No Rush to Reform in Melbourne

Will the success of the real-estate market endanger smart growth in the suburbs? Outside Australia's city of Melbourne, politicians are siding with developers against the growth management group Melbourne 2030, according to a recent article in The Age, an Australian national newspaper. The capital of Victoria, Melbourne is Australia's second largest city, with a population of 3.2 million that grows by some 1500 people each week. Melbourne also boasts one of the lowest density rates in the world, with less than half the density of London (11 lots per hectare versus 25, but don't ask us what a hectare is.)

The authorities in Victoria have formed a commission to deal with the city's future growth called Melbourne 2030--named for the year by which Melbourne will have added another million people. The commission's goal is to study the best way "to comfortably absorb up to 620,000 extra households ... while protecting and enhancing our existing suburbs." This entails familiar steps like restricting suburban development to 40 percent of new building (from the current 60), and promoting commercial centers in residential areas that will encourage density and discourage the use of cars.

The usual objection to this sort of planning is that Australians--every bit as bent on upward mobility as Americans--won't give up their dream of owning their slice of the homeland and be shoved into apartments. And no less of an Ausssie icon than actor and Melbourne burber Geoffrey Rush (above; photo: Ken Irwin) has joined the opposition group Save Our Suburbs in protesting suburban high-rises. (S.O.S. has proposed that Melbourne 2030 leave posh burbs east of the city alone and direct its do-gooderism to the newer towns to the west.)

But local planning experts say the bigger threat to Melbourne 2030's plans is that politicians have become spoiled by unbridled growth. "The Government’s primary objective is to keep the building industry going because it’s essential to the Victorian economy," observes Bob Birrell, Monash University’s Centre for Population and Urban Research.

Bear this dynamic in mind as the U.S. housing market comes back from the dead in the next few months: its arguable that the building boom here forestalled for nearly two years the downturn we're experiencing now.