City Structure 2.0 – The future of cities post Covid

As VPELA President Tamara Brezzi noted in her introduction, one of the positives arising from the covid-19 pandemic is a new normal of more frequent webinars featuring highly regarded international speakers such as Alain Bertaud.

Following reading Alain Bertaud’s book Order Without Design – How Markets Shape Cities, Mark Sheppard, Principal of kinetica was intrigued by the premise that cities are structured in order to accommodate the labour market and its commute between home and work, and whether covid-19 is disrupting this and may continue to alter this into the future. Keynote speaker Alain was joined by the Lord Mayor of the City of Melbourne Sally Capp, and former CEO of the VPA Peter Seamer, author of Breaking Point – Future of Australian Cities.

Bertaud argues for much greater densities in inner cities and middle ring suburbs and a lesser role for the planner in actually shaping those cities, seeing land value and density patterns in a city as a response to the proximity and availability of jobs. People make housing choices depending on their commute time and access to jobs, will accept a smaller house if it comes with a shorter commute, or a longer commute if it provides a larger house.

With the event of covid-19, that counter-balance has been disrupted. Those with longer commutes that can work from home are enjoying the benefits of greater work-life balance, and those with smaller houses are now realising the deficiencies in not being able to accommodate dedicated work spaces without compromising the role of the house as a home. However, for the large part we have discovered that working from home is not only largely achievable, but often provides large upsides as well.

While we can’t predict how much this will reshape our work and living arrangements in the future, it is clear that this pandemic has finally unlocked the door (within the professional spheres at least) to a normalised degree of work-from-home being incorporated within our daily lives moving forward.

The webinar set out to explore how this will change our choice in where to live and the ‘urban model’ as described by Alain Bertaud? There is already evidence since the start of the pandemic in decreased demand for living in the city centre, and increased demand for living in regional centres an hour or so from Melbourne has increased. There is also evidence that people are modifying housing choice to provide larger homes in areas with increased amenity.

Will this increase in remote working change the structure of our city or disrupt the urban model? What is the future of the CBD with reduced demand for office space?

Bertaud started with the radical notion that planners do not design cities. The labour market is the essence of the city; people trying to sell their labour to companies, and companies looking for the best and brightest available in the area. There is an important role for top-down design or city planning, in shaping (though not necessarily building) the city’s public spaces (streets, parks, utilities, infrastructure), yet considering the private lots of a city as space for the private market ‘to play’.

Within the prism of a city as a labour market, the job of planner is to ‘keep ear to the ground and know what is happening, what is changing – prices are a good indication, allowing the market to shape the city through private land development and following the signals sent by the market to intervene as required or respond by further modifying the underlying structure.

Bertaud challenged Transit oriented development, stating that infrastructure must adjust to densities generated by markets rather than prescribing the type of development best suited to the type of infrastructure. He noted that covid-19 highlights the importance of this as housing and transit patterns rapidly alter before our eyes.

The flow of daily commuting, the ‘tide’ of cities and their labour markets, reflects the city’s role as a labour market. As a city grows to be a large city, the classical monocentric model shifts to a hybrid model accommodating some dispersal of jobs throughout the wider city. Unfortunately for some urban planners who have been espousing it for decades, the ‘urban village’ model of numerous dispersed centres providing housing within close proximity to jobs doesn’t exist in the real world. Bertaud asserts that this is because it contradicts the understanding of the city as a labour market.

Considering covid-19, Bertaud doesn’t see any radical change to this model, though sees an increase in some people working from home 3 days a week, an arrangement that would facilitate a longer commute for those two days – a shifting of the balance towards housing choice for some.

A critical role of planning in this market led process described by Bertaud is to prevent the fragmentation of labour markets, which happens when limited affordable housing is paired with travel times of longer than one hour across a city. It is up to planners to ensure regulation is not increasing housing costs, and the transport systems provide efficient movement.

Bertaud describes the efficient functioning labour market as requiring:

  • Land use flexibility to allow affordable housing within 40 minutes from job locations; and,
  • The possibility of travel to any part of the city within 1 hour.

City of Melbourne Lord Mayor Sally Capp, shared some of the local ‘ear to the ground’ emerging data and market signals from the pandemic in the City of Melbourne. Capp provide some sobering stats:

Pre-covid Melbourne had over 1 million people coming in and out of the city daily, and is currently ‘devastated’ by the effects of over 800,000 people working from home and as a result not visiting the city every day and supporting the restaurants, retail, and cultural institutions. Noticeably this has led to empty streets, with the lowest pedestrian count being recorded in the 41 years of data collection. Looking ahead to 2021 this is only expected to return to around 64% of pre-covid rates.

Another key ‘market signal’ is commercial vacancies, which has increased from an all-time low of 1.9% to around 6%, and is likely to get up to around 10-14% in 2021. Major commercial developments are being cancelled or put on hold. 39,000 jobs lost already in the city centre. Less city workers equals less foot-traffic which has a devastating flow on effect for the service sector.

A strong commercial, cultural and community core in the city centre has positive effects for wider Victoria. The City of Melbourne is responding by fast-tracking plans to extend cycle- and footpaths throughout the city, grateful for the inbuilt flexibility granted by the original layout of the city streets and inspired by previous transformational projects in the city like Postcode 3000.

Capp reminded us that you can still live in the city and work from home, while (hopefully soon) continuing to enjoy all that the city has to offer – pointing to the phenomenon of ‘NORCs’ – natural occurring retirement communities that recognise the liveability of the city centre. The city is investigating how to convert commercial space to residential dwellings, with the housing affordability conundrum in mind. How to bring back creative industries that have been priced out of the inner city by the Melbourne metropolitan labour market is also a focus.

The City of Melbourne is hoping that a slower rate of growth post-covid will enable a more ‘thoughtful and considered’ approach about how to manage growth in the city, and perhaps reveals an anxiety within the planning profession to this market-led approach, and the ability to respond to market signals and maintain an efficient functioning labour market in the face of such rapid growth. Capp notes that this has in the past been largely incremental change around the growth, whereas covid potentially allows for transformational change in the vein of Postcode 3000.

Setting up an enticing clash with the keynote speaker Bertaud, Peter Seamer stated that (in the pre-covid condition) the standard urban model requires review, in particular the role of CBD, which is essential but shouldn’t be trying to do everything, but focus on tourism and culture rather than attracting such high volumes of workers every day. Seamer does not see building our way out of transport congestion through higher densities currently working, and instead promotes the more ‘localised city’ approach of a polycentric city, the 20-minute city of state policy and strategy.

Following covid-19 Peter Seamer sees emerging changes. Small apartments are a problem, crowded city streets and public transport is not particularly safe. Working from home, at some rate, will continue – with more flexible working hours. Significantly for Melbourne, inner city universities and city based tourism will be hit hard. However, small businesses and home delivery will benefit from increased trade and the compact city form, suburban flexible commercial spaces will increase in desirability.

Economy will be drastically changed, generational higher debt and slower recovery. Throw in climate change, increasingly insecure global politics, and the rise in shared and autonomous vehicles.

He provided a few suggestions for planners – start planning for and investing in a shift to the suburbs. The CBD has historically seen a great deal of higher level investment and this needs to change post-covid. In agreement with Bertaud, he suggested freeing up planning systems to allow a greater number of planning systems to co-exist, particularly for development and redevelopment of suburban centres.

This shift would reallocate spending of infrastructure dollars on projects that exacerbate CBD congestion to those that instead spread activity around the metropolis. Seamer called on the government to use this time of crisis to review lame-duck political promises such as the airport rail or nuclear submarines.

Picking up on a significant point of departure between the two planners, Bertaud seeking infrastructure responding to market demands for intensity focused on the CBD and Seamer envisaging top-down action to spread activity around the centre, Mark Sheppard sought response from Bertaud in light of Seamer’s assessment of post-covid planning imperatives in Melbourne. Bertaud reasserted that the role of the planner is not to restrict the CBD growth, but to restructure the radial-concentric transport structure that no longer works for a city the size of Melbourne, something that would both facilitate some dispersal of jobs throughout the city but also ease congestion in the city centre and free it up to take advantage of its desirability to the market. In short, the transport system of Melbourne recognises the historical development of the standard urban model, but no longer serves it efficiently.

Citing his home city of New York, Bertaud criticised planners for neglecting these larger infrastructure projects and even the focus on public space, instead seeking control who lives in the city centre and how they live there. Seamer agreed, in that planners are very important but doesn’t believe that current planning focuses in Melbourne are on the right projects.

Questioned about the responsibility of the market in ensuring social or sustainable outcomes, Bertaud reminded all that markets are fundamentally people, and that negative consequences are often market distortions such as housing unaffordability that are frequently caused by inefficient and misguided regulation.

I think all those that attended would love to see a formal debate between Bertaud and Seamer, though I suspect we may arrive at a shared conclusion that the way we plan for cities should free-up the market to shape the inner city, with planners ensuring that benefit is spread throughout the broader city. Planning where we want to go, though not how we will get there; instead taking advantage of the market to get us there in a process of strategic navigation.

VPELA Webinar review by Tim Nichols, Senior Consultant at kinetica

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Why have we changed our name?

kinetica was formerly known as David Lock Associates (DLA).

David Lock Associates (Australia) Pty Ltd changed its name to Kinetica Studio Pty Ltd on 21 February 2020 to reflect the significant reinvention of the business.

Starting with the crystallisation of our vision and values, continuing with a transformation of our planning offer, and culminating in our move to a ‘grown up’ office in the CBD, we are no longer the business we were.

Paralleling these changes, we agreed with David Lock Associates Limited (the English business which gave birth to DLA Australia) that it is time to undo our formal corporate ties, while retaining a strong informal relationship.

This reinvention of the business needed to be expressed outwardly and we began the process of refreshing our graphic identity. DLA has been predominantly known for urban design expertise, and the name reflects our history as a satellite of an English business. A new name offered the opportunity to establish a refined brand, based on a home-grown organisation featuring planners and urban designers trusted for their expertise and independence.

Our new company name, kinetica, reflects our passion for change.  We facilitate and shape changes in the use, ownership and development of land to create a better lived experience.

kinetica retains the best of DLA—highly regarded independent urban design expertise—and combines it with highly regarded independent planning expertise.