Transport infrastructure key to housing development

Increasing the supply of housing in areas where the existing transport infrastructure is able to accommodate the additional demand is the recommendation of the Department of Infrastructure and Regional Development to the inquiry into Home Ownership.

"The release of additional land for residential development in areas with poor transport connections can lead to poor accessibility for residents, which can result in marginalisation from employment, education and essential services. 

"If planning is not undertaken in a coordinated way, residential land releases may require substantial infrastructure investments to subsequently deliver an acceptable level of transport service. 

"Especially in cases where adequate transport corridors have not been reserved and tunnelling is required, the additional cost of these investments may prove unaffordable in the long run. 

"Based on ABS Series B (medium growth) projections, the population of Australia’s capital cities is expected to grow by 6.1 million people between 2011 and 2031, and by 15.5 million between 2011 and 2061. 

"By 2061, both Melbourne and Sydney are expected to be home to around 8.5 million people. Perth is expected to experience the highest level of population growth over the next half century, almost tripling from around 1.83 million people to 5.45 million. 

"The Department has analysed changes in population and dwelling approvals in Australia’s major cities for two periods: 2006 to 2011 and 2012 to 2014. 

"During those two periods, the ratio of population increase to new dwelling approvals generally declined, suggesting that newer households tend to consist of fewer persons than in the past. 

"Assuming the recent trend continues, with the occupancy of new housing development remaining near the 2012-2014 levels of around two people per dwelling in Sydney and Melbourne, then it is expected that the two cities would respectively require around 40,000 and 45,000 new dwellings per year to accommodate the forecast population growth. 

"This is well above the average dwelling approval rates for the two time periods considered. If the figure going forward were instead closer to the long-term average of 2.6 people per household, then the number of new dwellings required would be around 30,000 for Sydney and 35,000 for Melbourne. 

"During the period 2001-2011, Sydney experienced an overall increase in housing density with 44% of all new housing stock consisting of apartments, 20% semi-detached units and 36% detached housing. 

"This saw the city’s share of apartments and semi-detached units increase from 36% to 41%, with detached housing’s overall share declining from 64% to 59%. 

"Over the past two decades, the Australian economy has reduced its reliance on manufacturing industries, with a greater economic focus on high paying jobs in knowledge intensive industries, which tend to be concentrated in the inner suburbs of major cities. 

"Specialist business parks, including those in close proximity to airports, are also emerging as key employment and economic centres in the landscapes of major Australian cities. 

"These highly productive, high paying and centralised jobs form a small but increasing proportion of the number of jobs overall, but are critical drivers of growth for Australia’s urban economies."

The continued growth of detached housing on the urban fringe, combined with the consolidation of many jobs in inner suburbs, creates a policy challenge for governments to effectively connect homes and workplaces. 

"This is placing pressure on Australia’s urban transport networks and leading to growth in road and public transport congestion." 

In the submission to the House of Representatives Standing Committee on Economics, the Department of Infrastructure and Regional Development supported the increase of housing supply in areas that complement the existing patterns of employment growth and that take advantage of existing transport networks. 

"Meeting the future transport needs of Sydney will be a significant challenge under any growth scenario, but it will likely become even more difficult if housing supply is added in areas that are poorly supported by transport services. 

"In formulating long term housing supply policy, the Department recommends a considered approach that takes account of the broader costs and benefits of housing development, including the costs of infrastructure connections and impacts on transport networks (such as road congestion). 

"While greenfield developments will be appropriate in some instances – a more holistic assessment may result in certain development proposals proving uneconomic." 

The Department believes that there are a number of other ways in which greenfield developments can be more costly than infill development, including reducing the supply of suitable land for agricultural, recreational, environmental and other uses; infrastructure connection costs; productivity and social costs.

"Overall, however, there is a clear body of evidence showing that, on average, the aggregate cost of infill development is well below that of greenfield development. 

"According to a study by the Centre of International Economics for the Australian Infrastructure Audit, urban consolidation can lower costs and environmental impacts. 

"Findings indicated that the resource costs of providing infrastructure associated with urban infill development are seven to 12 per cent lower than on the urban fringes."