Australian cities need creative destruction, says Brian Haratsis

Robert Harley
Australian Financial Review
Wednesday, 20 July 2016

Australian cities need “creative destruction, not constipated construction”, says forecaster Brian Haratsis.

​Haratsis, an economist, and the founder and executive chairman national property research consultancy MacroPlan Dimasi, has built a career on his ideas for cities, regions and planning.

In his latest book, Destructive Cities, to be launched on Thursday, he calls for a radical new way of city-making to suit the disruptive new economy.

“Australian cities need to evolve from ‘nanny state’ place-making policy frameworks.” he writes.

“We need a new city model, not more regulation of inner and middle ring areas.

“Spatial planning frameworks need to accommodate rather than regulate change.”

But Haratsis goes beyond the old arguments about cutting red tape. There is a reason to change.

“Global servicisation is a key driver of structural change in the Australian economy and Australian city building is a key to Australia’s services sector competitiveness,” he writes.

“The global services boom can deliver significant economic deepening and productivity growth, if correctly pursued.”

At the moment the opportunities are restricted by restrictive city planning, high infrastructure costs, high business accommodation charges, and very high house prices.

“In Australia, city building has a long-run average cost increasing function. To participate in the global services boom, this production function needs to alter to a reducing long-run average cost outcome, hence the requirement for destructive/regenerative cities to reduce housing, transportation and business rental costs,” he writes.

“Continuous regeneration should be the essence of modern city building and the basic principle driving new strategic and statutory planning regimes.”

Haratis does not present some futuristic vision of the of the city. “The destructive cities approach focuses on city building processes rather than imaginary visions of the future,” he writes.

Nevertheless, Haratsis has plenty of ideas about how the cities will change.

He is a believer in value capture and would go further. What about easy urban renewal options for groups of land owners? Or automatic land rezoning if the resulting homes are to be sold 35 per cent below market? Or automatic density bonuses for homes to be sold for retirement, welfare or the disabled.

He forsees “transformational” uses evolving. They include “dark stores” where consumers pick up but do not shop, major car parks for shared vehicles, inner urban warehouses for “last kilometre” on-line delivery, pre-designed apartments for short and long term rental, new accommodation for millennials, and new structures to accommodate automated vehicles.

The approach to retailing planning also has to change. “Traditional retailing is in transition so retail floor space controls also need to change.” he writes.

The long-running Sydney-Melbourne rivalry should also end. For Haratisis, it’s over. In a global world, the two cities should complement each other.

Many city planners are now using big data. For Haratsis, they are using it for the wrong reason. It should be used not to control cities but “to create the conditions for innovation and equitably distributed opportunity.”

Nevertheless, Haratsis can see the opportunities in big data. It can help answer questions such as, What type of city maximises innovation or employment? Or what type of city minimises house prices and the cost of living?

“There is an urgent need to combine technology with deregulation to recreate the seed beds of innovation and smaller-scale investment that was previously to be found in Australian inner cities but which have now been gentrified,” he writes.

Haratsis’s firm, Macroplan Dimasi, has been generating ideas for 30 years and now has more than 100 staff who specialise in some of the new service sectors, such as retail, residential, health, retirement and tourism. Now he has to put those ideas into practice.

Read more: http://www.afr.com/real-estate/australian-cities-need-creative-destruction-says-brian-haratsis-20160719-gq9df7#ixzz4EzuEZOci
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