Is public transportation infrastructure really that important?

For those of us that live and work in the inner city areas of our capital cities, we think that public transport infrastructure is a must across the city.  The reason being that it is essential for those of us in suburbia to be able to travel to and from the city in an efficient and timely manner, notwithstanding the fact that so many of us still drive.  But I question Whether or not public transport is actually that important.

According to data from the end of June 2013 from the Property Council of Australia, the total floor space across the CBD office markets is 17,263,536 square metres.  If we were to assume that the typical office has a workspace ratio of say 20 square meters for every one worker, this would mean that if these offices were fully occupied they would house 863,177 workers.  If we include the nearby fringe areas, which I have defined as: Brisbane Fringe, North Sydney, St Kilda Road, Southbank, West Perth, Crows Nest/St Leonards, Adelaide Fringe and East Melbourne, there is an additional, 4,396,603 square metres of office space.  Again assuming a 1:20 ratio these offices if fully occupied would house 219,830 workers.  Between the CBD and fringe office space, if we assume one worker for every 20square metres of floor area, there is enough space for 1,083,007 office workers nationally.

At the moment, office vacancy rates are quite high across the country, sitting at 10.1% across the CBDs and 10.2% across these fringe office markets.  Based on these figures and our ratio assumptions there are 775,945 workers within our CBD markets and 197,484 workers within the fringe areas.

Of course not everybody that works in the CBD or fringe areas works in offices there will be a mixture of retail, services, industry etc that also offer employment in these areas which would also increase the overall working population in these areas.

If we look at the labour force data from June 2013 we see that at a national level, there were 8,138,418 persons employed full-time and 3,519,841 persons employed part-time for a total of 11,658,258.  Of course the nature of part-time employment is such that jobs are at times shared so given this I will assume that half of the part-time positions are travelled to each day (reflective of job sharing) resulting in my total employment figure of 9,898,338 persons.

Based on this 9,898,338 persons figure and the current occupied CBD and fringe office space, these inner city area offices are providing employment for just 9.8% of the nation’s workforce.  Now of course most of those people that live outside of the respective capital cities are not going to travel to the closest CBD for employment (yes there are some exceptions) so it is beneficial to analyse the proportion of the capital city workforce that travels to the inner city area for employment.

Demographic data to June 2012 showed that 15,015,290 persons lived within a capital city which equated to 66.1% of the nation’s population.  Now we know that unemployment tends to be slightly higher outside of capital cities however, if we assume simplistically that 66.1% of the 9,898,338 persons are employed within a capital city that provides a capital city employment figure of 6,542,801 persons.  Based on this figure, 14.9% of all capital city jobs are situated in a CBD or fringe office markets.  As I mentioned, there are other forms of employment in these area other than just that within an office.  Given this, let’s assume that a further 5% of the total capital city employment is located within either the CBD or the fringe areas taking the figure to 20%, leaving four out of every five employed persons not being employed in the inner city area and therefore not having to travel centrally each day.

Of course there are those that need to travel centrally that aren’t workers that would rely on public transport, this includes: students, shoppers, tourists and those who require government services that are located within these areas.  We would estimate that overall, this proportion of population is quite small.  Outside of this, although users of public transport may not necessarily be travelling all the way into the inner city areas of the capital cities, they do utilise it to travel to other working and retail nodes along the transport system.  Despite this, a majority of the population is unlikely to be relying on public transport to reach their destination each day with even fewer using it to tavel to the inner city areas for employment.

The implications of this is quite significant, although the roads and public transport are undoubtedly congested, a large proportion of the population are simply not commuting centrally on a day-to-day basis.  It also means that public transport is only benefitting a small proportion of the overall community.

From a future development perspective this also has some repercussions.  It is clear that in our larger capital cities there is a significant focus on densification of the inner city areas and those along transport spines.  Although this is the case, demand for these higher density inner city properties is likely to be strongest amongst those who actually work centrally.  In fact, it is probably fair to say that for those who do not work centrally that higher density housing in the inner city areas would likely be highly undesirable.

The push for higher density in the inner city means that you can squeeze more residents into a smaller area.  From government’s perspective it also means that you can rely on existing infrastructure which tends to be most abundant in inner city areas rather than having to provide new infrastructure such as that which is required when development takes place on the outskirts of the city.

Nevertheless, it certainly appears that public transport infrastructure such as rail lines and busways connecting suburbia to the inner city areas only benefits a small overall proportion of the population.  Of course, of the estimated 20% of people that travel to central areas of the capital city, you only have to look at the roads of a morning to see that for many the preferred way to commute continues to be via the private car.

The other aspects of public transport to consider are the cost and the coverage.  The overall cost of public transport is expensive and acts as a deterrent for many to use on a more regular basis.  I live in Brisbane and to travel just one zone costs $4.80 if you don’t have a go card.  The trip to the city from my house is only two zones which is $5.60 by paper ticket and $3.95 if I use a go card .  I live relatively close to the city centre however, if I lived four zones away and purchased a paper ticket the cost is $7.50, if you have a go card the cost reduces to $5.13.

In my opinion, those costs are extremely excessive.  Yes it is probably slightly cheaper than the cost of running and maintaining a car on a week-to-week basis however, the differential is likely to be minimal.

My overall conclusion is that public transport is not as important as many of us believe it to be, particularly for those of us that believe we all need to have public transport to commute to work in the inner city.  This analysis shows that the majority of the working population actually don’t work in the central areas which tend to be the areas best serviced by public transport.

The main reasons that public transport it is not as important are due to: public transport being over-priced, services are generally irregular and unreliable and the services do not effectively cater to the overall needs of the wider community with the main focus of the service to transport people from the suburbs to the central areas of the city.  If the system was expanded, run on a more regular basis and made more affordable, I am sure that it would be more widely used, especially if it was more cost effective and efficient than using a private vehicle.  Sadly, at this stage it is generally a long way from delivering these benefits.

Cameron Kusher is senior research analyst at RP Data.



Cameron Kusher

Cameron Kusher

Cameron Kusher is senior research analyst at CoreLogic RP Data.

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