1 Democratising Prosperity: Democratising Prosperity: Global Perspectives on Global Perspectives on Housing Affordability Housing Affordability Urban Consolidation Seminar Urban Consolidation Seminar Sydney Sydney By Wendell Cox By Wendell Cox 1 August 2005 1 August 2005 The Great Australian Dream Sydney A BROADER A BROADER ISSUE ISSUE The issue is not The issue is not… Land use Land use Cities Cities The issue is The issue is… Quality of Life Quality of Life Social Equity Social Equity Future of the Future of the Nation Nation -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 160% 1981 1986 1991 1996 2001 GDP per Capita (AUS) Sydney: Median House Price Inflation Adjusted Housing Affordability Crisis in Australia EXAMPLE OF SYDNEY The American Dream St. Louis 23 July 2005 Housing Affordability in the USA THE RULE, NOT THE EXCEPTION Democratizing Prosperity The Role of Home Ownership UNDERSTANDING “URBAN SPRAWL” UNDERSTANDING “URBAN SPRAWL” PUBLIC TRANSPORT: HOPELESS RHETORIC PUBLIC TRANSPORT: HOPELESS RHETORIC BACKGROUND: DEMOCRATISING PROSPERITY BACKGROUND: DEMOCRATISING PROSPERITY HOME OWNERSHIP AND PROSPERITY HOME OWNERSHIP AND PROSPERITY OUTLINE OUTLINE Public Transport: Hopeless Rhetoric Public Transport: Hopeless Rhetoric Understanding “Urban Sprawl” Threatening the Dream THREATENING THE GREAT AUSTRALIAN DREAM THREATENING THE GREAT AUSTRALIAN DREAM PORTLAND: FAILED MODEL PORTLAND: FAILED MODEL Portland: The Reality of Failure The Anti-Sprawl Theology CONDEMNING WHAT THEY DON’T UNDERSTAND
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HOME OWNERSHIP AND PROSPERITYHOME OWNERSHIP AND PROSPERITY
OUTLINEOUTLINE
Not enough people going to the same
place at the same time
Don Valley Parkway& Commuter Rail
Toronto
Public Transport: Hopeless RhetoricPublic Transport: Hopeless Rhetoric
Understanding “Urban Sprawl”
NicolaiCeaucescuFather of
Smart Growth
Social HousingBucharest
Spanish DreamBarcelona
Threatening the Dream
THREATENING THE GREAT AUSTRALIAN DREAMTHREATENING THE GREAT AUSTRALIAN DREAM
PORTLAND: FAILED MODELPORTLAND: FAILED MODELPortland: The Reality of Failure
New SprawlingCommercial Development
Portland Suburbs
The Anti-Sprawl TheologyCONDEMNING WHAT THEY DON’T UNDERSTAND
2
NOT A BRIEF NOT A BRIEF FOR SPRAWLFOR SPRAWL
LONE MOUNTAINLONE MOUNTAINCOMPACTCOMPACT
“ … absent a “ … absent a material threatmaterial threatto otherto otherindividuals orindividuals orthe community, the community, people shouldpeople shouldbe allowedbe allowedto live andto live andwork wherework whereand how and how they like.”they like.”
The GreatGerman Dream
Leipzig
Understanding Urban Sprawl
Sprawling Paris 1954-1999 Paris: Avenue de l’opéra
Paris to Tourists & Urban Planners
Tourist Paris is Not ParisDIFFERENCE BETWEEN AUSTRALIA & EUROPE: HISTORY
Population82%
OutsideCity of Paris
Employment67%
OutsideCity of Paris
The GreatFrench Dream
Paris
Paris Missed by Tourists & Planners
3
Tourist (&Planner’s)
Map of Paris
Paris AtlasWhere People Live
and Work
MODERN MODERN ““SPRAWLSPRAWL”” = AUTO ORIENTED= AUTO ORIENTEDDEVELOPMENTDEVELOPMENT
Merriam Webster: Merriam Webster: ““the spreading of urban the spreading of urban developments on undeveloped land near a developments on undeveloped land near a citycity””
Sprawl is Sprawl is ““suburbanisation.suburbanisation.””
Sprawl is Sprawl is ““urban growthurban growth”” –– nearly all urban nearly all urban growth in the highgrowth in the high--income world has been income world has been suburban in recent decades.suburban in recent decades.
Sprawl = Sprawl = Automobile oriented development Automobile oriented development (especially in Australia, the US, Canada, (especially in Australia, the US, Canada, Western Europe and Japan).Western Europe and Japan).
Milan
Toronto
Tokyo
Portland
The GreatAustralian Dream
Sydney
Urban Sprawl is SuburbanisationHISTORY OF URBAN GROWTH IS HISTORY OF SPRAWL
050
100150200250300350400450500
1981 2002
Hectares(x1,000,000
Australia: No Shortage of LandAGRICULTURE & FARM LAND: 1981-2002
Reduction=Land Area of
Victoria,Tasmania +South Island
(NZ)
Urbanisation2001 (<0.3%)
Human Footprint
Reduction1981-2002
The Declining Human FootprintMIRRORS TREND IN CANADA & UNITED STATES
Agriculture& Urban
SubstantialProductivity
Improvements 0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1800 1850 1900 1950 2000
Paris
New York
London
Population perSquare Kilometer
Urban Areas: Historical Densities
Los Angeles
4
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Pre-Auto Japan W. Europe Australia Canada U.S.
Universality of Auto-Based SprawlURBAN DENSITIES COMPARED TO PRE-AUTO ERA
UrbanPopulation
PerSquare
Kilometer
1900 Now
Suburbanisation in Barcelona
Core
Suburbs
The GreatSpanish Dream
Barcelona
Suburbanisation in Athens
CoreSuburbs
The GreatGreek Dream
Athens
Core
Suburbs
Suburbanisation in Tokyo
Urbanisation:7,000
Square KM
5
The GreatJapanese Dream
Tokyo
0
500
1,000
1,500
2,000
2,500
3,000
Los Angeles
Toronto
Sydney
Auckland
Melbourne
Adelaide
Edmonton
Brisbane
PerthAtlanta
Urban Area DensitiesAUSTRALIAN & NEW WORLD SIMILARITIES
UrbanPopulation
PerSquare
Kilometer
SURPRISESSydney More Sprawling than Los Angeles
Los Angeles Least Sprawling in New World
The GreatRomanianNightmareBucharest
Ceaucescu: Understood Curbing SprawlFATHER OF URBAN CONSOLIDATION
Toronto Area Green Belt PlanMUCH PAIN, LITTLE GAIN
2000LandArea
Additional2031
“Smart Growth”
Additional2031
“Businessas Usual”
0%10%20%30%40%50%60%70%80%90%
100%
Australia WesternEurope
Canada UnitedStates
Asia
The Automobile is Here to StayNO ONE PROPOSES RETURN TO PRE-AUTO ERA
Share ofMotorized
TravelUrban Areas
Over3,000,000
•• No serious proposals.No serious proposals.
•• Would require dismantling more than Would require dismantling more than 85% of urban area & resettlement.85% of urban area & resettlement.
•• Auto oriented urban area is here to Auto oriented urban area is here to stay.stay.
•• Densification worsens the quality of Densification worsens the quality of life.life.
Restore Public Transport City?REJECT AUTO BASED URBAN AREA?
6
0500
1,0001,5002,0002,5003,0003,5004,0004,500
Under 750 750-1,999 2,000-3,999 4,000-7,999 8,000 &Over
Suburbanisation Dilutes CongestionTRAFFIC INTENSITY IN WORLD URBAN AREAS
Vehicle Hours/Square Kilometer
By PopulationDensity
0
10
20
30
40
50
60
Under 750 750-1,999 2,000-3,999 4,000-7,999 8,000 & Over
Suburbanisation Speeds Up TrafficTRAFFIC SPEEDS IN WORLD URBAN AREAS
1990:KM/H by
PopulationDensity
0
10
20
30
40
50
60
Dallas-FortWorth
Houston LosAngeles
Atlanta Sydney Paris Tokyo
Suburbanisation: Faster Work Trips INTERNATIONAL EXAMPLES
MinutesOne-Way
0
5
10
15
20
25
More Air Pollution at Lower Speeds
CO
VOCNOx
Based UponIndex of 1.00 atLowest Point forEach Pollutant
ByKM per Hour
NOxCONMHC
ROADWAYROADWAYAIR POLLUTIONAIR POLLUTIONPROGRESSPROGRESSIN EUROPE (EUIN EUROPE (EU--15)15)
Gross levels downGross levels down60% or more in 1160% or more in 11yearsyears
7
Job Location17.9%
Other Location17.9%
Neighborhood25.9%
House20.5%
Other Reasons17.7%
Reason forNeighborhood Choice
US Census Survey
Hong Kong:Average Work Trip
7.7 KM
“Jobs“Jobs--Housing Balance” MythHousing Balance” MythTHE RECORDTHE RECORD
Urban Villages: Insignificant & Futile”JOBS-HOUSING BALANCE:” THE RECORD
Example:London Area New Towns
WelwynAverage Work Trip DistanceWelwyn Residents
$0
$50
$100
$150
$200
$250
$300
$350
Core (1939) Ring 1: 1959 Ring 2: 1979 Ring 3: Later
>700 USA MunicipalitiesFees/Capita: 2000
Exaggerating Suburban CostsUS SUBURBS LESS EXPENSIVE THAN CORES
Sewer
Water
Density3.020
Density1,880
Density1,090
Density800
•• How did we manage to afford the last How did we manage to afford the last 60 years?60 years?
“…“… if the urban policies if the urban policies …… were not so were not so ill informed and presented in such a ill informed and presented in such a disingenuous way, there would not be disingenuous way, there would not be a need for this contribution to the debate a need for this contribution to the debate on Australiaon Australia’’s citiess cities””
-- Patrick Troy (Patrick Troy (The Perils of Urban ConsolidationThe Perils of Urban Consolidation).).
8
NOT SINCENOT SINCECOPERNICUSCOPERNICUS
… has the… has theconventionalconventionalwisdom wisdom been so been so wrong.wrong.
no imperativeno imperativehas beenhas beendemonstrated.demonstrated.
•• Strong PostStrong Post--War population growthWar population growth
•• People moving from rural areas to urban areasPeople moving from rural areas to urban areas
•• Housing growth well above population growthHousing growth well above population growthAverage household size down 1/3Average household size down 1/3
•• Larger, more efficient commercial structuresLarger, more efficient commercial structures
•• Employment growth well above population growthEmployment growth well above population growthContributing factor: More women in the workforceContributing factor: More women in the workforce
•• Affluence Affluence
Factors Driving SuburbanisationIT IS MORE THAN POPULATION GROWTH
Not enough people going to the same
place at the same time
Don Valley Parkway& Commuter Rail
Toronto
Public Transport: Hopeless Rhetoric
CBD13%
Outside87%
Public Transport10%
Autos90%
Public Transport Work Trip ShareIMPORTANT TO CBD, A SMALL PART OF THE MARKET
Sydney Area Employment
CBD: WorkTrip Share
Elsewhere: WorkTrip Share
Public Transport70%
AutoCompetitivePublicTransport
Auto-Competitive Public TransportONLY TO DOWNTOWN
Most Employment is not DowntownMost Employment is not Downtown
Nor West Business ParkBaulkam Hills
9
High or Low Density in SuburbsMAKES NO DIFFERENCE IN PUBLIC TRANSPORT
Atlanta Graystanes (Sydney)
Halle Neustadt, Germany
Auto Competitive Public TransportSYSTEM DESIGNED FOR PORTLAND (800M GRID)
0
5
10
15
20
25
30
35
0 10,000 20,000 30,000 40,000 50,000
Urban Density & Transit Competitiveness HIGH INCOME WORLD URBAN AREAS OVER 3,000,000
PUBLICTRANSPORTCOMPATIBLE
DENSITY
TOO DENSE FOR CARS
NOT DENSEENOUGH
FOR PUBLICTRANSPORT
CARCOMPATIBLE
DENSITY
Population/Square KM
Pop
ulat
ion
(Mill
ions
)
0
25
50
75
100
125
150
175
200
Before Rail: 1989 Latest Data: 2003
Urban Rail in the USA DEMAND DRIVEN BY AVAILABILITY OF FEDERAL $
1989-2003LOS ANGELES
1 Metro Line3 Light Rail lines6 Suburban Lines
800 KMA$13 Billion
Auto
PublicTransport
Auto
Public Transport
-2%
0%
2%
4%
6%
8%
10%
12%
Melbourne Boston Brussels Zurich Portland
Misleading or “Doubtful” InformationUNREALISTIC EXPECTATIONS FOR PUBLIC TRANSPORT
MELBOURNE 2030 PLANReduction of
Auto Market Share inPercentage Points Goal is many times
previous record
2020Goal Since
1980
Portland: Failed ModelCHEERLEADERS ARE UNRELIABLE REPORTERS
New Auto-OrientedCommercial Development
Portland Suburbs
10
0
500
1,000
1,500
2,000
2,500
3,000
Los Angeles Portland Sydney
Urban Area Population DensitySYDNEY, LOS ANGELES EXCEED PORTLAND
136,000
4,0000
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Suburbs Core
Portland: Most Growth SuburbanMETROPOLITAN AREA: 2000-2004
Core +0.8%Suburbs +9.4%
0%
2%
4%
6%
8%
10%
12%
14%
Portland Sydney
Public Transport Overall Market ShareSYDNEY 5 TIMES PORTLAND
0%2%4%6%8%
10%12%14%16%18%
Portland Sydney
Public Transport Work Trip ShareSYDNEY MORE THAN DOUBLE PORTLAND
The Bloating Urban Growth BoundaryPORTLAND RETREATS – RESPONDING TO REALITY
-30%-20%-10%
0%10%20%30%40%50%60%
LAPR
VW
DC RSB
SAC NY
DFW
BOS
SAN SD VB PHI
TSP SF
ORL NO HO
UM
IA SJBA
LST
LPH
X LV ATL
SEA
CHI
MSP KC
PGH
CIN
COL
IPS
CLV
MIL
DEN
DET
POR
Portland Housing Prices Up Most1990-2000: HOUSING MULTIPLE (US CENSUS)
PortlandPortland•• AntiAnti--densification referendum (2/3)densification referendum (2/3)•• Property Rights referendum (2/3)Property Rights referendum (2/3)
•• Requirement to pay for economic Requirement to pay for economic loss from zoning changesloss from zoning changes
Other RetreatsOther Retreats•• MinneapolisMinneapolis--St. PaulSt. Paul•• New JerseyNew Jersey•• MarylandMaryland•• Suburban Washington, DCSuburban Washington, DC
Urban Consolidation: Not Sustainable RETREAT: PORTLAND AND ELSEWHERE
The GreatSwedish Dream
Stockholm
Background: Democratising Prosperity
Luxury CondosNear
Rocinda FavelaRio de Janeiro
Every Society Has Rich HouseholdsEvery Society Has Rich Households
12
Affluent Economies Have Achieved aDemocratisation of Prosperity
Rocinda FavelaRio de Janeiro
What DistinguishesSocieties is the
Extent of PovertyOverwhelming Reality
$0$5,000
$10,000$15,000$20,000$25,000$30,000$35,000$40,000
1870 1890 1910 1930 1950 1970 1990
United States
Japan
WesternEurope
Australia
US Poverty Threshold
History of the World is theHistory of Poverty
GDP-PPPPer Capita
1990$A(OECD)
$0$5,000
$10,000$15,000$20,000$25,000$30,000$35,000$40,000
1870 1890 1910 1930 1950 1970 1990
United States
Japan
Argentina
Australia
US Poverty Threshold
Economic Progress is Not AutomaticThe Case of Argentina
Rationing land forRationing land forhousing development housing development tends to raise house tends to raise house prices. prices.
Higher housing prices Higher housing prices lead to lower rates of lead to lower rates of home ownership.home ownership.
Raises housing prices
AustraliaPortlandDenver LondonToronto
Urban Growth Boundaries & Green Belts
Raises housing prices
AustraliaCalifornia
Excessive Development Impact Fees
Raises housing prices
Northern Virginia, Boston
Down-zoning
IMPACTSEXAMPLESSTRATEGIES
Smart Growth:Strategies & Housing Impacts
15
ANDRES DUANYANDRES DUANY
There is NO There is NO question that question that urban growth boundariesurban growth boundariesand that elaborate and that elaborate environmental public environmental public processes processes increase the cost of increase the cost of housing by creating housing by creating scarcity. (And donscarcity. (And don’’t t tell me otherwise, tell me otherwise, because I am not stupid, because I am not stupid, nor am I inexperienced, nor am I inexperienced, nor do I have nor do I have underdeveloped powers underdeveloped powers of observation).of observation).
Italian DreamMilan
“Sun Rises
in the West”
studies……our evidenceour evidencesuggests that suggests that
zoning zoning and other and other land use land use controls controls play the play the dominant dominant role in role in making making housing housing expensive.expensive.
HARVARDHARVARDSTATE OF THESTATE OF THENATION’S NATION’S HOUSINGHOUSING20052005
“Development “Development constraints constraints drive up drive up land and land and construction construction costs as well costs as well as prevent new as prevent new housing from housing from keeping pace keeping pace with rising with rising demand.”demand.”
WACHOVIA BANKWACHOVIA BANK
““We have identified We have identified three major factors three major factors which have worked which have worked to restrain supply to restrain supply over theover thepast decade, past decade, all of which remain all of which remain very much alive very much alive and well todayand well today. . The first is the The first is the spread of the spread of the Smart Growth, Smart Growth, Slow Growth and Slow Growth and No Growth movements No Growth movements throughout the country.throughout the country.””
0%10%20%30%40%50%60%70%80%
1972 1977 1982 1987 1992 1997 2002
United Kingdom(Strong Land Rationing)
Land Rationing Raises Housing PricesREAL HOUSING PRICES IN THE UK & EUROPE
EU Outside UK(Little land rationing)
U.S. DEPARTMENTU.S. DEPARTMENTOF HOUSING &OF HOUSING &URBAN URBAN DEVELOPMENTDEVELOPMENTREPORTREPORT
“A number of “A number of communities … communities … have used smart have used smart growth rhetoric to growth rhetoric to justify restrictingjustify restrictinggrowth and limiting growth and limiting developable land developable land supply, which lead to supply, which lead to housing cost housing cost increases.”increases.”
16
LAND USELAND USEREGULATIONREGULATIONRETARDSRETARDSECONOMICECONOMICGROWTHGROWTH
“metropolitan areas “metropolitan areas with stringent with stringent development development regulations regulations generate less generate less employment employment growth growth than expected than expected given their given their Industrial bases”Industrial bases”
AN ALARM ONAN ALARM ONPLANNING IN THEPLANNING IN THEUNITED KINGDOMUNITED KINGDOM
“The nightmare“The nightmarescenario for the scenario for the British economy British economy could be that a could be that a ‘tipping point’ was‘tipping point’ wasreached where thereached where thefinancial servicesfinancial servicesindustry of theindustry of thecity decamps tocity decamps tocheaper citiescheaper citieselsewhere in elsewhere in Europe.”Europe.”
•• Sydney urban population density higherSydney urban population density higher
•• Both have high auto market shares, but Sydney has Both have high auto market shares, but Sydney has larger public transport share.larger public transport share.
•• Less travel time in Atlanta.Less travel time in Atlanta.
ConclusionsTALE OF TWO CITIES: SYDNEY & ATLANTA
0%10%20%30%40%50%60%70%80%90%
100%
HomeOwners
The Democratisation of Prosperityis not Complete
Renters
0%10%20%30%40%50%60%70%80%90%
100%
Australia Now Perth Rate Sydney Rate
HomeOwners
Renters
EventualRates Based
Upon HousingPrice Multiples
Land Rationing: Toward a Nation of Renters:Restoring Inheritance as the Deciding Factor