ABC Off the Rails

Sadly, the engineering practicalities relating to transport proposals never seem to be considered by commentators. Wendell Cox writes as follows:

ABC’s Background Briefing ran a story on Sunday (14 December) decrying the continued delay in expanding Sydney’s rail system. Regrettably, it was typical of a policy environment that appears to understand neither cities nor urban transport.

The story provided virtually no balance and certainly no perspective. To read it you would get the impression that everyone works in downtown Sydney. It isn’t even close to that. All of downtown Sydney, Haymarket and North Sydney accounts for less than 20 percent of employment in the Sydney area. This means that 80 percent of the commuters work elsewhere. There is virtually nothing that a rail system can do to get these people to work, because not enough of the employment outside the central business district is within walking distance of rail stations, and most trips would require a transfer downtown. That would not be changed by adding a metro in any of Sydney’s corridors. The government appears to have stumbled into wise policy as a result of the exorbitant cost of these systems.

Transport systems need to be chosen based upon their cost effectiveness in achieving public objectives. As regards the economic growth and affluence of the Sydney area or any other area, minimizing travel time does that best. Thus, projects should be chosen on such factors as the cost per reduced delay hour. Regrettably, in Sydney and many other urban areas in the developed world, such considerations take a back seat to romantic affection for rail systems and hefty political donations from those who build the systems and those who anticipated that building them will substantially increase their property values.

Paris

Why, people ask, does Sydney not emulate the density of Paris? Then everyone can use public transport and Sydney's transport problems will be solved.

Yes, it is a delight for tourists to travel around Central Paris.

But they are referring to the part of Paris seen by tourists and town planners. What they see is the old central Paris, built before the advent of motorised transport. Such old cities were dense because they had to be. Walking was the only means of getting around. But as soon as people were freed to travel by faster means, they started moving out of the inner cities. The central city of Paris now has severe congestion, the average vehicle speed is only 20 km per hour. It has more congested streets than Los Angeles. Yet Central Paris has high density living, no freeways and one of the world’s most intensive rail transit systems.

The part of Paris tourists and town planners do not see are the post WW2 housing estates built around Paris which are as dense as any city anywhere but are notorious for poor public transport and high car usage.

The Ville de Paris reached its peak population 80 years ago, and has lost more than 700,000 residents since 1954. At the same time, the suburbs of Paris have accommodated all of the growth in the area.

This trend is not just limited to Paris. Virtually all urban growth in major European cities has been in the suburbs over the past 40 years.

The proportion of public transport journeys in these cities is not significantly different from that of Sydney. Public transport percentage of journeys in Sydney is 10%, in Paris, Vienna and other similar European cities it is 20%, not all that different If we look at worldwide trends in public transport use – they are nearly all down. Hamburg was down 26% in a decade, Copenhagen down 12%. Sydney, in spite of urban consolidation policies has been down 7%. The world average down 13%. Realistically, as soon as people become sufficiently affluent to live in a suburb, they tend to do so.

Thus, contrary to what the high-density advocates would have us believe, the higher densities of European cities do not seem to be doing much for transport. Latest figures for Sydney are even more startling. They show that during the period of imposed urban consolidation, the Sydney public transport share of journeys has decreased even more, down by a whopping 28%. There are a number of reasons for this but a major factor is that jobs are now becoming distributed all over the city. Public transport is only good for going to a central location. 70% of journeys to work in the CBD are by public transport, for the rest of Sydney only 10%. But only 13% of employment is in the CBD.

Average journey time to work increases in dense cities, not the other way around. Sydney travel times now are worse than those in Los Angeles. This is not surprising –In addition to deteriorating public transport Sydney has a shocking road system. Our freeway capacity compared to other cities. Way below that of Hong Kong, Singapore, Barcelona, Athens, Paris, Toronto, Milan and Tokyo

It is geometrically impossible for public transport to go from everywhere to everywhere in most cases. The only city in the world which has a significant majority of jouneys by public transport (80%) is Hong Kong. Hong Kong has a population density of 50,000 per sq km compared to Sydney's 2000. Do we really have to live like that? If so, why?

How to Make the First Home Buyer Grant Work

It is clear that the Rudd government has given housing affordability a prominent place in its agenda. The government’s efforts to reduce infrastructure fees on the fringe of Canberra are surely a step in the right direction, since such fees are, along with urban consolidation land rationing, responsible for destroying housing affordability.

In further pursuit of housing affordability, the Rudd government has announced plans to increase the first home owner grant from $7,000 to $21,000 for new houses. The reviews are not nearly so positive, however. Some experts, including ANZ Bank Chief Economist Saul Eslake see a risk that the program will simply increase house prices. This would, of course, simply neutralize the effectiveness of the first home owner grant.

While there is no disputing the good intentions of the government, Eslake and other critics are probably right. Any infusion of money into the housing market is likely to increase prices, simply because the supply of new housing is so strictly and artificially rationed by severely restricting the release of new housing land. If there is one thing that economics makes clear, it is that rationing leads to higher prices. And, there have been few better examples of that principle of economics in action than the stingy land use policies that are in operation in virtually all of the nation’s major urban areas.

State governments, and in some cases local authorities, have fitted a tight noose around existing urbanization, despite the fact that more than 99 percent of the nation remains rural --- not developed. As a result, new homes are not being built at a sufficient rate and those that are being built are far too costly. For example, in recent years, house construction on the fringe of Sydney has been at 1950’s levels. The problem is that Sydney and the nation have far more households to serve than half a century ago but there has not been enough land made available on which houses can be built. Without the normal market supply of inexpensive new housing on the urban fringe, there is no way for house prices to go on the fringe but up, as the larger first home buyer grant leads to higher prices.

The problem of first home buyer affordability needs to be addressed at its root. The Great Australian Dream was made possible by building housing on cheap urban fringe land. The cost of the land on which the houses were built was little more than its agricultural value plus the cost of providing streets and utility connections (most of that included in the developer’s price). If today’s land use planning policies had been in effect, much of suburban Australia would not have been built, there might not have been a Great Australian Dream and the nation would be less affluent. Affordable new housing on the fringe is beyond reach until law, regulation and policy allow it to be built, Canberra’s money or not.

Probably no nation in the world has been more driven by egalitarianism and the hope for a better life for all than Australia. In that pursuit, generations of Australians have worked hard to better the future for those that follow.

But, more recently, radical land use policies have begun to extinguish this most attractive of Australian values. Restrictive land supply policies such as urban consolidation have made housing so expensive for up-and-coming households that many will never participate in the Great Australian Dream, unless fortunate enough to inherit their homes (how un-Australian can you get?). What is even more troubling is that these radical policies were adopted, without the slightest consideration of their likely longer term social or economic consequences. Indeed, some academic and planning elites scorn the likes of western Sydney from their upper-middle-class perches, unmoved by the reality that places like western Sydney had much to do with making Australia an inclusive nation of hope.

Few reforms could more restore the promise of Australia to younger households and immigrants than to abandon the radicalism that has virtually banned low cost housing on the urban fringe. In such an environment, larger first home buyer grants would also make housing more affordable.

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Wendell Cox is principal of Demographia, St. Louis (USA), co-author of the Demographia International Housing Affordability Survey and a visiting professor at the Conservatoire National des Arts et Metiers in Paris.

The Tenth Scalp

Save Our Suburbs has been fighting over-development for 9 years. We have challenged the Government to show their high-density policies, which are so devastating to local communities, are to the benefit of the broader public. But they always shrink from the challenge, slinking back into their cushy offices and slamming the doors. Our tenth such antagonist, Minister of Planning, Frank Sartor has bitten the dust. Other now-vanished foes have been:

Andrew Refshauge, Minister of Urban Affairs and Planning
Sue Holliday, Director General of the Department
Craig Knowles, Minister of Urban Affairs and Planning
Di Beamer, Junior Minister of Urban Affairs and Planning
Andrew Cappie-Wood, Deputy Director-General
Jennifer Westacott, Director-General
Evan Jones, Sydney Strategy Administrator
Professor Peter Newman
Professor Ed Blakely
And now:

Frank Sartor, Minister of Planning


As with his predecessors, Frank Sartor, who regularly boasted his doors were always open, steadfastly refused to see me.

Frank Sartor claims he has been “cheated”. We suggest the thousands of Sydneysiders who have been deprived of their heritage, democratic rights and Australian way of life have more right to feel cheated.

Lony history of corruption

In our fight against political donations, I have occasion to mention the recorded case of NSW Premier Robert Askin receiving $15,000 in a brown paper bag in relation to a development proposal. I then encounter raised eyebrows. Many people just do not want to believe this. But it is necessary to fully appreciate how deeply embedded is this practice in NSW.

More on donations is now emerging from Alan Saffron’s biography of his father Abe Saffron in his forthcoming book Gentle Satan. The Sydney Morning Herald reveals that at one stage Abe Saffron was paying Askin (and the police commissioner) $5000 to $10,000 per week. And that was in the money of the 1960s and 1970s. Alan says Askin was totally corrupt. “In his early years as premier Askin would meet Saffron at restaurants at arranged times and speak to him on the phone regularly. But as Saffron came to the attention of law enforcement agencies intermediates were used”. He says Askin was also the recipient of payments via horse races that were fixed as “a courtesy to premier Askin”!

It is noteworthy that 11 developers received knighthoods from Askin.

But our battle against political corruption, started in 1999, is making progress. The report of the Select Committee on Electoral and Political Party Funding is out with many worthwhile recommendations. We need to work hard at getting them adopted.

Voice of Community Needed

"FIRST WORD" LETTER
Sydney Morning Herald 21 June 2008

Why planning needs the voice of the community
The passage of the Environmental Planning and Assessment Bill 2008 late last Tuesday night will sound the death of community participation in planning in NSW.

The then premier Neville Wran introduced in 1979 the original Environmental Planning and Assessment Act. In the decade before this, Sydneysiders saw the emergence of green bans and the rise of resident action groups. The end result of this activity was the push for planning to change.

Jack Mundey, a former recent chair of the Historic Houses Trust, was instrumental in campaigns in the late 1960s and 1970s in saving The Rocks, Woolloomooloo, Centennial Park and Kellys Bush in Hunters Hill. It was the actions of Mundey and the Builders Labourers Federation - which imposed green bans at the requests of conservationists, residents and community groups - that apparently influenced Wran's legislation.

The original planning legislation was based on consultation, something that is foreign to the current legislation. Consultation on the discussion paper "Improving the NSW Planning System" was limited.

The rights of residents will be eroded so they will not have a say about how their neighbourhood develops. What impact will this have on our streetscape, our heritage and our environment? The end result will inevitably be conflict between neighbours.

The residents in Kogarah municipality are proud of their homes, their streetscape and their suburbs. The mums and dads will only recognise the scope of the legislation when a neighbour attempts to build an inappropriate design next to their property.

Then, Minister Sartor, you'll see the rebirth of community activism across our local communities.

May the ballot boxes of September 13, in the local government elections across NSW, send strong signals in your direction that the legislation is to the detriment of our heritage, our environment and our communities.

Anne Field Kogarah

Inquiry needed

SAVE OUR SUBURBS

MEDIA RELEASE

23 February 2008

Save Our Suburbs demands inquiry into Government Planning Policies

The staggering revelations about developer donations inevitably lead to questions about the NSW Government’s high-density policies (termed “urban consolidation”). The Department of Planning has

never provided credible justification for this policy which provides huge profits for high-rise developers who in turn make large political donations.

It is undeniable and well documented that high-density is detrimental to the public good [1]. Greenhouse gas emissions per person are greater in high-density [2]. The policy overloads infrastructure. Choking traffic congestion and longer travel times result. Sewers overflow, electricity supply is at breaking point and there are chronic water shortages. High-density policies create land shortages that result in unaffordable housing. Concrete, tiles and bitumen replace trees, gardens and public open space. Sustainablility is adversely affected.

Current media coverage reveals the huge donations high-density developers make to the political parties. What is not yet being publicised is the long history the Department of Planning has of working closely with developers. The Department demands that councils submit strategies for high-density (under threat of taking away their planning powers) and developers who subsequently stand to benefit are actively involved in the assessment of these strategies [3]. Under these circumstances, a good example from the top state planning department is not being set for councils. Proposed changes to the planning system, involving state appointed planning panels, are unlikely to improve the situation.

It needs to be questioned why a policy detrimental to the public interest is being forced onto communities, as this policy provides huge profits [4] to organisations that are actively participating in its formulation and implementation and which make massive donations to the major political parties. Save Our Suburbs demands an Upper House inquiry into the motivation for this policy.

Further information: Tony Recsei 02 9487 2061

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[1] See www.sos.org.au

[2] See http://www.acfonline.org.au/custom_atlas/index.html

[3] For example as at 16 November 2000 the Departmernt’s “Residential Strategy Advisory Committee” consisted of:

John Collins (DUAP Assistant Director-General and Chair)

Peter Woods (Mayor of Concord and President of the Local Government Association)

Bruce McDonald (Director of Strategic and Economic Planning, Penrith Council)

Ian Costley (Mirvac Group - standing in for Robert Hamilton, the General Manager)

Neil Bird, (Urban Pacific Ltd)

Peter Lean (Urban Development Institute of Australia).

After this situation was publicly revealed on the ABC Stateline program of 30/03/01 the committee was replaced with a less obvious method of involving developers in the planning process but the overall effect is the same.

[4] In a letter to the Department of Urban Affairs and Planning dated 17 November 2000, Ian Costley, Development Director of Mirvac reports on the financial viability of development that would result if a residential strategy submitted by Ku-ring-gai Council were to be accepted by the Department. In this report internal rates of return of up to 128% on Mirvac’s equity investment were considered “not viable”.

Government Inquiries

The NSW Government has announced an inquiry into improving the planing system and has requested public comment. The address to send submissions is given as "Planning Reform".

An SOS member has written to this address as follows:

Dear Sir/Madam, Another point I should have made is my strong objection to your use of the term “reform” when you are putting proposed changes out for public comment on whether they will make things better or worse. By using the term “reform” you are saying the changes will definitely make things better, which implies that you are not going to be paying genuine attention to any public opinions that they will make things worse.

Could you please correct that misuse of English language by changing all your headings to ‘planning changes’?

Please let me know ASAP that you are doing that; and if not, why.

Can lies go on forever?

SOS member Adrien Krebs has done some research on the cost of housing. He writes:

In yesterday's Australian Financial Review (2 January 2008) an article entitled Adelaide Steals Perth's Crown mentions that the median house price in Australia in 2007 was $482 601 and that of a unit was $386 873.
So out of curiosity I did a little research and found the median home (I assume house and unit all included) price for the USA in 2007 was $212 000 USD, which roughly equates to $237 000 AUD.

Not including interest rates, which are slightly higher in Australia, the cash price of a home is DOUBLE in Australia of what it is in the USA, the world's wealthiest nation!!

- Is it that the USA have much more land available than Australia? NO. Mainland US covers 7.8 million km2, when Australia is 7.7 million km2. So reasonably the same size

- Is it that Australia has much more people competing for land? NO. The exact opposite is true with only 20 million people in Australia vs. 300 million in the US!

- Perhaps our Aussie homes are made of silver and gold or diamond bricks? NO. When driving through the Sydney suburbs, I mainly noticed sandstone for old and historic houses and mostly bricks for more modern ones, and a few wooden ones.

- The US must be going through a severe real estate crisis! There has been a lot of news about this, but according to the US Census http://www.census.gov/const/uspricemon.pdf the historical record month for Real Estate was April 2007 where the median home price was at $257 000 USD. Still a universe away from our Australian prices.

The American median income is also higher than the Australian one, so I am definitely out of options and can not figure out why a small 500m2 lot of raw land 60 kilometers West of Sydney will sell for the same price as a built house with a garden in the US.

This information is public. When spread accross Australia, lies will not be able to go on forever and people will want answers. What answers will Frank Sartor and our governments provide us with?