Out-Of-Touch Planning Blamed For High Home Prices In Australia

Planning and land use regulations are being blamed for Australia's high home prices, and also for the fact that four of its major cities are in a list of the 25 most unaffordable cities. Some feel planners are not planning with the people in mind.

"Australia has arrived at its present poor position despite having one of the most efficient and low-cost house building industries in the world."

"The cost increases are partly produced by rising government taxes, charges and regulatory requirements on houses. But, above all, they are due to planning restrictions."

"Gradually over a 40-year period the role of urban planners has switched. Planners used to determine where people wished to live and arranged roads, sewerage, school developments and other infrastructure to meet the demands. More urban planners have tried to dictate where people live, and designating this to be confined to within an 'urban growth boundary'."

"This sort of development is in line with the preferences of those who want to transplant to Australia the densely packed European-style city. Such people see this as ideal to promote culture and facilitate public transport."

Full Story: Planning rules price more people out of housing market

Comments

Comments

Considering the sources

While we should always be careful to take into consideration opposing views (if indeed the above op-ed represents an opposing view), and while I am not necessarily doubting the accuracy of the survey mentioned in the article, we should take into account the sources:

The author:

Alan Moran is with the Institute of Public Affairs and is the author of The Tragedy of Planning.

The editor of Demographia (who did the survey the op-ed cites):

"[Wendell] Cox has also emerged as an opponent of smart growth, especially urban growth boundaries, impact fees, and large lot zoning, citing their tendency to raise housing prices artificially and suppress economic growth. Wendell Cox, as paid consultant, has authored studys [sic, yuck!] for the American Highway Users Alliance, a group that lobbies for more highways. He has been employed by various conservative and road building groups over the years.

[snip]

Donors to the St. Louis-based Heartland Institute -- where Cox is the Sprawl and Urban Transit Senior Fellow --include the American Highway Users Alliance, the American Petroleum Institute, the Alliance of Automobile Manufacturers, Exxon Mobil, General Motors, the Pennsylvania AAA Federation and the Texas Farm Bureau."

Cox is also author of "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life," prominently displayed on the Demographia website.

So without dismissing the survey out of hand, let's keep in mind it didn't come from a source that tries at all for neutrality on planning issues.

Problems With Project-And-Accommodate Planning

The article says:
"Planners used to determine where people wished to live and arranged roads, sewerage, school developments and other infrastructure to meet the demands. More urban planners have tried to dictate where people live ..."

But there is an problem with this old-fashioned project-and-accommodate planning: it magnifies market failures.

Because cars create more external costs than other forms of transportation, the market tends to generate more automobile use than the economic optimum.

Early planners tried to accommodate this projected automobile use by building freeways and requiring developers to provide parking, and this planning generated even more automobile use.

The early planners found that freeways filled up much more quickly than projected, because freeway construction itself induces demand. One study in California found that, within five years, 95 percent of the new capacity of major freeway projects filled up with new traffic that would not have existed if the freeway had not been built.

The article doesn't deal with this issue at all when it says planners should build more roads to accommodate projected suburban growth. Yet the external costs of automobile use are a much greater threat in age of global warming than they were in the old days of project-and-accommodate planning. If you ignore these environmental costs, then you are the one who is out-of-touch.

Charles Siegel

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