Queen Lucy: ‘Let them eat apartments’

Queen Lucy Turnbull of Sydney recently launched the “three cities” vision for her kingdom which has gotten certain financial sector interests excited. From Westpac [our emphasis]:

Designing Sydney around three economic hubs presents a substantial urban planning challenge, but the future benefits in productivity gains and liveability are predicted to be profound.

Sydney is renowned worldwide for its quality of life, measured in part by the enviably short distance from the business district to the beach and the urban sprawl around its harbour. But the city’s success has driven rapid population growth, putting enormous pressure on infrastructure and living space, which, if left unaddressed, could undermine the Sydney’s ‘liveability’.

Westpac has collaborated with Deloitte on a new report, ImagineSydney, Live, that examines the current and future liveability of the city, defined as the ease with which Sydneysiders are able to get to the places that they need or want to be.

Deloitte mapped the time it takes for people to travel to work, schools, healthcare facilities and shops across Greater Sydney to understand how liveable its various districts are, using as a measure the idea of a ’30-minute city’, where residents can access all that they need within half an hour.

It is no surprise that Sydney’s most liveable areas are clustered around the shores of the harbour. The CBD, Haymarket and The Rocks offer their residents proximity and easy access to jobs, schools, supermarkets and leisure; they contain its most visible cultural venues and centres of government, as well as a thriving bar and restaurant scene. A chart of the city’s liveability radiates out from there, almost in concentric circles.

“If you think of Sydney at the moment, it’s a monocentric city. Much of the focus and attention and lots and lots of the employment is within the Sydney CBD,” says Kathryn Matthews, Partner, Deloitte Access Economics and one of the authors of the report. “As Sydney grows and the population grows, that’s going to be unsustainable. We’re not all going to be able to travel into the city. Congestion is rising, people are living further away from where they work. Liveability in terms of access is declining.”

The less liveable areas further out are already absorbing a huge number of people. Over the past decade, Sydney’s outward sprawl has accelerated; the greater city’s population passed five million people in 2016. That growth has pushed the urban frontiers further west, and increasingly distant from the CBD and its nearby concentrations of employment, cultural venues and leisure facilities.

Overcoming geographic inequality

Communities are ever more remote from the economic heart of the city, and growing swathes of the population are less able to access the opportunities that Sydney has historically offered, contributing to rising inequality in wealth and health.

Research from the Committee for Sydney in 2017 found an alarming disparity in healthcare outcomes between the west and the centre. People living in western Sydney are twice as likely to die from cardiovascular diseases as those in the centre, and the area has a substantially higher incidence of diabetes.

Longer commutes by car are exacerbated by increasing congestion — Sydney has seven out of the 10 slowest roads in Australasia, according to Austroads — with serious impacts on productivity and health.

A 2017 study conducted in the United Kingdom by the University of Cambridge for Mercer found that people who commute to work in less than half an hour gain a full week’s worth of productive time over those that take an hour or more to get to work. Those with longer commutes are also 33 per cent more likely to suffer from depression, 21 per cent more likely to be obese and 46 per cent more likely to get less than seven hours’ sleep a night, the study found.

Understanding these problems now, and planning to address them, is critical, because the city’s growth is only going to continue. Infrastructure Australia predicts that over the next 20 years the population will increase by another 2.7 million people, putting further strains on housing, infrastructure and services.

The three-city solution

The New South Wales government’s solution is to see  the city grow around three centres: an Eastern City, encompassing the CBD and its surrounding area; a Central City, based around Greater Parramatta, which is already a growing economic hub; and a Western City, centred on the planned Western Sydney Airport at Badgery’s Creek and including Camden, Campbelltown, Liverpool and Penrith.

Deloitte estimates that the impact from this strategy – giving more people increased access to the jobs and services they need – due to agglomeration, reduced travel time and new infrastructure investments could be as high as AUD10 billion per year. Shorter commutes could unlock AUD3.5 billion to the Sydney economy annually, while the positive health and social outcomes from better work-life balance could reduce the strain on services.

However, making this happen — moving from the idea of a multicentric city to one that functions in that way — will need substantial additional investments in infrastructure, and mean finding ways to bring businesses and people into the new centres.

“The trick to all this I think is actually creating the jobs,” says Jon Ross, Global Head Public Sector at Westpac Institutional Bank. “If people actually have work and you build the infrastructure for that and then support it through health and education, then people will be encouraged to actually live in those environments.”

The state government has already begun to lead by example, shifting several key agencies from eastern Sydney to Parramatta, Ross says. “They are already decentralising. The question is, how quickly will businesses follow that? The biggest employer is always small-to-medium enterprise, so we need to encourage the development of small business.”

The Western City is effectively a greenfield site, but history shows that the construction of an airport, is a catalyst for businesses – particularly those in retail, manufacturing and logistics – to come to the area.

A new approach to infrastructure

To work, these new centres need to be well-served by transport links to and from the communities around them, and they need to be well connected to one another. This means changing the historic mode of infrastructure development, which has been characterised by large investments in infrastructure heading into the CBD from residential areas.

“The whole of this development requires an unprecedented coordinated urban planning and financing approach across all levels of government and private sector,” says David Scrivener, Head of Infrastructure and Utilities at Westpac Institutional Bank. “There’s a need not just for the traditional model that we have – in terms of moving enormous numbers of people from the suburbs to the city and back out again – but to ensure that there’s interconnectivity between the various economic hubs.”

The New South Wales government is investing AUD80 billion into infrastructure over the next four years, financed through an innovative policy of asset recycling. Nearly AUD15 billion has been committed through the Western Sydney Infrastructure Plan, Parramatta Light Rail and Sydney Metro Northwest projects, which will ease pressure in the west of Sydney and create some of the network needed to build out the Central and Western Cities.

Just opening up the two new areas of the city may not be enough to make sure that liveability keeps pace with Sydney’s growth. The ImagineSydney, Live report, demonstrates how businesses and individuals need to find different ways of working. Again, government is leading by example by embracing digitisation, meaning that people no longer need to physically come to public buildings to interact with a whole range of services.

Private sector changes

Companies need to make similar changes too. They need to look at how they interact with customers, making use of new technologies to optimise their delivery channels. They need to map their supply chains and think creatively about how they can collaborate with others to share infrastructure or find agglomeration benefits by being clustered close to similar businesses. They also need to rethink how and where their employees work, considering how much of their workforce really needs to travel into a central location every day and adopting flexible and agile working practices.

Simple changes, such as staggering the times that school or work starts, or encouraging employees to come to the office only when necessary, could have quite significant impacts on accessibility, by reducing the pressure on roads at peak times.

To make those changes at a systemic level would take a quite profound shift in mindset, decoupling both employee and employer from the industrial revolution-era notion of the standard working day and the commute to the office.

Deloitte’s research found that the majority of working Sydneysiders are still making ten trips a week to and from the office, consistent with the traditional nine-to-five. Telecommuting, working from home and flexible hours remain the exception, rather than the norm, despite the availability of technologies that would allow them to be more widely used. As Matthews says, a lot of the impetus may need to come from individuals.

“The conversation we want to start is getting people to really think about: ‘why am I travelling 40 minutes from Western Sydney into the city every day? It’s not good for me, I miss out on time with my family, I could be doing all these other things with that valuable time’,” she says. “It’s about thinking: ‘why am I travelling all that way? Is there a different choice that I can make?’.”

Cripes, 40 minutes from Western Sydney now? Try two hours. And, as Infrastructure Australia made plain recently, whether Sydney elects to have one, three or a thousand cities, the end result is the same, falling living standards and much longer commute times:

Except in Queen Lucy’s Woollahra palace of course. The ABS yesterday released data from the 2016 Census measuring Socio-Economic status, which revealed that Queen Lucy’s courtiers in the inner-eastern suburbs and north shore are among the most privileged in Australia:

Ku-ring-gai on Sydney’s upper north shore is Australia’s most advantaged Local Government Area (LGA) according to new data released today from the 2016 Census of Population and Housing.

Home to just over 118,000 residents on Census night, the leafy area is officially the most advantaged LGA in the country based on the ABS’ Socio-Economic Indexes for Areas (SEIFA), which ranks areas in Australia according to relative socio-economic advantage and disadvantage.

Another Sydney LGA, Mosman, which includes the affluent suburbs of Balmoral, Beauty Point and Clifton Gardens, has also been ranked amongst the most advantaged. In fact, SEIFA data shows the 10 most advantaged LGAs in Australia are all located around the Northern and Eastern areas of Sydney Harbour and in coastal Perth…

Sydney’s Western Suburbs, by contrast, are home to significant disadvantage, as illustrated by the next chart (Parramatta is denoted by the black dot for reference):

Not surprisingly, Sydney’s West is also the region that has absorbed the lion’s share of Sydney’s 775,000 population increase over the past decade (see bottom right panel below):

And the West is projected to absorb the lion’s share of population increase out to 2036, whereas the Turnbull’s LGA of Woollahra is projected to take the smallest population increase:

Back in December, the Urban Taskforce projected that Sydney will transform into a high-rise ‘battery chook’ city mid-century, whereby only one quarter of all homes will be detached houses:

By protecting affluent areas from substantial development, while crush-loading already disadvantaged areas, Queen Lucy is ensuring that only the wealthy elite can afford to live in a detached house with a backyard, while widening inequality across Sydney.

‘Let them eat apartments’ she has been heard to whisper.

Comments

      • I hope so. And I think that dying economic opportunity will help speed it along as immigrants with valuable skills pick up and leave. But I still find this sad. The areas around where I grew up which used to be full of small houses with yards are now replaced with apartments, 40kms from the CBD.

      • “The areas around where I grew up which used to be full of small houses with yards are now replaced with apartments, 40kms from the CBD.”

        40km from the CBD!! Welcome to tomorrow’s ghost towns.

      • nexus789MEMBER

        A sharp economic downturn will end it like it did in Ireland and Spain. It could be epic though given the amount of debt that has to unwind.

      • What are they complaining about, we’re building two new cities for them. The “Central River City” will be where your accountant and the guy who fixes your internet live, and the “Western Parkland City” for the people who deliver your online shopping.

      • Having been to Macau I agree, they can live in tiny boxes or bird cages like in Hong Kong, that doesn’t mean they are happy or it’s a nice place to live, but in Lucy land i’m sure it’s full of water views and big backyards. 😀

  1. This idea has worked in Houston making areas like The Woodlands major employment centers, reducing traffic to the city center. Exxon (the words biggest company) sold its downtown skyscraper and bought 500 acres next to The Woodlands to move all their staff to join many other companies in the area. The staff could buy lovely homes for 200k-300k 10 minutes away, The Woodlands has a free tram, as well as many cycle paths and the houses can barely be seen on google due to the canopy of trees.

    We looked at a house for $325,000 it is 10 minutes from the Exxon campus it has 3 car garage with 3 car carport, 4 bedrooms 4 bathrooms (plus study) on the golf course on a third of acre with a putting green in the backyard, gamesroom on the second story with french doors opening up to balcony, 20ft ceilings in the living areas. It is a bit too big for us so we are looking for more affordable ones in the area.

    All you need in Sydney is to make an area affordable for development, business and housing, then the businesses and people will move there. It took us 3 hours to get fire, sewer and development permits on our new business, and cost about $500 in fees for a 3 acre development, inspectors from the county need about an hour notice for inspections.

    The Woodlands did this all without government funding, without zoning or government planning or restrictions. They built their own sewage treatment plants and infrastructure. Building affordable housing and giving land to businesses at lower than market rates (naming the street after the business), with the developer making a billion dollars doing it.

    • The Woodlands is neoliberal capitalist urbanistic utopia. Everything designed for fully controlled consumption driven by underlying depression. ‘s like real estate version of antidepressants – the kind that keeps you alive but continuously depressed.

      • “The Woodlands is neoliberal capitalist urbanistic utopia”. Really? Have you got some evidence to back up that up? Please tell us all why The Woodlands is a bad, socially destructive development that should not be allowed by policy makers?

        Everything I have heard and seen about it looks positive. I guess if you hate the Woodlands, then you must also had the myriad of towns across Germany that are built around particular industries.

      • Afraid that Sydney will soon suffer from dead-heart syndrome? I hope so. You get what you deserve, I guess.

        Sydney and/or Melbourne can look at Baltimore as a model for the future. Enjoy!

    • The only problem with this wonderful vision for Australia, is that the businesses are predominantly FIRE sector, which depend on the non affordability of housing, or resources based and are located where the resources are.

      • Spot on comment.
        Thinking by the the likes of LT is that all we need is Sydney. No need for the rest of Australia. Noi need to worry about anything outside Sydney. No need to have productive sectors of the economy. No need for any externally facing industries.

      • …. which is why, when the next recession (probably depression) comes the FIRE sector will see the single largest loss of jobs.

        And bring it on.

    • Yes. What it would take for Australia to be able to do places like the Woodlands is cheap land. But while the NSW Government keeps its iron fisted control on zoning which artificially keeps land prices up it can never happen. NSW also needs an infrastructure funding mechanism like Texas’ MUDs to fund such developments.

      • If you owned a modest home in either Melbourne or Sydney with a decent amount of equity you could move to the U.S. and live like a king in a f#ck off mansion (providing you didn’t insist on living in San Fran, Manhattan etc). Outside of the main urban centres it’s ridiculous what you can get for a few hundred thou’

  2. reusachtigeMEMBER

    Sydney is lucky to have visionaries like the Turnballs. Who have Melbourne got?

    • Ronin8317MEMBER

      Yup, it is a brilliant vision : poor people should live in apartments owned by rich people living in houses.

      • it’s a bit different: poor people should live in apartments owned by rich Australian landlords living in houses overseas because Australian cities are unlivable.

      • And houses are closer to CBD in lower density areas while higher density apartment living further out from city. Lol… Why hasn’t any other city thought of this. Singapore and Paris have it completely wrong 🙂

      • nexus789MEMBER

        Nice cordon sanitaire the Trumbull’s and their rich mates have appeared to have set up around their eastern suburbs – no unsightly blocks or masses of third worlders for them.

  3. Such complete disingenuousness. The “problems” are a feature of deliberately driving land costs ever higher and the “solutions” are little more than false promises and preperation for the next phase of the bubble’s inflation. This is the very essence of Sydney’s (cough) “productive” economy, and it’s no different in any other of Oz’s major urban areas.

  4. LOL I will be chuffed to do the 10 trips for anything under 60mins each way. 40mins, and still being too much that WFH is needed? Pipe dream!
    Even if they pull it off (which won’t happen), then what’s the benefit of the sardine life required for this infrastructure to work – squashed in poor quality box apartments, +40km from water, to be jam packed on transport only 8 times a week. Not sure how that helps mental health?

  5. So, the future for Sydney is this: a tiny white (+ Chinese) elite living in homes with pools etc while a massive underclass lives in 40 storey dog-boxes? Sounds like paradise. Thanks Turdball.