Strategic planning, ‘city deals’ and affordable housing

The recent publication by AHURI seeks to examine Australian and international evidence on a range of strategic planning and funding interventions that can improve urban productivity and leverage affordable rental housing choices near job centres.

This research was conducted in response to concerns about the increasing economic inequity between metropolitan and regional Australia. There is an evident need to strategically solve the spatial distribution between low-cost housing in regional areas and employment opportunities in city centres.

City deals in Australia | What are city deals?

City Deals are a partnership between all levels of government and the community to improve the productivity and liveability of cities. In Australia, city deals rely on funding interventions and the wider strategic planning frameworks which govern future outcomes for cities.

Australia’s emerging City Deal model aligns the planning, investment, and governance of the strategic frameworks. Typically, Australian capital city strategic plans focus on the following objectives:

  • Employment growth.
  • Transport connectivity.
  • Housing affordability and choice.

These objectives are vital elements for enhancing urban and regional productivity.

The role of satellite cities

Regional and outer suburban areas, also known as “satellite cities”, typically offer lower-cost housing markets and play an important role in providing affordable housing to lower-income households. City deals can be strategically designed to provide low-income earners in satellite cities efficient transport systems that provide access to the labour markets in the capital cities.

City deals have been particularly beneficial for low-income earners in the second income quintile. Some Australian examples include the satellite cities of Wollongong and Geelong, which provide affordable housing, and connected transportation systems which creates access to the capital city employment centres of Sydney and Melbourne, respectively. However, it is important to note that low-income earners should not be forced to commute long distances between affordable housing and capital city employment centres, and the affordability of satellite cities is significantly decreased if there are poor transport connectivity and high car dependency.

International evidence and key findings

By analysing international experiences in developing and implementing place-based city deals in Europe, North America, and the United Kingdom, the following five key learnings emerged.

  • A key success factor of city deals was the place-based interventions where customised to address and respond to the complex contextual factors for each given city.
  • Place-based city deals with a predominant focus on achieving economic development through infrastructure funding often lead to unclear benefits to disadvantaged groups.
  • The emphasis on housing supply in place-based city deals has not resulted in improved outcomes for low-income households in the rental market.
  • Often investment in transport and infrastructure have unintended consequences on the housing market, such as potentially raising prices in the housing market which displaces low-income households.
  • To be effective, city deals require vigorous and transparent objectives, monitoring frameworks, performance measures and governance arrangements. Prior consideration must be given to required funding and the capacity of local governments to provide additional funding.

Housing and Affordable Housing example

Unfortunately, for most governments housing and affordable housing is an ‘option’ in City deals rather than mandatory. International city deals with a key focus on housing have seen great success in providing a diverse and significant supply of housing initiatives, outlined by the table below.

A briefing paper on the United Kingdom City deals, including all of the above and more, can be found in the House of Commons Library. A direct link to the briefing paper PDF can be found here

Policy development

This research demonstrates how place-based city deals can be an effective policy vehicle for catalysing economic development, affordable housing supply and improved employment opportunities. However, successful city deals require whole of governmentindustry and community collaboration and based on analysis of both international and Australian city deals, policy development should exhibit the following characteristics.

  1. Defined aims and objectives, with strategies and funding packages reflecting an accurate and contestable evidence base.
  2. Strategies to ensure that existing affordable rental housing supply is preserved, and/or new opportunities created, in contexts where new infrastructure or other investments may inflate local house prices or rents.
  3. Clear governance structures, with defined roles for each partner.
  4. Structured opportunities for public engagement and consultation, including recognition of local communities of interest, such as Indigenous communities, and representation of disadvantaged and/or vulnerable groups.
  5. Defined implementation arrangements that are closely aligned with local planning and other decision-making processes.
  6. Funding arrangements with achievable time frames.
  7. Meaningful performance measures, a monitoring framework, and time frames for review.

City Deals in Australia need to also be reinforced with opportunities for public engagement and consultation and the inclusion of interest groups such as Indigenous communities and representation of disadvantaged and vulnerable groups.

Summary

This report highlights the overall need for specific mechanisms to create and preserve affordable housing – both rental and ownership, whilst areas benefit from new investment and improved connectivity to employment. It also highlights the importance of lower-income workers and the crucial role they urban and regional labour markets and productivity. Whilst, for most cities in Australia this is still not common practice with a large absence in forward-thinking strategic planning, city deals are resulting in extensive collaboration across governments, communities, and industries.

The full AHURI publication can be found here.

Western Australia context

The Australian and Western Australian Governments agreed to a City deal in 2019, which would focus on the Perth CBD. Through a signed memorandum of understanding in April 2018, the Perth City Deal was to invest and reform several key areas, including increasing infill housing in the current Perth CBD boundaries and explore opportunities of value capture through Metronet public transport projects. Unfortunately, the COVID-19 pandemic has meant a temporary pause on the Perth City Deal, including project commencements. However, in a post-COVID world, an effective city deal that provides much needed affordable housing and employment opportunities would provide needed relief to the Western Australian economy and Perth community.

Reference

Pill, M., Gurran, N., Gilbert, C. and Phibbs, P. (2020) Strategic planning, ‘city deals’ and affordable housing, AHURI Final Report 331, Australian Housing and Urban Research Institute Limited, Melbourne, http://www.ahuri.edu.au/research/final-reports/331 DOI: 10.18408/ahuri-7320301

DMIRS. 2020. Perth City Deal. Department of Infrastructure, Transport, Regional Development and Communications (DMIRS). Link here.

Architecture Media. 2020. Perth City Deal paused amid pandemic uncertainty. ArchitectureAU, online news article, published: 18 March 2020. Link here.

Disclaimer

This is a Shelter WA analysis of the AHURI research report and does not reflect the opinions of AHURI or the authors.