Urban locational efficiency: long term energy and affordability implications of residential location decisions

Abstract

Planning in the advanced economies of the US and Australia has demonstrated a continued separation of urban functions in the post-war period, taking advantage of cheaper land on the outskirts of urban areas and increasing dependency on the motor car. While the threats of climate change and peak oil have increasing drawn attention to, and criticism of, current modes and paradigms of development, the policy debate remains shaped by perceived trade-offs in locational efficiency through the supply of lower cost land (and therefore housing) on the outer urban periphery, remote from key employment centres. Australian cities are highly car dependent as a result of this history, with approximately 80 per cent of trips taken by private automobile. There is some evidence that insufficient public transport, unfavourable accessibility and long distances are accepted by households who attain other advantages in return: quiet location, low price of land, pleasant neighbourhood. Current trends suggest that households choose their housing location and consumption bundle to maximize their utility. However, extensive building on the urban fringe not only consumes precious land resources, for example, but is largely responsible for high costs of infrastructure and energy, the congestion of transport networks and degradation of the environment. Over medium term timescales, spread-out cities are also more vulnerable than compact cities when confronted with an abrupt increase in their transportation costs. This pattern of development therefore has implications in terms of wider social and economic costs resulting from perceived trade- offs, and for the future security of households who may be highly vulnerable to future energy price rises.