Animation of world urban population growth 1950-2050 (UNICEF)

Bernard Salt had a fascinating but ultimately somewhat flawed article in The Australian last Saturday, Welcome to the Metropolis, which looks “at how Melbourne is narrowing the gap with Sydney in the contest to become the nation’s top city”. It’s gated, but well worth reading – I recommend doing what I did and taking out a free 28 day subscription.

In 1901 both cities had around 500,000 people but thereafter Sydney pulled ahead, initially capturing the new technology of aviation, followed in due course by other key new service industries like media, advertising and finance. Sydney is more conveniently located to the rest of the world, has more national and regional headquarters than Melbourne, and even the PM and GG each have “a pied-a-terre on that damned harbour”.

Now however Melbourne is fighting back and on trend will have a larger population than Sydney sometime in the 2030s. He says that’s largely because the southern city set about assuring a supply of cheap land while Sydney dithered – a fringe house and land package is $100,000 cheaper in Melbourne.

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That advantage underlines Melbourne’s suburban character. Central Melbourne is a gracious Victorian city but beyond those “gorgeous arrondissements” is Melbourne’s “celebrated and caricatured suburbia”:

The outer suburbs are a different territory, filled with battlers and, less kindly, bogans and other assorted life forms, including the highly prized swinging voter. Working families live in the suburbs. Interestingly I have found the tendency to believe in a god of any description escalates with distance from the city centre: the devout and the godless live at either end of the Monash arterial.

Mr Salt argues Melbourne’s urban form is predicated on affordable fuel, but what if petrol should escalate to $10 per litre? Workers would not be able to get to CBD jobs so, he contends, “CBD jobs must go to workers”:

Herein lies the great transformation that will shape Melbourne in the 2020s and the 30s. Jobs decentralised to strategic regional centres such as Footscray, Broadmeadows, Box Hill, Dandenong and Frankston will reduce the need for suburban workers to get into and out of the city every day.

He says if jobs were decentralised to Footscray it would obviate the need for a second Yarra crossing to alleviate congestion on the Westgate bridge. It would also lessen the city’s cultural divide by seeding all those glamorous knowledge workers in the suburbs.

This is the issue I find problematic. He seems to be unaware that jobs are already overwhelmingly decentralised in Melbourne (I’ve discussed this a number of times before – see Employment in the Categories section of the sidebar). For example, in 2006 the “Golden Mile” had 10% of all metropolitan jobs; the extended CBD including Docklands and Southbank had about 15%; and the entire City of Melbourne LGA had less than 20%. The inner 5 km ring had only 28% of all jobs.

The historic decentralisation of employment is true of the other Australian capitals too because it’s driven by underlying structural changes in the economy and society. The process of decentralisation has stabilised since 1996 but it hasn’t reversed – it’s likely all that recent job growth in the city centre has been matched by suburban job growth (subject to seeing 2011 Census results).

There’s another problem too. Getting the remaining CBD-type jobs to move to the suburbs is extraordinarily difficult, as the former Government discovered with its ill-considered nomination of six suburban activity centres as Central Activities Districts in Melbourne @ 5 Million (a policy Mr Salt seems unaware of). These were intended to provide “CBD type” jobs in the suburbs.

But modern CBDs are highly specialised in corporate headquarters and in firms in the finance, insurance and business services industries. These firms want to be near to each other and to the raft of “producer services” firms they rely on for expert advice and assistance. The evidence of their desire for intimacy is the fabulously high rents they pay to be located in one small, very dense part of the metropolitan area.

There’s also a whole raft of firms for whom proximity to major centralised institutions like Parliament, the Courts, or major arts institutions, is essential for their existence. On top of all that, there are firms who value highly the unparalleled access to workers of all skill levels that Melbourne’s CBD-focussed  public transport system gives them.

As if it wouldn’t be hard enough already to induce CBD firms to relocate to the suburbs, Melbourne’s CBD has shown a great capacity to expand to meet demand. While to some extent it’s grown upwards, it’s mainly been able to expand at the fringe into areas such as Docklands and Southbank. In fact it’s so elastic firms in Dockland have been able to retain backoffice functions in the CBD that elsewhere are customarily decentralised to the suburbs (or the country, or overseas).

So Mr Salt’s great transformation might not be the silver bullet he imagines. He mentions public servants as another potential way of seeding the suburbs and in this case I think there’s some potential. Indeed, it’s an idea I discussed a couple of years ago, Should Parliament move to Werribee? Most non-policy functions in the bureaucracy aren’t located in the CBD anymore so I’m not sure selective decentralisation of particular business units has a lot of potential, but a more comprehensive move could have merit.

Government benefits from face-to-face contact in the same way that other knowledge-intensive industries like finance do, but what’s most important for politicians and bureaucrats is to be cheek-by-jowl with each other rather than with the non-government sectors. That explains the success of Canberra. It functions effectively as the nation’s capital but has never attracted a large corporate presence and still has a population of only 350,000.

There’s also the example of the 33 out of 50 States in the US where the legislature isn’t located in the largest city. For example, the capital of California is Sacramento, not the considerably larger Los Angeles or San Francisco, and the capital of New York State is Albany. Some of these capitals are quite small – the population of Olympia, capital of Washington State, is less than 50,000. It might’ve been more efficient to have the capital in Seattle rather than Olympia, but evidently not enough to have brought sufficient pressure for a change.

So provided the politicians as well as the bureaucrats are moved, relocation might work as a way of giving an economic charge to a suburban centre. But it’s not going to power all the suburbs, just one region at best. And not necessarily Werribee either, there are also other potential candidates like Footscray or Clayton. It would be damned hard politically, but it’s worth putting on the table.

Nevertheless, in terms of the big picture, I think Mr Salt’s instinct is right. While the low-hanging fruit on job decentralisation has largely gone – the “black-clad inner city latte-sippers” left the CBD long ago, leaving it to those in suits – policy needs to support shorter and more sustainable trips, especially trips between work and home. The really big challenge now is to encourage suitable suburban jobs to clump into centres rather than disperse willy nilly.

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Peter Fray
Peter Fray
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