The infrastructure mismatch

by admin | 16th October 2013


The Infrastructure mismatch
- Connecting employment, housing and infrastructure

Recent economic conditions and government spending policies have highlighted the need to be fiscally responsible with both public and private investment. The high-spending days of the early 2000s are well behind us, and governments and businesses will need to optimise the efficiency of their investments going forward if we are to maintain our current standards of living. Land use development and infrastructure provision are particularly important in this regard as they have significant costs involved with their development and operation.

There are substantial economic, environmental and social efficiencies to be gained in providing urban environments where travelling time is minimised. This can be achieved through faster and more regular forms of transport, and/or creating situations where people need to travel shorter distances to the activities they participate in, such as work, entertainment, shopping, education and general day-to-day living.

The ability to invest in faster and more regular transport is considered limited due to the economic constraints we are currently facing (Queensland State Debt of approximately $80 billion; Commonwealth Government Debt of approximately $272 billion. Sources: Queensland State Government; Australian Federal Government). The alternative is to reduce people’s travelling distances. A key transport trip is the journey to and from work. The ability to reduce the time associated with this journey has significant social and environmental benefits as well as economic benefits in the form of saving time for individuals. Thus there are benefits for coordinating the planning of future residential and employment land uses as well as the infrastructure required to connect these land uses.

Recent research by Urbis and King & Co indicates that this may not necessarily be occurring.  From 2007 the Council of Mayors (South East Queensland) undertook an employment forecasting project which estimated future employment populations by Statistical Local Areas (approximate suburb boundaries) in South East Queensland. This project has not been updated since the 2011 Census when the Australian Bureau of Statistics (ABS) moved to Statistical Local Area (SLA) geographies for the collation of census data. This does not therefore align with the latest Queensland Government population forecasts with the most comparable geography reflecting Statistical Area Level 2 (SA2) areas (which equate to one to three suburbs). To maintain consistency the Urbis and King & Co research has used SLA forecast data for employment and population. This means that employment data is from the 2010 Council of Mayors (SEQ) employment forecasts and population data is from the Queensland Government’s Office of Economic and Statistical Research (OESR) 2011 population forecasts. We acknowledge that this data does not necessarily reflect the latest trends, economic circumstances and land supply information; however, it is the latest consistent data available.

In researching the forecasts of employment and population at the SLA level from 2011 to 2021, there appears to be a disconnect between the growth in employment and the growth in population. When shown graphically for the Greater Brisbane area, there is a clear pattern of employment concentration (green on the following map) in the middle ring of Brisbane and the TradeCoast area. Complementing this is the concentration of heavy population areas (red) in the outer areas of Greater Brisbane.

When the top ten forecast areas for employment growth are compared to the top ten areas for population growth, there are few areas of overlap. Caboolture Central, Ipswich East and Ipswich Central rate in the top ten fastest employment and population growth areas. Caboolture Central and Ipswich Central both reflect growth of around two persons per job, which represents a relatively sustainable job-creation level. Ipswich East reflects growth of around four persons per job, which will lead to residents having to leave the SLA for work.

Land-use imbalances and hence inefficiencies are going to be greatest in areas that have high population growth and low employment growth, or vice versa. Effectively, this requires increased time and cost in travelling and providing the infrastructure for that travel. In the following section we examine those areas that will place the greatest pressures on infrastructure investment.

  • Areas that have high population forecasts and comparably low employment forecasts include:
  • Ipswich South West incorporating Walloon, Thagoona and Rosewood.
  • The Northern Brisbane Corridor along the Bruce Highway from Mango Hill to Morayfield.
  • Marsden – conversion of rural residential land into urban residential.

The Ipswich South West area reflects growth of around twenty persons for every one job increase. Whilst employment opportunities may increase around Ebenezer in the longer term, this area is likely to see high outward commuting in the short to medium term.

The high population growth forecast for the Northern Brisbane Corridor along the Bruce Highway from Mango Hill to Morayfield and Caboolture has not had complementary employment forecasts. This is indicating that the major residential developments of North Lakes, Warner Lakes and Forest Lake will not be supported by employment opportunities. In this case the employment forecasts appear to be underestimated as there is significant employment land at North Lakes and around Narangba, Dakabin and Caboolture.

Marsden is forecast to generate around one job for every fifteen residents over the period to 2021, indicating that most new residents will have to commute outside the area for employment. There are potential future employment opportunities in Crestmead and along the Logan Motorway; however, a growing population in surrounding areas will also compete for these jobs.

Whilst not specifically examined in this study, the more southern areas of the Logan Local Government Area and the Gold Coast Local Government Area are also likely to have a disconnect between population forecasts and employment forecasts. Significant infrastructure investment has occurred on the Gold Coast and employment potential exists in proximity to train stations and the motorway. For the southern areas of Logan, more infrastructure investment is required to achieve a better balance between future jobs and future residents.

Areas with high employment forecasts and comparably low population forecasts include:

  • The Australia TradeCoast (Pinkenba–Eagle Farm).
  • Inner Brisbane including the CBD, South Brisbane, Woolloongabba, Fortitude Valley and Bowen Hills.

The Australia TradeCoast area reflects growth of approximately nine jobs per new resident, indicating that there will be strong in-commuting activity to this area. The predominant industrial and shift nature of work in this area indicates future infrastructure requirements are going to be in the form of roadways.

The Brisbane CBD is forecast to have employment growth far in excess of its population growth, reflecting sixty jobs per new resident. This is likely to reflect an underestimate of population growth in the CBD. Central Business Districts are the most concentrated employment locations being centres for regional, state, national, and international services and activities. They provide certain efficiencies in trip activity for workers, visitors and residents. Rather than discourage the Brisbane CBD as an employment hub, a preferred land use efficiency strategy would be to encourage the CBD as a residential location.

The Inner Brisbane areas surrounding the CBD reflect growth of three to four jobs per new resident. Once again, there are certain synergies in job concentrations in these areas as they leverage the transport infrastructure and networks serving the CBD. Similar to the CBD land-use strategy, there should be an emphasis on encouraging further residential development in these locations.

This research into future population growth and employment growth in Greater Brisbane reflects only an initial investigation into the efficiencies of land use and infrastructure investment across our region. It has highlighted, however, the importance of efficiently aligning residential land use with employment land use and the implications for infrastructure investment.

Based on recent employment and population forecasts there is the potential for future work trips of Greater Brisbane and South East Queensland residents to increase, even without added congestion. There are substantial social, environmental and economic costs associated with this. To avoid this situation, or to be more realistic, to minimise this impact, greater strategic planning is required to align land use mix with infrastructure requirements. The current revision of the South East Queensland Regional Plan is an ideal opportunity to address this issue.

To best inform the preparation of the updated SEQ Regional Plan, the following factors need detailed examination:

  • Revision of employment forecasts for SEQ in line with the latest population forecasts at the SA2 level.
  • Alignment of employment forecasts with the availability of employment land.
  • Alignment of future residential land and employment land.
  • Alignment between current infrastructure investment plans and population and employment forecasts by location.

With respect to action that can be taken now, governments should look to planning levers such as infrastructure charges to influence the direction and timing of appropriate development. Infrastructure charge reductions for employment lands in close proximity to residential areas have the ability to fast-track employment land development. The State Government has recently used its planning powers to identify Priority Development Areas (PDAs) to facilitate better development outcomes. Future PDAs should be targeted towards optimising land use and infrastructure efficiencies.

Malcolm Aikman
Director
Economics & Market Research
Urbis

Malcolm directs the Economics & Market Research unit of Urbis in Queensland and has undergraduate and postgraduate qualifications in Economics and Business Administration from the University of New South Wales, Macquarie University and Queensland University of Technology. Malcolm is most highly regarded for his understanding of the property market, particularly his expertise in the Queensland residential and industrial markets.

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