From one very confused immigration booster, Rob Burgess, today:
The Coalition has ramped up its ‘socialist’ attack on the opposition, hoping to counter Labor’s ongoing campaign against ‘inequality’.
Finance Minster Mathias Cormann said in a fiery speech that Labor’s “socialism” would “flatten” aspiration and that young Australians would “leave Australia and go where hard work, risk-taking and success are more highly valued”.
Well, one aspiration has already been flattened for many, but it has nothing to do with socialism and everything to do with inequality.
It’s the aspiration to buy an affordable, suitable home within a reasonable distance of job opportunities.
A major reason for this is the tax break-induced credit bubble, though the Turnbull government prefers to focus on the highly misleading ‘supply problem’.
By some definitions we don’t really build cities at all.
Definitions can be fuzzy, but the United Nation’s ‘World Cities 2016‘ survey uses three:
– the ‘city proper’ which is analogous to old-Paris or old-Beijing;
– the ‘urban agglomeration’ or the ‘built-up’ parts;
– and the ‘metropolitan area’ which is defined by the commuting patterns and economic relationships of residents.
Australian cities have very small ‘city proper’ areas, fairly small ‘urban agglomerations’ and massive ‘metropolitan areas’ – sprawling miles of suburbs.
As the ABS map below shows, Sydney has become as large as London, but with very low population density.
That kind of sprawl is inefficient in economic terms, and offers a bleak future for young Australia.
Property consultant and University of Sydney lecturer Shane Geha points out that the aspiration to own a home in Sydney can mean looking at a 400 square metre block of land 70 kilometres from the CBD, costing $425,000.
Mr Geha, whose consultancy specialises in getting local councils to rezone land for higher-density developments, thinks the solution is to ‘retro-fit’ larger parts of the metropolitan areas – to expand the ‘built-up’ zone.
That is happening to a degree, but Mr Geha thinks much more extensive public transport infrastructure is needed to make it possible.
Historically, Australians wanted to live in suburbs, and enjoyed the transport that helped create them – the motor vehicle.
However, basic arithmetic says that every additional 10km band of suburbs, assuming the same population density, will add double the number of people housed in the previous 10km band.
When large parts of those outer bands of population crush into the city each morning, horror commutes are the result.
Urban planners have long known that when this happens, demand grows for new homes closer to work, creating a maximum commute time of about an hour, known as the ‘Marchetti constant‘.
As Professor of Sustainability at Curtin University, Peter Newman, puts it: “Cities adjust; they don’t keep expanding travel time.”
But to adjust, or to be retro-fitted, local councils and state governments have to approve the right developments in the right timeframe.
Mr Geha, who holds a PhD in urban planning, recently returned from Dallas, absolutely incredulous that “rezonings [in Dallas] take four to eight months with most development applications completed in under one month”.
That, he says, is like “greased lightening” compared with Australian planning processes – meaning the expansion of new ‘built-up’ zones is too slow.
For some, like high-profile entrepreneur Dick Smith, that means we should vastly scale back immigration, to a level our dysfunctional cities can cope with.
But that comes with its own costs – such as choking off Australia’s lucrative ‘education exports’ sector.
It also sends a pretty clear message to young Australians: while other developed nations can plan and create functional cities, but we can only release more and more far flung ‘burbs.
And there’s not much to aspire to in that.
Let’s unpack the logic here:
- young folks are disenfranchised by the bubble;
- it’s the fault of negative gearing;
- there’s no housing shortage;
- except that there is a housing shortage, in inner burbs;
- that’s crush loading outer suburban infrastructure;
- we should build much more infill, much faster;
- Dick Smith’s solution is wrong because it will trash the education sector.
I could go and on about how wrong this all is but let’s just leaven the argument with a few facts:
- we’ve just built more infill housing per capita that anyone worldwide by an huge margin. At one recent point Sydney and Melbourne had more cranes than Dubai and New York;
- the process was spectacularly fast;
- however, mass immigration is even faster at 200k per annum and that it is already threatening to overrun the tidal wave of supply in Sydney and Melbourne with the latter seeing falling vacancy rates;
- we’re running mass immigration straight into dysfunctional planning for which there may be lots of academic discussion but there have been no solutions;
- it is also weighing on wages especially at the entry level for youth and, as Burgess says, crush-loading infrastructure;
- not to mention jeopardising Paris agreement climate change commitments, as well as encroaching enormously on the natural environment;
- finally, drop the education rubbish, Rob, it’s wrong. If immigration is cut in half, interest rates and the dollar will fall and education will boom.
In short, mass immigration is a comprehensive War on Youth. The same youth Burgess claims to care about.
Now, I know Rob quite well and I know he cares about the bubble. We scaled Kosciusko together in support of Steven Keen.
But there is no halfway house here. Mass immigration is now the housing bubble. That’s why nobody in Canberra wants to cut it. That’s why MB is attacking it. The two cannot be separated in some wowserish act of unreason.
Line up the drivers. Credit is being constrained by macroprudential and the investor boom is over. Supply has gushed forth. Yet house prices keep rising in the population growth centres, largely owing to two factors:
- cashed up foreign buyers, and
- fundamental pressure from more people.
Both must be addressed or the bubble will not deflate, at least not until we reach total debt exhaustion (which is not that far distant!).
It’s just a sad fact of life. You can’t hate the housing bubble and love mass immigration.
Time get your hands dirty, snowflake.
