Sunday, February 12, 2006

They're here to help you (oh yeah)

One of the great lessons of life is to be sceptical of things and people that claim to know what is best for you and seek to force you to do it.

This applies in spades to the new urban planning elites that are increasingly controlling and undermining our lives and businesses.

While their stated aims may sound good, their approach is deeply flawed.

Take the example of the recent redevelopment of Essendon airport.  In the late 1990s the Federal Government decided to sell Essendon, along with most other airports around the country.

While Essendon was to remain a functioning airport, use of it would have been small-scale, providing scope to divert a substantial amount of land in a rapidly growing area to other purposes.

Being a Commonwealth entity, the airport was exempt from state and local government planning laws and specifically from the tentacles of Melbourne 2030.  In pursuit of a higher price and good policy, the Government sold the property with the exemption largely intact.

Under Melbourne 2030, retail activity is to be increasingly concentrated in a limited number of existing large centres.  This is reinforced by existing planning laws which require new retail developments to prove they will not have a deleterious impact on existing retail centres in their region -- in other words, they will not compete with existing centres.

The planning laws also require that new centres provide the same level and character of public amenity and access as existing facilities, irrespective of their clients' desires and nature.

As such, planning laws have greatly reduced the scope for expansion of retail infrastructure and handed monopoly development rights to shopping centre owners.

It is little wonder that a disproportionate number of Australia's super-rich have become so through property development, protected by the planning system.

The laws have also reduced the scope for new forms of shopping such as factory outlets and bulky goods centres.

These types of retail outlet place a higher premium on car transport than existing centres and planners.  It is, after all, hard to bring a dishwasher, a lathe or 20 boxes of shoes home on the tram.

They also aim to provide a low-cost, single-purpose experience rather than the high-cost, all-things-to-everyone environment forced on shopping centres.

Not surprisingly, the purchaser of Essendon airport paid a premium for the property and announced its intention to redevelop the site as a large retail centre, starting with a 120-store, Direct Factory Outlet centre.

Again, not surprisingly, the owners and financiers of existing shopping centres were furious and pursued legal actions to stop the development.

The development undermined the monopoly powers they had obtained and the profit that flowed from them.

The State Government and its planners also resisted the decision, as they undermined the ability to extract their own share of the excess prices stemming from the protection of existing centres, as well as their control over people's actions and lifestyle.

The centre opened last October and has been a huge success.  It has offered a new low-cost shopping experience.  It has forced competition on to existing retail outlets;  fits into the city transport system;  and has provided new jobs for hundreds, and catered to thousands, of happy consumers.

If left up to the planners, all this would have been denied.  Existing shopping centre owners would be the winners.  Consumers would be the losers.


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