A sprawling issue for Australian cities

COVID-19 could have derailed efforts to stop urban sprawl in Australia, ending a decade-long trend of shrinking houses and halting a major population shift towards the nation’s inner cities. 

No less an entity than The Organisation for World Peace has condemned suburban sprawl as an environmental and social disaster on a global scale.

The lower-density areas with relatively higher carbon footprints that their report last week decried are all too familiar to Australian city dwellers. 

Unambiguously titled The Detrimental Impact Of Suburban Sprawl On The Environment, the report described the “cul-de-sac dominated design of sprawling areas producing street patterns that foster social isolation and a lack of community.”

While its focus is global, it could hardly be more apposite to Australia.

Australia is again building the biggest houses in the world, ahead of the United States, according to the newly released CommSec Home Size Report. 

The average new house built in Australia in 2019/20 was 235.8 square metres, up 2.9 per cent on the year and the biggest increase in 11 years. US houses built over the 2019 calendar year (latest data) fell for the fourth year, down 3 per cent to 2,509 square feet (the equivalent of 233.1 square metres), according to the Australian Bureau of Statistics.

As Australia’s capital city leaders espouse a desire to increase urban living density and restrain the seemingly boundless expansion of suburbia, the return to larger dwellings appears to be undermining this ambition. 

And COVID-19 may be a culprit.

CommSec Chief Economist Craig James said home buyers had, before last year, been building progressively smaller houses on average. 

“Aussies had embraced apartments as well as smaller houses on smaller lot sizes - in fact the size of the average house built last year (2018/19) was the smallest in 17 years,” he said.

“So while Aussies built bigger homes over the past year, the big question is whether the decade-long downtrend in home size has ended.”

He said the pandemic may play a big role in answering that question. 

“Government-imposed lockdowns in response to the COVID-19 virus have prompted more Aussies to re-assess their housing needs,” Mr James told Australian Property Investor Magazine. 

“With more time spent at home for both leisure and work, some are looking for bigger homes while others are coming to the belief that the layout of their home needs changing.”

“If Aussies opt for bigger homes in the suburbs or regional areas then there are broad-ranging implications.

"Not only does it have implications for building trades and material providers but it also affects provision of economic and social infrastructure, office and retail property industries."

Infrastructure implications

Last year, ahead of a four-year audit into the country's transport, road and service needs, Infrastructure Australia declared the end of the suburban sprawl across Australia's east coast and warned the biggest challenge facing governments would be providing enough inner-city services to cope with the surging population.

The chief executive of the infrastructure regulator, Romilly Madew, said in August 2019 “the 70-year dominance of our urban fringe has ended and a wave of investment and reform was needed to maintain quality of life.”

COVID-19 appears to have undermined this ‘mission accomplished’ position.

Infrastructure Australia has received additional funding in the 2020–21 Federal Budget to provide reform and investment advice in support of the infrastructure-led COVID recovery.

Speaking to API, the regulator conceded the battle against suburban sprawl and its implications for infrastructure spending and engineering is far from over.

“Increasing pressure on outer urban growth areas and their connection to jobs and services will increase the importance of a range of housing types close to employment centres, transport and social infrastructure across our cities,” Ms Madew said.

“Any sustained increase in working from home as a consequence of COVID-19 will make housing choice even more important where households and work patterns change. 

These changes will continue not just as a consequence of the pandemic, but are also anticipated with longer term forecast changes in demographics and households more generally.

Ms Madew said recommendations from Infrastructure Australia’s Planning Liveable Cities report from 2018 continue to be relevant “as we grapple with new challenges for our cities in the context of COVID-19, namely that governments focus on planning and sequencing infrastructure to ensure outcomes are coordinated, and help anticipate demand and respond to changes as those communities evolve.”

Commute or sprawl?

While working from home has delivered some positives – enough that it may well become the norm after the COVID-19 crisis ends – it has brought with it other social implications that are less desirable. 

Modelling by Victoria University’s Centre of Policy Studies shows there will be costs alongside the personal benefits, with more urban sprawl, fuelled further by job flight to the biggest cities and greater economic disparities between regions.

Writing in the The Conversation, James Lennox, Senior Research Fellow, Centre of Policy Studies at Victoria University, said workers commuting less often will be prepared to commute further, changing patterns of housing demand and labour supply. In particular it will drive more urban sprawl and boost populations of communities within acceptable commuting distances, the Centre concluded.

Dr Lennox said people naturally value housing in locations with good access to employment, educational, shopping, social, cultural and other opportunities, as well as natural amenities. 

“As our cities have grown outwards, it has become harder and harder for residents on the urban fringes to access such opportunities, while at the same time, economic and cultural shifts have reinforced the attractiveness of urban living," Dr Lennox told Australian Property Investor

He cited local regulations limiting built densities that heavily restrict new housing supply in many of the areas that people would most like to live in. 

“It is easier and cheaper for developers to provide housing on the urban fringes. 

“On greenfield sites, they are charged infrastructure levies well below the full costs of their developments to the public purse, and are subject to weak environmental regulations.

“Assuming we do not need to social distance forever, our inner cities will surely regain most of their attractions, including younger people, who are especially unlikely to abandon the social opportunities they offer. 

“However, if many workers do not need to commute daily - perhaps just once or twice a week - this will significantly weaken one key factor that draws people to pay for expensive housing in the inner city or suburbs. 

“As we have already seen during the pandemic, the luckier of them may opt to move out of the city to nearby lifestyle regions, while other households may prefer to remain in the city but live in suburbs a bit further out, where they could afford a larger home. 

“That is especially likely if they would in fact need extra space for home-based work,” Dr Lennox said.