Thursday, December 14, 2017

Sydney's growth problems - from free range to battery city

This is the Eastern Suburbs "continuous flow intersection" at the junction of Anzac Parade, Dacey Avenue and Alison Road planned as part of Sydney's WestConnex project. It involves a continuous traffic flow with 12 lanes of traffic and a light rail through the middle.   
At the end of August 2017 (Sydney's growth problems - light rail, Kingsford, Pagewood and Daceyville), I wrote of the changes taking place around the little Sydney area in which I have been living connected with the combination of population growth and planning. Change has continued since then.

A bloody big intersection

The illustration above shows a planned major intersection in what is called the Alexandria to Moore Park Connectivity Upgrade (A2MP) plan. Those who are interested can find find videos of the proposed A2MP route here. The connectivity requirement flows from the need to take traffic to and from the eastern end of the giant WestConnex freeway project. Councils and local MPs are up in arms in part because of tree loss, in part because this traffic will be then funneled into already overcrowded local streets.

Yet more density housing

 In pursuit of its vision to transform Sydney through the creation of three metro centers,. the Greater Sydney Commission's Eastern City District Plan (the Eastern City also know as the Harbour City is the current CBD plus surrounds) provides for the area from South Kingsford to Maroubra especially along Anzac Parade to be developed as a priority precinct. For this, read medium and higher density. Randwick Council is objecting on the grounds that the transport on which the plan is based will not be developed in the immediately foreseeable future.

And more waste

The South Sydney Regional Organisation of Councils projects that the population covered by its councils will grow by 28% to 2.18 million people by by 2036. This is expected to increase waste generation up by 27% to over 880,000 tonnes per annum.

And crowded buses - but who could have expected universities to become mega-industrial institutions?

Under the heading "Don't worry, it's usually worse", the Southern Courier reports on the problems faced by University of NSW students seeking to get from Central railway station to UNSW. The Telegraph  carries the story if under a less dramatic heading.

The story is linked to changes in the bus timetables, but it's also connected with the sheer size of the university. If I had known when I supported the Dawkins' university reforms that it would lead to a homogenised university sector dominated by  mega corporatised industrial institutions I would have died in a ditch to prevent it. In fairness to myself and Mr Dawkins, nobody could probably have foreseen the tinkering that would take place later.

Extreme? The best way I can illustrate this is to say that it's like trying to shift the entire adult working population of the Northern Tablelands to Armidale each day to study or work in one institutions.

House prices and rents

When we first moved  to Sydney, the million dollar price point for a simple house or semi was south of Rainbow Street. Soon after, it roared across the street and ran south along the coastline. Further inland, the million dollar price point crept up Anzac Parade through Kingsford and then jumped Gardner's Road into Daceyville. Further west, the million dollar price point swallowed Rosebery, and then jumped.Gardner's Road.

Over the last twelve months, the median price in Eastlakes has jumped 34.4% to $1.55 million. With very low inflation rates, this is a huge real increase.

Rents are slowly inflating. Slow income increases mean that landlords' ability to increase rents have been suppressed, leading to very low rental yield on investment properties. This can't continue, and owners are constantly pressing the margin.

Last week, my daughter and her flatmates received notice that the rent they were playing on their apartment was to be increased from $800 to $850 per week. It's a nice apartment, but that's a very big increase, one they can't afford. So a move has to be on.

The end point

The position in Sydney is unsustainable. The present Australian gross median income is about $81,000. Sydney's is higher. It has to be. Even if you are prepared, to use Leith van Onselen's phrase, to move from free range to battery city, to move from house to smaller apartment, the place is becoming just too expensive.

The solution offered to meet the growing problem of all the service workers who can no longer afford to live in the place is to subsidise  the construction of affordable housing. I don't support this unless the program is funded by a levy on those who wish to live in Sydney and need the services. Instead, and I have come to this conclusion quite reluctantly, we should slow immigration.

The majority of migrants come into Sydney or Melbourne. They are the driver of Sydney growth. They are chasing other people out. If we froze immigration even for a brief period, and I would only support a brief freeze, the Sydney bubble would collapse. We could then resume migration on a sensible basis.


Anonymous said...

wb, J

"Crowding" rather than "chasing" out, surely.

I admire your daughter and her flatmates for their energy in deciding to move.

If they can't afford less tahan $17 a week increase then probably they can't really afford that flat already.

Jim Belshaw said...

Morning, marcellous. You are right: crowding would have been better. I do think, however, that some of those affected by the change process do feel chased. I suppose an example here would be the public housing tenants in the rocks!

On the $17, it is almost $17, you are right in one sense. It's complicated. People do want to live in particular areas. They will pay a price for that, accepting that rent will be a higher proportion of post-tax income than would otherwise be acceptable. Then something happens. It may just be that the rent increases pass an acceptable pain point. It may be that someone leaves a share place leaving others to pay a sudden rental increase. It may be a job problem that turn a couple from two incomes to one.

For my own reasons, I have been mapping rental patterns across greater Sydney, something I have referred to before. It's not just rental costs, but also travel time and costs. And access to a car. The economic dynamics are complicated. For example, those who own are quarantined at least for the present. They are in a very different position from those who rent.

I should write the analysis up. My feeling is that the Sydney position is now inherently unsustainable. But does this view just reflect my personal biases?

Anonymous said...

I agree with @marcellous re the $17 per week - what's that: Two coffees or half a pack of cigs, or a couple of beers?

If we froze immigration even for a brief period, and I would only support a brief freeze, the Sydney bubble would collapse. We could then resume migration on a sensible basis.

Whilst wishing to agree with your conclusion, I'd need fairly specific definitions for "froze", "brief freeze", "collapse" and "sensible basis" :)

Nice to see you back, Jim!


Anonymous said...

Yes jim please write more on this topic.
I grew up in sydney but moved away ten years ago. its an unrecognisable place now when i visit.
I think the issue is that previously it was a choice normal middle class peopel could make to live (rent or buy) in central locations. Buying something was a longer term possibility. The prospect of buying is gone now, and the rents seem more a dead weight when they get up to 50-60% of incomes. Ypure absolutely right its unsustainable...i dont know where it ends up!

Jim Belshaw said...

Hi kvd. I have been very quiet. Struggling a bit with priorities.

it's a bit like the boiling frog problem. You cope with each temperature increase and then, suddenly, you are being boiled alive. This may be because someone moves out and it takes 3-4 weeks to find a replacement. It may be because one of the income earners suddenly faces a job loss. It may just be because you suddenly say, shit, why am I spending such a high proportion of my income on rent. This is, I think, the second rent increase in a relatively short time.

The dynamics here are quite important. There has been a diminution in choice, an increase in vulnerability.

On the immigration one, the short answer is I don't know what would be sensible. I cannot give a satisfactory response to your questions. I have to go back to the stats and the policies. My gut judgement is that we now have the system set up in such a way that all responses are likely to have unforeseen consequences and involve hard choices.

Jim Belshaw said...

Hi anon. I will write more because I get confused, I don't understand all the dynamics. i don't have a problem with people paying very high rents if that's their lifestyle choice. It comes back to choice. I do have a problem with some of the approaches to what is called affordable housing if that's a need created by present structures that mean that the people required to deliver services can't do that. If they are to be subsidised, it should be paid for by those who have crowded out and now need the services!