Connected Cities, economic development, London, Melbourne, Sydney

Photo by Dixi Carrillo

The Australian Bureau of Statistics forecasts that the populations of Sydney and Melbourne will grow to 7.8 million each by 2052, a respective increase of 66 percent and 86 percent over a 40 year period.

Such rapid growth prompts some obvious questions, the answers to which are less obvious:

Where and how will all these people live?

Where will they work and what will their jobs be?

An increasing challenge for local government is how to balance policy objectives of a diverse employment market with increasing demand for residential development. As our cities become more connected through transport, planning, and urban renewal decisions and outcomes, it’s a balancing act that’s proving difficult.

The employment and residential nexus

Over the last decade, rising housing demand has seen a significant increase in high-rise apartment developments in Australian cities, resulting in debates regarding overshadowing and the visual impacts and merits of urban densification. In some Melbourne suburbs, for example, the proposed application of new planning regulations could limit higher residential densities in certain areas.

Meanwhile, there’s been a continued shift in employment focus across Australian cities. Melbourne’s manufacturing sector continues to decline, while the much-touted transition to a more “knowledge-based economy” – namely increased opportunities in the health and business services sectors – shows early promise but will take time to translate into major points on the economic scoreboard.

The challenge for inner-city local governments is how to support the growth of these emerging sectors while maintaining and supporting light industry, small business, and retail, all desirable and essential parts of healthy, functional and connected cities.

The problem is that increased demand for residential development has already substantially impacted these activities, forcing them farther out of the city.

The term ‘mixed-use’ is often promoted as a way to address these challenges, but the uncomfortable truth is that few developments successfully achieve their primary objective, resulting in a ‘mixed bag’ of outcomes. Further, the rental expectations for these premises can also be significantly higher when compared to the spaces they have replaced. What tends to be delivered is a residential development with retail or small office provision at the ground floor, an approach that often results in a disconnect with the actual local demand for such spaces. They often lack the physical features that allow them to be attractive work places, and prove difficult to adapt to other uses without creating conflict for the residential portion.

Global lessons learnt

The Greater London Authority’s (GLA) policy objective to deliver mixed-use developments holds lessons for us here in Australia. Its inclusion of active frontages and employment spaces has resulted in ground floor retail space of predominantly residential buildings often being boarded up and unoccupied, creating an unwelcoming and unpleasant urban environment in many middle-ring suburbs.

We can’t allow such outcomes to eventuate here in Australia. Encouragingly, however, a number of approaches can be adopted to address this emerging employment and residential nexus.

Smarter design is a crucial factor at both the precinct and building level. There is often the tendency to deliver a standard product that limits diversity and fails to provide for multiple users. Good mixed-use developments can introduce a level of complexity that not only delivers visual interest, but provides additional market opportunities.

Cross-subsidies between uses and inclusionary zoning mechanisms meanwhile present an interesting layer into the process, but they need to be calibrated at detailed scale and applied to specific areas to be both commercially and socially successful. Such an approach has been used in the planning and development of Hackney Wick in London. While still in its early stages, Hackney Wick has had robust technical support and strong leadership from the GLA, and may present a way forward in providing homes and jobs for a growing population.

Local government must inform and test its structure planning process, and it should be supported in these efforts by an analysis of the market to understand not just existing and future demand, but to recognise the requirements for the job sectors it wishes to support.

This will ensure that local government is able to clearly articulate its ambition and guide development in a way that utilises market forces to deliver short and long-term benefits for our cities and their communities.

If tomorrow’s Sydney and Melbourne are to reach their potential – if “home is where the jobs are” – we need to get cracking; the people – millions of them – are coming, and they’re going to want somewhere to live and somewhere to work.


Adam Williams@aecom comAdam Williams ( leads AECOM’s Design, Planning and Economics practice in Victoria.

Originally published Jul 9, 2014

Author: Adam Williams