Save our suburbs: shifting the load

Save our suburbs: shifting the load

Our inner city areas are highly valued for work and living, in large part because of past state  largesse. Jago Dodson suggests the time is ripe for a ‘spatial accessibility tax’  that could spread jobs and services far more equitably across Melbourne.

Our suburbs are Australia’s ‘heartlands’,1 but the way we produce and manage them – especially new development – remains haphazard, episodic, fragmented, and under-resourced.

Most of the grand processes of demographic, economic and social change in the Australian nation are enacted within and through Australia’s suburbs. Yet there is an obdurate blindness in our policy-making to our basic suburban grounding. This oversight leads to many social and economic vulnerabilities, ills and harms and to an impotence in policy attempts to achieve a more economically productive nation while strengthening our wider social fabric and reducing ecological injury.

Social disadvantage in Australian cities remains persistently concentrated in the outer suburbs thanks to inflating inner housing markets and uneven employment distribution.

Australia’s suburbs first developed as refuges for wealthier groups to escape the crowded conditions of our early cities but later became a wider ‘solution’ for housing quality and affordability problems.

New transport technologies broadened the suburban housing option to the middle classes who took it up en masse from the late-19th century onwards. It was not until the early-20th century though that this option was made widely affordable to the working class – but at a cost. Employment and government services remained concentrated in the historic city cores of our port capitals. The further one travelled to access cheaper land the greater the transport trade-off in accessing employment and high quality services.

New government, financial and industrial arrangements introduced after World War Two to improve housing quality for less affluent households facilitated a new suburban expansion that buoyed home ownership from 52 per cent in 1947 to 72 per cent by 1970.

The pace and scale of post-war suburbanisation stressed the abilities of suburban municipalities to provide local services. Employment was slow to grow and develop in these new places and state governments were laggard in delivering public services.

By the 1990s scholars were describing wide problems of ‘locational disadvantage’ in which outer suburban residents were remote from employment, education and other community services and endured long car-based journeys to access them.2 The post-1970s economic restructuring compounded these problems while micro-economic reforms wrought a new suburban employment territory of contracting and casualisation.

Many suburban households found prosperity in the recovery of the late-1990s and boom of early-2000s, and took up ‘McMansions’ set among master-planned fringe estates.3 Yet the trade-off between cheaper housing and poorer accessibility persisted.4 Affluence shifted to vulnerability in the later 2000s amid rising fuel and home-ownership costs5 and as the global financial crisis unsettled employment prospects.6 Many suburban households never saw the boom’s bounty.

Social disadvantage in Australian cities remains persistently concentrated in the outer suburbs. This contrasts with those who have found an urban idyll in the older city cores, redeveloped and gentrified by affluent households taking advantage of high value employment concentrations and the sunk wealth of public and cultural amenities.

Redressing housing affordability, at scale, will require active State investment, not simply regulation to extract new ‘affordable stock’ from – city focused – private development.

‘BLUEPRINTS’ FOR OUR CITIES
Australia has long recognised its failure to adequately plan and service its new suburbs but attempts at remediation have been rare and sporadic. The Whitlam Government’s policies were the most explicitly suburban with a core plank being redress of suburban underservicing, such as unsewered lots. The sole explicitly suburban component of the Gillard Government’s 2011 National Urban Policy was an employment location program but it received just $60 million in funding.

The Abbott Government has promised new ‘blueprints’ for Australian cities, but its 2014-2015 Budget offers scant assurance of new infrastructure, save for road investment. Worse, this harsh unwieldy Budget is likely to stress suburban households with increased costs for using already poorly distributed government services, such as healthcare, via user and fuel excise charges.

Few federal or state governments in Australia have articulated and elaborated a comprehensive vision of a more equitable, sustainable suburbanisation. Of course a hasty air-drop of urgent schemes for roads and facilities can always be arranged when an election looms but policy attention soon fades after the polls close.

Even then, rarely do they consider the spatial structure of our cities and the mismatches in population and services. This is despite recognition at both levels of the need for coherent and comprehensive metropolitan level planning7 and regular issue of strategic urban plans but which lack a sound and enduring financial basis for improving underserviced suburbs.

The most consistently applied urban policy in Australia over the past few decades has been ‘urban consolidation’ which seeks to constrain expansion at the fringe and intensify new employment and housing in well-serviced areas. Such an approach is poorly positioned to resolve issues of locational disadvantage.

Australia has long recognised its failure to adequately plan and comprehensively service its new suburbs but attempts at remediation have been rare and sporadic.

Newer denser development driven by the market tends to focus around the high-value inner urban sites with many middle suburban municipalities blocking multi-unit development. Current market-driven private-sector-led consolidation provides improved accessibility in the city cores where it is focused, but little redress to the persistent spatial underservicing and poor accessibility faced by millions of existing suburban households. A gilded citadel is no haven for those outside its gates.

Rather than passively wait for development processes to incrementally build new housing in accessible locations, more proactive planning and investment is needed.

STRENGTHENING SUBURBAN ‘CLUSTERS’
What of the newly released Plan Melbourne? A major feature of the plan is new policy to shape designated ‘employment clusters’ in existing and emerging concentrations. The intended mechanism appears to be private sector investment, the pace and scale of which, in turn, is dependent on long-run economic growth.

Missing from this is recognition that government itself is a major employment sector and that the location of government jobs can influence urban structure.8 A scheme to shift non-strategic government work from central Melbourne to the emergent suburban employment nodes (with good public transport access), as identified in the plan, funded by CBD rental savings, could accelerate suburban clustering at greater scale.

The recent announcement that VicRoads will be moved from inner-city Kew to regional Ballarat suggests government office relocation can be feasible.

The Plan Melbourne scheme expects nearly 1.6 million dwellings will be required by 2051 and projects that two thirds of these would be multi-unit. The spatial distribution of this housing stock, though, is ill defined.

With greater detail to come in a future metropolitan housing map, the Plan promises to focus new housing build at locations with higher numbers of jobs and services. But for those who cannot afford to relocate, this new stock will likely provide little redress for existing locational disadvantage and underservicing.

If Plan Melbourne is to genuinely resolve Melbourne’s entrenched spatial divide in poor employment, infrastructure and employment provision it will need to offer a more positive, pro-active planning stance than simply channelling new market-led growth. Redressing housing affordability, at scale, for instance, will require active State investment, not simply regulation to extract new ‘affordable stock’ from – city focused – private development.

EXTRACTING VALUE FROM UNEVEN CAPITAL
One of the factors behind state government reluctance to deliver better suburban infrastructure and service is the burden this might place on state finances. In a constrained fiscal environment this seems an easy deflection but which nonetheless perpetuates failures to address disadvantage and spatial servicing disparities.

The high accessibility and amenity of inner-urban areas that is capitalised into land and housing prices may offer a solution to this fiscal challenge.

The great concentration of public capital within inner-urban areas has been achieved on the basis of nearly 160 years of Colonial and State government decision-making and capital investment. The 16 rail lines and 30 tram lines passing through Melbourne’s CBD are just one example. The strong growth in CBD employment and housing implies a considerable consumer surplus (or rent) accrues to private parties from this extraordinary sunk capital and its agglomeration effect, but of which government receives at best a minor share.

This surplus may offer a taxation opportunity that could be used to redress metropolitan underservicing by providing capital for new investment in zones that have seen less historic State largesse.

A ‘spatial accessibility tax’, levied progressively on metropolitan properties and based on a relative composite measure of spatial access to employment, infrastructure and services, could have two principal effects.

First, it might fund new state investment in suburban servicing, particularly public transport. Second, it would raise the marginal cost of location in high-accessibility zones, offering greater incentive for businesses to locate in less valuable locations, such as suburban activity centres and clusters. Economically such a scheme would target the economic rent received by businesses based on historical government infrastructure and service investment as well as the agglomeration economies, or productivity savings, that this state-led centralisation has further stimulated.

The tax would fall on those most able to bear it while the fixed nature of landed assets means that it would be difficult to avoid. If spatial accessibility is too abstract a concept, then an expanded land or property tax regime might be a simpler substitute.

Financing issues are now among the most pressing in urban, transport and infrastructure policy. We need to seriously investigate innovative means to redistribute the value capitalised in our uneven and inequitable patterns of metropolitan development. A stronger, expanded and more progressive property tax regime, for example, could prove a powerful new tool for financing suburban redress via land and house price inflation.

The climate seems suited to innovative financing options – Victoria’s new Metropolitan Planning Authority is to be funded from a planning applications levy which, given the distribution of new developments, will have a spatial dimension.

New financing measures should be considered beyond the indecorous lolly scrambles of electoral cycles. Australia’s suburbs have long occupied the fringe of national and state policy making, to their disadvantage. To reset this historical imbalance they need to be placed at the core of new policy, planning and service financing attention.

Jago Dodson is Professor of Urban Policy in the School of Global Urban and Social Studies at RMIT University in Melbourne.

1 B Gleeson, Australian Heartlands: making space for hope in the suburbs, Allen & Unwin, Sydney, 2006.
2 C Maher, ‘Residential mobility, locational disadvantage and spatial inequality in Australian cities’, Urban Policy and Research, 12 (3), 1994, pp. 183-191.
3 G Gwyther, ‘Paradise planned: community formation and the master planned estate’, Urban Policy and Research, 23 (1), 2005, pp. 57-72.
4 I Burnley, P Murphy, A Jenner, ‘Selecting Suburbia: Residential relocation to outer Sydney’, Urban Studies, 34(7), 1997, pp. 1109-1127.
5 J Dodson, N Sipe, ‘Shocking the Suburbs: Urban location, homeownership and oil vulnerability in the Australian city’, Housing Studies, 23 (3), 2008, pp. 377- 401.
6 ibid, C Maher, 1994
7 Department of Infrastructure and Transport, Our Cities, Our Future: a national urban policy for a productive, sustainable and liveable future, Commonwealth of Australia, 2011.
8 M Burke, T Li, J Dodson, ‘Planned Spatial Restructuring of Australian Cities: Are the transport benefits of employment decentralisation policies greater than those of transit-oriented development?’, Proceedings of Fourth National Conference on the State of Australian Cities (SOAC), Melbourne, 2011.

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