Using economics to improve urban planning

Urban economics can help transform the way local councils approach planning proposals, enabling them to take into consideration economic assessments and leading to better decision making, an expert says.

Duane Cole, Perth Director of RobertsDay, an urban planning and design practice, says it is important to take rate-revenue generation into account.

Mr Cole and his team, together with urban economics firm Urban3, used a data analytics tool to collect this information for the City of Melville in Western Australia.

The tool uses a rate-per-hectare analysis metric, which allowed the council to compare different patterns of urban development to determine what that means for rate-revenue generation, Mr Cole said.

Duane Cole

“What this tool enabled (the council) to do is to consider various design options for any particular project to understand which one might produce the optimum results for them for rate-revenue generation,” Mr Cole told Government News.

By using this tool, Council was able to review the performance of planning interventions over time to determine if it was meeting targets and allowing it to make adjustments if needed to improve the outcome, Mr Cole said.

“The tool enabled them to understand forward projections of rate revenue into the years to come that previously (they) haven’t understood as well as they could do now,” he said.

“And that meant that they could better plan to understand where they can invest their money for the community and meet community benefits and gaps that might exist.”

Comparing land uses and properties

The tool works by taking rate data from all properties concerned and converting it into a per hectare metric, which is then used to compare land uses and properties, Mr Cole said.

Once this data has been collected, a 3D model is generated to provide a geospatial illustration of the performance of land.

“So, instantaneously, you get a view of which areas are quite potent in terms of rate revenue generation and which areas perhaps could be performing better,” Mr Cole said.

Another advantage of the tool, according to Mr Cole, is that it also analyses costs on a per hectare basis.

Up until recently, economic considerations were not a primary concern for councils when making decisions on planning matters, Mr Cole said.

“This is highlighting to them that if we are being socially responsible to the next generation of our community then we should be making smarter decisions about planning matters that (benefits) the future leaders of the local government to provide for the needs of the future community,” he said.

Changing community attitudes

A barrier to the adoption of this technology is the attitude of the community, which can be resistant to change, Mr Cole said.

The community naturally feels that change is unlikely to benefit them, according to Mr Cole, and they may have seen poor development done in the past and are expecting this outcome again.

Mr Cole believes it is important to show them that good urban design practice and outcomes can be achieved, and demonstrate how these can drive additional financial benefits.

“Once we understand the fiscal benefits of good planning outcomes, we can demonstrate to the community that we can afford to provide for those facilities and services that are expected of local government, and how we can actually address the changing needs of the community into the future,” he said.

The future of urban economics is bright, Mr Cole said. “I think it will be a more prominent element of what we do as town planners… There’s a whole opportunity to really change the way we’re thinking on all aspects of what we do.”

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One thought on “Using economics to improve urban planning

  1. Sales (demand) is my councils biggest challenge in WA – the city is half developed after 10 years of listening to Urban planners – so much supply, yet no demand; there is little revenue until after development, is this factored into the model and if so, whose Research are you using for modelling urban demand drivers – hopefully no Government contracted or Development lobby groups data, that would present a conflict of interest. Perhaps that is what has gone wrong in my city 🤔 And I feel incredibly sorry for the council now who has to take it upon themselves to think outside of the box to re-brand the city as to compete for demand against all of the other urbanisation projects proceeding at full steam ahead, pushed by the State because we failed to proactively diversify the state economy further than to just rely on construction and resources.

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