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Melbourne 2030: Planning Rhetoric Versus Urban Reality

CHAPTER 6

MELBOURNE 2030: THE NEED FOR A FUNDAMENTAL REVIEW

Bob Birrell, Kevin O’Connor, Virginia Rapson and Ernest Healy

The Melbourne 2030 vision has won the support of many in the planning fraternity. Its goal of guiding Melbourne towards a more sustainable future is admirable. But the plan is encountering a variety of obstacles. Because of these, it will not work as intended. Activity centres will not attract the desired numbers of residents because of lifestyle and cost issues. Business enterprises, too, are unlikely to concentrate in such centres because of the way the contemporary urban economy now functions and the limited tools which the planners possess to encourage such concentration. Instead, under the current rules governing housing redevelopment (ResCode), much of the growth in Melbourne’s dwelling stock will be in the form of infill. This is not a future which most current residents of Melbourne would favour. Nor will it solve the sustainability issues which Melbourne 2030 attempts to address.

THE DEMOGRAPHIC CONTEXT: A MILLION EXTRA MELBURNIANS

Melbourne 2030 is a response to the planning dilemmas raised by the prospect that Melbourne’s population will increase by around one million by 2030. This implies a major increase in housing demand because of the additional households. In 2001 there were 1.3 million households in Melbourne (Department of Sustainability and Environment 2004). This number is expected to grow by more than 600,000 households, mainly because of the extra residents. Household numbers will also grow because of the ageing of the current population of Melbourne. The consequence is that there will have to be a huge growth in the supply of new dwellings by 2030 in order to accommodate the extra households. According to the planners, if the city is to live in an environmentally sustainable way, these new dwellings cannot continue to be located in the dispersed, low density, private transport oriented manner of the past.

It is worth first contemplating the origin of the extra 600,000 plus households. If it is the scale of growth of the city’s population that is the main reason for the new policy direction, can the problem be headed off at the pass by reducing these numbers? The answer is that it probably cannot. Most of Melbourne’s anticipated household growth is attributable to net overseas migration. Currently about 30 per cent of the increase in household numbers in Melbourne derives from net overseas migration (Birrell and Healy 2003 p. 50). If current migration levels are maintained, the migration share will increase to about 63 per cent by the year 2020–21.

The reason why not much can be done about the population factor is that international migration policy is set in Canberra. Nonetheless, the Bracks Government, like the Kennett Government before it, continually lobbies the Federal Government for more migrants – not just for regional Victoria but Melbourne as well. Bracks has personally stated his enthusiasm for migration and this is reaffirmed in the recently released Population Policy statement Beyond Five Million (Department of Premier and Cabinet 2004). To its credit, this latter document does acknowledge (p. 37) that ‘the impact of population growth must be carefully managed’ and that ‘Some areas [not named] are already facing environmental stresses which need to be addressed before these areas can sustain greater numbers of people’.

HAVING IT BOTH WAYS

Melbourne 2030 is a manifestation of State Government policy to achieve a growing population compatible with a sustainable future. According to the Bracks Government, Melbourne can manage an additional one million people and live in a sustainable manner, so long as it manages the tension between population and environment. However, as the population policy acknowledges, this ‘will depend on our ability to improve the way we use resources and energy, limit waste and pollution, and preserve and enhance the natural landscape’ (Department of Premier and Cabinet 2004 p. 37). In the case of Melbourne, the Government has decided that the city must sacrifice its past dispersed suburban style and move rapidly towards a higher density, compact city form.

For the planning fraternity, this is an exciting prospect. They see few pitfalls. Their approach to urban planning is derived predominantly from favourable judgements of the diversity and bustle associated with the increased density of the inner city, as well as its culture and built environment. If their approach means that Melbourne residents have to give up their dispersed suburban living style, this is not seen as a problem by compact city advocates.

Yet there is an alternative view of what is special about Melbourne which involves its leafy suburban lifestyle. Large numbers of households continue to seek this outcome in the choice of their new home. However, their view is in eclipse amongst the politicians, bureaucrats and planners who are the movers and shakers in planning circles. They can state that the compact city form does not threaten Melbourne’s liveability because they have little regard for what would be lost.

THE PROBLEMS OF AVAILABILITY OF HOUSING UNDER MELBOURNE 2030

The real world of housing markets will determine what happens to Melbourne. Our judgement is that the prospects for implementation of Melbourne 2030 are bleak as its housing objectives hinge on an effort to locate some 40 per cent of the growth in Melbourne’s households in activity centres. There are three main reasons why this is unlikely to happen. The first is that most of Melbourne’s household growth to 2030 will be amongst older households. These households have a low propensity to leave their detached houses, at least while they are in good health. This is also true of most of the large cohort of the sons and daughters of baby boomers (who are now in their late twenties and thirties). Many have already purchased a detached suburban home. For those who have not but who aspire to raise a family, a high density dwelling in an activity centre will have little appeal.

The second is that, even if such households were inclined to move, they have a much more appealing alternative open to them than an activity centre apartment. This is an infill dwelling located within the suburban setting which most have lived in all their lives. For those who wish to downsize, such a dwelling is likely to have much greater appeal than an apartment in a dense, noisy commercial centre. The likely candidates for activity centre living – younger singles and couples without children – face a hurdle embodied in the third reason, which is the anticipated high cost of dwellings constructed in activity centres.

One qualification to this argument is that there are a few locations where the costs will not deflect some purchasers. These include certain high status inner and middle suburban centres where there is a rich array of civic and commercial services attuned to an affluent lifestyle. The problem is that the resulting investment is likely to diminish the very attributes that encouraged the investment in the first place. The ferocity of protests over the Camberwell Railway Station development and the Smith Street Banco project are examples where residents have concluded that their lifestyle is under threat.

This leaves the profound question – where will the new households locate over the period to 2030? Most new households will be predominately drawn from those cohorts which are currently aged less than 30, as well as from internal and overseas movers. As noted above, they are unlikely to locate in activity centres. The two main alternatives are location on the suburban perimeter and infill in established suburbia.

Melbourne 2030 purports to limit the outer suburban options through its Urban Growth Boundary (UGB). But, as we have shown, it is not a hard boundary. The UGB is ‘flexible’ and the Bracks Government has made it clear that it will extend it if land is in short supply. Our analysis suggests that the main limitation on outward suburban movement is the high cost of current suburban house and land packages. Nonetheless, given the likely outward dispersal of employment opportunities and the weakness of the measures incorporated in Melbourne 2030 to change this trend, it is likely that the suburban frontier will accommodate a higher proportion of Melbourne’s housing growth than is contemplated in the plan. In short, Melbourne’s suburban spread will continue under Melbourne 2030.

Elsewhere, the ResCode legislation accompanying Melbourne 2030 allows relatively unrestricted infill across much of established suburban Melbourne. Those wanting to live in these areas will choose infill accommodation because it is cheaper and offers more indoor living space and surrounding outdoor space than is likely in the activity centre alternative. The Government has repeatedly claimed that Melbourne 2030 is consistent with the provision of affordable housing. However, there are no mechanisms which will achieve this goal. What is likely to happen is that the sole opportunity for lower income households will be cheaply built infill in suburban locations with the lowest urban amenity.

Our concern is that the Victorian State Government, in its determination to stand by the Melbourne 2030 template, is insensitive to the damage that is being done to established suburbia through infill.

We have noted that Melbourne 2030 has little to say about the possibilities of innovation in planning outer suburban communities in ways consistent with the environment sustainability ideas which the plan endorses. As the following section of this conclusion reiterates, there are underlying economic forces promoting the outer spread of suburbia. In particular, there is the potential to plan new outer suburban areas on a decentralised basis where work, residence and civic activities are integrated with new transit nodes, rather than being artificially forced into existing activity centres.

With the current policy settings, Melbourne is heading in the Sydney direction. In 1991, about two-thirds of Sydney’s dwellings were detached housing (Australian Bureau of Statistics 2001). With the imposition of a de facto urban growth boundary, reflecting geographical limitations and high infrastructure costs, Sydney’s outward growth has stopped to a crawl. By 2001, two-thirds of Sydney’s housing construction was in the form of infill and high rise in redevelopment areas (Australian Bureau of Statistics 2004). Over the decade to 2001, the proportion of Sydney’s dwellings which were detached houses fell to 62 per cent. By comparison, the proportion of Melbourne’s dwellings which were detached was 76 per cent in 1991, and 73 per cent in 2001 (Australian Bureau of Statistics 2001).

Opinions will differ about whether this is good or bad. Compact city advocates will say that that the dispersed frontier was unsustainable and that the new denser city makes much more efficient use of the city’s infrastructure. Sydney residents have made their views clear. They do not like the congestion, the loss of built heritage and the price escalation (as people compete for remaining high amenity suburbia) which are the inevitable result of these developments. They have a Labor premier (Mr Carr) who can state that Sydney is full and advocate that overseas migrants should be deflected elsewhere in the confident expectation that most of the city’s residents will agree. For first home buyers in Sydney who would like a new home on the frontier this option is gone for all but the well-off. Even quite small lots on new frontier estates cost a minimum of $300,000. Is this what we want in Melbourne?

BRINGING ACTIVITY CENTRES TO LIFE

There is a case for the promotion of activity centres, especially in new outer suburban areas. Here their development needs to be part of a new vision in the planning of outer suburbia where there is a real prospect of integrating housing with employment opportunities in a relatively self-contained manner. If new outer suburban communities are to flourish in this way, a much sharper set of policy instruments are needed.

Wherever they are located, they will also require the provision of infrastructure and related services. Yet as Nicole Lindsay (2004) of the Australian Financial Review noted, Melbourne 2030 was not even mentioned in the 2004 State budget. City development is expensive. If activity centres are to work, funds will be needed to buy land, to build public transport connections, to supply public transport services, and perhaps to move a hospital or a TAFE college to a more accessible site. An effective metropolitan plan would have a clearly expressed funding arrangement reflected in links to Treasury and Finance.

A major issue in activity centre planning is the management of changes in land use from the previous uses to the desired uses. This will often require the merger of separate titles to create spaces that suit modern activities, including office functions. Restructuring of land titles is a slow and difficult business which will usually deter private investors. (Subdividing large sites into small sites is less of a problem for the private sector and is a common outcome across the middle and outer suburbs, although this change often substitutes a large factory that might have employed 50 people with 20-30 small factory/office units that might double the employment density and add to the car traffic.)

Innovations in the taxing and charging of metropolitan activities are needed to help provide for the new and re-developed infrastructure and services required if the activity centre strategies are be successful. As was outlined in the discussion in Chapter Three, this also applies to new levies on the capital gains from re-zoning of land in the outer areas, as well as upfront capital contributions for major infrastructure from land developers. More creative thinking could deliver funds to transport in the same way that a parks levy delivered the Melbourne Metropolitan Board of Works (MMBW) system of metropolitan parks. Additional taxation and charges are not popular in a neo-conservative economic culture. However, the establishment of a congestion levy in London showed that funds could be raised and other urban objectives achieved by such a tax.

The Victorian State Government has reaped an enormous financial windfall from the property boom and in particular from the transfer of infill properties. Where a dual occupancy involves two new dwellings, there are stamp duties on three property transactions over a relatively short time period. This fee income is an obvious source of revenue to help provide public open space and other urban services needed where infill proliferates.

MELBOURNE 2030 AND PUBLIC TRANSPORT

The Melbourne 2030 planners put enormous store on changing Melburnians’ transport patterns. The plan’s activity centre strategy is justified largely in terms of its alleged contribution to converting residents from their cars to public transport usage.

Melbourne 2030 emphasises the current transport network, particularly the centrally focussed fixed rail component, with little attention – apart from acknowledging the need for a cross-town bus network and the implementation of some ‘smart bus’ routes – to the movement of people between middle and outer suburban houses and middle suburban jobs. Yet, as indicated, these linkages are far more numerous than are journey-to-work trips into central Melbourne. This focus is also inconsistent with the go ahead given to the Mitcham-Frankston Freeway which will facilitate the cross-suburban movement of people and goods, as has been the case with the Western Ring Road in the west.

Since cross-suburban movement will inevitably grow, initiatives to diminish private car use are required. For example, it might be possible for employers to group together to fund morning and evening small scale public transport services along major arterial roads which feed the key employment locations. This is happening in the western inner suburbs of London and is required in some industrial estate developments in some United States cities.

Melbourne 2030 relies almost entirely on land use strategies to achieve its objectives. It gives developers the green light to construct high-rise development projects and move out-of-centre industrial and commercial activities into more than 100 principal and major activity centres. As indicated, there is no guarantee that development interests will take up the opportunity. Even if they did, there is not much evidence that residents or employees (whether travelling to work or while at work) will make greater use of public transport. As a consequence, this approach could take a very long time to be effective, if at all. People may well maintain existing transport behaviour, even as density rises or land gets scarce, simply putting up with congestion and inconvenience.

If the State Government is serious about reducing private car transport, it should look to more effective financial strategies. We know that price can be a powerful weapon, as the congestion charge in London and the pricing of water locally has shown. If the State Government wants to reduce car use, it would probably have a much greater impact if it penalised car usage.

What about the impact of infill? Even if it is not a policy focus of Melbourne 2030, it is possible that an intensification of infill might prompt more use of public transport. However, this is unlikely because, by its nature, infill is opportunistic and dispersed. As a consequence, residents of infill dwellings are just as likely to use their cars for work and other trips as those living in detached homes. This is not to argue for the abolition of infill. There are parts of suburbia which need redevelopment. Furthermore, the price of detached housing in much of inner and middle suburbia is now at a point where it is excluding younger couples. There needs to be some creative thinking about how to guide infill into areas where it is most suitable (for example near public transport), and where it will do the least damage to the most valuable suburban heritage. The earlier analysis indicates that the heritage overlays and other measures made available to councils through ResCode are not sufficient. Nor are the options currently available to councils to tighten the conditions under which infill can occur (site coverage, private space, setbacks and so on). Even when these options have been taken up, they have not stopped infill from encroaching on low density settings. Part of the solution may be greater devolution to municipal councils of powers to regulate infill (as by limiting its scale to 10 or 20 per cent in particular precincts and limiting the size of buildings permitted in infill sites). However, councils will also need to be more proactive in taking advantage of the existing provisions within ResCode which allow them to restrict the conditions under which infill can take place.

MELBOURNE 2030 AND THE ECONOMIC FORCES SHAPING THE METROPOLIS

Melbourne 2030 appears to misunderstand the modern metropolitan economy. Its emphasis upon activity centres to accommodate a range of businesses is inconsistent with the current dispersal of industrial and commercial activity through the middle and outer suburbs. The planning rhetoric and the economic reality are wide apart. It is true that high level business services are concentrated in the central city but with modern communications these no longer need to be in close proximity to the diverse industrial and commercial enterprises which use these services O’Connor and Blakely 1989. Low density outer and middle suburban industrial and commercial development is common in metropolitan areas in advanced economies. This was confirmed in the observation of the joint Organisation for Economic Co-operation (OECD) and Development and European Council of Ministers of Transport (ECMT) Group (OECD/ECMT 1995 p. 3) that the continuing suburbanisation of population and jobs is one of the major features of settlement patterns in OECD/ECMT countries.

This outcome derives from the compatibility of the middle and outer suburbs with the needs of the new flexible firms which are networked through just-in-time logistics systems to other suppliers and consumers. In many cases, these firms are involved in supplying global markets and utilise high level technology and research in their product development. Those without global markets often reach national markets, using warehousing facilities in one or two cities to supply computer-linked customers across the country. Most of these firms favour lower density sites in order to facilitate a mix of office, factory and warehouse or to ensure close contact with markets or related firms that are in surrounding locations. The OECD/ECMT (1995 p. 3) has observed that ‘firms of all kinds have...tended to move to edge of town sites...’ These edge developments feature labour-market self-containment at a sub-regional scale in that like firms tend to locate in the same area, as do many of their workers.

The Victorian Government is aware of the general strength of this activity. For example, it has recognised the significance of manufacturing in the south east and the need to provide for land for this sector (Department of Infrastructure 2002 pp. 14–15). However, the implications of assisting this growth for the location of work in the suburbs are not then incorporated into any actions within Melbourne 2030. Its main employment push involves promoting job growth in activity centres.

MELBOURNE’S FUTURE

Melbourne 2030 sprang fully formed as a statement of government policy in late 2002. The Victorian Government made some effort to involve the interested public prior to this time. However, there was so little awareness of the scope of the plan that few interested parties engaged in this preliminary process. It is only since the plan’s implementation that the residents of Melbourne have become aware of the extent of its challenge to Melbourne’s traditional pattern of urban life.

Melbourne 2030 permits medium to high density housing in hundreds of activity centres across Melbourne. No wonder resident action groups are proliferating like mushrooms. Yet few stakeholders amongst business interests are happy. Developers understand that they face serious financial risks if they take up the challenge of high rise housing projects in activity centres. Outer suburban land developers are frustrated by the competition they face to secure residential land within the UGB. Meanwhile the State Government is reluctant to allow new high rise projects which municipal councils reject to go to VCAT on appeal for fear that the Tribunal will take Melbourne 2030 seriously and approve the project.

To this point there appears to be very little awareness of the incompatibility between Melbourne 2030’s emphasis on activity centres as the focal point for the city’s economic development and the realities of the spatial dynamics of Melbourne’s metropolitan economy.

The Government’s main action so far has been to demote the unfortunate Melbourne 2030 figurehead, Mary Delahunty. The Bracks Government needs an exit strategy. Our advice is that it would be best to acknowledge the limitations of Melbourne 2030, reassess its good and bad points and the commission a new plan. Our hope is that this book will contribute to the necessary re-assessment. The current plan is not going to work as the Government hopes but, in the process of its patchy implementation, it could do considerable damage. Our purpose has not been to chart an alternative future for Melbourne. This requires fresh thinking. Such a re-assessment can only occur after the weaknesses of Melbourne 2030 are acknowledged.

REFERENCES

Australian Bureau of Statistics. Census of Population and Housing, Time Series, Table T18. 2001.

Australian Bureau of Statistics. ‘Building approvals by capital city subdivision’ [Internet]. Ausstats. 2004. Downloaded from: http://www.abs.gov.au.

Birrell, Bob; Healy, Ernest. ‘Migration and the housing affordability crisis’. People and Place 2003; 11 (3): 43–56.

Department of Infrastructure. Melbourne 2030 Planning for Sustainable Growth – Summary. 2002.

Department of Premier and Cabinet (Victoria). Beyond Five Million: the Victorian Government’s Population Policy. 2004. 44 p.

Department of Sustainability and Environment (Victoria). ‘Victoria in future 2004’ [Internet]. Melbourne Statistical Division; downloaded from: http://www.dse.vic.gov.au.

Lindsay, Nicole. ‘Planning minister in state of chaos’. Australian Financial Review 2004 June 4: 88–89.

O’Connor, K; Blakely, E. ‘Suburbia makes the central city: a new interpretation of city suburb relationships’. Urban Policy and Research 1989; 7: 99–105.

Organisation for Economic Co-operation and Development and European Council of Ministers of Transport. ‘Final report of the Joint OECD/ECMT Project Group on urban travel and sustainable development, principal conclusions, executive summary’ [Internet]. 1995. [Accessed 2005 January 20]. Available from: www.oecd.org/cem/urbtran/1995sum/pdf.

Cite this chapter: Birrell, B; O’Connor, K; Rapson, V; Healy, E. ‘Melbourne 2030: the need for a fundamental review’. In: Melbourne 2030: Planning Rhetoric Versus Urban Reality, Monash University ePress, Melbourne, 2005.

Melbourne 2030: Planning Rhetoric Versus Urban Reality

   by Bob Birrell, Kevin O’Connor, Virginia Rapson and Ernest Healy