Tuesday, August 29, 2006

Wendell Cox on Radio 2GB 28 August 2006

On 28 August Wendell Cox, one of the speakers at the SOS forum of 19 August was interviewed by Alan Jones on prime time on Sydney's most popular radio station, 2GB (673,000 listeners).
You can see the illustrations from Wendell Cox's presentation at the SOS forum on the SOS website http://www.sos.org.au/new_newsletters/August_2006_conference.htm
or on this Blog
These illustrations will substantiate what he said in the interview.
For those who missed the radio interview or were not able to attend the forum, here follows a precis of some of the points covered in Alan Jones' interview from when I started listening this morning:
Alan Jones - What is the correlation between high house prices and urban consolidation?
Wendell Cox – around the world only places where housing affordability has been destroyed, where it does not retain its traditional historical relationship to incomes, is where there are urban consolidation policies. Atlanta sprawls 3 times as much as Sydney and yet people spend less time travelling in Atlanta than in Sydney because traffic moves better. The Atlanta median house price today is $175,000 – relative to incomes that is 1/3 what it is in Sydney.
Jones – that was just fascinating was’nt it. We have this debate – we have got these experts and it is no good having them in the country if we ignore them. Remember how many times I have been saying to you - we need to be able to access land at Goulburn* and everywhere else which will reduce the price of land in order to enable these people to get to work in areas where they want to go in a time which is reasonable.
We have got this stupid policy of urban consolidation – we talk of Meritonising our city …. You say there is a strong correlation in USA, Ireland, Canada, Australian and New Zealand between high prices for residential accommodation and urban consolidation policies.
Cox - Exactly. You don’t have high prices where they don’t have urban consolidation policies or other kinds of land rationing.
Jones - We have got land rationing here. We have released fewer new blocks of land than other Australian capital cities and house prices have gone through the roof.
Cox - You now have the first city of Australia (Sydney) growing slower than the second city of Australia (Melbourne), probably for the first time since the 19th century.
Jones - You say there is a link between prospering the suburbs and dispersing wealth?
Cox - If Australia had had urban consolidation policies in 1946 you would be a much poorer country. People would be stuck in flats that they would be renting. There is nothing wrong with living in high rise if you want to do that except that no government should be requiring you to do that. There is no question that prosperity in USA, Ireland, Canada, Australian and New Zealand is tied up with the suburbisation of those societies, the home ownership that occurred, the fact that people can get anywhere in the urban area by car. Just try living in the Western suburbs or for that matter the Eastern suburbs and getting to work anywhere but downtown.
Jones - You say that government policy, urban consolidation is stealing the future from many lower income Australians?
Cox - Precisely. And middle income as well. And you think about this. The average householder buying a house is going to pay $500,000 more than they would have 5 years ago. That is $500,000 that is not going to new jobs, it is not going to new consumer products. We are talking about something very significant for the economy. The Reserve Bank Governor was absolutely right to suggest that this is a very significant problem.
Jones - You are saying that there are people who won't be able to accommodate these prices and therefore they will be paying rent to landlords for ever and a day.
Cox - Exactly. By government policy you are undertaking a reverse Robin Hood effect that will distribute money from lower income people to higher income people. That does not strike me as the legacy of Australia.
Jones - The urban consolidation policy has come from politicians whose ideological disposition is anti car.
Cox - The urban planners just think they can go moving people around like pieces on a chess board and not have any impact but their impact on the market is destroying the future of many in the Sydney area.
Jones - People should be free to live and work where they choose when economic growth would be greater than otherwise would be the case.
Cox - Latest US census data shows that about 2 ½ million people in just 5 years have moved out of the high cost metropolitan areas of the US such as Los Angeles and San Franscisco. This have been unprecedented. For 60 years people have been moving West in the USA, now they are starting to move in the other direction. If it is a choice between living in a rental unit in the beach or living in a house in Kansas City, Kansas City that all of a sudden looks better.
Jones - In 1988/89, the NSW government here released 10,000 new blocks of land. In the last financial year ¼ of that – 2,500. What is the consequence of that?
Cox - That basically drives prices through the roof. House prices relative to income is three times what it should be in Sydney and the principal reason for that is the government’s stingyness in releasing land on this false premise that mankind is a scourge on the Earth.
Jones - Where should we go on transport.
Cox - In the new suburbs you can provide sufficient capacity. You need to forget extending the rail system to these new release areas where only a small percentage of the people will be riding the trains to downtown which is the only place you can get onto on public transport. 87% of the jobs in the Sydney statistical division are not downtown. Indeed what you need to make the transportation system better is more decentralisation of jobs not centralisation of jobs in places such as Chatswood where I see stories of sewer systems failing**. Downtown Sydney is a wonderful place and public transport is great to there but it is only 13% of the whole.
Jones - If you have already built freeways that are only 2 lanes each way – has the horse bolted?
Cox - If you go to the M7 you have room to expand it to 8 lanes most of the way. The best way if you do not have sufficient capacity is build the capacity in the new areas. I don’t think anyone is going to get away with building a freeway system that should have been built 40 or 50 years ago. In a sense you are sort of stuck. But you should not make it worse by cramming more people into this area that was not built for a population anywhere near what you now have.
Jones - Anyone in government spoken to you?
Cox - I have spoken to people in government but not to anyone in NSW government.
Jones - Well they have probably got all the answers Wendell, that is why they have not asked you.
Cox - The real issue is to recognise the long term economic impacts of this and the impacts on the future of Australia.

A subsequent caller to the radio station, Rolf Clapham from Ryde referred to Frank Sartor’s wife's objection to the four storeys 74 unit block proposal next to their house. He compared this to the Putney 795 unit 6 storey proposal that Sartor is pushing through in Rolf's area (we have advised members about this) . Rolf questioned who wrote Mrs Sartor's objection. A ballet dancer (which she is) is not likely to know much about the technical matters such as transport nodes referred to in the objection she ostensibly sent.
Jones The public don’t have to put up with this totalitarian stuff. It is all very well to say we consulted the good people about the bus timetable. Everywhere where people express a view, whether it is at Beacon Hill High School or at the Ryde Rehabilitation Centre and there is a stack of others. Then Frank Sartor says "you might have a view but my view’s superior. I know better". And in relation to Wendell Cox he said " Ah well, that is just another opinion". It just happens to be more superior. Frank Sartor needs to mend his ways or he won't be here next election.

I phoned in the next morning and criticised government and opposition policy on urban consolidation. I said pressure must be put onto the politicians at the next state election.

*SOS intiated the suggestion of building satellite cities along the road to Goulburn in 1999.
** I mentioned the sewage system failures in Chatwood in my address

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