44 Urban policy

As urbanists from around the world often remind us, about 55 per cent of the world’s population lives in cities.^[1] By 2030, that figure is likely to be over 60 per cent.^[2] Cities, therefore, will be increasingly important sites for managing the prosperity of the world’s population. Since colonisation, Australia has had a strong urban focus. This is partly the result of the physical geography of the continent, with a rugged desert core surrounded by sections of agriculturally productive coastline. For example, a little over 5 million people live in Sydney – Australia’s first city – which is about 20 per cent of the nation’s population. But this is likely to grow by one and a half million people over the next 20 to 30 years. While each Australian state faces its own growth challenges, four common themes are emerging in every city: How and where will we house everyone? How will we source enough food and water for the city? Where will people work? And how will we move everyone into and out of – and around – the city? In short, the four big and interrelated urban policy challenges that confront Australian cities are housing, jobs, food security and transport. A key task of urban policy is to build a network that allows different people, sectors and organisations to work together, across their differences, to plan and build a better city for every citizen. This raises critical questions about what a city is and who a city is for.

This challenge is complicated by the urban policy domain itself, which is shaped by the constitutional and statutory arrangements between federal, state/territory and local governments in Australia. These arrangements determine how ‘the state’ (federal, state and local governments and their agencies) intervenes in ‘the urban’, as an arena for the formulation, implementation and contestation of policies. The development and realisation of effective urban policy is further challenged by the complexities of urban governance and the messiness of urban space.

Urban governance is the process through which a city is governed. It involves different government agencies at different levels with diverse interests and responsibilities in relation to the urban arena, which they may pursue (such as major infrastructure provision) or disregard (such as ensuring access to safe, secure affordable housing). It also involves other, non-governmental actors and interests in the private and third (non-profit or community) sectors. Urban policy is therefore characterised by the ‘search for co-ordination’^[3] as the policy challenges cities face are cross-cutting and multi-level and require multi-agency, cross-sector responses. Policy co-ordination across the government portfolios of transport, infrastructure, environment, housing, finance, education, health and social services would be required to build a ‘multi-dimensional policy perspective’ on cities.^[4]

The urban space of cities is also complex. In terms of politics and public policy, we need to know who is responsible for what (where infrastructure is provided and services delivered) and who has a say (who is involved in policy formulation and delivery, who gets to vote). But this is complicated too. For example, urban regions might comprise more than one local government area, so it makes sense that public service provision, such as public transport, is co-ordinated at a higher level to ensure there is a transport network that serves residents who live in one local government area, work in another and use services or access amenities like public open space in a third. In Australia, there is a renewed focus on long-term metropolitan planning, with periodic discussion of a national, federal government-driven urban agenda. But Australia does not have an elected metropolitan (between local and state) level of government responsible for planning and co-ordination of its urban regions. In turn, we know that people’s strongest attachments tend to be to local places, rather than urban regions. Furthermore, while some policies explicitly target ‘the urban’ in terms of the place or the people who live there, many policies that are not urban-targeted have urban effects. Finally, cities are part of wider, often global, socio-economic processes and flows of people, finance, goods and services. Policy makers can seek to resist the effects of or capture the benefits of these flows.

In this chapter, we first establish why urban policy matters and then consider the major theories that help us to understand urban policy. We then examine how urban policy has evolved in Australia, particularly in relation to changing federal emphasis on a national urban policy and in terms of the strategic planning and governance arrangements for the metropolitan regions of the capital cities, in which the vast majority of Australians live.

Urban policy matters in an urban society

Australia is a majority urban society. Over two-thirds of the population live in the metropolitan regions of the state and territory capital cities (Table 1). Increases in Melbourne, Sydney and Brisbane accounted for 70 per cent of Australia’s population growth in 2016–17. These patterns reflect both the concentration of economic opportunities and growth in urban areas and Australia’s unique urban system, the pattern for which was set during European settlement, when the majority of each colony’s population was concentrated in its capital city. During the 20th century, the capitals continued to claim an ever-increasing population share due to rapid suburban growth.^[5] Australia’s two largest cities, Sydney and Melbourne, now have global city^[6] status, meaning they are significant nodes in international networks of economic, political and cultural exchanges.

Urban policy matters because most people live in urban areas, and the policy challenges we experience in these areas affect our quality of life. This gives rise to questions about the extent to which urban policy tackles these challenges. Some argue that urban policy is part of the problem, prioritising private investment activities over efforts to tackle socio-spatial inequalities and create a more equitable or just city. Others contend that private activities, assisted by state intervention, ultimately create more opportunities for all.

Urban policy is politics

Urban policy lacks a singular definition. Its defining feature is state intervention in the urban.^[8] While mainstream accounts regard such state intervention as a technical process of making and implementing plans, or as part of an administrative, managerial function of government, a critical approach to urban policy entails understanding that (as with all forms of state intervention) it is inherently political. Policy, planning and governance arrangements for the urban reflect political contestation and conflict between actors and interest groups with different levels of power and different stakes in the city. These actors and interest groups, comprising the federal, state and local levels of government, corporate interests and landowners, as well as social movements, residents and community-based organisations, shape urban policy.

Urban policy requires understanding of the underlying rationales for state interventions and how these are contested by different interests seeking to assert their vision for a city and to create and implement policy agendas guided by this vision. In other words, while urban policy is characterised by policy objectives that purportedly seek to enhance the quality of life of those living in cities, it propagates specific values and visions for the city. In turn, the social construction of ‘the urban problem’ that policy makers are trying to address has implications for what policies are developed and implemented. Two kinds of challenges remain constant: enabling the social reproduction of urban residents (the ability to reproduce the means for people to live) and managing growth (including planning, land use and redevelopment). Much debate occurs around what should be the overriding priority of urban policy: equity (social redistribution) or efficiency (economic growth).^[9] Equity goals suggest that everyone ought to be provided with equal opportunity to access jobs, goods, services and amenities. Efficiency goals justify urban policies that support urban economies by making the best use of land and infrastructure to enhance productivity and wealth creation.

From 1945 until the late 1970s, equity concerns shaped policy in many Western countries, with high levels of state intervention in the economy and society, including provision of public housing, education, transport and infrastructure, along with redistributive income support programs. But since the late 1970s, urban policy has been primarily influenced by efficiency criteria, with a shift towards the pursuit of private-sector-led strategies of wealth creation, or what David Harvey^[10] terms urban entrepreneurialism. Thus political commitment has shifted from government investment in public infrastructure and public control of significant assets to the sale of assets and their control and management by quasi-governmental and private-sector agencies as well as the outsourcing of service delivery to private or third-sector providers. What some term a neoliberal political agenda, which aligns with the practices of new public management, has promoted policies of privatisation, fee-based services and a general rollback of government’s social welfare function. For example, in terms of major urban redevelopment of former industrial areas, a common approach is the creation of special purpose districts managed by arms-length state agencies, which distance major projects from local accountability. The influence of international examples such as the redevelopment of Baltimore’s Inner Harbor in the USA and London’s Docklands in the UK are evident in Australia. In Sydney, the redevelopment of Darling Harbour was overseen by a development authority established in 1984, and the current central city waterfront redevelopment is being led by a New South Wales (NSW) state agency, the Barangaroo Delivery Authority, created in 2009.

Theories of urban policy

The ongoing tension between equity and efficiency goals is fundamental to debates about urban politics and policy. Two broad theoretical positions aid understanding. The first focuses on the role of cities in processes of social reproduction, and the second emphasises cities’ role in processes of production or in realising profits from property development.

Neo-Marxist debates of the 1970s stressed the role of cities in social reproduction and collective consumption, or the delivery of services and goods – including those which are or can be collectively consumed, such as transport, education, health care and housing – by the state to support the reproduction of labour power. Politics stems from the struggle between those propagating profit-seeking and those favouring welfare via state support for collective good provision. For Manuel Castells,^[11] the lives of many poor people in urban society are shaped by crises of collective consumption, referring to the unaffordable nature of many goods and services necessary for their sustenance. Collectively consumed goods and services, such as public transport and policing, which involve the majority of households and especially wealthier groups able to mobilise and be heard, tend to generate more public awareness. In contrast, those allocated on the basis of need, such as public housing, and reliant on poorer groups’ and their advocates’ ability to mobilise and be heard, tend to figure lower on the political agenda.^[12]

A second set of theories originating in the USA argues that the focus of urban politics is economic growth and the realisation of profit through land and property development. Growth coalition theory^[13] sees policy as part of the exercise of elite power around economic growth objectives, with the city as ‘growth machine’. Urban regime theory^[14] refines this, arguing that power is fragmented and that regimes arise between local governments and private actors that need to combine power and resources to be able to devise and enact a policy agenda. These theories, which identify urban policy as a mechanism that seeks to promote economic growth and boost urban competitiveness, are consistent with the shift towards a neoliberal political agenda.

Globalising the city

Another perspective on the shift from equity to efficiency goals is provided by considering policy as attempting to globalise cities by positioning them within global flows of people, finance, goods and services. Such understanding has been used to justify major investment and infrastructure projects, accompanied by place branding and marketing and the provision of incentives, including land and tax breaks, to attract major global investors. The changing urban economy, characterised by the proliferation of advanced services and knowledge-based industries, has resulted in bifurcation between highly skilled, well-paid professional work and low-paid, unstable, unskilled service jobs in those cities clamouring for or seeking to retain global city status, including Sydney and Melbourne. By the late 1990s, in such cities, house prices had already risen beyond the incomes of many people. Gentrification, or the process by which urban neighbourhoods, usually the home of low-income residents, become the focus of reinvestment and (re)settlement by higher-income residents, is framed by some as urban renewal, but others see it as displacement of poorer, vulnerable city residents and a reduction in their opportunities to gain access to good quality urban areas.^[15] Rising house prices and rents also attract property speculation, which fuels further inflation. In turn, ‘the urban problem’ has been socially constructed as one of poor city residents lacking the skills to compete in job markets and generate the means to look after themselves – a justification for cutting social welfare provision by promoting the moral imperative of self-improvement. Others critique this construction as a form of social pathology, where people are blamed for their problems, rather than relating these to inequities resulting from global processes, compounded by state withdrawal of social welfare. In contrast, the public goods and services consumed by the wealthier are rarely framed as welfare benefits.^[16] For example, both public housing for those in need and negative gearing tax concessions for the wealthy are benefits, but the ways in which these are socially constructed indicates the dominance of efficiency goals given public subsidy to encourage profit-making from private property ownership.^[17]

Certainly the city needs to be considered as part of wider processes. Flows (such as of investment and people), intervention by higher levels of government (targeted at urban areas or not) or international policy transfer shape what goes on within urban areas. But the urban remains distinctive as a political realm, with its everyday struggles about public services, housing and infrastructure, along with conflicts about urban renewal and redevelopment. These struggles focus attention on the planning and governance of cities and on the scope for more equitable alternatives that resist the increasing intrusion of private interests into the urban public realm.

Existing urban policy

These theoretical accounts of the shift in the state’s role, from helping to secure social reproduction to assisting in capital accumulation, highlight key aspects of today’s existing urban policy, under which economic success, rather than the existence of an extensive welfare state, tends to be framed as the necessary precondition for the wellbeing (or welfare) of citizens. Urban policy now seems predominantly shaped by the pursuit of economic growth, and land and property development as a means to boost profits and wealth creation. These objectives follow the logic promoted in political rhetoric that people’s wellbeing is best secured by disciplining individuals into accepting the efficacy of the market, from which they will benefit due to the ‘trickle down’ of growth.

For some, this understanding constitutes the basis of normative policy making, the ‘new conventional wisdom’,^[18] which, due to rapid policy transfer, has been applied globally. For others, it forms the basis of a critique of urban policy visions and values that do not represent or respond to the needs of the many. This leads to questions regarding the right to the city:^[19] who is the city for, and what is the role of policy in facilitating people’s access to, and uses of, the goods, services and spaces of the city? Critical urbanists boil this down to the core question of whether urban policy (and indeed the city) is for people or for profit.^[20] They argue that people’s inhabitance of the city, rather than access to money, should form the basis for holding the right to remake and remain in the city. These scholars stress that there are progressive possibilities within urban policy, in terms of the locally specific and flexible ways in which policies can be implemented and in terms of the scope for development of alternative visions for the city that may lead to more equitable urban policy goals and outcomes.

At what level of government?

In Australia, urban policy is further complicated by a federal system of government that has tended to overlook the significance of cities and metropolitan regions, which, as ‘orphans of public policy’,^[21] are ‘caught between the three tiers of Australian government, hardly registering on the agenda of many politicians’.^[22] Although Australia is a vastly urban nation, attempts by the federal government to articulate a national urban policy have been episodic. Urban planning is a key tool in the urban policy toolkit. The intra-governmental arrangements around urban planning are therefore important. In this context, it is important to note that: 1) local government is not referred to in the Constitution of the Australian Commonwealth – local governments’ responsibility for managing regulatory planning at the local level is deferred from the states/territories; 2) in the absence of a national urban policy, the federal government does not have any direct political oversight over urban planning at the state/territory level; but 3) the federal government may provide funding to the states/territories for large-scale infrastructure in cities, either as block funding or through one-off arrangements (such as City Deals, below). Therefore, the states/territories are powerful actors in urban and regional planning in Australia, but urban policy and infrastructure funding tensions are present between the federal government and the states/territories.

National urban policy

Globally, interest in formulating national urban policy peaked in the 1970s, with high levels of government intervention aimed at realising equity goals through provision of public housing and other public goods. The highpoint in Australia was the Whitlam government’s (1972–75) urban and housing development initiatives, which focused on the rapidly growing suburbs. During the 1972 election campaign, Gough Whitlam famously explained that:

Following the shift to efficiency goals, the most notable federal interest in cities was expressed in the Hawke–Keating government’s ‘Building Better Cities’ program (1991–96), which focused on the renewal of former industrial sites in the inner city to provide higher density housing (in Pyrmont and Ultimo in inner Sydney, inner Melbourne and inner north-eastern Brisbane) as well as the redevelopment of mainly government-owned land in East Perth.

However, more recently, cities have crept back up the national policy agenda, reflecting growing understanding of their role as the underpinning drivers for national economies. In 2011, the Rudd–Gillard government launched a national urban policy, ‘Our Cities, Our Future’,^[24] which sought to guide public intervention and private investment around four themes that remain widely deployed in metropolitan strategic planning rhetoric: productivity, sustainability, liveability and governance. In 2016, the Liberal–National Coalition government launched the ‘Smart Cities’ plan with the ambition to ‘rethink the way our cities are planned, built and managed’.^[25]

The plan, not a substantive policy document, reflects internationally shared (and poorly defined) ‘common sense’ tenets that productive cities are smart, innovative, connected and liveable. In the same year, the government announced the Australian Infrastructure Plan, asserting that ‘the Australian government should drive change in the planning and operation of Australia’s cities’.^[26] Federal commitments comprise funding for infrastructure planning and provision and seeking partnerships with state and territory governments via City Deals, which are ‘bespoke’ place-based funding agreements presented as boosting urban productivity while enabling the ‘value capture’ of enhanced tax revenue from development. The deals are described as ‘driv[ing] national priorities tailored to local needs’.^[27]

Questions arise about the federal government’s engagement in matters that are generally regarded as the states’ prerogative – metropolitan strategic planning and infrastructure investment. The resurgence of national urban policy in Australia contrasts with the approach in other Western countries, where intergovernmental decentralisation is leading to the creation of institutions at the metropolitan level, justified on the basis of enhancing metropolitan regions’ global competitiveness while increasing democratic accountability. In the UK, where the City Deals approach originated, the funding agreements are ‘devolution deals’ premised on the creation of metropolitan governments that include representatives of constituent local governments and a directly elected ‘metro mayor’.^[28] Australian conceptions of national urban policy do not envisage representative, revenue-generating metropolitan governments, perceived as a threat to state and federal power and influence.

Australia’s exceptionalism can be related to its extreme vertical fiscal imbalance.^[29] This imbalance is based on which level of government has the power to make decisions about public spending and taxation. Australia is atypical, given the power of the federal level in collecting most taxation revenue before making transfers to the states and territories in the form of general and tied grants. The states/territories can levy limited taxes but derive nearly half their revenue from federal grants.^[30] This imbalance enables the federal government to assert power over planning for and infrastructure investment in cities, when it chooses to do so. Major road projects such as the East West Link in Melbourne, Perth’s Roe 8 highway extension and Sydney’s WestConnex have been highly contested but exemplify the influence of funded federal priorities on state priorities. The projects are insulated from local accountability as they are managed by public–private partnerships that operate like private corporations but are authorised to use public funds to leverage private investment. For example, WestConnex is managed by the Sydney Motorway Corporation, a private company established by NSW government in 2014.

This poses questions about what level of government is best placed to resolve contested urban policy challenges, how projects are funded and which urban actors should be involved. Some argue that urban policy should locate responsibility and funding for urban intiatives in the level of government where they are most effectively addressed; urban scholars often conclude that this will be at the level of metropolitan regions. In Sydney, bodies such as the Greater Sydney Commission evidence the state government’s commitment to metropolitan city governance (but not government).

Metropolitan planning and governance

Currently, state and territory governments have responsibility for creating strategic plans for Australia’s metropolitan regions. Strategic planning at a metropolitan level is a framework for and expression of urban policy. As such, it is highly political and is subject to a great deal of contestation – such as debates over whether new developments should replace farmland on the urban fringe, the provision and location of public and social housing, and the gentrification of neighbourhoods and displacement of poorer residents.^[31] Recent and ongoing struggles in inner Sydney provide pertinent examples, such as the private transport-led redevelopment of government-owned land and public housing in Waterloo and the sale of public housing in Miller’s Point.

Metropolitan planning for Australia’s capital city regions is longstanding but is increasingly subject to debates about whether it can meet the challenges posed. Reflecting the shift from equity to efficiency goals, market-driven development has led to rising socio-spatial inequality since the 1980s. In Sydney, the term ‘latte line’^[32] has been used to describe the divide between the well-connected, affluent and skilled jobs-rich inner suburbs and the poorly connected, highly car dependent outer suburbs, which lack employment opportunities. In turn, the phrase ‘new urban divide’ was coined to describe the spatial mismatches that strategic planning seeks to address:

Metropolitan plans tend to share a commitment to urban consolidation, seeking compact cities by restricting new land released for development on the urban fringe and implementing plans for densification within the existing built environment, based around centres providing jobs and services and corridors of public transport. High-rise apartments are increasingly evident in the inner city. But metropolitan plans have generally failed to provide affordable housing. Plans do not meet their goals of higher public transport use due to inadequate investment in infrastructure. Where public transport use has increased, this has mostly involved radial journeys to the CBD or within the better-served inner suburbs. Employment in middle and outer suburbs remains sparse. Poor access to job opportunities in these areas has generally added to labour market inequalities.^[34] Clive Forster describes:

Reasons cited for the relative failure of metropolitan plans relate to their frequent revision due to changes in state government, leading to a lack of policy certainty and consistency. The process is also often captive to private property, infrastructure and financial interests. Strong representation from the property industry has led to the perception of urban consolidation policies as raising land and housing costs, to the detriment of housing affordability, which encourages release of new land for development on the urban fringe.^[36] Calls for the deregulation of planning to ‘streamline’ the system are also common,^[37] heightening concerns about the downgrading of planning as a profession with ‘a weakening of the influence of planning agencies in shaping metropolitan policy’.^[38] This is combined with the lack of accountability in privately financed infrastructure schemes, such as road tunnels in Sydney.^[39] Though the need for more affordable housing is recognised in policy debates, policy change has not occurred to redress inequalities. In considering why this is the case, Nicole Gurran and Peter Phibbs conclude that the ‘busy work’ of policy discussion and review acts to defer any substantial change. They describe this as an ‘expedient strategy for politicians beholden to home-owning electorates, industry sponsors, or ideological interests’.^[40] It is also a ready tactic to shift blame to another level of government.^[41]

Here, it is useful to return to our consideration of the underpinning rationales for state interventions in shaping urban economy and society. Metropolitan strategies are an expression of urban policy and thus of urban politics. As such, the strategies underline the shift from equity to efficiency and have made little progress towards rectifying the spatial mismatches and inequities described above. However, actually existing urban policy has an imperative (to an extent at least) to address the key underlying tension between equity and efficiency. For example, in considering strategic planning for the Sydney metropolitan region, Pauline McGuirk finds that though its planning broadly reflects a neoliberal commitment to furthering Sydney as a global city, redistributive compromises are necessary to achieve this. She describes strategic planning as ‘an institutional site of negotiation’^[42] between demands for economic development and redistribution. Other forces that shape the urban realm, such as immigration policies and tax and finance policies like negative gearing, underline the urban impacts of federal policies not explicitly targeted at urban areas, which are not within the purview of metropolitan strategic planning.^[43]

Much debate has occurred about how Australia’s metropolitan regions should be governed. The current complex and fragmented governance arrangements are perceived as lacking clear and effective institutional arrangements for strategic planning and the co-ordination of urban services, including infrastructure. Co-ordinating policy in a fragmented system of governance dilutes policy efficacy because it can be unclear who has responsibilities for the different elements of policy development, delivery and implementation. Advocates for metropolitan government see it as able to rectify the perceived democratic deficit which enables private interests to exert undue influence.^[44] Government at this level is viewed as giving metropolitan regions a collective voice in debates about planning, resource allocation and major strategic issues, such as immigration, economic development and sustainability. Metropolitan governments are also perceived as being able to better tackle the perennial challenge of urban policy co-ordination – across government policy siloes and government levels (including local government areas) and between the public, private and third sectors. But the introduction of a fourth level of government in Australia would face considerable opposition from vested interests, including state and federal governments unwilling to cede power and responsibilities.

Greater Sydney, which has a population of 5.1 million and comprises 35 local government areas, and Greater Melbourne, which has a population of 4.9 million and 32 local government areas, are Australia’s two largest cities. Since 2015, metropolitan planning for Sydney has been the responsibility of an independent organisation created and funded by the NSW government, the Greater Sydney Commission. Greater Melbourne does not have an equivalent agency. The extent to which such a metropolitan planning commission comprises a step towards metropolitan government, with directly elected members or members elected by regional local governments, clear responsibilities (such as for public transport) and tax raising powers, remains to be seen.

Conclusions

The key tension in thinking about cities – as ‘where people live’ or as ‘growth machines’ – plays out constantly in urban politics and urban policy. Urban policy is redefined accordingly, ‘combining its elements in different ways at different times and in different places’.^[45] A key debate in Australia is around the level at which the state can best intervene to co-ordinate urban policy, but the debate tends to be dominated by conventional understandings of state intervention as technical and managerial rather than political, underlining the normative power of neoliberal ideologies in shaping public policy. Debates about citizens’ role in the processes of planning and governance seem subdued, perhaps because ‘many residents are unwilling to consider the possibility that cities could get better’.^[46] However, cities are also sites of struggle over social justice and equity that may lead to rebalancing of priorities and redefining of policies.

References

About the authors

Dr Madeleine Pill is a senior lecturer in the Department of Government and International Relations at the University of Sydney. Her research focuses on urban and neighbourhood governance and policy and is informed by her experiences working in local and central government in the UK, state government in Australia and as a researcher in the USA. The findings of her recent international comparative investigations into the effects of austerity on the collaborative governance of cities have been published in the Journal of Urban Affairs, Policy and Politics, Local Government Studies and the International Journal of Urban and Regional Research.

Dr Dallas Rogers is the program director of the Master of Urbanism in the School of Architecture, Design and Planning at the University of Sydney. His recent work includes a monograph on The geopolitics of real estate: reconfiguring property capital and rights (2016), an edited book on The globalisation of real estate: the politics and practice of foreign real estate investment (2018), and an edited book on Housing in 21st-century Australia: people, practices and policies (2015). Dallas is the host of City Road Podcast.