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Alan Kohler is one of
Australia’s leading finance journalists. Since the late 1960s he has worked for
some of the country’s most important newspapers, including a stint as editor of
The Australian Financial Review, before going on to publish the Eureka
Report, a popular online investment newsletter. Later he began appearing on
the national broadcaster, initially ABC Television’s Inside Business and
now he presents a finance segment on ABC News evening bulletins. More recently
he has written a column for The New Daily, an online newspaper owned by
Industry Super Holdings, which represents industry superannuation funds.
As the publicly-funded
ABC and The New Daily cater generally to audiences made up of progressive
inner-urban professionals − industry super funds are dominated by former
trade union and Labor Party functionaries – it’s not surprising that many of Kohler’s
own views track the progressive line, particularly on social issues and climate
change. Against this background, his recent book The Great Divide:
Australia’s Housing Mess and How to Fix It (Black Inc., 2024) takes an
unexpected turn.
Housing affordability features
prominently in Kohler’s television and online journalism. He has clearly thought
about it deeply. The book comes across as the culmination of a long festering sense
of frustration. “Australia is less of an egalitarian meritocracy” he laments,
rightly, and “the problem of housing affordability now dominates the national
consciousness and has affected the lives of everyone, dividing Australia into
those who own a house and those who don’t.” But after traversing the ups and
downs of successive housing policies going back to the nineteenth century, Kohler
ends up rejecting the set of assumptions currently in vogue, popularly known as
‘yimbyism’, which are hardening into a conventional wisdom across the official
class and social circles forming the bulk of his audience.
Almost routinely now,
opinion and policy leaders assert that upzoning is the key to affordability, focusing
on intensive in-fill construction of mostly apartments around rail nodes which
are ‘well-placed’ and ‘close to jobs’ and as such are ‘where people want to
live’, phrases commonly used as code for the metropolitan core. Leave aside for
the moment that these claims do not correspond to the realities of contemporary
job location or the preferences of all ‘people’. Perhaps owing to his social
environment, Kohler doesn’t necessarily dispute the claims and is sympathetic
to yimbyism throughout the book. His accounts of the movement’s origins in San
Francisco and the activism of yimby groups in Canberra, Sydney and Melbourne
are generally positive. These are people, he writes, that “I’ve been spending
some time lately with.”
Yet after weighing up a
range of factors shaping modern Australia, including the role of land grants in
the dynamics of European settlement, intercity and intracity patterns of urbanisation
across the continent, inherited forms of land tenure and ownership, effects of transportation
technologies on phases of urban development, friction between the three tiers
of government, political complexion of parties in office at critical turning
points, electoral demographics and generational disparities, the influence of
property ownership on evolution of the tax system, the central bank’s ambivalent
remit on interest rates and lending, unprecedented rates of immigration and
population growth, amongst others, Kohler’s investigation of the housing
problem leads him inexorably to the conclusion that yimbyism is simply
unrealistic as a practical program.
The book’s final
chapter draws together the strands of his tour d’horizon and offers up some
solutions. Quoting the main points of a yimby submission to a senate inquiry,
which calls for measures to raise housing densities, he writes that one of the points
“would make a big difference”: “investigating mechanisms for the efficient and
equitable consolidation of urban blocks, particularly small lots in residential
areas.” But then Kohler breaks ranks and plunges a dagger into the heart
yimbyism itself:
In fact, let’s face it, significantly increasing the
density of housing within 10 to 30 kilometres of Australia’s CBDs – which is
what is required – is going to be difficult, if not impossible … and the
“efficient and equitable consolidation of urban blocks”, as the YIMBYs put it,
is a lot easier said than done.
Kohler elaborates that if
heritage protections aren’t enough of an obstacle, homeowners can’t be relied
on to sell their properties in a synchronised pattern and landowners have their
own self-interested timetables for developing valuable sites. Then he does more
than just repudiate yimbyism. His ultimate solution to Australia’s affordability
problem is, effectively, to embrace the polar opposite. Kohler turns to suburbanisation,
which yimbys and urbanists reflexively damn as sprawl:
What’s needed is decentralisation of housing but not
necessarily of employment, and that requires fast, efficient commuting trains
that allow dormitory suburbs to be developed further from the CBD. That would
dramatically increase the supply of “well-located” land as the government’s
housing policy describes it, without pushing against the natural barriers
against medium-density housing closer to the city. In a way, the effort to
squeeze more housing into a 50-kilometre radius from the CBD is really just an
effort to avoid the cost of infrastructure. The trouble is it won’t work. All
the talk about a lot more medium-density housing is just that − talk. It will
never actually happen.
In parts of the book a
distinction emerges between Kohler’s views and the yimby position on whether
the location of new housing supply matters for the purposes of improving
affordability. For most yimbys supply has positive flow-on effects regardless
of location. Even development concentrated in the high-priced metropolitan core
will improve affordability across the city. On one level Kohler appears to think
likewise and only shifts to suburbanisation because there are insurmountable
physical barriers to supply in established urban areas. But on another level,
he clearly acknowledges that peripheral housing is intrinsically more
affordable. He refers in passing to “a country town where the houses are cheap”
and uses the distance angle to demonstrate the rising affordability problem in
cities:
So that’s another, more real, way to express what
happened to housing in Australia. In ten years, the multiple of the average
wage needed to buy an ordinary little three-bedroom house in Box Hill [a suburb
16 kilometres east of Melbourne CBD] has almost doubled. Another way to express
this is: to get a three-bedroom family home now, if that couple who bought 35
Foch Street, Box Hill South in 2012 are still earning 2.6 times average weekly
earnings, they would need to be looking another 10 kilometres away from the CBD
…
Sydney is much worse, of course. To get a
three-bedroom family home there, you’re looking in, say, Yagoona, 10 kilometres
further out again … For a place that’s the same distance from Sydney’s CBD as
[Box Hill] is from Melbourne CBD, you’re up for a million dollars more.
Later he is more
explicit: “The essence of the problem of affordability is location. Land that’s
further than 50 kilometres from the city [CBD] is cheap ...” To some extent
this informs his belief that “the commuting radius needs to extend to 100 to
200 kilometres.” Kohler engages with an axiomatic truth which the gyrations of yimby
thinking are calibrated to deny, that cheaper housing is built on cheaper land,
or land generating lower locational rent.
One thing Kohler does
share with yimbys is an anachronistic mental-image of our urban regions and
their economic structure. As strange as it may seem, he persistently assumes
that most jobs are confined to CBDs. He claims that
The other important element of Australia’s extreme
urbanisation is that our cities have only one CBD … That means they work as
hubs and spokes, and the further from the city [CBD] you live, the lower the
quality of life and the lower the price of land … on the whole Australian
cities are focused on the 3 or 4 square kilometres in the middle.
This accounts for Kohler’s
ultimate solution of a “high-speed rail network” linking CBDs to new suburbs up
to 100 to 200 kilometres away, “a very big investment in trains designed to at
least double, preferably triple, the commutable distance from the capital cities
and industrial inner suburbs where people work [emphasis added].” “Yes,
it would be expensive”, he writes, “but every other solution looks too hard, no
matter what the cost.” What we need are “trains, fast ones, lots of them,
radiating from the CBDs.”
The book doesn’t cite
any statistical evidence to support this idea that our cities are still so monocentric
and it bears little relationship to reality, particularly in the case of
Sydney. Kohler isn’t alone on this score. Reporters on urban issues in the
mainstream media commonly cling to the myth that everyone works in the CBD and
outer suburban residents are “far from jobs”. As long ago as 2010, however, the
NSW Government’s Long-Term Public Transport Plan for Sydney reported
that of the 37.1 per cent of Sydney’s jobs located in 33 supposed ‘centres’
dispersed widely across metropolitan Sydney, none of these ‘centres’ hosted
more than 2 per cent of total jobs part from the legacy CBD with 12 percent and
South Sydney with 2.5 per cent. The other 62.9 per cent of Sydney’s jobs were not
in any ‘centre’ at all, scattered randomly throughout the Greater Metropolitan
Region.
 |
| Table from Long-Term Public Transport Plan for Sydney, page 140 |
The same picture emerges from a report published by Marion Terrill and Hugh Batrouney of the Grattan Institute eight years later, Remarkably adaptive: Australian cities in a time of growth (2018). They write that “many people assume Australia’s major cities are mono-centric … with the majority of workers converging on the CBD for work … But the reality is that the CBD in most Australian cities contains around 15 per cent of the city’s workforce.” Echoing the Long-Term Public Transport Plan, they explain that
Beyond the quarter of jobs in
CBDs and other employment centres are the three quarters of jobs that
are dispersed all over the city … In Sydney, 15 of the 20 biggest suburbs for
employment each contain just 0.8 per cent to 1.4 per cent of the city’s total
workforce [emphasis added].
Terrill and Batrouney explain that in Sydney and Melbourne
“the centre of intense economic activity is expanding outwards” and “jobs are
becoming more dispersed” while “many of the areas of fastest growth are outer
suburban areas.” They feel “the geographic dispersion of jobs and jobs growth
has been a crucial mechanism by which Australia’s cities have adapted to
population growth.” More recently, this process was probably accelerated by the
pandemic.
Just this year, the
Australian Bureau of Statistics Index of Household Advantage and Disadvantage
(IHAD) indicated that the most advantaged area of Sydney on criteria like
household income, home size, ownership status, educational attainment,
occupational skill level, vehicle ownership, employment status, volunteering
and family stability was “not where you think”, as the Sydney Morning Herald
put it. The Index rated Schofields West-Colebee as the most advantaged part of
Sydney, 45 kilometres north-west of the legacy CBD. As journalist Matt Wade
points out, “Norwest Business Park, adjacent to the M7 [motorway] and 36
kilometres by road north-west of the CBD, has also emerged as an economic hub …
ready access to knowledge-based jobs at Macquarie Park, and to a lesser extent
Norwest Business Park, has played a pivotal role in the success of the
northwest.”
Norwest and Macquarie
are amongst the largest nodes in a wide network of business parks, industrial
estates, logistics parks, science parks and intermodal terminals stretching
across western Sydney, including Bradfield City Centre ‘aerotropolis’, a
mixed-commercial-industrial precinct adjacent to the soon to be opened Western
Sydney International Airport, 56 kilometres west of the CBD. These scattered
hubs perform functions in a disaggregated form which were once concentrated in
the legacy CBD under the old dispensation, when Sydney’s rail and road system
converged on maritime wharf and storage facilities around the Port of Sydney.
Since dispersed hubs now represent the focus of work and social life for an
expansive portion of the metropolitan population, widening of the commuting
radius as envisaged by Kohler can more easily be achieved by incremental
extensions to the existing arterial road, motorway and rail system, without resort
to budget busting high-speed trains.
But that’s not the end of the story. Just weeks after the release of his book Kohler did an about face. In an article appearing in The New Daily on 24 October 2024, Kohler announced abruptly that “in my recent Quarterly Essay (The Great Divide), I concluded that the solution to more housing supply must be fast trains to regional areas to open up more land for subdivision further out. But I have to admit that’s unrealistic as well: It’s too expensive.” He then falls back on a more typical yimby position which he considers feasible under a reformed tax regime. This barely explained retraction is less than convincing for anyone who followed the meticulously constructed argument documented at length in the book. It may be that Kohler’s embrace of sprawl earned him the mother of all backlashes from yimbys in his social circle, but that is speculation. In any event, his claim that the benefits of decentralisation depend on a distinct high-speed train network is a false premise.
John Muscat is editor of The New City
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