Infrastructure – conceptually simple, devilishly tricky

One of the major bugbears in the development and quality of cities of recent times is how to pay for infrastructure – for transport, comunity uses and open space, water, waste disposal, energy etc. And there has been a big push in most Australian states to reduce infrastructure charges on development. Governments have been listening to this push, and trying to do something about it. As the process plays out, local government is starting to push back, as this clip from a local news shows.

Here’s why, and a suggestion about a new approach.

Planning for Infrastructure

Although there is a lot of work and detail involved in planning, funding and delivering infrastructure, it is typically in essence a four step process:

1. Work out your planned future development for your city.
2. Adopt levels of service for the infrastructure required.
3. Work out what infrastructure is needed for this development.
4. Work out the cost of this and how to pay for it!

The big challenge presently is typically the last step – how to, and who, pays for it. Again, this is conceptually simple. Either the user pays, so that new development pays the cost of the infrastructure it requires or its share of the cost for big system items (through an infrastructure charge of some sort levied at the time of development) or the community generally pays (from rates or more general taxes) or some combination of these.

But of course, doing each of these steps separately is a lot of the reason why it has progressively got harder to fund infrastructure. The tail might be wagging the dog.

There’s a catch, right?

There sure is. Most communities throughout the western world are struggling to pay for infrastructure and are facing growing backlogs as their lack of funding sources causes under provision of infrastructure and reduced maintenance of existing infrastructure. The result is that we are always playing catchup, and never getting there.

And for various reasons, traditional funding sources are under pressure too, as communities push back against increasing taxes making this option politically unpalatable and the development industry continues to push back about the impacts of user pays charges on viability of their projects and their impacts on their vital role in providing new housing and the other services communities need. More often, private sector money is sought, through public-private partnerships. Of course these are not always winners, as Brisbane’s recent experience has shown.

There must be another way

I reckon there is. It’s about thinking again about planning for our city development, how we use our existing infrastructure, the concept of levels of service, and making more efficient use of the land already in use for infrastructure.

Planning for infrastructure and development together

This is about planning for infrastructure and land use together, rather than separately as often happens. It might seem obvious, but isn’t standard practice. Land use pattern options can be identified, then assessed against both the planning and infrastructure implications (and costs). This can then be done iteratively, for example, by testing different future development scenarios to find the least cost path for infrastructure.

In my experience, it is amazing how often planners do the planning with only very basic infrastructure analysis, and the other professionals responsible for  infrastructure provision, don’t engage fully in this process (often because they have other priorities from pressing day to day responsibilities) and instead just do their best to cost the infrastructure needed to support the pattern of development that has been worked up on a “planning only” basis. Then the bean counters have to try to work out how on earth to pay for it all!

But infrastructure is lumpy. Different greenfield growth paths can have significantly different cost structures, while in existing urban areas, some places will have spare capacity across a range of infrastructure and others will require major upgrading. Understanding these complexities to inform planning strategies is both a sensible idea and good planning. And the more development fronts a community has, the harder it gets to fund duplication of the big lumps needed for each one – a classic case of spreading things too thinly.

More efficient use of infrastructure 

Most places in the western world have gone along for the ride on a dispersed pattern of development (often pejoratively referred to as sprawl), which is expensive to service with infrastructure, because it is low density and involves longer distances of infrastructure (more pipes, bitumen etc!) and spreading the cost of this over a smaller number than previous traditional city forms. While it can be patchy, much of the infrastructure already provided for the older parts of the city end up under-utilised, while we continue to stretch new infrastructure further afield. I’d be pretty sure most places with this form and development have been subsidising their dispersed pattern of development from their broader revenue base too, which ultimately puts more squeeze on funding sources. As an aside, these patterns of growth are founded on assumptions of cheap energy and land, which I reckon are under challenge now.

So really understanding the implications of matching planned growth with infrastructure costings, where the spare capacity is and adopting more efficient patterns of development, would be a good start.

Thee is more to be said about the role of the approach of levels of service – like whether it is a good idea to strive to keep car traffic moving at a certain speed, but I’ll leave that for another day.

Greg Vann
February 2014

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