The future of Australian cities

Transcription

1 The future of Australian cities Submission to the Standing Committee on Infrastructure, Transport and Cities July 2017 The Future of Australian Cities Committee for Sydney Submission 1

2 Contents Towards Sustainable Australian Cities: A view from Sydney... 4 The Triumph of the Knowledge Economy in our Cities... 4 Divided Cities: Sprawled vs compact urban growth... 4 Rebalancing Sydney?... 5 Sydney: Adding to the dividend... 5 Ending the Divides? Economic and Health Consequences of Urban Form: The premium for walkability Benchmarking Sydney Housing Affordability and Supply The Importance of Getting the Right Transport Infrastructure Reforming the Transport Infrastructure Appraisal Process: Key Issues Transport Infrastructure Appraisal: 8 key points Encouraging Innovation: The Greater Sydney Commission and city deals City Deals Understanding our cities: The impact of sprawl Access to knowledge jobs Environmental impacts of sprawl Social mobility and sprawl Health and wellbeing Overcoming Sprawl: A new urban structure for the cities Infrastructure Appraisal City Deals and City Shaping Infrastructure Value Capture, User Charges and Funding City-Following Infrastructure Modal Shift Green Infrastructure Walkability Towards the 30-minute city The 60-minute city What impact does congestion play on effective job density? Can we expand the 30-minute city without requiring additional transport infrastructure? Taking a lead on affordable housing Maximise the use of public land Partner with the private and not for profit sectors The Future of Australian Cities Committee for Sydney Submission 2

3 Table of References Figure 1. GDP growth of Sydney and Australia... 6 Figure 2. Productivity of Sydney... 6 Figure 3. Sydney s Financial Services sector contributes as much GVA as WA mining... 7 Figure 4. Growth of Sydney as an international finance centre... 7 Figure 5. Sydney is one of the most dynamic cities in the world... 8 Figure 6. FDI per capita (US$) for major global investment destinations... 8 Figure 7. Forecast population growth, Figure 8. Sydney s income divide Figure 9. Per capita income by postcode in Sydney Figure 10. Effective Job Density of Sydney Figure 11. Number of residents that can be reached within 30-miuntes by public transport Figure 12. Access to knowledge jobs in Sydney Figure 13. Share of knowledge jobs in the NSW economy 2015/ Figure 14. Walkable urbanism correlates with higher productivity Table 1. Comparing traditional innovation spaces and districts Figure 15. Instances of hospitalisations related to type II Diabetes in Sydney Figure 16. Spidergram of Sydney s performance in 2016 and Figure 17. Sydney compared to other global cities Figure 18. Sydney s strengths and weaknesses Figure 19. Housing prices have dramatically increased while supply has increased Figure 20. Housing completions per capita of cities in the OECD Figure 21. There is a strong correlation between sprawl and amount of highways Figure 22. Efficiencies of different modes of transport Table 2. Average time spent commuting in Sydney from Table 3. Government infrastructure costs (upfront) Figure 23. Land use impacts on transport emissions Table 4. Government Infrastructure Costs (upfront) Figure 24. Access to Knowledge Jobs in Sydney Figure 25. Land use impacts on Transport Emissions Figure 26. Income by Postcode 2013/ Figure 27. Average NAPLAN year 9 reading score by Sydney LGA Figure 28. Hospitalisations due to Type II diabetes (left) and cardiovascular disease (right) Figure 29. Urban density versus road supply Figure 30. Walkable urbanism correlates with higher education levels (US) Figure 31. Walkable urbanism correlates with productivity measured in per capital GDP (US) Figure 32. Walkable urbanism correlates with greater social equity Figure 33. Number of jobs accessible within 30 minutes in Sydney Figure 34. Effective job density above and below average access Figure 35. Number of jobs accessible within 60 minutes by public transport and private vehicle Figure 36. Increase in access to jobs within 30 minutes between the Morning Peak and Midday Table 5. Middle-ring suburbs are those most affected by congestion Table 6. Top 10 locations for workers available for each current job Figure 37. Number of workers within 30 minutes of each job The Future of Australian Cities Committee for Sydney Submission 3

4 Overview Towards Sustainable Australian Cities: A view from Sydney In our view a sustainable city is one which while growing its population and GDP does not lose the essence of what made it successful in the first place. The very function of cities is to agglomerate activity, innovation and wealth and in so doing provide the best opportunities for the widest range of talent and commercial activities. However, as they grow ever more successful and expand spatially and demographically, there comes a potential tipping point in the life of any city where their success begins to inhibit their capacity to succeed further. This for example can happen when cities become so in demand because of their productivity, capacity to meet business and personal aspirations and the lifestyle they offer that housing becomes less affordable close to jobs, public transport capacity doesn t keep with need and the resulting sprawl results in longer and longer commutes by car from home to work. In such cities, businesses begin to see the high costs of living deter key workers, talent begins to look for alternatives cities in which to work, and younger people despairing of getting onto the housing ladder begin to relocate. The city becomes the victim of its own success, no longer providing attractions and opportunities for the wide range of human resources required to maintain the city s momentum and indeed role as a wealth creator: a working definition of unsustainable city. The Triumph of the Knowledge Economy in our Cities While all cities have such cycles of growth, dominance and challenge, what makes this era of urbanism different is the triumph of the knowledge economy which is adding to the attractions of certain cities and indeed certain places within cities. Agglomeration of the economy is increasing in the knowledge economy not dispersing because if having access to knowledge is now the prime source of economic wealth then success comes top cities which attract talent and enable them to cluster and learn from each other most efficiently. This process has been called the reurbanisation of the economy. By contrast, agriculture and indeed manufacturing were far more dispersed in terms of location of industry. The result is that certain cities attract today s key workers graduates- more than others and that such workers themselves are agglomerating in knowledge dense work environments and are also seeking to live in denser settlements closer to where they work, particularly if well connected by mass transit or indeed walkable. These trends are not only resulting in some cities succeeding more than others. They result in some parts of cities being hot both in terms of productivity and talent attraction but also in terms of residential costs- and others being far from the economic action in their city, resulting in fewer easily accessible opportunities for their citizens while still experiencing some of the consequences of higher urban costs, such as housing. Divided Cities: Sprawled vs compact urban growth In Australian cities this divide takes the form of the Compact City and the Sprawl City. The former, for example the area within 10ks of the Sydney CBD, is a thick and broad labour market with high The Future of Australian Cities Committee for Sydney Submission 4

5 effective job density (EJD) and high value knowledge jobs, better public transport connectivity and the high urban amenity that comes from employment and residential density. The latter has a lower EJD, lower residential development and less accessible urban amenities with long journeys required by car from home to work and indeed leisure opportunities. Both by international standards are residentially unaffordable with even a home in Oran Park 60 kms from Sydney s CBD costing 12 times average salary for the South-West Sydney region though far more affordable than the areas closest to knowledge jobs in Sydney s East. Rebalancing Sydney? The Committee has long identified the need to rebalance Sydney s growth model to better link opportunities in terms of jobs with where the population is growing fastest. Better link is precise as in some cases this requires policies and interventions to ensure people can move more efficiently and speedily from where they live to where jobs are agglomerating. In other cases, the better link will mean developing new centres of knowledge job agglomeration where possible across Greater Sydney, closer to, and feeding off, expanding population centres. In our view, our cities cannot maintain their momentum and success, cannot be sustainable, cannot take some development heat off over-heating locations or provide opportunities for all, unless there are analyses of the kind we have been advancing and policies which serve the key aim of overcoming the strategic barriers to continued city success and inclusion. We have researched and written about such matters in a series of publications we are attaching with this submission. The broad intention and purpose of them can be summed up in the title of a recent Committee for Sydney Issues Paper Adding to the Dividend, Ending the Divide. That is, we need to see consistent and long-term policies and investments from both Federal and State governments if Sydney is to maintain its huge economic role for both the state and the nation. Sydney: Adding to the dividend Sydney s growth since at least 2013 has served the nation well as the difficult transition away from resources took place, with Sydney s CBD s financial services alone creating as much GDP for Australia as the WA mining economy and overall, Sydney has seen the creation in the last few years of more than 30% of the nation s jobs. However, at the same time we have seen that the Sydney spatially remains divided in terms of economic, education and health outcomes. This in general terms refers to the differential outcomes between Western Sydney and Sydney East of Parramatta which remain starkly substantial and are best summed up in the finding from the recent Census that average life expectancy drops by over a decade on the journey from the Eastern Suburbs to Rooty Hill. In addition, the Sydney divides referred to by the Committee are around intergenerational inequity particularly access to housing ownership and the wealth effect it promotes. If Sydney cannot deal with these challenges, its sustainability is at stake and that means its significant contribution to national well-being and international standing will reduce as will its capacity to meet the aspirations of its people. Below we include some of the key findings from recent Committee Papers which we believe sum of the core challenges facing the sustainability of the city. The Future of Australian Cities Committee for Sydney Submission 5

6 Figure 1. GDP growth of Sydney and Australia Source: Committee for Sydney Report - Adding to the Dividend, Ending the Divide Figure 2. Productivity of Sydney Source: SGS Economics and Planning, 2016 Sydney CBD s financial services alone contribute as much to the nation s wealth as the WA resources economy. The Future of Australian Cities Committee for Sydney Submission 6

7 Figure 3. Sydney s Financial Services sector contributes as much GVA as WA mining Sydney s finan cial services sector bigger by quantum than Hong Kong or Singapore - is being recognised internationally as a top performer. Figure 4. Growth of Sydney as an international finance centre Source: Committee for Sydney Report Joining the Top Table The Future of Australian Cities Committee for Sydney Submission 7

8 And the city s overall economic momentum is also being acknowledged internationally: Figure 5. Sydney is one of the most dynamic cities in the world Source: JLL The general notion of Sydney s momentum is specifically exemplified in recent data of Sydney s performance in terms of foreign direct investment: Figure 6. FDI per capita (US$) for major global investment destinations The Future of Australian Cities Committee for Sydney Submission 8

9 As a consequence of such trends, Sydney is now one of the fastest growing cities in the developed world: Figure 7. Forecast population growth, The Future of Australian Cities Committee for Sydney Submission 9

10 Ending the Divides? At the same time as this momentum has been going on, it has become clear that as the city delivers its dividend, divisions across the city have not reduced and seem to be entrenched. So there is a pronounced split spatially in Sydney in terms of wealth outcomes: Figure 8. Sydney s income divide Source: Committee for Sydney Report: Adding to the Dividend, Ending the Divide 2 Figure 9. Per capita income by postcode in Sydney Source: Committee for Sydney Report Adding to the Dividend, Ending the Divide 3 The Future of Australian Cities Committee for Sydney Submission 10

11 This split is matched by and reinforced by differential effective job density across Sydney which means that most jobs in Sydney are still being created far from where people live, with for example, Western Sydney s workforce expanding at 13,000 a year whilst its jobs only increase by 8,000 a year, leading to commuting on a mass scale from west to east: Figure 10. Effective Job Density of Sydney Source: SGS, 2016 This commute is promoted and reinforced by the differential access across Sydney to public transport with a far heavier concentration of supply East of Parramatta than West of Parramatta, with significant economic and health consequences: Figure 11. Number of residents that can be reached within 30-miuntes by public transport Economically this has led to concentration of knowledge jobs in the higher density areas to the east and close to the CBD better connected by public transport: The Future of Australian Cities Committee for Sydney Submission 11

12 Figure 12. Access to knowledge jobs in Sydney Recent work by the NSW Government shows an irreversible shift towards knowledge jobs in the state economy and raises again the need to grapple with the spatial distribution of such job opportunities across Sydney and how the current imbalance geographically needs to be addressed beyond the welcome advent of a second airport in outer Western Sydney whose impact will be helpful to rebalance Sydney to some degree in the longer term but not in the next decade or so - if we are to both maximise Sydney s performance but also enable more of its communities to benefit from growth: Figure 13. Share of knowledge jobs in the NSW economy 2015/2036 The Future of Australian Cities Committee for Sydney Submission 12

13 Economic and Health Consequences of Urban Form: The premium for walkability It should be noted that the spatial differential across Sydney is also having health consequences. Areas in the West with low density development, poorly connected to public transport have dramatically less access to walkable environments. This means that they lack the environments which global research is showing are crucial to the future knowledge economy as places where knowledge workers agglomerate. Walkable precincts are now seen as more successful economically and where key innovation districts are located in our cities: Figure 14. Walkable urbanism correlates with higher productivity Source: WalkScore Table 1. Comparing traditional innovation spaces and districts The Future of Australian Cities Committee for Sydney Submission 13

14 To add to this economic benefit from walkable precincts, we now know there are adverse health outcomes associated with unwalkable places. Diseases such as diabetes are thus increasingly rife in areas such as Western Sydney with less access to walkable precincts and public transport: Figure 15. Instances of hospitalisations related to type II Diabetes in Sydney Benchmarking Sydney Recent work by the Committee on benchmarking Sydney s performance also usefully summed up the opportunities and challenges facing the city and pointed us in the direction of some of the key interventions required to add to the dividend and end the divides. The author Professor Greg Clark compared Sydney s performance against a wider series of indicators and relevant competing cities. While noting that Sydney was a potential candidate to join the top table of world cities, the paper stresses that some of the negative externalities of Sydney s growth model needed addressing by all tiers of government. Professor Clarke s overall assessment of Sydney s comparative performance is set out below. The analysis shows that Sydney is performing just below the level of established world cities and needs to resolve some of its challenges if it is to decisively move up. Please note that we have urged this kind of analysis be done for all Australian cities and welcome the move in this direction under the aegis of the new Federal cities policy: The Future of Australian Cities Committee for Sydney Submission 14

15 Figure 16. Spidergram of Sydney s performance in 2016 and 2017 Source: Committee for Sydney Report Joining the Top Table That analysis leads to the conclusion that we need to see concerted action to address challenges around Sydney s liveability, which is key component in a knowledge economy of a talent attraction strategy. We set out below the area where Sydney is ranked highest and lowest against competing cities. The lowest ranking relates to affordability (particularly housing) and transport infrastructure where action needs to be taken: Figure 17. Sydney compared to other global cities Source: Committee for Sydney Report Joining the Top Table The Future of Australian Cities Committee for Sydney Submission 15

16 Figure 18. Sydney s strengths and weaknesses Source: Committee for Sydney Report Joining the Top Table Housing Affordability and Supply On housing affordability, action is vital given that Sydney now has the second most expensive housing market in the world, just behind Hong Kong but well ahead of places like London or San Jose(where Silicon Valley is located). While the Committee sees increased supply as a necessary it is not a sufficient strategy to address this key pressure. Australia is already a housing-productivity hot spot and Sydney s house prices almost doubled in the very years that supply almost doubled. Figure 19. Housing prices have dramatically increased while supply has increased The Future of Australian Cities Committee for Sydney Submission 16

17 Source: Sydney Morning Herald, 2016 Figure 20. Housing completions per capita of cities in the OECD Source: ABC News While the supply discussion is controversial in terms of its impact on affordability, it is less controversial that restrictions on housing supply through for example NIMBY pressure on the planning process are preventing as many of those knowledge workers that would wish to live closer to high value jobs from doing so; and that this has an impact on productivity. This is clear from work by the leading academics internationally working on this subject, Enrico Moretti and Chang-Tai Hsieh. Although their work is based on US examples they find that stringent restrictions on housing supply effectively limit the number of workers who have access to the city s high productivity. This reduces aggregate national growth significantly. The argue both for an end to what they call exclusionary zoning thus reducing barriers to supply close to centres of urban productivity but also an alternative. This is the development of public transportation that links local labour markets characterised by high productivity and high nominal wages to local labour markets characterised by low nominal wages 1. They point to relevant examples in the US, UK and Japan and that the possible benefit of the high-speed train currently under construction in California is to connect low wage cities in California s Central Valley to high productivity jobs in the San Francisco Bay Area. This could allow the labour supply to the San Francisco economy to increase overnight without changing San Francisco housing supply constraints. And, we add, without adding to road congestion. The Importance of Getting the Right Transport Infrastructure What emerges from this and the Greg Clark analysis is the centrality of infrastructure and the right kind of infrastructure to ensuring that Sydney like all Australian cities, maximises productivity whilst promoting spatial and intergenerational inclusion. It seems to us that the aim of doing both can only be achieved by a strategy of modal shift towards public transport/mass transit in and across 1 Moretti, E., Hsieh, C. T Housing Constraints and Spatial Misallocation. NBER The Future of Australian Cities Committee for Sydney Submission 17

18 Sydney. This is not because we have an ideological preference of one mode over another. It is because as the economy is now shifting decisively to being an urban one based on the benefits of agglomeration economies in the knowledge era, the new challenge becomes to enable large numbers of workers to access such agglomerations without bringing the city to a halt via congestion. When the economy was dispersed transport programs which supported that dispersal road programs- were most relevant. Now the economy is more concentrated and urban, we need a shift towards modes which service agglomeration. Further, while we believe that this shift is important now to make the city we have work better it is clear to us that the Sydney not of our current 5 million but that of 8 million by 2056 at the latest simply cannot be sustainable on a business as usual for Sydney basis. Findings from the US below show how low urban density goes hand in hand with increased road supply. Essentially, urban sprawl is encouraged by such programs when the need is to service urban concentration: Figure 21. There is a strong correlation between sprawl and amount of highways The illustration below shows how mass transit modes are more efficient in transporting higher numbers of workers to places of agglomeration with less impact on congestion: The Future of Australian Cities Committee for Sydney Submission 18

19 Figure 22. Efficiencies of different modes of transport Source: TU Delft It is because we have avoided the policy implications of such an analysis and kept on prioritising infrastructure which disperses our city s population that the very stated purposes of such projects travel time reduction and decongestion - are never actually achieved. The following table shows how despite continued and significant expenditure on a major road program for Sydney, average travel time has actually gone up. We shall pursue this matter further below in the comments on the need for a new approach to appraising urban infrastructure. Table 2. Average time spent commuting in Sydney from Average work trip duration (mins) Average nonwork trip duration (mins) Daily travel time per person (mins) Total travel time per person (km) Average trip length (km) VKT per person (km) Source: SGS, / / / / / / / / / / / / / The Future of Australian Cities Committee for Sydney Submission 19

20 While the opportunity costs of a lower density mass transit approach to cities is suggested above and identified further in the Moretti analysis, the table below from Australian sources pins down the specific extra costs to the public sector of servicing low density, car-reliant development: Table 3. Government infrastructure costs (upfront) Infill: Cost per lot Greenfield: Cost per lot Comparison: Cost per lot Roads $5,623 $33,583 $27,960 Water and Sewerage $16,303 $24,738 $8,435 Telecommunications $2,847 $4,103 $1,256 Electricity $4,512 $10,719 $6,207 Gas $0 $4,080 $4,080 Fire and Ambulance $0 $334 $334 Police $0 $429 $429 Education $4,306 $36,644 $32,338 Health $22,237 $35,759 $13,522 Total Cost per Lot $55,828 $150,389 $94,561 Source: Trubka, Newman and Bilsborough (2010) And the externality costs from emissions of the low-density car reliant city model versus the higher density public transport/walkable city model is illustrated below in the contrast of Atlanta with the Barcelona region, both having about 5 million inhabitants, the same as Sydney or Melbourne. Figure 23. Land use impacts on transport emissions The Future of Australian Cities Committee for Sydney Submission 20

21 It should be noted also that a recent Harvard study showed that Atlanta s model not only provides poor mobility and access, it also provides poor social mobility accordingly. These findings strike us as relevant to an Australian cities discussion. They also raise what we regard apart from the governance of Australian cities as the most important reform aim of public policy: the complete overhaul of the way state and federal governments identify and appraise key city infrastructure. Our current approach is not helping us tackle our cities problems or maximise their opportunities: it is worsening outcomes and increasing costs and externalities. Reform is essential. Reforming the Transport Infrastructure Appraisal Process: Key Issues The process by which governments select infrastructure in and for Sydney is called appraisal. When it works properly the selection is based on firm evidence that a specific piece of infrastructure a road or rail project is the answer to a specific need in or fits a key strategic purpose for our city. Getting this process right is a crucial matter as what Sydney needs is not just quantity of public spending on road or rail, welcome though that is after decades of low investment. Rather, it needs a focus on quality and specifically on ensuring the specific infrastructure preferred is the right one. Having reviewed international best practice, the Committee believes we need to see reform in the appraisal process by which governments select infrastructure in and for Sydney. Certain choices made by governments have caused controversy and raised concerns in the public mind. We believe that to avoid this certain key principles must underpin this process to ensure we select the right infrastructure and to reassure the public about the objectivity and empiricism behind decisions. We set the key ones out here. With tens of billions being allocated to infrastructure as of writing, it is important that this process is based and is seen to be based by Sydneysiders - on firm evidence that a specific road or rail project is the answer to a specific need in or fits a key strategic purpose for our city. The project should be tested rigorously against other options and modes for example, does a railway answer the need better than a road project? We also need to test whether a no new infrastructure option involving the more efficient sweating of existing assets might deliver as much public benefit as a multimillion dollar new piece of kit. Road pricing and demand management are for example far more effective at managing congestion than new road capacity. This also means that the appraisal process needs to be multi-modal or non-modal and not over-influenced by the inevitably siloed bias of a single government agency. A project s value for money, its total costs and benefits and all its potential up and down sides should be objectively and transparently assessed. Currently too much weight in the selection process is giving to projects which purport to significantly reduce travel-time 80% of the benefits claimed for a road scheme can be travel time reductions which research and our own experience demonstrate are never ultimately realised. At the same time, too little weight is given to the residential value or GDP uplift achieved by some modes over others. This is a crucial benefit of rail projects whose value uplift should be captured by the public sector to subsidise infrastructure costs. Rail projects enable higher density, reduce a city s sprawl and encourage economic agglomeration all such benefits count for little in our current approach. Crucially, the project s capacity to raise or depress productivity and create jobs should be a key factor as will how the project fits with and reinforces the objectives of the overall development plan for Sydney for example, will this project reduce or further entrench our city s sprawl and better The Future of Australian Cities Committee for Sydney Submission 21

22 connect the West with economic opportunity? Current appraisal processes don t require such a strategic fit with the statutory plan for growing Sydney. To ensure that any such benefits were in fact realised, before the project is implemented a data baseline for the area impacted by the infrastructure project should be modelled so that after implementation a true picture can be identified of the actual benefits achieved in relation to benefits claimed beforehand. Then we can know whether those travel time reductions actually happened, congestion improved, remained the same or went backwards, whether residential values rose or fell, did the number of jobs claimed actually eventuate and overall and crucially, and did the strategic improvement sought for the city from this project take place: overall, did the city function better or worse as a result of this project? On the basis of this learning and feedback, our appraisal, infrastructure planning and procurement process would be significantly improved. At the heart of this reformed appraisal process would be a deep and transparent process of community engagement not only on the basis of ensuring accountability but also to secure buy-in to the project as a legitimate and perhaps only answer to the strategic need identified. Big infrastructure projects have massive city-shaping and indeed potentially city-damaging consequences, as well as massive costs. Clearly, the community should have open and continued access to the key information or arguments driving infrastructure decision-making and their views must be factored deeply into the process. We will get better decisions that way. Finally, politicians of all colours should stop announcing projects as coming well before they are even appraised, putting undue pressure on the system to produce appropriate business cases, as an announced project can obviously never be unannounced, whatever the evidence. We can and must do better. There are emerging examples of better practice which we must learn from and apply more deeply. The consultation on the rail options and airport links for Western Sydney commendably ask for wider evidence of land-use benefits than is usual and importantly ask for views on the city-shaping impact of options: that is what option will improve the way the city works best? Similarly, early discussions around the emerging West Metro project are focussing on the economic uplift for Paramatta and Sydney overall from a rail alignment, and the impact on residential numbers and densities. Crucially, the emerging TfNSW transport strategy looks to be much more about linking infrastructure with land-use than any previous approach. These are positive moves towards a better appraisal process. We add one other reform. Siloed government leads to modal bias. If your very purpose as a department is to build roads you are simply not going to recommend a rail project. This structural problem requires a number of reforms. One is that no significant infrastructure project in Sydney should proceed past the strategic fit requirement without the approval of the Greater Sydney Commission to show it conforms with the Sydney Plan. Beyond that the day cannot be far distant when we see a fully unified transport department subsume a roads section. Cities cannot have the infrastructure they need in the round or community confidence in the growth strategy for their city where there is a separate and powerful department for a single mode. Transport Infrastructure Appraisal: 8 key points 1. The emphasis on travel time reductions arising from road projects is intellectually wrongheaded, given the lack of evidence for such an impact in reality The Future of Australian Cities Committee for Sydney Submission 22

23 2. The analysis of alternative options is unconvincing, suggesting a pre-determined approach to modes, a shallow approach to evidence, and a failure to fully identify the strategic problem being tackled 3. A failure to evaluate what actually happened after an infrastructure project was delivered, to see if the benefits claimed were in fact realised 4. A failure to include in the appraisal process and the assessment of benefits the actual impact caused by transport investment changed land use, densities and values and the implications these have for the shape of the city 5. A bias towards investing in expensive, physical, infrastructure, rather than sweating existing assets more efficiently through congestion charging or other demand management techniques 6. A related tendency to underestimate the extra demand, which some new infrastructure induces, and a failure to fully account for this in appraisal 7. A failure to engage the community early or deeply enough in an evidence based discussion about why a specific project is preferred, what problem it allegedly solves, and what are the overall benefits for citizens and the performance of the city itself 8. A failure to account for the economic and social impacts on the city of projects that exacerbate sprawl, as contrasted with those supporting a more compact, higher density city; that is to say, a failure to base the justification for the project on meeting the objectives of Sydney s own growth plan, which explicitly calls for an end to sprawl. That last failure is perhaps the most extraordinary - and most inimical to the long-term success and sustainable growth of Sydney. This means there is a profound disconnect between the infrastructure appraisal process and city planning. Indeed, too often projects undermine the objectives of the metropolitan city plan, with the consequence being the sprawling city and disconnected communities we now have. Encouraging Innovation: The Greater Sydney Commission and City Deals In seeking to reform the appraisal process -on which subject the Committee is drafting a new Issues Paper we are encouraged by two governance innovations. One is the existence and work of the Greater Sydney Commission, which is exploring the key objectives of better land use and transport integration and of a closer fit of infrastructure planning and city planning, and the emergence of the City Deal process, as part of the new Federal cities policy. The GSC is Australia s first cross government Metropolitan Planning authority, covering all of Greater Sydney. It was founded 18 months ago and having published its draft plans for Sydney s 6 districts it is now working on the next iteration of the Plan for Sydney. It is also leading for NSW in the discussions with the Federal Government and the 8 councils involved in the emerging City Deal for Western Sydney. It is a serious attempt at cross government coordination of land use and transport planning and at creating an urban-planning led approach to infrastructure prioritisation and delivery. In a real departure from NSW history which is one of siloed governments departments determining their own infrastructure priorities according to their own perceptions of need, the GSC brings the relevant government departments to the table to collaborate, agree on priorities for the city, and The Future of Australian Cities Committee for Sydney Submission 23

24 determine what infrastructure should be preferred to deliver the objectives of the shared Plan for Sydney. While these are early days, it seems clear to us that the collaboration between urban planning and transport planning is already hugely improved, with Transport for NSW indicating a much deeper commitment to ensuring their transport modes support the land use planning objectives of the GSC than we have ever seen in this State. This is welcome though long overdue. We cannot see how good infrastructure planning was ever feasible without such collaboration and coordination and without the Urban Plan for Metropolitan Sydney being the basis of all key transport infrastructure appraisal and prioritisation decisions. It is a key recommendation of the Committee for all Australian capital cities that key infrastructure priorities must be based in the Urban Plan for that city and aimed at delivering its land use objectives. We cannot continue to have the Urban Plan for our Capital cities have but a distant link to the infrastructure choices of State governments with the consequence that the urban planning objectives of building higher density more compact cities are either not delivered by the transport infrastructure preferred by State governments or are actively undermined by them. We have in a sense talked compact cities whilst delivering sprawl. The GSC itself is an attempt to corral all of government behind the single city strategy. We shall see how effective it will be in practice. We are optimistic and indeed would urge Federal Government to join the State government in reviewing the success of the GSC with a view to supporting the model in other dispensations. The Federal Government should also review how outcomes have been impacted by the GSC in due course particularly as regards whether improved collaboration across government around delivering the objectives of the Metro Plan will also lead to improved and more credible bids for infrastructure spending to the federal Government via Infrastructure Australia for projects which show with credible evidence how they will improve city outcomes rather than on poor or no evidence that such projects will reduce travel time. In the past the Federal Government has approved funding for city infrastructure projects such as major road programs on very poor evidence or on the basis of the wrong objectives. Cities are shaped and indeed misshaped by such decisions. IA itself needs to require from State bidders for infrastructure projects going forward how they conform with achieving the goals of a city s Metropolitan Plan. IA should lead State Governments to a reformed appraisal process for infrastructure of the kind we suggest here and are developing in greater detail in our forthcoming Issues Paper. City Deals The positive news is that the emerging City Deal for Western Sydney is showing a new way forward for infrastructure appraisal for our cities, or at least has innovative elements we should see implemented more broadly. The concept of the City Deal is new to Australia but has been working for some years now in the UK. They are highly relevant to Australia as they encourage strategic alignment and funding commitments between the Federal and City governments and indeed local councils. In the UK they were invented because a centralised way of allocating funding to regions and cities and of determining and funding infrastructure using national metrics and requirements, had led to disappointing results. The case was made by cities that the national government would get a better return from its investment if it allowed some local priority setting on infrastructure prioritisation and investment and allowed some local discretion on strategic objectives. So for example, instead of Greater Manchester having a road program foisted on it from the centre, it argued that the The Future of Australian Cities Committee for Sydney Submission 24

25 transport kit that would have most impact on GDP uplift and local job creation was in fact a light project that would under existing infrastructure appraisal approaches failed to have won over a road project and its claims to aid de-congestion. That light rail project is now being built. In their translation to Australia and particularly Sydney, the City Deal concept has kept most of its strengths and is being adapted to Australia conditions. In the complex constitutional environment of Australian Cities which have been orphans of public policy and fallen between stools City Deals are perhaps more important as they enable collaboration between tiers on specific city objectives as never before without the need for frankly unlikely constitutional changes. In the Western Sydney version there are positive signs that the transport infrastructure decision-making process is different to the current one which essentially is based on siloed departmental decision-making based on highly challengeable evidence and very narrowly focussed on travel time reduction an approach which in practice excludes options such as rail and encourages modes which exacerbate sprawl, lower the productivity of the city and actually further distance suburban Australian precincts from job opportunities and short commutes. As we understand it, the City Deal discussions in Sydney are based on the GSC s emerging Plan for Sydney and properly involve a balanced consideration of the multi-modal infrastructure needs of servicing the new airport and of better connecting the area s communities with jobs and services. The Sydney City Deal infrastructure appraisal process has at its core a desire to select the infrastructure which results in the best city-shaping consequence for Sydney: that is, one that fits with land-use and transport integration principles and helps deliver the objectives of the Metro Plan for Sydney being developed by the GSC. The GSC has framed Sydney as three separate but linked cities and called for each of them to enable most people in their catchment to access the cities in no more than a 30-minute journey. So transport infrastructure will be assessed in future in relation to its contribution in delivering this strategic objective. Finally, the City Deal appraisal process, unlike the current approach, stresses the importance of projects which deliver the best economic outcomes with all tiers of government agreeing to the major infrastructure projects which have the at their heart targets for job creation, housing construction and other economic measures. We commend this approach. At the same time, the GSC is developing a new approach to ensure that Sydney s population growth is matched by transport, schools and other infrastructure through what they are calling Growth Infrastructure Compacts. These are to be mechanisms for government agencies to stage and implement what broad infrastructure is needed in different areas to support population growth and residential development. Compacts will be established before areas are rezoned as part of the planning vision for an area, for more (or for denser) housing. We commend this effort at integrated land use and infrastructure planning and indeed collaboration not just across government departments but also between the public and private sectors. In the rest of this submission, we focus in more detail on the themes stressed in this overview. The Future of Australian Cities Committee for Sydney Submission 25

26 Issues in Detail Sydney is facing the kinds of challenges that attend growth and economic success in most global cities. We are seeing high costs in housing, labour, goods, living; infrastructure investment demand; a two-tier labour market, traffic congestion, pollution and opposition to the growth model. We have major problems of affordability and intergenerational equity. Sydney is now one of the least affordable cities in the world. The average home price in Sydney now exceeds $1 million, which is 12.2 times the median household income of the city. This ratio has been rising; dwellings in Sydney are becoming less affordable over time as growth in wages slows it took 9.8 times the median household income to buy a home in 2014 and 6.0 times in Using another measure, the Rental Affordability Index, many parts of Sydney are not considered affordable for rental properties. For key service workers, such as teachers, nurses and retail workers, to rent anywhere within 15 to 20 kilometres of the jobs-rich Sydney CBD requires more than 50% of their incomes. Similarly, Sydney has almost no affordable renting stock for low-income earners located east of Blacktown. This is a spatial challenge of a city divided East to West in terms of economic productivity and social outcomes. Understanding our cities: The impact of sprawl The single most effective policy objective that the federal government can adopt to transition to a sustainable future for our cities is to arrest urban sprawl. In spite of much evidence to suggest that sprawl is bad for our health, for social mobility, for the environment and in terms of the costs to government in perpetuating the sprawl model (see Table 1), we are still seeing sprawl occur in our cities. Table 4. Government Infrastructure Costs (upfront) Infill: Greenfield: Comparison: Cost per lot Cost per lot Cost per lot Roads $5,623 $33,583 $27,960 Water and Sewerage $16,303 $24,738 $8,435 Telecommunications $2,847 $4,103 $1,256 Electricity $4,512 $10,719 $6,207 Gas $0 $4,080 $4,080 Fire and Ambulance $0 $334 $334 Police $0 $429 $429 Education $4,306 $36,644 $32,338 Health $22,237 $35,759 $13,522 Total Cost per Lot $55,828 $150,389 $94,561 Source: Trubka, Newman and Bilsborough (2010) There are currently two Sydneys: the compact one of Eastern Sydney within 10kms of the CBD, which is higher density and comparatively well serviced by public transport, and the sprawl city located further out, which is characterised by lower densities. This economic and social imbalance is The Future of Australian Cities Committee for Sydney Submission 26

27 undermining the economic vitality and productivity of Sydney, as well as dividing us socially, spatially and economically. Driving both job creation and better access to employment centers in Sydney west is critical to ending this divide, while adding to the economic wellbeing of the whole metropolis. Going forward, two out of every three new Sydneysiders will live in these lower density suburbs of Western Sydney most of them west of Parramatta while most jobs are being created east of Parramatta. The result is now a spectacularly unbalanced metropolis. Compounding this imbalance are changes in the composition of the Australian economy. We have transitioned away from an economy with a large manufacturing sector to one based on services. By 2036, Jobs for NSW forecasts that knowledge intensive jobs will make up 61% of the workforce. Manufacturing was one of the few generators of jobs in Western Sydney in the past and its decline is being felt more severely here, than elsewhere. Service jobs, however, tend to cluster around higher density, higher amenity areas, especially in, or close to, the CBD. This transition is only going to accelerate and we need to plan our metropolis accordingly. Access to knowledge jobs The result of our planning, and these economic changes, is a relentless commute of hundreds of thousands of people from Western Sydney to jobs outside the region and far from where they live. Each day some 400,000 people leave Western Sydney for jobs located elsewhere. While research shows that Parramatta s GDP grew faster in the last few years than that of the CBD and of North Sydney though not Macquarie Park this East Sydney dominance in high value jobs is expected to persist for some time ahead. This has many obvious social, environmental, and economic consequences. Work by Committee for Sydney members Western Sydney University and Deloitte has recently set out some of the challenges and opportunities in Western Sydney. Despite advances, particularly in the growth in the number and proportion of Western Sydney residents with university degrees and the growth in financial and insurance services in Parramatta (the suburb s 3rd largest employment sector), large concentrations of jobs in high value adding professional services sectors are not emerging at sufficient pace to match the growing number of tertiary qualified Western Sydney residents. 2 On current projections, between now and 2041, most jobs in Western Sydney will still be in retail, health care, education and manufacturing, with manufacturing continuing to decline in its share of overall employment. While logistics is likely to grow following the growth of the new airport, on current trends the overall jobs profile and growth of the region will not. Currently the jobs in Western Sydney increase by 8,000 a year but the number of workers grows by 13,000. This leads to a daily worker outflow from the region which may be over 400,000, and increasing. The challenge is outlined in the below Figure. The opportunity is also clear, as agglomerations of knowledge jobs have begun to form in and around key centres in Western Sydney. These can and must be built on by recognising and addressing not just the jobs-gap but, as we shall see, the public-transport gap experienced by Western Sydney. 2 Deloitte, Shaping Future Cities, Designing Western Sydney, 2015, 328/images/Shaping%20Future%20Cities%20blueprint%20v2.pdf The Future of Australian Cities Committee for Sydney Submission 27

28 Figure 24. Access to Knowledge Jobs in Sydney Environmental impacts of sprawl Below in Figure 2, we compare the emissions of a low-density car-based city and a high density mass transit based city of a similar population size to Sydney. The difference is striking and matters in health and socio-economic terms. The difference also symbolises the key strategic question for Sydney to be answered by public policy. What kind of city you want this to be, a dispersed highly carbased Atlanta type of city or a denser public transport-based Barcelona type of city? Figure 25. Land use impacts on Transport Emissions The Future of Australian Cities Committee for Sydney Submission 28

29 Social mobility and sprawl We are now learning of the social mobility implications of urban form and connectivity. There is increasing evidence of an inverse relationship between sprawl and social mobility. The ongoing Harvard and Berkeley study into inequality in the US shows that social mobility, the degree to which children manage to achieve a higher socio-economic status than their parents, is actually lower in Atlanta than Detroit. Atlanta s social inequality is very much linked to problems of mobility and accessibility. The city is so spread out and with poor public transport options that job opportunities are literally out of reach for people stranded in the wrong suburbs. This model of urban sprawl is also leading to homogenous communities and residential sorting by income so that poor children no longer attend the same schools as the well-off, leading to poorer educational performance and fewer opportunities. Our research provides evidence that these forces are in play in the Sydney model. The average income of Sydney is clearly divided between the Eastern half of the city, where the income is much higher, and the Western half, where the average income is well below the Australian average. Figure 26. Income by Postcode 2013/14 Educational gaps are a significant issue, not just in terms of general principles of equity in providing a high level of income to all residents regardless of where they live. The jobs of the future, including those in the FinTech and Innovation industries, require workers with a high-level education, to produce an internationally competitive workforce. The Committee s view is that we need to focus on the policies, innovations and investments that will on the one hand promote better educational performance at secondary level and on the other create the jobs ecosystem and opportunities across Western Sydney to exploit the skills and knowledge of the increasing number of graduates in the area for the benefit of all of Sydney. The Future of Australian Cities Committee for Sydney Submission 29

30 Figure 27. Average NAPLAN year 9 reading score by Sydney LGA Health and wellbeing The structure of Sydney is not only dividing us, it s making some communities ill. We have seen that the deepening and enhancing of the amenity, density, design, mix of uses and connectivity of our town centres and improved links with their suburbs should be seen as a core economic policy. But we also believe it is a core health and equity policy. The amenity benefits of walkable precincts connected by good public transport lead to differential health outcomes. Individuals in such precincts who use public transport more get over three times the amount of physical activity per day of those who don t (estimated at approximately 19 minutes a day versus 6 minutes a day by walking to and from the stations). Such active transport unconsciously leads to lowering risks such as heart and vascular diseases, strokes, diabetes, hypertensive diseases, osteoporosis, joint and backproblems, colon and breast cancers and depression. As Jeff Speck notes, If you live in a more walkable neighbourhood, you are 35 percent more likely to be overweight. If you live in a less walkable neighbourhood, you are 60 percent more likely to be overweight. Recent academic research in Australia has modelled the impact of urban planning on health, measuring a compact city model against a sprawled one, to assess the impacts of policy changes by governments in 6 cities around the world. 3 The results are directly applicable to Sydney and the message is clear: people who live in higher density neighbourhoods tend to walk more, cycle more and use public transport more often. In contrast, suburban sprawl discourages active transport 3 Giles-Corti, B. et al. City Planning and Population health: a global challenge, The Lancet, 2016 The Future of Australian Cities Committee for Sydney Submission 30

31 walking and cycling. The study revealed that a concerted policy effort to encourage compact cities (through major infill densification) results in significant health gains. Major land-use changes are needed to promote density and diversity of uses to encourage a modal shift to walking, cycling and public transport. Local and State Government should consider policies that encourage active and public transport as a major health and environment policy, not just a transport or planning one. Western Sydney communities continue to lag in a series of health outcomes such as diabetes, deaths attributable to high body mass, coronary heart disease, circulatory disease and asthma. Although much of this is associated with relative disadvantage, there is another factor at play here. The maps of diabetes, obesity and cardiovascular disease in Sydney overlap closely with maps of low density and poor public transport access. Figure 28. Hospitalisations due to Type II diabetes (left) and cardiovascular disease (right) We ve known for some time now that homes follow transport, and that the market is not providing denser, healthier communities in the middle and outer rings. Population density has increased within 5kms of the CBD since 1981, but beyond, density has barely changed. In addressing the structural imbalance of Sydney, the Committee believes it is crucial to arrest sprawl, and plan for and design good density. Too much of the debate currently seems to be about inviting consultees to support one new alignment or rail line over another. We actually need a new system of rail lines across the city that facilitates fast journeys from east to west, north to south and from south-west to northeast. Yes, the lines in the network may have to be phased in for cost and practicality reasons over the next generation, but in the long run there must be a new pan-sydney rail network for our city of 8 Million. We need to state that strategic ambition now even if the funding is not yet in place, so that we get maximum land-use and transport integration and can give the community and businesses of Greater Sydney confidence about the direction of travel for the city. The Future of Australian Cities Committee for Sydney Submission 31

32 All new rail alignments, whether in Western or Eastern Sydney, need to be justified in terms of how they add to a new network that fits with and delivers the goal of the economic and community strengthening of Sydney as a whole. The success of East and West will always matter to both and better connections between them will result in a 2+2=5, in which a faster rail link between Parramatta and Sydney CBDs adds to the success of all. It remains important that the links between them be stressed as much as what needs to be addressed within each of them. Priority must be given to the need for faster public transport connectivity between the three, but the centres of each city also need to be well connected by public transport to their adjacent suburbs. Hence, the importance we attach both to a fast rail link between Parramatta CBD and Sydney CBD to make them part of a single agglomeration but also the need to connect Parramatta s suburbs by a new light rail network. We also stress the need for Badgerys Creek to be connected to Blacktown, Penrith, Liverpool and Campbelltown as part of a new rail network across Western Sydney. Overcoming Sprawl: A new urban structure for the cities In the Committee s view, the solution to overcoming sprawl means extending the benefits of Density Done Well. In Sydney, that means ensuring that the economic and social benefits clearly enjoyed by the compact Sydney to those who currently live in sprawl Sydney. That is to make a more unified city out of current two Sydney model, and in so doing transcend and reduce the gap in outcomes between Western Sydney and the rest. In our recent discussion paper, Making Great Places: Density Done Well, we identify the five commonalities of density done well which are: Streets not roads; people not cars Fine grain and mixed use Order and variety Connectivity and infrastructure Diversity of people and experiences Below we discuss some of the policy interventions which we consider are required in order to achieve density done well. Infrastructure Appraisal The current approach to appraising infrastructure is broken and does not deliver the outcomes Sydney needs now, let alone the infrastructure the city will need to build a sustainable city of 8 million by mid-century. It is broken in two main ways, both of which have to be fixed if ambitions for our capital cities to be sustainable are to be realised. One is that infrastructure prioritisation, design and delivery have to be plan-led and driven by the outcomes of metropolitan strategic plans. Those outcomes are not travel time reductions - which in reality are seldom ever achieved from the major road programs. They are city-objectives around enhancing effective job density, GDP/GVA uplift, improving spatial justice, improving health, delivering the homes we need and environmental resilience. Without such an appraisal process the infrastructure required to deliver sustainable cities will simply not be identified and implemented. The spatial consequence of this failure will be to continue the sprawl model of Sydney against the intentions of Sydney s metropolitan planning approach - to maintain the structural split in the city between relatively advantaged and disadvantaged areas and maintaining the jobs gap in Western Sydney. The Future of Australian Cities Committee for Sydney Submission 32

33 Underpinning the fix to this part of the broken city infrastructure system is the evidence and data on which the appraisal process should be based. The current reality is poor evidential basis for infrastructure prioritisation and appraisal processes and very little post-implementation evaluation of whether the chosen infrastructure delivered the claimed benefits and desired outcomes. This all needs to be reformed if land-use and transport planning integration is to happen. The second fragment of the broken infrastructure system needing to be fixed is to ensure that Australian cities are not just more data-driven but also more responsive cities. The Federal Government has shown leadership in the Smart Cities and Suburbs program, the Cities Performance Framework and supporting an innovation economy. This has been fantastic. Sydney, however, while a top twenty performer in terms of most global city benchmarking exercises, is not yet at the races in terms of smart city infrastructure, the Internet of Things, urban analytics or engaging citizens in designing outcomes for the city itself. Although there are pockets of smart city activities in Sydney, overall, that future hasn t been distributed here yet. The Committee for Sydney has since 2013 been calling for an approach to city planning that is datadriven and responsive. We have called for, and published a report, on the benchmarking of Sydney. In the Committee of Sydney s view in the city which is the nation s centre for ICT, tech start-ups and fintech, the problem is not in origin a private sector one. The urban governance challenge facing Sydney has, in the past, been one of a lack of metropolitan governance coordination and collaboration of many other cities with which we are in competition. We have also lacked innovation and leadership within a specific department or agency of the state government, where siloed administration and rigid bureaucratic walls have inhibited cross-government alignment and adoption of innovation. At stake is not just the opportunity to improve the management and performance of Sydney through for example, speeding up the implementation across the city of world class digital infrastructure, of the Internet of Things, of data analytics in the service of urban management and of applications and platforms to engage citizens in the design and delivery of public services, in providing new solutions to urban problems and in their very experience of the city itself. Also at stake is the extra economic output which smart city initiatives can create through encouraging forward looking high productivity sectors in the knowledge and innovation-based industries and the commercial opportunities which collaborative and responsive government catalyses for SMEs when smart governance leads to convincing open data initiatives and smart procurement. The actual process of appraising federally significant infrastructure investment proposals has a minimal role for public engagement at its core. We need to see a deep engagement of the community in a transparent process of identifying what the key strategic problem is to which a specific infrastructure project is the only answer. The public need to be taken into the confidence of government infrastructure proponents and involved more fully in the appraisal of options. This will also help public acceptance of infrastructure projects going forward and less controversies, together with lowers costs. City Deals and City Shaping Infrastructure The sort of intergovernmental compact the City Deal represents is the perfect model for funding (and leveraging) large city shaping projects needed in Australian cities. City shaping infrastructure projects are those that fundamentally transform the structure of the city. An early example is the Sydney Harbour Bridge. This project not only provided a landmark for Sydney and something to put The Future of Australian Cities Committee for Sydney Submission 33

34 on postcards and Facebook posts, it fundamentally realigned the structure of City. It opened up the North Shore and Northern Beaches to development, creating over 100 new suburbs and several new town centres. A more recent example is the Western Sydney Orbital or M7. This project provided the missing logistics link between Melbourne-Canberra-Newcastle-Brisbane through Western Sydney. It dramatically improved the supply chain of goods across South Eastern Australia and created thousands of jobs in Western Sydney. Badgerys Creek Airport and rail projects accessing it will similarly reshape Sydney. It will not only reinforce Western Sydney as a logistics hub but will support many of the new service industries and jobs the region needs. It is exactly the sort of city shaping project which should be supported by a Commonwealth/State/Local City deal. It has at its core the objective of overcoming the structural divides in Sydney which have held back the dynamism of Western Sydney while also restricting the performance overall of Greater Sydney. In stressing city shaping as one of the key criteria of the selection of rail options for Western Sydney in the context of the new airport, the federal government has opened up a new and we think improved approach to the infrastructure appraisal process. That process should assess projects from the perspective of what they will do to meet cities economic, social and environmental needs. It should be based on integrated land use and transport strategies for cities and appraise projects in terms of how they will contribute to meeting the key objectives of the city strategy; how, for example, they improve or increase its productivity, liveability, inclusivity, housing delivery and other strategic city shaping aims. The current approach is modally siloed and gives too much weight in the selection criteria to claimed travel time reductions for transport users which have little empirical basis, while giving too little weight to the evidenced impact on land uses, values and densities brought about by transport investment. Rail projects, for example, bring a value uplift to homes near stations and enable higher density development but neither outcome is properly accounted for in our appraisal process. City Deals offer a revolution in the way we assess and value the impact of infrastructure investment in our cities: long overdue and very welcome. The traditional welfare benefits metrics on which transport Cost Benefit Analysis is based simply don t provide an adequate guide to which mode we should be selecting and what the priorities should be for our city. City shaping infrastructure projects need to be assessed against wider criteria than just the traditional cost-benefit analysis and requires a change from the traditional and modally siloed approach from our transport agencies. Value Capture, User Charges and Funding City-Following Infrastructure The Committee s Issues Paper Are we there yet: Value capture and the future of public transport in Sydney identified a best practice approach to value capture, concentrating on models that will work for the Australian context. The paper contended that value capture offers the best option to solving the funding conundrum facing public transport infrastructure. However, to get community buy-in, a clear nexus between the additional cost and the provided benefit is central to success. Since that Paper, value capture has received in principle support from both sides of politics and from each tier of Government. However, there is a still a lack of coherent and clear policy direction on how it should be implemented and which model should be adopted. This policy vacuum has meant several projects have commenced without a means to claw back the benefits they engender. This vacuum The Future of Australian Cities Committee for Sydney Submission 34

35 resulted in a lost opportunity and one that federal and state governments should address. It is widely accepted now, for example, that a value capture approach should have been implemented in relation to the building of the North-West Rail Link (now Sydney Metro) as the costs of this massive project were carried by the public sector but the returns were privatised by land owners. We must avoid similar unearned private uplift to land values around the Western Sydney Airport arising from public intervention as rezoning there provides a real opportunity to introduce value capture with widespread public support. The same can be said of the Sydenham to Bankstown extension of the Metro: we must avoid history repeating itself and the government depriving the community of a significant and justified return. Value capture or sharing approaches can be applied as a contribution to the cost of the infrastructure itself, or to ensure that appropriate community infrastructure is in place to meet the needs of an expanded population enabled by, for example, a new rail link. There is an array of potential initiatives of this kind to be explored. They are, with road pricing/user charge strategies, variants of a beneficiary pays approach. Policy innovation and a politically mature conversation with the community on such approaches is vital as business as usual will not deliver the investment required. This discussion is needed because it s not just federal funding that Sydney needs; to some extent it needs to tax itself if it is to fund the infrastructure demands of a city of 8 million people. That requires both new funding mechanisms and renewed community involvement. Modal Shift Investment in roads cannot provide the integrating dynamic required in cities, because such investment exacerbates a city s sprawl, as illustrated by the relationship between urban density and road supply in US cities, seen in the below Figure 30. Figure 29. Urban density versus road supply The Future of Australian Cities Committee for Sydney Submission 35

36 Modal shift is required to make our cities more productive, liveable, healthier and equitable for more people notwithstanding the other environmental benefits such a shift brings, including lower emissions. The low-density city is a low productivity city as well as being a low social-mobility city. The modern knowledge economy is an agglomeration economy not a dispersed one such as we saw in the manufacturing era. This means we need a mass transport network that gets more and more workers to the places where large numbers of knowledge workers are agglomerating. The road network cannot achieve this outcome, and the attempt to do so exacerbates congestion and actually disperses residential development further. Public transport tightens a city up and road programs loosen them. We need to tighten this city up so that as we grow bigger we become a better city. That also means greening this city not least because a city that grows greener as it grows bigger will command support for growth from a sometimes oppositional community. The Committee does not, on the basis of international evidence, see how greater integration of capital cities can be achieved without a decisive shift from a car-based transport system to a world class public transport network. We need a decisive modal shift towards public and active transport. In a digital and shared transport era this clearly also means planning for how this modal shift will mesh with autonomous vehicles and car sharing and thus how it will integrate with the more efficient uses of the existing road infrastructure through demand management and road pricing. At the heart of the required modal shift will be enhancing and expanding Sydney s rail network across the city. Rail is the mode that fits the economic future of a city of knowledge jobs agglomerated in a small number of big centres where the task is to get large numbers of workers to those destinations without worsening congestion. But also because no other mode acts as a strategic integrator of a city at a metropolitan level. Light rail is also an important part of the public transport system and can play a significant role in the Sydney of the future, particularly in connecting our key town centres to their suburban hinterlands. But fast rail journeys shrink the physical and indeed mental distances between parts of a city as no other mode can for as large a number of people. Rail-led regeneration has delivered economic benefits in other cities. For instance, the Crossrail project in London enabled in part by value capture is not only providing an additional 10% capacity on the underground network but is forecast to create an anticipated GDP impact of 42bn, a figure that dwarfs its expected construction cost of 14.8bn. It is also radically improving job access and life-chances for diverse communities in East London and the Thames Gateway, with a myriad of opportunities opening-up for transit oriented developments along the route. This is the kind of city-shaping consequence that only mass transit infrastructure can bring. Green Infrastructure Green infrastructure is an urban infrastructure hidden in plain site. The benefits of good urban green spaces are diverse and wide ranging. The evidence base for green infrastructure is well established, and we know that a well-designed, high-quality, connected public realm system can raise property values, enhance economic vitality and increase the tax base. Where improvements were made to Bryant Park in New York, commercial rental values increased by 220%, economic activity in the area increased, and house prices close to the park went up by 5-7%. 4 Of course, economic uplift is not the only benefit of green infrastructure, but it is often overlooked. 4 CABE Space, Start with the park, The Future of Australian Cities Committee for Sydney Submission 36

37 We need to identify, map and recognise the value of the green infrastructure of our city which supports the city both in terms of environmental outcomes and liveability. Valuing green infrastructure and planning for is a necessary ingredient of doing density well. Walkability The conventional wisdom used to be that creating a strong economy came first, and that increased population and a higher quality of life would follow. The converse now seems more likely: creating urban places with high amenity, mixed use density and connectivity is the first step to attracting new residents and jobs. Above we discussed the reasons that making places more walkable is a health strategy. But living and working in walkable places affects much more than just our health. Research conducted in the United States has found that of walkable places in the 30 largest metros found that the most walkable places were also the most educated, wealthy and most socially equitable. Walkable places are also gaining market share over drivable suburban places. These findings are illustrated in the figures below. Figure 30. Walkable urbanism correlates with higher education levels (US) The Future of Australian Cities Committee for Sydney Submission 37

38 Figure 31. Walkable urbanism correlates with productivity measured in per capital GDP (US) Figure 32. Walkable urbanism correlates with greater social equity The Future of Australian Cities Committee for Sydney Submission 38

39 Western Sydney lacks walkable urban precincts, and in our analysis, redressing this imbalance is not some minor matter of urban design or architectural bias but actually a core part of designing a serious strategy for economic renewal and spatial inclusion. The literature on innovation now not only emphasises the economic role of cities in the modern knowledge economy but more specifically places within them where jobs have been agglomerating because that s where the talent wants to be and to work. These are mixed use urban places, physically compact, located in or close to city or town centres, above all accessible by public transport and walkable. These walkable urban places in which we increasingly find educational and research institutions mashed up with start-ups and clusters of knowledge industries all wired for digital technology and fuelled by caffeine, are, based on extensive research into US cities, gaining market share over their drivable sub-urban competition and showing substantially higher rental premiums. And not just rents. And not just in the US. In The Geography of Time we also showed how market benefits for areas such as the Inner West of Sydney accrued to homeowners in the form of higher residential price uplift for properties which are closer to rail stations and thus walkable. The Committee has in its work on public transport and density done well previously identified both the strategic planning and urban design barriers to making great walkable places. At the strategic city-shaping level nothing supports walkability as much as a good public transport network within perhaps 800 metres of your home. In Adding to the Dividend, Ending the Divide 3 we identified that such good public transport access and thus walkability were much more available in the compact city of higher density development compared with the sprawl city of low density suburbia with inferior access to such benefits. Reinforcing the walkability of the public transport connected compact neighbourhood are some key urban design features associated with its more concentrated street pattern. We raised elements of this debate in Making Great Place where we identified that a higher density city area with more compact street networks and a multiplicity of intersections encouraged walking contrasted with the dispersed low-density form greenfield development in which cul de sacs limit intersectionality and this walking. When we look at pedestrian friendly neighbourhoods we notice certain features about the way they planned the streets around the buildings. The first thing is that the streets are almost universally in a grid pattern, with lots of intersections, close together. Street blocks are short and there are few, if any, cul-de-sacs and dead ends. The street pattern is critically important because it is on the street The Future of Australian Cities Committee for Sydney Submission 39

40 where the life of these places is played out, not in the residential or commercial buildings which surround them. Having lots of intersections has a significant impact on how we choose to move through the urban landscape. Intersections slow down vehicles, improving the amenity of the footpath. Having a grid pattern makes for an easily navigable place. You can walk around but not get too lost. It also provides lots of different directions in which you can explore. The fine grain network of streets and lanes of Venice, with 577 intersections per square kilometre provides an accessible and pleasant environment for people to explore the city on foot; but impossible to explore by car. By contrast the large city blocks of Los Angeles, with only 58 intersections per square kilometre makes walking and cycling much less attractive. Sightseers in LA do so from the back of a bus. Taken to extreme is Irving California which has only 6 intersections per square kilometre making its residents and visitors completely car dependent. In the Committee s views the implication of this is not that public policy should simply reinforce the strengths and assets of the walkable precincts. It is that we should seek to create more such places in Sydney outside compact Sydney and extend their health benefits to more communities in Greater Sydney. The demand for increased walkability is not reducible to what in similar circumstances in Houston has been called a downtown versus suburb debate. There developers are responding to these demands by building more transit-oriented walkable communities not just in Houston s downtown but also in the urbanising town-centres throughout this far fling metropolis. Towards the 30-minute city The Prime Minister has articulated an ambition that Australian capital cities should be 30 minute cities. To achieve this, our cities must aim to increase effective job density. Effective Job Density is measure of the number of jobs accessible to a worker relative to the time taken to get to these jobs, adjusted by the current mode split of those workers in their travel to employment. In short how many jobs can a worker access from their home by public transport or private vehicle? It is a commonly used proxy measure of the agglomeration economy and how connected into the benefits of the city a person is, as people who live in areas of higher effective job density can access more jobs and the consequent benefits of agglomeration. The Committee for Sydney, with members PwC, have developed some analysis of Sydney s effective job density. This analysis helps illustrate the reality of the 30 Minute City in current day Sydney. We can now see which parts of Sydney has access to the most jobs in the shortest time and through different transport modes. A 30 Minute City is not yet a reality for all Sydneysiders approximately 30 percent of areas of Sydney can access significant numbers of jobs within 30 minutes. To put this in a wider context, Sydney is home to over 2 million jobs, containing approximately one fifth of all of Australia s employment. This implies that within Sydney, approximately 6 per cent of Australia s jobs are accessible within a 30 minute commute on a weekday morning. In our view, the 30 minute city symbolises the shift we need to see in transportation policy and planning mindset away from mobility (moving as many people and goods as possible as fast as we can) and towards accessibility (getting where you want to go). Unfortunately, much of our current thinking about transport planning emphasises the reverse. This leads to a focus on traffic-based (vehicle movement) or mobility based (people and goods The Future of Australian Cities Committee for Sydney Submission 40

41 movement) analysis, with planners tending to overestimate metrics like travel time savings as the overarching objective. These metrics tend to favour automobile transport over other forms of accessibility, including alternative modes, demand management, and more accessible land use. This intellectual confusion is quite understandable when you re sitting a traffic jam. It s natural to think that for want of an extra lane on the road you ll be at work sooner. However, more lanes and more roads are not always the right solution, and as often as not don t solve the problem anyway. Better solutions may involve not moving you more quickly but moving your job closer, maybe to where you live or near your kid s school. Remember the problem is not the traffic jam, the problem is not being able to get where you want to go. A better understanding of accessibility can help identify truly optimal solutions to transport problems. The below map shows how many jobs you can access on a weekday morning from any part of Sydney within 30 minutes. Figure 33. Number of jobs accessible within 30 minutes in Sydney The Future of Australian Cities Committee for Sydney Submission 41

42 Figure 34. Effective job density above and below average access For many areas of the inner-ring of Sydney, effective job density is high. Areas around Parramatta and North Sydney are also above average. We can see from this analysis that access to employment in Sydney is uneven, varying depending on which region you live. For instance, the outer edges of the city have the poorest access to jobs, with access to 10 per cent of jobs within a 30-minute commute on a weekday morning. At the other end of the scale is Central Sydney, which enjoys access to 46 per cent of Sydney s jobs within a 30- minute car commune on a weekday morning. The 60-minute city What is clear is that almost all areas of Sydney can access most jobs across the city within 60 minutes. This tracks with historical experience of the outer-limit of people s travel preferences, with any more than 60 minutes driving citizens to either move closer to work or find alternative employment closer to home. The Future of Australian Cities Committee for Sydney Submission 42