The density dividend: smaller, worse, slower, less?

However, density is difficult and not very popular. It is also more expensive to develop and takes longer for even simple development propositions to be approved.  

The lowest hanging density fruit is what is now euphemistically called “gentle density.” But try introduce this in the form of relatively benign townhouses into low density streets full of detached housing and you have a residents war on your hands. Write them off as NIMBYs if you like but they all vote and they are entitled to protect their single biggest asset – their home. If they are not convinced that broader town planning aspirations mean knocking down detached houses in their neighbourhood for the common good, they will let their elected representatives know of it. And they do, loudly.

Consider also that finding suitable sites for even medium density housing projects is not easy. Sites with the least risk of confronting community and local council opposition are either spoken for or - if available - demand a high price premium. Developers will tell you that finding sites at prices which work is a massive challenge.

Then you need your project approved. One site in inner Brisbane has just received development approval – a full decade after it was first lodged.

Neither is density affordable. A two-bedroom apartment struggles to be built (not including land) for less than $800,000 these days. A three-bedroom house can still be built for under $350,000 not including land. The greater the density of housing type the higher the cost per square metre to build.

It’s worse for social infrastructure: a typical low-density school on a 7-hectare site in a new estate will cost around $15m to $20m to build.  Try to even find a 3ha site for an infill school where you won’t confront a phalanx of objections over traffic, noise etc. Then you have the build cost of a vertical school which will be closer to $150m for the same number of students. Ten times more expensive. And in all likelihood, many years before you get through all the planning applications, assessments, appeals, courts etc.

But surely there are infrastructure savings under the density model? That’s debatable. The cost of installing below ground water, sewer, power and telco infrastructure in a new housing estates is considerably cheaper than the cost of retrofitting older infrastructure in existing areas which may not have been designed to handle the increased demands of higher density models. Plus, you can even find that infrastructure providers in the form of utility companies may object to infill proposals which increase density if that means it risks over taxing the capacity of their aging network infrastructure. They become objectors to the very models of urban growth endorsed by their government owners.

Infrastructure such as public transport is more efficient under higher density models. But getting to the point where density becomes efficient for public transport includes many years of pain when it isn’t. Savings on one side of the density equation are often over-hyped, while the costs on the downside are frequently glossed over.

We need to accept the reality that higher density development, especially when being introduced into existing metropolitan areas, is more costly, more difficult and takes longer, whether that is housing, schools, hospitals or network infrastructure of some type. Given this, it should come as no surprise that our supply responses are slowing down. Stuff is taking much longer.

But density is our preferred urban development policy approach, and there are compelling reasons for it. Logically it should follow that, if we are to pursue higher density as the preferred metropolitan development model, we would also do so in a lower growth environment, in recognition of the delivery challenges.

Instead, we are promoting density as a solution to very high rates of growth. This is a bit like putting a tractor on the start grid of the F1. You don’t stand a chance.

If the objective is to address the “housing crisis” and other shortages, then doing things “bigger, better, faster, more” is how we need to be doing it.