is the ideal – but their Tube is pretty good.

      • I like the hub in Parramatta, haven’t seen Chatswood

        It is a good idea, however we don’t have the transport links in an orbital manner, if we did then I could see similar hubs forming in Glen Waverley, Doncaster ect

        It won’t happen, no room for an orbital train system and no money, our state loves building toll roads at the expense of train lines

      • I agree with your sceptisim. But London has had more time to evolve. I have been surprised coming to Sydney (been here since 2005) at how the northern beaches and eastern suburbs are so poorly served by rail. I am also surprised how little density exists in the SE around the UNSW down to Malabar. Malabar actually is weird, a prison right on the beach, could be the equivilent of Coogee or Bondi if settled with a clean slate.

  11. UE,

    In relation to the question of travel via the CBD.

    It is not just sufficient to point out where one traffic destination is, ie employment, but where the other travel node is, ie home. It is the integration of the flows between both nodes that determines where the best transport solutions lie.

    So, for example, if in an idealised circular city, maybe only fifteen percent of work is done in the CBC, but if another 25% is best accessed from people’s homes by going through the CBD, the transport solution is going to be quite different compared to the situation where there is no further employment able to be accessed by going through the city. In the first case, 40% of commute is either to or through the city, and in the second only 15%. A simplistic analysis of just one node (ie destination for employment – leaving aside shopping/recreation) is not that illuminating for serious discourse.

    An economic analogy would be the case of saying that person A gets an economic benefit without any discussion of whether it is person B or person C who pays for that benefit. Which economist, conventional or otherwise, would regard as valid, a conclusion about a flow of money to a particular sector of the economy without any reference to the source of that monetary flow?

    Traffic is a real world analogy.

    • There are theoretical papers now, by William Wheaton and by Alex Anas et al, supporting the way cities evolve and disperse and capture efficiencies, not lose them, in the process.

      The more dispersed, the flatter the urban land rent curve, the more mixed the land use, the more efficiently everyone can co-locate and the more congestion will be dispersed, not concentrated, and the shorter average trip distances and times will be.

      And real life data is tending to show this. Planned high density means worse traffic congestion, greater unaffordability, more forced bad location decisions, reduced urban productivity, reduced income growth, increased debt, etc etc.

      • I get this now hey.

        We have this fetish of demonising ‘urban sprawl’ as unaffordable in terms of infrastructure.

        It’s like saying 2 cities of 1 million, 250 kilometres apart are ok, in terms of funding amenity.

        But say those CBD’s were 30km apart instead of 250km, thus became a conurbation, all of a sudden a solitary 2 million population city is different in terms of funding.

        For a lack of better description, what is needed is 2+ cbds to be at the centre of 1 million populations each, dispersing providers of retail space, commercial space, industrial space. So more lax zoning rules.

        Disparate locations like this cut down on commuting times.

        I know where we differ re:rail, but it would probably correlate with your argument that an outcome of urban rail reinforces planned high density, as well as seeing land owning parties where there land it favoured by rail tend to capture the planning and political process to increase their land value… the obvious ‘need’ for centralisation via radial railway networks.

  12. Nice article Leith. The comments critical of your thesis seem to be picking at rather small nits and ignoring the enormous leech that is sucking the lifeblood out of our country.

  13. Substitute “energy” with “land”, “America” with “Australia”, and the various types of energy with various land use in the following text;

    “Those who preside over the worst energy shortage in our history tell us to use less, so that we will run out of oil, gasoline and natural gas a little more slowly. Conservation is desirable, of course, for we must not waste energy. But conservation is not the sole answer to our energy needs.

    Large amounts of oil and natural gas lay beneath our land and off our shores, untouched because some seem to believe that the American people would rather see more regulation, taxes and controls than more energy.

    Coal offers great potential. So does nuclear energy produced under rigorous safety standards. It could supply electricity for thousands of industries and millions of jobs and homes. It must not be thwarted by a tiny minority opposed to economic growth which often finds friendly ears in regulatory agencies for its obstructionist campaigns.

    Make no mistake. We will not permit the safety of our people or our environmental heritage to be jeopardized, but we are going to reaffirm that the economic prosperity of our people is a fundamental part of our environment.”

  14. Whilst I am convinced by this and other recent articles that residential land supply is a major issue I can’t help feeling that other relevant issues are neglected in the comments. It’s not as if politicians do not have the will to review urban planning. They favor the existing situation – who owns them ???. Removing the UGB will change nothing unless we also change the release vehicle of the land. I presume all read the article yesterday on German planning / land release via local authorities not developers. A model for consideration PB and how now ??

  15. There are some incorrect assumptions about UGB increasing housing prices in the article. When examining core/inner housing vs sub/exurban housing a more accurate measure is total cost, which is housing + transportation costs. There are studies, Toronto as an example, have shown that sub/exburbs have a higher total cost than inner/core. The general population do not have perfect information and tend to NOT include or vastly underestimate the cost of transportation in the sub/exburbs vs housing in the inner/core.

    Land scarcity is only a part of the reason for increasing housing prices. Construction material, labour and interest rates play a bigger role for housing price inflation. Demographics and life stage play a bigger role in housing type and location preference. Also the maintenance of infratrucutre to ex/suburbas are subsidized by tax payers in city-wide; on a per capita basis infrastructure maintenance is mroe expensive in the sub-exburbs than inner/core.