Housing affordability solved - by levitation
March 10, 2011 - 9:14AM
Overlooked in the constant rage about housing affordability is the ability to move it. There are plenty of variables in the equation, but a key factor in making expensive housing expensive is proximity to the city centre, so if you can move the city centre closer...
It can be done. It takes investment, it takes politicians prepared to take risk, to not be afraid of making a mistake for the greater good, a breed unlike the usual risk-averse, poll-driven, short-term plotters.
The first thing to be understood is that CBD proximity is a distance measured in time, not kilometres. You can argue about exactly where the limit is, but being within about 25 minutes of the CBD seems to be a key determinant in housing desirability and, therefore expense. If there's a limited supply of housing within a 25-minute radius of the CBD, demand will do its usual thing to price.
The response of government tends to be to increase housing density within the desirability zone, sometimes successfully, sometimes not. If the increased density isn't matched with improved transport infrastructure, the effect can just be to shrink the geographical zone. Jam the roads, overload the trains, you can find yourself further than 25 minutes out.
The alternative is to improve transport speeds. Achieving peace in the Middle East also would be nice.
Melbourne can build a you-beaut new road, improving travel times, facilitating a marked housing expansion in feeder suburbs – and pretty soon the morning traffic jams mean the new road isn't so you-beaut. It might seem hard to believe, but once upon a time Sydney's M5 provided a refreshingly fast link from the airport to the south-west. If you were heading from the North Shore to Canberra, you'd happily pay the tolls and take the M5. Now, you'd have to be paid to use it and then you should be mindful of a former NSW Health Minister's advice to keep the windows shut as you crawl through the tunnel's fume haze.
Moving right along (slowly), mass transit systems would seem logical – but then you collide with the horrendous cost of extending and improving heavy rail or compounding road traffic with light rail or, in the truly exceptional case of NSW, blowing hundreds of millions not building a subway. That takes a very special talent.
The state of state government revenue (not good and destined to get worse) makes serious investment in heavy rail sharply rationed, the stuff of election promises rather than reality. Acquiring new land corridors and/or drilling the tunnels on the scale required to make a sizeable difference is simply beyond state treasuries. Heavy rail isn't about to move CBDs closer in our lifetime. And, even if the money could be found, heavy rail simply isn't fast. The CBD doesn't get moved much. What's more, new heavy rail is still run by the people who run old heavy rail. In the NSW case, that's effectively Sussex Street. 'Nuff said.
The Central Planning Commissariat, well-meaning that they might sometimes be, counter that the answer isn't to improve transport because they simply don't want proles from the outer areas travelling into the city anyway. They should know their place. In fact, transport getting worse is better as it will force people to work locally, preferably bicycling to reduce their nasty habit carbon habit and giving them more time to grow vegetables and weave rugs.
So the central planners impose weird local employment targets on councils and try to force developers to provide jobs as well as housing in the boondocks and give up on meaningful transport change. Yet plan as they might, we simple souls still find something appealing about bright lights, big city. Good luck to those who are happy on the fringes, but the Big End of Town, with all its premium salaries and opportunities, will continue to reside eponymously, not in Geelong, Penrith or Gosford.
Enter high speed rail. No, enter the dream of high speed rail, but just because the Greens like it, it doesn't mean it can't be true, just as a persistent little fan club doesn't have to consist of Trekkies.
A skim of the files shows that there's been plenty of talk about high speed rail and no action. Under the Howard Government at the start of the century there was a study done on the feasibility of Sydney-Canberra by the iron horse on elephant juice. That exercise went as far as calling tenders and awarding one, but the wheels subsequently fell off when more details of the bid were examined. There's another study under way now, thanks to the Greens' new power, on a Sydney-Newcastle link. And in between Melbourne-Geelong's been looked at and Tullamarine Airport-Melbourne CBD and so it goes.
The Sydney-Newcastle effort has a preliminary report due mid-year. Maybe it will be different, but you'd be brave to bet on it. Generally what happens is that any and all studies find that it's expensive to build a high-speed rail link and, therefore, it doesn't happen. (D'oh, you need to spend millions on a study to find that out? Next time, hire me and I'll tell you for just one million and everyone's a winner.)
What the sticker shock doesn't let people see past is housing affordability and growth centres. That concept of moving the CBD is hard to get across to the dull.
Typical of the political reaction is Paul McLeay, the Member for Heathcote – or he is for 16 more days. At a regional transport forum, McLeay rubbished the idea as Wollongong didn't have the population density to make such a thing viable. Oh, those Japanese and French can have their high-speed trains because there are millions of the blighters, but there just aren't enough Norman Gunstons to make it work here.
But modern high-speed rail has the potential of being a genuine Field of Dreams: if you build it, they will come. Move the CBD so that it's 25 minutes from the 'Gong and the Illawarra's cheap housing and empty beaches suddenly become much more appealing.
And high-speed rail has changed too. The Japanese and French examples so often quoted have become rather old technology – there are good reasons to think twice about their suitability, especially over relatively short distances and through cities. They have metal wheels rolling over steel and thus can be a little noisy as they pick up speed, which they don't do especially quickly.
To see what might have changed the game, catch the train to or from the airport in Shanghai. It's not new anymore after seven years in commercial service, but it is fast, reliable and quiet as it has no wheels. The Maglev system sounds like science fiction – a train that works on magnetic levitation – but it's real enough.
To risk quoting Tony Abbott, I'm no tech head, but Maglev, as extolled by ThyssenKrupp's Transrapid Australia, has some rather neat attributes. They claim that not having wheels means it's quiet up to about 200km/h, after which the wind starts making a noise but still less than that of a freeway, so you can run them through cities without frightening the horses. The Maglev business means these things also can accelerate very quickly, so they can make servicing relatively frequent stops – say, every dozen kilometres – still worth doing. Because the train is actually wrapped around the track, they can't derail, which is nice to know if they're hurtling through a city a bit quicker than the Stig on his best day. Maglev also means the track isn't so heavy – it can be stuck up on pylons running across the countryside, letting wee beasties happily hop, skip and jump beneath and grazing cattle graze. They can run down the median strips of existing freeways, saving that troublesome business of acquiring new rail corridors. And they can go up and down steeper hills than conventional rail, both high and low speed, and require less electricity to do it. They're certainly not cheap to build and the actual train bit is expensive – the Koreans haven't started knocking them out on assembly lines yet – but the running and maintenance costs are significantly lower.
Which is all rather neat and a vast improvement on the model trainset my adult third cousin had under his house that he never let us kids play with. It'd be cool to have one. More importantly, ThyssenKrupp has believed in the product enough to offer interesting deals on building a set. I understand Transrapid spent several million on a feasibility study for the NSW government a decade or so ago. The deal offered was a one-off capital spend by the government – more than $1 billion, but well less than two – and that was it. TransRapid would build and operate the thing (not State Rail) with ownership reverting to the state some years down the track, so to speak.
For that initial investment, a wide arc of more desirable housing could have been opened up. Gosford, Penrith and Wollongong would have been moved to a matter of minutes from the CBD. Transport hubs could then be developed servicing those centres. Weekly commuter tickets wouldn't be cheap, but the difference in housing costs between the Blue Mountains and the inner west is enough to pay for an awful lot of train rides. The problem solved wouldn't be public transport, but housing and quality of life.
OK, that's an exaggeration – it wouldn't solve the housing affordability problem. That still requires a major increase in supply, but it would mitigate it and make the necessary extra building more achievable by moving it further out. Maybe it's not much of an exaggeration to suggest that it would change Sydney in more ways than anything since the automobile.
What happened to that study is open to conjecture. Maybe the day's Transport Minister had good reasons to disregard it. Maybe it was tossed out in a fit of pique. Maybe it fell foul of the byzantine politics within the transport sector and its powerful unions. Whatever the history, the rather expensive study and an offer (that now looks cheap) was shelved.
Transrapid is having another crack in the context of the Greens-inspired Sydney-Newcastle study. If they make an offer, it's likely to be considerably more expensive than it was a decade ago, but probably cheaper than it will be in another decade. It could be interesting if the government was capable of taking it seriously.
Michael Pascoe is a BusinessDay contributing editor.