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Population

Jul 3, 2017

Is immigration ruining our cities?

The Age ran a set of stories on the weekend geared around the idea that immigration-fuelled population growth is seriously damaging Melbourne’s “celebrated liveability”

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Estimated Resident Population, Victoria and major regions 1971 to 2051 (source: Victoria In Future 2016)

Following the Sun Herald’s Future Melbourne series last month, Fairfax journalists Royce Millar and Ben Schneiders looked at population growth on Saturday and asked if Melburnians are “sacrificing the very things that made Melbourne a destination for so many in the first place?” (see How big is too big for liveable Melbourne?):

Beyond Spring Street a consensus is developing that we need something transformative in planning and transport to cope. The alternative is to ease the pressure, and that means slowing immigration. It’s a no go subject for many in the political class. But not for many Melburnians who are beginning to ask: how real are the benefits of this level of growth and how sustainable is it?

It’s a long and well written article that if anything tries to cover too much, but the key propositions seem to be:

  • Melbourne is losing its liveability under the pressure of population growth
  • property-related activity fuelled by immigration is the State’s de facto economic strategy
  • It’s time to turn down the immigration tap.

It’s good to see The Age engaging directly in a debate about the appropriate level of immigration. It’s obviously an important public policy issue but too often sensible discussion is derailed by knee-jerk accusations of xenophobia or racism. That element will inevitably be present, but it shouldn’t be a reason to avoid debate.

But there are more than a few propositions in the article – some of them attributed to interviewees – that range from the doubtful to the arguable. For example:

  • The idea that Melbourne Metro is a lot of money for “not a lot of track”. Wrong; Metro is about increasing capacity and reliability of the entire system. It’s like building the foundations of a building; not visible, but essential. A similar point could be made about the removal of level crossings and upgrading signalling; no extra track, but a big improvement in the performance of all existing track.
  • The idea that the ‘World’s most liveable city’ gong is a proper benchmark. Again, wrong. The ranking measures cities in terms of their liveability for well-paid overseas executives on assignment; it’s not relevant to the average permanent resident, existing or new. That’s well known now and journalists should cease quoting it willy nilly.
  • The idea that Melbourne’s economy is primarily driven by immigration-fuelled property prices.  It’s harder to pin down the drivers of Melbourne’s economy because it’s now broad-based; it’s been a long time since it was manufacturing-based. Property is certainly important, especially in the short-term, but there’s much more to it. For example, Melbourne ranks 21st on the Global Financial Centres Index, ahead of places like Frankfurt, Dublin, Paris, Munich and Amsterdam. It ranks third on Forbes’ ranking of most popular cities for international students and second in the QS Best Student Cities ranking for 2016.
  • The idea that Melbourne could realistically retro-fit a “metro network like those in Berlin and Paris”. That’s unrealistic. Paris Metro covers an area of just 5 km radius. It’s virtually all subway, it has 303 stations, and it services 2.2 million residents plus a huge number of visitors. Driving is hard because of narrow streets and very limited parking. That compares to Melbourne’s 28 stations and 0.43 million residents in much the same area. Melbourne can’t justify building a network that’s anywhere near as elaborate as the Paris Metro, but anything less dense and frequent will have a hard time competing with driving. Melbourne needs a transport system suitable to local circumstances.

Here are some broader issues I think should be taken into account when considering the issue of population growth in Melbourne:

  1. Melbourne can grow to 8 million residents in 2050 without collapsing into a dystopia. There are currently around 100 cities in the world with a larger population than Melbourne and about 40 with double its population. Some of the world’s most desirable and successful cities are already much larger than 8 million e.g. New York (21.4 million), London (10.5 million), Paris (10.9 million). Melbourne will necessarily be different at almost double its current size and there’ll be new challenges, but it’s wrong to assume it must be a disaster.
  2. Immigration-fuelled growth brings short-terms problems and makes some residents worse off; but the evidence seems to be that in the longer run the average resident is better off. Bigger cities are more productive, more innovative and pay better. They offer more opportunity for both economic and social specialisation e.g. meeting people “just like you” (e.g. see here and here).
  3. The implicit assumption that rapid growth inevitably means a significant loss of liveability overlooks the fact that cities adapt to the forces driving growth e.g. residents change the location of their job and/or dwelling, or they change how they travel, so that average trip times remain relatively stable (see Will Sydney and Melbourne implode as they get bigger and bigger?). It’s invariably belated, but governments invest in infrastructure, improve services, and release land (see What’s government done to make public transport better?). Is Brisbane, with a current population of circa two million, significantly more liveable than Melbourne?
  4. It’s not inevitable or even likely that the “population boom” will play out in line with the current projection. Australia’s had plenty of localised population booms before. The resource booms in the Hunter Valley, Central Qld and Western Australia all came with dramatic housing price escalation and glaring inadequacies in infrastructure. But they passed. It’s probable the same will happen with Melbourne’s boom before we get anywhere near 2050. Population projections at the level of cities over long time frames are uncertain because they’re largely based on recent trends. Melbourne might well hit 8 million one day, but the timing matters; if it’s a long way in the future (Millar and Schneiders say government should be looking out to 2100) then unforeseen social and technological changes are likely to render current projections meaningless.
  5. The challenge of growth in all Australian cities is largely political. It requires investing in infrastructure on a massive scale over a short time frame; that necessarily competes with other important uses and means we can’t simply “build” our way out as politicians and many advocates like to claim. The biggest political challenge is to use existing assets more efficiently e.g. roads repurposed for more space-efficient modes than cars; existing suburbs redeveloped at higher densities. It will also be necessary to do what all cities have done historically; continue to accommodate some growth at the fringe and/or in “overspill” regional centres.
  6. It’s important to consider if immigrants would live more sustainably if they stayed in their homeland compared to settling in Melbourne or in another Australian city or town. It’s also relevant to ask if their standard of living and life chances would be lower if they didn’t migrate.
  7. The Commonwealth has a huge role in determining how well cities like Melbourne deal with growth. It manages the level of immigration of course, but just as importantly, it controls the purse strings for infrastructure spending, and through taxation policy it shapes the demand – and hence to a large extent the affordability – of housing.

It’s pleasing to see some journalists from The Age make the effort to contact some new and well-informed observers on urban affairs, rather than resort to the same old wind-up reliables. It’s a pity though that the writers didn’t make the effort to explain the positive case for growth and immigration.

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