Are Australia’s cities full? Economist Nicki Hutley doesn’t think so. “Whether it’s economic, social, environmental or cultural, the benefits of density are enormous and quantified,” Deloitte Access Economics’ partner says.
Hutley joins a thought-provoking panel – including Professor Tim Flannery, the Grattan Institute’s chief John Daley and Infrastructure Australia’s CEO Romilly Madew AO – at The Property Congress in September to ponder the topic of population growth.
It’s an issue that can divide the community, academics, politicians and planners. So, are we full? Or do we just need to plan better?
“To say that we are full, as Bob Carr famously did, is to ignore the huge benefits of migration,” Hutley says.
“One of the things that drives productivity is skilled migration. We produce 5,000 ICT graduates a year, but we need 100,000, for instance. Three quarters of Atlassian’s workforce in Australia is reportedly on a visa. We look at Atlassian as the ‘crown jewel’ of Australian IT success, but that requires us to attract skilled migrants.”
Hutley has spent the last 15 years in the field of urban economics, analysing issues from affordable housing to urban renewal, climate mitigation to precinct planning. She says managing growth is a “tricky piece of policy-making”.
“Close everything off and we dam the economy. Open the floodgates and we have problems with liveability. We have to plan better.”
The government’s decision to cap migration at 160,000 for the next four years “sends a signal that will appease some people”. This has been “layered” with policies designed to encourage more people to move to the regions, although Hutley says “it might be a bit Polyanna-ish to think everyone will sign up for three years in the Kimberley”.
“The most obvious way of dealing with population growth without having to spend more on economic infrastructure is to increase density in our cities.”
There’s no doubt people are attracted to Australia’s biggest cities. The latest data from the Australian Bureau of Statistics finds 119,400 new residents moved to Melbourne in 2017-2018, while Sydney attracted 93,400 people and Brisbane 50,100. Together, these three cities absorbed 65 per cent of Australia’s population growth.
Hutley says Australia’s cities must embrace a new YIMBY mentality that says ‘yes in my backyard’. Density doesn’t have to mean tall towers; the “missing middle” of townhouses, terraces and manor houses would be “density done well”, she says.
The economic benefits are clear. “You’ve got greater access to affordable housing by increasing the supply. Productivity improves because more people can live closer to the jobs they are suited to.”
The social benefits are equally clear, she says. “There’s lots of evidence that denser communities enjoy greater cohesion,” she says, adding that the health benefits are also overwhelming. One Deloitte study compared the benefits of 1,000 dwellings of infill compared to greenfield, estimating that the increased walkability in the denser region delivered between $4.2 and $5.8 billion in avoided health costs, as well as a six per cent reduction in the probability of obesity.
“Density is better environmentally, because there’s less urban sprawl and because the average apartment has a lower energy footprint”.
It’s no longer just the development industry driving the density agenda, she says, pointing to the Good Growth Alliance, in which community organisations, including Homelessness NSW and Shelter NSW, have teamed up with the Property Council, the Sydney Business Chamber and others.
“Many organisations supporting the needs of the most underprivileged understand the benefits of density too.
“We want to keep advancing our standards of living, invest in schools and hospitals and address inequality by having more money to help our most disadvantaged citizens. We have to have some level of growth to do this.”
Hutley urges the property industry to “keep prosecuting the benefits loudly”.
“We have to raise our arguments coherently – and raise the flag for the YIMBY movement to create a better future.”
Join Nicki Hutley and the industry’s thought leaders at The Property Congress from 11-13 September on Hamilton Island.