Urban renewal governance in Australia needs reform

A distinct shift in the governance arrangements for urban renewal projects took place in Australia from the mid-1980s, reflecting the broader ascendancy of neoliberalism. Whereas urban renewal had previously been the province of statutory authorities with close Ministerial surveillance and direction, major projects, such as the Melbourne Docklands, were put in the hands of arm’s length, government-owned businesses holding a strict commercial mandate in conjunction with their public policy mission.

These reforms were consistent with the then (and continuing) dominant practice of separating the roles of ‘funder’, ‘purchaser’ and ‘provider’ in the delivery of community services and infrastructure. The expectation was that this separation would foster a sharper definition of government objectives and more efficient and innovative methods of achieving these objectives by harnessing private sector disciplines.

This paper explores the extent to which these commercial disciplines have, indeed, fulfilled their promise. This includes a discussion of how commercialised urban renewal authorities have balanced their obligations to deliver financial returns on the one hand and create community value by way of quality public realm, affordable housing and inclusive community facilities on the other.

A case study of Melbourne Docklands and a contrasting example in Hamburg’s HafenCity are used to develop the themes of the paper.

Governance reform

The paper contends that the tensions between these objectives are typically resolved in favour of financial outcomes, leaving the host community with a compromised urban renewal legacy. It proposes reforms in governance arrangements for urban renewal to mitigate this adverse tendency.

Firstly, there is a need to rebalance the objectives, general powers and duties of urban renewal authorities in favour of community outcomes rather than financial returns. Performance criteria should closely align and be specific about the returns to the community.

Secondly, and related to the previous, is the need to more carefully define and detail the outcomes that are sought. For instance, the need for granularity and mix of uses is very important in terms of urban form and quality public realm. Strong requirements for the inclusion and integration of social and affordable housing into the development is key to delivering sustainable urban communities.

Thirdly, there should be clear and binding involvement of the community in defining outcomes and urban design.

Lastly, the Authority needs some level of control to ensure agreed outcomes are indeed delivered.

Under these mitigating measures, the separation of roles ‘funder’, ‘purchaser’ and ‘provider’ would continue to exist, but with a keen awareness of the profit maximisation objectives of developers, and the need for control over the delivery of outcomes.