emmanuel_smith_final

How planning can better encourage economic and socioeconomic diversity in global Sydney

GLOBAL SYDNEY:A RACE TO THE SAME

Emmanuel Smith3347531Bachelor of Planning Thesis

Australian School of Architecture + DesignUniversity of NSW

October 2015

EmmanuelSmith3347531 Acknowledgments

Thank you to everyone who helped me get over the finish-line. I would especially like to thank my fantastic family, Hanish, Maria, Zara, Arahia, Jacqueline and Rocket: You have been my inspiration over the last four years, thank you for be-ing there and putting up with me.

A special thank you also to Philip Graus my supervisor, for his honest critiquing and for also sharing his expansive knowledge and expertise in all things urban.

Thank you also to Bridge Housing, I could not have asked for a better employer during my time at UNSW. Finally, thank you to all the wonderful staff at UNSW, especially Christine Steinmetz, for guiding me through the last five years of my life.

I.

Acknowledgments....................................................................................Table of Contents........................................................................................List of Figures and Tables...........................................................................Acronyms....................................................................................................Abstract......................................................................................................

1.0 Introduction.......................................................................................... 1.1 Problem Setting.................................................................................... 1.2 Research Statement and Objectives.................................................... 1.3 Conceptual Context.............................................................................. 1.4 Scope and Limitations.......................................................................... 1.5 Research Methodology......................................................................... 1.6 Thesis Structure...................................................................................

2.0 Literature Review................................................................................. 2.1 Globalisation and the City.................................................................... 2.2 Power in the City.................................................................................. 2.3 Competitiveness in the City................................................................. 2.4 Sydney as a global city........................................................................ 2.5 Economic and Socioeconomic Diversity..............................................2.6 Conclusion............................................................................................

3.0 A Snapshot of Global Sydney............................................................... 3.1 What is a global city............................................................................. 3.2 Global Sydney...................................................................................... 3.3 The City of Sydney............................................................................... 3.4 Conclusion............................................................................................

4.0 The Importance of Diversity in Global Sydney..................................... 4.1 Diversity for Resilience......................................................................... 4.2 Diversity for Innovation......................................................................... 4.3 Diversity for Access to Opportunities...................................................4.4 Conclusion............................................................................................

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II.EmmanuelSmith3347531 Contents

5.0 Governance and Diversity................................................................... 5.1 Governance in Global Sydney............................................................. 5.2 Planning Governance.......................................................................... 5.3 The Metropolitan Strategy...................................................................5.4 LEPs and SEPPs.................................................................................5.5 Planning for Acquisitions, Regulation and Persuasion........................5.6 Sustainable Sydney 2030...................................................................5.7 Conclusion...........................................................................................

6.0 Findings and Discussion..................................................................... 6.1 Homogenisation of Global Sydney...................................................... 6.2 Spatial Competition.............................................................................. 6.3 Governance in Global Sydney.............................................................6.4 Planning Instruments that Encourage Diversity...................................

7.0 Conclusion and Recommendations..................................................... 7.1 Conclusion...........................................................................................7.2 Research Findings...............................................................................

Reference List...........................................................................................Appendix A: Project Information Statement............................................... Appendix B: Project Consent Form...........................................................

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EmmanuelSmith3347531 Figures and Tables

Figures Figure 1: Hybridised Cityscapes and the Gradient of Homogeneity....................Figure 2: The Destruction of Diversity from Internal and External Forces........ Figure 3: Literature Review Structure..............................................................Figure 4: PwC Cities of Opportunities 6: 2015 City Index...................................Figure 5: A Plan for Growing Sydney (Figure 2)..............................................Figure 6: The City of Sydney Local Government Area.....................................Figure 7: 2007 Percentage of Total Business (COS).......................................Figure 8: 2012 Percentage of Total Business (COS).......................................Figure 9: Population Growth in the CoS to 2036..............................................Figure 10: Dwelling Growth in the CoS to 2036...............................................Figure 11: Individual Income Quartiles 2011....................................................Figure 12: Startup Lifecycle and the Built Environment....................................Figure 13: Disadvantage across Sydney Metropolitan Region.........................Figure 14: Conditions that Support Homogenised Cities..................................

Tables Table 1: Factors of Economic Diversity............................................................Table 2: Income Quartiles................................................................................Table 3: Educational Levels.............................................................................Table 4: In-depth Interview Justification...........................................................Table 5: Common approaches to understanding economic development.......Table 6: Age Ranges in the CoS and Greater Sydney.....................................Table 7: Median Rental Prices for Inner Ring Suburbs and Greater Sydney...Table 8: Median Sale Prices for Inner Ring Suburbs and Greater Sydney......Table 9: NSW 2021 Goals for Planning and Environment................................Table 10: Land Use Zones in the City of Sydney..............................................Table 11: State Environmental Planning Policies for Diversity..........................Table 12: Sustainable Sydney 2030 for Diversity.............................................

City Spotlights Spotlight 1: Detroit, Michigan – A Template for Urban Decay...........................Spotlight 2: Denver, Colorado – A Template for Progressive City Policy........

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EmmanuelSmith3347531 Acronyms V.

Acronyms ABS.................................CBD................................ CoS.................................DCP................................. FES.................................GDP................................IPART..............................ILGRP.............................LEP.................................LGA................................. SEPP...............................

Australian Bureau of StatisticsCentral Business District City of Sydney Development Control PlanFloor Space and Employment SurveyGross Domestic ProductIndependent Pricing and Regulatory TribunalIndependent Local Government Review PanelLocal Environment Plan Local Government Area State Environmental Planning Policy

EmmanuelSmith3347531 Abstract

GLOBAL SYDNEY: A RACE TO THE SAMEHow planning can better contribute to an economically and socioeconomically diverse global Sydney

With the proliferation of globalisation, the rate at which capital, people and ideas are exchanged is unprecedented. These transactions are most pronounced within the western construct of global cities that compete with each other to attract unfettered hyper-mobile capital. This pursuit of capital has encouraged the specialisation of high value industries and people, resulting in the homogeni-sation of cityscapes and impacting on economic and socioeconomic diversity. Service industries currently account for over 90% of the City of Sydney’s total economic output, with financial firms accounting for half of that amount alone. Sydney is at risk of further homogenisation resulting in decreased economic resilience, stultifying innovation and reducing access to opportunities. The aim of this thesis is to investigate the role of planning in encouraging economic and socioeconomic diversity throughout the city. Empirically, this research includes a series of in-depth interviews which sought to juxtapose perspectives from government, business, academia and community experts, against statutory and strategic planning controls. The outcomes of this research suggest changes are needed in terms of how planning interacts with the spatial economy of the city. Understanding the value planning can contribute to global Sydney’s diversity is crucial to the city’s sustainability and future within the global city hierarchy.

“The pursuit of capital has encouraged the specialisation of high value industries and people, resulting in the homogenisation of cityscapes and impacting on economic and socioeconomic diversity.”

VI.

EmmanuelSmith3347531 8Introduction

“Cities have the potential to make us more complex human beings. A city is a place where people can learn to live with strangers, to enter into the experiences and interests of unfamil-iar lives. Sameness stultifies the mind; diversity stimulates and expands it” Sennett (2001)

Cities have been natural generators of diversity. They are places that support a variety of business-es and people who come together to create, share ideas and interact. This is especially the case for large cities like Sydney. Diverse cities provide the right conditions for the social mobility required to build creative, equal and civil societies. But now, under current conditions and a ‘business as usual’ approach to city growth the diversity that makes Sydney a unique and interesting place is at risk of disappearing, in favour of becoming a city that is primarily concerned with its place within the global city hierarchy. The intention of this thesis is to explore how planning can better contribute to an economically and socioeconomically diverse global Sydney. This chapter aims to introduce this research by providing context to the thesis argument, presenting the thesis statement and research objectives, setting out the conceptual framework and scope and limitations of this research, explain-ing the methodology used to develop this research, and finally to frame the structure of this thesis. 1.1. Problem Setting Globalisation has had a transformational effect on the way western cities operate. An intensified global interconnectedness from the advancement in technology and communication, and increased flows of trade and capital has formed a new economic world order (Hirst & Thompson 2003). Gov-ernments eager to capture the significant wealth created through international networks have po-sitioned their cities as catalysts in an attempt to attract hyper-mobile global capital (Sassen 2006). This has given rise to ‘global cities’, a term that is used to describe the cities that are at the apex of the relationship between location and the matrix of international capital. These cities form a global hierarchy of urban centers that control the flow of international capital. To do this successfully, global cities use their competitive advantages to attract foreign investment, influence the locational deci-sions of multi-national firms and the talented and educated transnational classes and to increase their visitor economies. Due to the nature of this global economic system, governments engage competitive policies in order to increase the advantages they have over other countries and cities (which are explained further in Chapter Five). In cities this is often played out spatially through competitive urban policies and strategies used to inform land use and strategic planning decisions (Thornley 1999). This leads to spatial elements of the city being created and redeveloped to suit the needs of a particular economic or social group. Ironically, the focus on competitive urban policies have caused analogous cities within the global city network where the ‘marketing of place’ has un-dermined local uniqueness and diversity, and planning decisions are made to attract to multinational corporations and high value activities and the stereotyped needs of social groups with highly dispos-able incomes (OECD 2010).

EmmanuelSmith3347531 9

As illustrated in Figure 1, factors associated with globalisation combine with local and cultural fac-tors within cities to create a hybridised environment in terms of culture, the economy, the built form and politics (Guinness 2011). Academics describe this phenomenon as city homogenisation, where the difference between and within cities reduce, impact-ing on the capacity of cities to provide spaces for a diverse range of economic and social groups. The scale of city homogenisation is usually most intense within the Central Business Districts of cities and diminishes towards the periphery of the city (Guin-ness 2011). This also correlates with the value of land also being highest within the city centre and diminishing towards the periphery, indicating a rela-tionship between spatial competition and city homo-geneity.

As one of the region’s most prosperous global cities, Sydney is no exception to the significant wealth created from globalisation. Sydney’s particular competitive advantages include its natural attributes, such as climate, beaches and access to the natural environment, its locational advantages in terms of its proximity to Asian markets and its burgeoning tourist market, and its strong agglomeration of advanced producer firms principally made up of financial and insurance industries (PWC 2010; CoS 2014; Department of Industries 2015). Competitive urban policies designed to build on these ad-vantages are used by both the NSW State Government and the City of Sydney Local Government through metropolitan and local strategies, and are also embedded within the statutory planning framework. Current and previous governments have responded to the potential economic oppor-tunities presented to cities by globalisation with plans that reflect the dynamic and opportunistic nature of the global economy. There is currently nearly 50 billion dollars worth of state significant infrastructure projects within the NSW planning system pipeline aimed improving Sydney’s global credentials, including the Western Sydney Airport, Sydney Metro Chatswood to Bankstown line, the Westconnex, Darling Harbour redevelopment, Barangaroo, Crown Sydney Casino, the Light Rail line, and the NSW Stadium upgrades (Clennell 2015). Successive competitive urban policies have positioned the Sydney CBD as the prime location in Australia to conduct business and have creat-ed an economic agglomeration that specialises in finance and financial services. In 2012, Finance and financial services and professional and business services made up just under 25% of the total number of businesses and accounted for 40% of all employment with in the City of Sydney (FES 2012). The services industries in the CoS account for 90% of the total economic output for the local government area (City of Sydney 2015). In addition, retail chains and high-end food and beverage businesses cater for the highly paid workforce based with in the city centre. This group of interde-pendent businesses are reliant on the fortunes of global economic conditions and market volatility.

Introduction

Globalisation Local Factors

Hybridised Cityscapes

Gradient of Homogeneity

Figure 1. Hybridised Cityscapes and the Gradient of Ho-mogeneity (Adapted from Guinness 2011)


An unintended consequence of this agglomeration is the intense spatial competition now acting out within the CBD. However, external global forces are not the only factor that inhibits economic and socioeconomic diversity and encourages economic specialisation within a city system. Spatial competition within cities is also caused by what Jacobs (1961) has termed the ‘self destruction of diversity’. Jacobs (1961) argued that outstanding success within cities has a tendency to destroy itself. The author argues that a place that represents a diverse mix of uses flourishes and becomes popular. Competition for space then occurs and the winners represent a narrow version of the many original uses, with the most profitable uses within the area repeated, continuing to crowd out the less profitable uses. Additionally, residents that are attracted to the flourishing and interesting diver-sity also form a narrow segment of the population due to the same spatial competitiveness, except within a residential context. Jacobs states “In creating city success, we human beings have created marvels, but we left out feedback. What can we do with cities to make up for this omission?” The thesis argues that spatial competitiveness in global Sydney impacts economic and socioeconomic diversity by two means: Firstly by the successfulness of being a global city and secondly from the successfulness of diversity itself, as illustrated in Figure 2, and aims to investigate the ‘feedback’ Jacobs describes needed to ensure city diversity through planning frameworks.

A diversified mixture of uses creating a flourishing and

magnetic cityscape causes an increase in popularity and demand. High income resi-

dents attracted to area

Most profitable uses emerge in locality and are repeated, crowding out the less prof-itable, spatial competition

intensifies between economic uses and residents

Winners in spatial compe-tition represent a narrow

segment of original economic and social composition

Internal Forces

External Forces

Competitive Urban Policy

Competitive Urban Policy that Considers diversity

Figure 2. The Destruction of Diversity from Internal and External Forces (Adapted from Jacobs 1961)


In addition to market volatility, this thesis also argues that a diverse economy is critical in terms of encouraging innovation and providing a greater range of opportunities to different socioeconomic groups. Florida (2011) contends that regions that promote diversity adapt better to new ideas, innovation and technologies in contrast to less diverse places. Using planning mechanisms and the built environment to encourage innovation is essential in setting the right conditions to assist start-ups and other ventures to grow. The technology start-up industry has been identified as major growth area in the global economy, and Brule (2015) suggests that for a global city to be truly diverse and unique conditions must be in place to assist new and innovative enterprises and independent ventures to prosper. Although a diverse economy needs an equally diverse population to sustain it, a specialised economy is also dependent on lower value industries and socioeconomic groups to contribute towards a functioning and cohesive city. However, with increased spatial competition, many businesses and people find property values to be prohibitive, and are displaced into other parts of the city. This research aims to explore these problems and identify the role planning has in ensuring a resilient, innovate and equitable city.

1.2 Research Statement and ObjectivesThe purpose of this thesis is to provide understanding as to what role planning has in creating conditions that encourage economic and socioeconomic diversity at a macro city-level. Strategic planning documents, such as ‘A Plan for Growing Sydney (2014)’, outline strategic aims to improve Sydney’s global standing with an emphasis on growing international competitiveness, however little consideration is given to growing economic and socioeconomic diversity within the city also. The central research statement for this thesis is:

► How planning can better contribute to an economically and socioeconomically diverse Global Sydney

The following research objectives have been designed to support the central research statement, and to provide a framework to develop the methodology and structure of this thesis, and include:

+ Provide an overview of the current statistical make up within the geographical study area + Better understand the importance of economic and socioeconomic diversity and their rela-

tionship with healthy city systems + Provide analysis of the governance structure and planning framework for delivering econom-

ic and socioeconomic diversity + Provide recommendations based on research findings and expert opinions about how to

best achieve an economically and socioeconomically diverse city that could be applied to the broader Sydney metropolitan region


The research aims to uncover what is wrong with the status quo, ‘business as usual’ approach cur-rently used to govern global Sydney, and argues that a fundamental shift is needed in terms of the way conditions that enhance economic and socioeconomic diversity are delivered through planning frameworks.

1.3 Conceptual Context Maxwell (2013) frames ‘useful’ theory as an enlightening story of a particular phenomenon that in-creases understanding about what is happening and why. This thesis aims to tell a story through a conceptual framework comprising of three key theoretical assumptions, which aim to act as founda-tions to also support the research methodology and literature review, and to establish the broader thesis narrative. The three key conceptual themes of globalisation, global cities and global city gov-ernance and planning provide a model to examine the relationship between global Sydney’s pursuit of international competitiveness and the quality of economic and socioeconomic diversity through planning frameworks and built environment outcomes.

Globalisation: Since countries began trading between each other, Zukin (2010) argues that the movement and exchange of people and ideas have reduced the differences between, those countries, cities and ultimately their identities. This process has been accelerated by the proliferation of globalisation as the major contributing and transforming force of the global market place today. As such, globalisa-tion is also the driving force behind the homogenisation of cities, and especially global cities that are more exposed to international influences and conditions. Thorns (2002) contends that globalisation has had a significant impact on the homogenisation of city landscapes across the western world, reducing cultural, social and economic differences, and ultimately leads to a decreased sense of national identity, loss of culture and tradition. Global Cities: This thesis is principally informed by global cities discourse, and in particular Sydney’s position and aspirations within the global city hierarchy. Within the global city network, cities utilise their com-petitive advantages to out perform one another in order to attract foreign investment and capital, multinational corporations and their talented workforce. Due to the standard attributes a global city must have in order to compete and attract these high value activities and people, global cities are becoming increasingly similar under the influence of globalisation and urbanisation (Reuse et al. 2005, p. 279). In Sydney’s case, the primary focus is building on the agglomeration of multinational and high value firms. Although generators of significant wealth within cities, critics of multinational corporations argue that they are also responsible for enhancing political power and profits for them-selves and the ‘local elite’, while also comprising the environment, social protections and eroding the tax base (Epstein 2003). Additionally, for global cities to be successful in attracting such firms,


the right built environment conditions must be created to accommodate them and their workforce, fundamentally changing the urban and social fabric of cities.

Global City Governance and Planning: Neo-liberal governance has been the driver for internationalising political, social and economic sys-tems. Global city governance and planning frameworks within Sydney are central to the develop-ment of this thesis. Competitive urban policies and strategies developed by state and local gov-ernments, in tandem with statutory planning instruments determine the degree of diversity that can exist with the city. Within the geographical context of global Sydney this is especially important due to somewhat complex relationship by the two primary agencies governing the city, and the resulting conflict generated between them. Additionally, the role of the private sector is becoming more dom-inant as a decision influencing force within global Sydney that also shapes the city’s economic and socioeconomic mosaic.

1.4 Scope and LimitationsAs discussed previously, the gradient of homogenisation found in global cities is most pronounced within commercial intense CBD (Guinness 2011). As such this thesis will concentrate on economic and socioeconomic homogenisation affecting the City of Sydney Local Government Area. This de-cision was also informed by the focus afforded to ‘global Sydney’, created by the State Government as a geographical boundary to attract and concentrate high value activities. According to ‘A Plan for Growing Sydney’, global Sydney is a theoretical area that includes the CoS LGA and parts of the North Sydney LGA. The majority of this theoretical area is situated within the CoS LGA. The intent of this thesis is to explore how better planning can contribute to economic and socioeconomic diversity, and uses the following standards to differentiate between different economic and socioeconomic groups. King et al, (2010) outline economic diversity as a diverse range of business sizes and types and, various industries. Table 1. outlines such economic diversity appropriate to this thesis.

Table 1. Factors of Economic Diversity (Source ABS 2009; Business.gov 2015)

Small Business Non-employing businesses - sole proprietorships and partnerships without em-ployees; Micro businesses: less than 5 people, including non-employing busi-nesses; Other small businesses - 5 or more people employees, but less than 20 people;

Medium Businesses Businesses employing 20 or more people, but less than 200 people

Large Businesses Businesses employing 200 or more people

Business Types Small business, Franchise, Online business, Family business, Home-based busi-ness, Independent contractor, Importer and Exporter

Industry Types Accommodation and food services, Administrative and support services, Arts and recreation services, Construction, Financial and insurance services, Information media and telecommunications, Manufacturing, Professional, scientific and tech-nical services, Rental, hiring and real estate services, Retail and wholesale trade, Tourism, Transport, postal and warehousing


Individual Income Groups

2011 Income Ranges (NSW)

Lowest Groups $0 to $266Medium lowest $267 to $560Medium highest $561 to $1,093Highest group $1,094 and over

Qualification levelBachelor or Higher degreeAdvanced Diploma or DiplomaVocationalNo qualification

Table 2. Income Quartiles (Source: Profile I.d. 2011) Table 3. Education Level (Source: Profile I.d. 2011)

Although assumptions maybe drawn from particular economic and socioeconomic groups, the in-tention of this thesis is to argue for diversity of the groups mentioned previously. This thesis recog-nizes all types of diversity are important to a healthy city system, however due to the limitations of this research, other types of diversity will not be investigated, such as:

+ Population diversity, such as age, race, gender, sexuality or cultural background + Ideological diversity, such as different political or religious opinions or affiliations + Other diversity not mentioned within this section

Other limitations relate to this research includes time and financial cost. These restraints have had an impact on the thoroughness of this research and the ability of the researcher to employ a more complex methodology. This includes utilising a quantitative assessment on economic diversity, such as the Hachman Index, to reinforce assumptions drawn from the conceptual framework in relation to economic and socioeconomic diversity within the City of Sydney. Additionally, an increased number of in-depth interviews may have delivered stronger findings (see Methodology). Although attempts to conduct interviews with a balanced cross section of professionals were made, some expert cat-egories have been omitted from the research. Most notably, this includes expert opinion from NSW Planning and Environment.

Introduction

Socioeconomic status relates to a combination of income, occupation and education, and refers to a group or an individual (APA 2015). Socioeconomic diversity refers to the variation and range of different socioeconomic statuses within a particular area, and also refers to variation within each group. This thesis uses ABS Census of Population and Housing 2011 date to determine socioeco-nomic groups, by Income Quartiles (Table 2), Educational Levels (Table 3) and Occupation (refer to Table 1, Industry Types).


1.5 Research Methodology The methodological approach for this thesis includes the ‘between method’ triangulation of a lit-erature review, quantitative analysis of key statistical data and series of in-depth interviews. Jick (1979) suggests that the triangulation of both qualitative and quantitative methods is a good way to increase the accuracy of judgments through collecting different types of data. The methods utilised throughout this thesis have been given equal weighting in their consideration, however information yields vary in relation to specific research outcomes (Flick 2004). Mandatory ethics approval was sought and accepted by the University of New South Wales (approval number 145066), and project information statements and consent forms distributed to all interviewees (Appendix A and B). No ethical considerations need to be declared with any of the methodology utilised in this thesis.

Literature ReviewThe literature review in Chapter 2 aims to support the conceptual framework outlined earlier in this chapter, and also aims to integrate previous international and domestic research throughout the thesis narrative, identify where potential gaps are in relation to the research statement, and provide justification as to why this research is important. Various literature mediums were utilised to inform this research, including books, research journals, articles and papers, reports and media articles. The structure of the literature aims to provide a conceptual and practical insight into the research problem outlined in section 1.1. Quantitative Assessment of the City Of SydneyHistorical and current statistical information has been gathered from various sources to investigate the current status of diversity within the study areas of the CoS. The 2012 Floor Space and Em-ployment Survey (FES) conducted by the City of Sydney’s Strategy and Economic Development Unit sets the scene for the diversity of businesses operating within the council’s area at the time of data collection and occurs every five years. The census data is used to inform strategy and policy development for the council. The survey collected data from 26,988 locations with in the City of Sydney, appraising 35,285,393m2 of internal floor space. Data collected through the FES, included the building characteristics, such as use and levels, establishment data, such as business names and industries, and spatial uses such as employment counts, capacity and vacancy (NYCGP 2010). The 2012 FES report incorporates data collected from the first FES conducted in 2007 FES for comparison and derives its standards from the Australian and New Zealand Standard Industrial Classifications (ANZSIC) codes developed by the Australian Bureau of Statistics. This classification system provides a standardised framework for the classification of data relating to business and em-ployment for comparison of regions both domestically and in some cases internationally. Likewise, ABS Censuses of Population and Housing data (1991, 1996, 2001, 2006 & 2011) has been cited from the City of Sydney’s Profile I.d. account to provide a snapshot of the socioeconomic diversity


within the government area. This includes presenting data on population, income, education, occu-pation, age (for the purposes of life-cycle stage), dwelling numbers and household types. Rents and sales figures are also included from FACS (2013, 2014 & 2015) to compliment the discussion on affordability and spatial competitiveness. These statistics are compared against the greater Sydney region, as defined by the ABS (2011).

In-Depth Interviews A table of potential interviewees was developed to help to achieve a balanced representation of expertise from business, government, academia and the community. A total of 16 emails were sent to potential participants requesting an interview, with seven replies and six completed interviews. Table 4 outlines the name of the interviewee, their role and organisation and also the rationale for their participation.

Name Role and Organisation Interview Justification Dr Tim Williams Chief Executive Officer,

Committee For Sydney Williams’ experience includes many private and public sector roles, including ‘Special Advisor’ to members of the UK cabinet on urban renewal, and advising London Boroughs, the Olympic Delivery Committee and Olympic infrastructure developers during the London Olympics. Williams currently works for the Committee for Sydney, an independent think tank representing business, universities, not-for-profits, local governments and cultural, sporting and marketing bodies.

Patrick Fensh-am

Principle and Partner SGS Economics and Planning

Fensham’s has been with SGS since 1990 as an urban planner and has worked across Australia. Fensham’s expertise lies in areas such as metropolitan and strategic planning, infrastructure planning and cultural and regional economic development and feasibility projects. Fensham’s projects include the Lower Hunter Renewal Strategy and Sustainable Sydney 2030. Fensham regularly speaks at various forums and teaches at UTS and UNSW, amongst other universities.

Councilor Irene Doutney

Councilor, City of Sydney Doutney was elected in 2008 as a Greens Councilor for the City of Sydney. Doutney is the Deputy Chair of Council’s Environment Com-mittee, alternate co-chair of the Aboriginal and Torres Strait Islander Advisory Panel and alternate member of the Central Sydney Plan-ning Committee. Doutney has a passion for social inclusiveness, and is dedicated on helping the socially disadvantaged and protecting the environment.

Esther Cheong Principle, AEC Group Cheong leads a national property economics practice, with in the Economics, Planning and Development division of AEC. Cheong has also provided strategic advice on large scale development projects for public and private sector clients, and has work closely on strate-gies within the City of Sydney.

Samara Barchet Community Organiser, Sydney Alliance

An employee of Sydney Alliance for the last 2.5 years, Barchet has worked previously in state government, and has worked on various campaigns within her current capacity. Barchet is currently working on a Sydney wide campaign for affordable housing and also works on local campaigns bringing together unions, faith and community organisations.

Anonymous Senior Specialist Planner City of Sydney

Anonymous was asked not to be identified for this research. Anon-ymous is a senior specialist planner at the City of Sydney, with a passion for affordable housing and strategic planning.

Table 4. In-depth Interview Justification


Due to the conceptual nature of this research thesis, in-depth interviews with experts familiar with this planning challenge were chosen. Other qualitative methods, such as surveys or focus groups were not utilised due to the potential of the subjective interpretation of city diversity, and the relative-ly unknown concept of ‘city homogeneity’. This thesis has adopted Kvale’s (1996, as cited in Babbie 2010, p. 322) seven-stage approach to ensure a compressive process for each in-depth interview was followed. An ‘interpretive research method’ was employed due to the conceptual nature of this thesis, that aimed to integrate the experiences and meanings interviewees associated with homo-geneity of the cityscape, and whether or not they perceived it as an issue and what, if anything, they thought could be done to improve economic and socioeconomic diversity within the study area (Merriam 2002). Each interviewee was asked guiding questions that were associated with their pro-fessional backgrounds, and to ensure a conversational approach to the interviews. This ensured an organic flow to the interviews so other topics and themes could be explored that were not known to the interviewer. Interviewees were also asked to provide a brief summary of their role at their respec-tive organisations, and how they are involved within the city. The subsequent themes of the interview guide aimed to explore the impacts of a homogenised city, within a global city context, governance, planning and regulation issues currently, and ways to increase the level of diversity through the cur-rent planning framework. Each interviewee focused their attention on different parts of the interview guide relative to their discipline or experience.

1.6. Thesis StructureThis thesis has been divided into seven chapters and is structured as follows:

Chapter 1. IntroductionThe intent of this chapter is to provide the context for this research, by introducing the research problem, outlining the research statement and objectives, provided the conceptual framework that this research is structured on, set out the scope and included the limitations that might impact on the outcomes of this research and has outlined the methodology and rationale for this research.

Chapter 2. Literature review This chapter provides further understanding to the theoretical underpinnings of this thesis, and ap-praises the key international and domestic literature developed in relation to the theme of this thesis.

Chapter 3. A snapshot of the City of Sydney, a global city This chapter provides a quantitative snapshot of the CoS. Firstly this chapter will introduce the at-tributes of a global city generally, and more specifically for the CoS. This chapter will then explore the economic and socioeconomic profile of the city, in an attempt to determine to what degree the phenomenon of homogenisation is happening in the CoS.


Chapter 4. The importance of diversity in global Sydney This chapter discusses the importance of both economic and socioeconomic diversity within global cities, and the issues that confront homogenous cities. The primary issues that this research ap-proached in this chapter are economic specialisation verses diversification, economic innovation and access to opportunities.

Chapter 5. Governance and diversity The intent of this chapter is to explore the current governance arrangement of the CoS, and what planning instruments and tools are utilised to encourage economic and socio economic diversity. This chapter also briefly explores the relationship of the state and local authority, and their commit-ment to encouraging a diverse city scape.

Chapter 6. Findings and discussion This chapter will present the results from the in-depth interviews. This chapter also includes a de-tailed discussion on the outcomes of the interviews, and attempts to integrate findings from the previous chapters to inform the conclusion and recommendations found in the following chapter.

Chapter 7. Conclusion and recommendations This chapter aims to conclude the research by reviewing the research objectives (Chapter 1) in alignment with research findings resulting from this thesis. Recommendations will also be provided to guide future potential research and to inform future consideration of economic and socioeconomic diversity within the CoS and broader metropolitan area.

Introduction


Global cities are often referred to, and defined in terms of their economic, social, cultural and polit-ical image and influence. The amount of academic discourse on this subject is vast, and requires broad academic inquiry to adequately examine the global cities phenomenon thoroughly. This liter-ature review aims to focus on literature that fits within two themes; global cities and the conditions that impact on economic and socioeconomic diversity. As illustrated in Figure 3, the structure of this chapter is represented as an inverted pyramid to provide a perspective on globalisation as a broad overarching theme, then on global Sydney, global city governance and competitive advantage, and concluding with economic and socioeconomic diversity in cities.

2.1 Globalisation and the CityModern global cities are a product of globalisation, an economic phenomenon that has ushered in a new order in the way economic activity, the flow of capital and global relations are carried out. Arguably it is also the force that contributes largely to the economic and socioeconomic homogeni-sation in cities. A relatively recent phenomenon, Sassen (2001) and Scott (2000) outline that the decline in Fordism and mass production in the 1970s, in addition to the failure of Keynesian state policies to adequately deal with such decline, was the catalyst for the rise in unemployment and the downturn in manufacturing in industrialised nations. Subsequent dispersal of production from the core of industrialised cities to peripheral locations contributed to urban deterioration, depopulation and high unemployment in inner city areas, which was most evident in the United States of America and the United Kingdom (Bluestone and Harrison 1984 cited in Sassen 2001, p. 54; Sassen 2001; Davies 1981, Schwartz 1981). Scott (2000) explains that the deregulation of markets and the emer-gence of neo-liberal governance in the 1960’s lay the foundations for economic, social and political systems to be opened up to international markets. Sassen (2001) and Searle (1996) illustrate that this period was characterised by a proliferation of financial and primary industry firms, fueled by

Figure 3. Literature Review Structure

Literature Review

G l o b a l i s a t i o n

Global Cit ies

Economic and Socioeconomic Diversity

Global Sydney

Global City Governance

Competit ive Advantage

EmmanuelSmith3347531 20Literature Review

advancements in technology, communication and innovations, which was amplified throughout the 1980’s and 1990’s. Searle (1996) suggests that this involved a shift in focus and a new international intensity, both spatially and sectorially, as the worldwide market for goods and services developed. Oatley (1998) describes this period as the ‘new right’, with post-Keynesian policies promoting priva-tism, entrepreneurialism and individualism. Managerialism as a governance style in cities decreased as they became the beneficiaries and hubs of the new economic world order. Sassen (2001, p. 330) notes however, that only a limited number of cities account for most of the capital and international transactions globally, with the alpha of these cities being London, New York and Tokyo (Grosveld 2002). Other cities in global city hierarchy must constantly compete for their share of capital, and use competitive policies to attract firms and a skilled workforce. The spatial outcomes of this include urban places that accommodate large firms (such as the CBD), and also attractive spaces that ac-commodate a particular demographic of high-income activities.

Sassen’s (1990; 2001 &1994) influence in this topic of academic literature is considerable, with many authors, including Dalla Longa (2010), Duffy (1995), Gosveld (2002), Hu, Blakely & Zhou (2013), Musterd & Murie (1998), Scott (2000), Searle (1996) and Stilwell (1998) citing the author’s work in globalisation and global city discourse. However Bryan et al (2013) raise the question as to whether observations of successful global cities (such as London, New York and Tokyo) can be con-ventionalised into assumptions about the city and economies generally, stating that authors often fail to adequately draw connections between how wealth is created, distributed and redistributed in and between global cities. Additionally, as with the majority of literature on global cities, and cities in general, the balance of inquiry is more often than not focused on North American and European examples. Furthermore, although globalisation is largely a western centric phenomenon, global city discourse tends to follow a ‘western construct’ of what constitutes successful cities. Nevertheless, indexes classifying the position of global cities in relation to each other are released often, and are used to grade cities on their global competitiveness and power, such as AT Kearney’s Global City Index, Foreign Policy’s The Global Cities Index and PricewaterhouseCoopers’ Cities of Opportunity, amongst others (Global Sherpa 2014). However, Marshall (2015) states such indexes should be treated with caution as ranking outcomes can greatly vary, due to different and divergent method-ologies, the subjective selections of what cities are included in rankings, western ideological per-spectives, and in some cases commercial or other interests. Moreover, the flippancy surrounding global city indexes, particularly through media interpretation, as highlighted by Baker and Rum-mings (2014), also indicates the need for caution. The Chicago Council on Global Affairs (2015) recommend that more comprehensive and up to date data, in tandem with academic rigor, should be employed in interpreting global city status and informing city policies and decisions. As such this approach will be taken in this research.


2.2 Power in the CityGovernance is an important factor in determining the city conditions that support or inhibit diver-sity. This is especially important with the emergence of neo-liberal governance frameworks that rely on the market to deliver outcomes rather than regulation. Complex and invisible networks of integrated economic, social and cultural relationships and exchanges cover the globe (Duffy 1995 & Scott 2000, p. 254), which are difficult to manage under traditional forms of governance. Borja & Castells (1997, as cited in Ursic & Kriznik 2012) describe cities as flexible vehicles to deal with the opportunities and difficulties presented by globalisation, in contrast to nation states that are often too removed or detached from global city networks. Dalla Longa (2010), Ursic & Kriznik (2012) and Toly et al. (2012) agree that the role of the nation state continues to diminish, as power is devolved at the regional and local level in line with the economic progress of cities. This suggests that while national governments still have governance and decision-making functions in cities, they are continuing to act more autonomously from central governments, especially in terms of their economic decisions. On the other hand however, Duffy (1995), Grosveld (2002) and Porter (1990) argue that national policies are an important factor in creating the climate in which cities can succeed and flourish in-ternationally; arguing it is the nation that is the first consideration in most international transactions and exchanges. These authors also argue that it is individual firms within a city that are truly global, with the city being the space in which they operate. This suggests that decision-making power in the city is devolved further, and the firms operating within them largely making the economic decisions that effect cities and their populations. Oatley (1998) however, brings these questions of governance together, by suggesting that it is a collaboration between government, private firms, citizens and external international forces that influence decision making in global cities, with each of these com-ponents influencing the other to get the outcomes they desire. This line of inquiry also feeds into what Sklair (2005) describes as the transnational capitalist class, consisting of a corporate faction (those in control of major transnational firms), state faction (politicians and bureaucrats), technical faction (professionals) and the consumerist faction (media and merchants). Sklair argues that these factions make decisions based on their own interests aiding globalisation, and reducing the capacity of the nation state to accord the global economy.

Tewdwr-Jones, Gallent & Morphet (2010) suggest that the new flow of capital into global cities does not necessarily integrate well with traditional forms of planning and urban renewal. The authors indicate traditional planning techniques; such as land use planning do not fit the dynamic and op-portunistic nature of global capital. Although this does not take into account the need to intervene in market failures, such as affordable housing, as the market is unable to allocate housing to different socio economic groups. The Organisation for Economic Co-operation and Development (2007, p. 107 – 108) (OECD) emphasise the need to develop contemporary policy relationships that involve new actors in strategic planning decisions in the aftermath of decentralization and globalisation. The authors note that this is particularly the case with larger urban projects; with the private sector


expanding its influence in planning decisions. This is also the case in an Australian context. Williams (2012) notes that there is an enhanced role of the private sector through public private partnerships that are used as a mechanism for private sector firms to access public land or infrastructure. Hough-ton, Allmendinger & Oosterlynck (2013) suggest that extending planning and urban management to business and communities is beneficial for economic activity, however Williams (2012) notes some skepticism that this type of urban management arrangement delivers the best planning outcomes, such as economic and socioeconomic diversity.

2.3. Competitiveness in the CityCompetitive advantage is an important factor in determining the success of a global city. Compet-itive advantages are emphasized and built upon in global cities in order to attract capital, multina-tional corporations and talented people, and have a direct relationship to the degree of economic and socioeconomic diversity. For example, one of global Sydney’s competitive advantages is the agglomeration of finance and financial services firms. This particular competitive advantage is pro-moted to attract multinational firms because of the conditions it provides in relation to business, and is included the latest metropolitan plan. Ursic & Krizmk (2012) and Oatley (1998) agree that cities are in competition with each other in order to achieve competitive advantage over one another to attract global capital, people and multinational firms. The internationalisation of economic activity and subsequent grappling for foreign investment has compelled cities to pursue competitive advan-tages in order to develop their economies (Duffy 1995; Grosveld 2002; Oatley 1998; OECD 2006; Porter 1990; Sassen 1994, 2001 & Toly et al. 2012). In order for a city to compete on a global level, a combination of forces must come together to provide the foundation for competitive advantage to develop. Musterd & Murie (2010) outline four popular theoretical approaches that are crucial in understanding the factors in supporting competitive advantage and economic development in global cities.

Classic location theory The availability of capital, skilled labour, institutional context, tax regimes, adequate infrastructure and accessibility

Economic clusters theory

Agglomeration economies cluster together where they use the same infrastructure, have linkages to each other and the same environment, profit from each other’s presence and enhance the image of the cluster

Personal Networks theory

Human networks of managers, employees, entrepreneurs making decisions about where to start and undertake business, ranging from personal or business networks, on a local, regional or international scale

Conditions for Settlement theory

Focus on urban amenity to attract skilled individuals, for exam-ple, quality of life and environment, diverse range of housing, and other factors related to a diverse and open society.

Hard C

onditionsS

oft Conditions

Table 5. Common approaches to understanding economic development


Additionally, Porter (1990) distinguishes four important factors that influence the competitive posi-tion of a geographical concentration or cluster within a country. Grosveld (2002) states that Porter’s (1990) ‘National Diamond Model’ (Figure 1.) can also be used to determine the competitive advan-tage within smaller areas (such as central business districts or inner city suburbs), with Grosveld (2002) claiming this model should be the standard for further debate on global competition. Other authors, (Duffy 1995, Grosveld (2002) Juan et al. 2010, Musterd & Murie 2010 & Oatley 1998) on the subject, also cite Porter’s model in their discussions on competitive advantage, agglomeration economies and urban renewal. Oatley (1998) notes that competitive advantage is now an important component of urban policy making in the United Kingdom, through developing cultural, social or physical resources and supporting business in an area. The model emphasises four factors that are important for economic competition in cities:

+ Factor Conditions: Natural conditions (such as Sydney’s natural environment) or high skilled workforce

+ Related and Supporting Industries: Industries that compliment each other’s function and pro-vide services to one another (see Chapter Three, optimum cognitive distance)

+ Firm Strategy, Structure, and Rivalry: Using competition to spur innovation, and increase competitive advantages of firms, and

+ Demand Conditions: Consumer demand that spurs on innovation and growth, and contrib-utes to profits

Porter (1990) argues that geographic concentration (or agglomeration economies) forms the most important foundation for competitive advantage, and also increases the factors needed to sustain such advantages. These geographic concentrations are made up of a diverse combination of eco-nomic, social and physical resources that inter-link to develop regional and city interests, inducing significant structural changes to economies (Duffy 1995, p. 3 & Scott 2000, p. 257). The OECD (2006) agrees, and states that agglomeration economics play a critical role in attracting regional or global headquarters, as they generally offer a wide range of resources, and offer specialised busi-ness services and better infrastructure. It is apparent that a large amount of academic discourse is focused on the hard conditions of economic theory in developing cities, including location theo-ry and economic cluster theory (refer to Table 1). Porter (1990) states that the role of geographic concentration is important in economic success, especially for cities (or buyers and suppliers) that generally operate internationally. Ursic & Krizmk (2012) detail that cities use their strategic resourc-es to gain competitive advantage, with Stilwell (1998) noting that due to the competitive aspect of cities, spatial competition is also intensified, not only between industries but also for consumption expenditures, for public resources and also for command functions (Harvey 1990; Huxley & Berry 1990, as cited in Stilwell 1998). Markusen and Schrock (2006) state that such urban competition policies and the pursuit of competitive advantages result in the professionalisation of economies.


Urban management policies that promote competitiveness in an agglomerated economy also pro-mote the growth of social divisions, income inequality, housing unaffordability and political exclu-sion. These negative consequences of globalisation and competitive policy are the theme of much academic discourse in planning and urban policy (Harvey 2003; Ursic & Krizmk 2012; Zukin 2009). Markusen and Schrock (2006) note that competitive policies and ambitions of cities to attract the same kind foreign investment encourages reduced diversity both economically and socially.

2.4. Sydney as a global city Hu (2012), Sassen (2012), Searle (1996) & Stilwell (1998) state that Sydney also benefited from the hyper-mobility of capital brought about by globalisation, amplified through competitive advantage. The authors catalogue Sydney’s transition on to the global stage in the 1980’s and 1990’s in response to the macroeconomics and state and government policy of the time, which saw the city grow as an important tourist and financial hub in the region. Sassen (2012) outlines the disproportionate level of growth experienced in Sydney, compared with the rest of Australia, from the 1990’s and into the 2000’s, stating that Sydney now produces 25% of Australia’s gross domestic product, with financial services and insurance being the fastest growing industries in the city. Searle (1996) acknowledges the city as a base for important financial institutions, such as the Australian Stock Exchange and the Reserve Bank of Australia. PWC (2010) posits that Sydney’s prominence within the global city hierarchy is primarily due to the flows of information and product networks moving closer to Asia. However, within international global city discourse Sydney is either rarely mentioned, or mentioned somewhat superficially. Hu, Blakely & Zhou (2013) agree, and argue that within international studies on comparative global cities, Sydney has largely been overlooked with domestic studies primarily focusing on the impacts of globalisation in the city. McNeill, Dowling & Fagan (2005) also agree, and contend this is partially due to how ideas on global cities are exchanged and circulated internation-ally, citing that pre-eminent academics, their institutions and publishing companies show a degree of bias to their respective cities.

Despite the mentioned lack of academic exploration with Sydney’s comparative position in the glob-al urban hierarchy, some research has been carried out on a domestic level. Hu (2015) and Searle (1996) note that Sydney is in a good position globally with its agglomeration of corporate headquar-ters and advanced producer firms, on a national, regional and international scale, of which Searle (1996) argues signifies the apex of globalisation. Similarly, Sassen (2012) notes that Sydney is a specialised global city, with the prominence of tertiary industries based in the Central Business Dis-trict. Price Waterhouse Coopers (2010) note that Sydney’s physical attributes put the city in good stead to compete at a global level, but also note that there is opportunity to improve in terms of further developing economic activity in the city. Likewise, other research conducted by Hu, Blakely & Zhou (2013), Grosveld (2002) and Sydney Business Chamber (2010) found that while Sydney placed well in terms of in livability, attractiveness and environmental sustainability, the city has a lower rate


of multinational firms and international hubs compared to its main rivals; however the city does rate well in this regard on an regional scale. Many metropolitan and local strategies reflect ambitions to sustain and improve Sydney’s competitive advantage and position in the global domain, for ex-ample, A Plan For Growing Sydney (2014), Sustainable Sydney 2030 (2013) & Parramatta 2038 Community Strategic Plan (2013) in addition many other government strategies. Private firms also declare their contribution to global Sydney through major urban renewal projects, publicising their global credentials, promoting their place within Sydney’s global condition (Barangaroo 2013, Central Park 2013 & Parramatta Square 2014). Other urban renewal projects publicise their contribution through supporting the essential functions of a global city by providing homes in close proximity to the CBD, such as Green Square, Ashmore and Harold Park (City of Sydney 2015). Searle’s (1996) discussion of global Sydney in the mid 1990s identified the spatial competition that would exacerbate the already unaffordable inner city. The author notes that this was primarily due from the internal migration of people moving to the inner city from the northern and eastern suburbs of Sydney, however since then this problem has expanded further. Although, many government plans may represent the ideological flavours of the time, with some state government metropolitan plans becoming redundant through electoral turnovers, or through internal evaluation. The NSW State and local governments, most notably the City of Sydney are clear in positioning Sydney as a global city and promoting the city’s global attributes (City of Sydney 2013; New South Wales Government 2015). However, this literature could arguably be categorised as promotional material rather than having a substantial place within academic discourse.

2.5. Economic and Socioeconomic Diversity Although there is a lack of literature on the impact on economic and socioeconomic diversity within global Sydney, literature does exist on the important of this diversity in cities generally. Baker and Rumming (2014) suggest urban research in relation to Sydney tends to focus on territorial and local understandings rather than an integrated global approach. Guinness (2011) draws the connection between globalisation and the reduction of diversity generally within global cities however and states, “The economies of scale necessary for industries to survive in an increasingly competitive global market have resulted in the growing uniformity of industrial landscapes.” The importance of diversity within cities was popularised by Jacobs (1961 & 1969) books ‘The Death and Life of Great American Cities’ and ‘The Economies of Cities’ with many authors citing Jacobs’ work to support their argu-ments for diversity within cities (Quigley 1998; Duranton& Puga; King et al 2010 and Xia & Drucker 2013). King et al (2010) suggest that robust diversity fundamentally stems from the built form, with industrial and neighbourhood diversity outcomes directly linked to a built environment that encourag-es mixed-use neighbourhoods and providing spaces that enable a range of different economic uses to flourish. These diverse uses have many benefits, as chronicled by, of course Jacobs (1961), but also by Mack, Grubesic and Kessler (2007), Quigley (2008), Felix (2012) and Knold (2013). There is mush academic discourse that discusses the economic theory related to diverse cities being more


resilient to external economic volatility. Mack, Grubesic and Kessler (2007) suggest that this stream of economic theory originated after the great depression, and has been maintained by economists as a way to minimize the effects of business activities on economies. The authors also suggest that although this theory is true in relation to regional economies, measurements on how to best capture industrial diversity continues to preoccupy economic researchers. However a popular and simple measure of economic diversity, the Hachman Index, is used in various publications to demonstrate economic diversity. This index uses location quotients that measures the percentage of employment in an area against the percentage of employment in its greater area, for example a percentage of employment in a particular industry in Sydney, versus the same percentage for Australia (Felix 2010; Knox 2013). Some academics such as Quigley (2008) note that economic specialisation within larg-er cities increases economic productivity and development. However, others such as Felix (2010) contend that there is no statistically significant difference in growth between specialised versus diverse economies. In addition to economic stability, industrial diversity also delivers other benefits, such as greater variety in goods and services, knowledge cross overs between industries, a diverse range of employment and entrepreneurial opportunities, and the reduction of transport costs. (Hollar 2006; Felix 2010; King et al 2010). However, perhaps the most difficult benefit to measure, is the assertion that diverse cities are generally more socially cohesive, integrated and healthy than less diverse cities, however this claim is asserted by any academics, such as Jacobs (1961), Beckstead and Brown (2003) and King et al (2010).

2.6. Conclusion Although the literature on globalisation, global cities and competitive advantage is broad and pres-ents a range of academic perspective, it seems that literature on Sydney’s position as a global city is limited within international discourse. This chapter has identified that there is perhaps a disparity on the amount of literature available that examines the impact that being a global city has in relation to diversity, especially in a Sydney context. However, assumption might be drawn from the litera-ture on city diversity in general, and some of the heightened features associated with global cities. This perhaps may form part of future research; to wholly understand the value diversity might bring to Sydney’s competitive advantage, and how more diverse economic spaces and socioeconomic groups would benefit the city as a global city.


Global cities attract particular types of industries and people to maintain and improve their positions within the global city hierarchy. Sydney is no exception, with the economic and social mosaic that makes up the city evolving over time to reflect global economic conditions. This chapter begins by providing further context for the thesis statement by describing the theoretical area of global Sydney, and the City of Sydney. This chapter will then present key quantitative economic and demographic data to provide a foundation for the conceptual argument of this thesis, and provide a snapshot of key economic and socioeconomic data for the CoS.

3.1 What is a global city Within the western construct of successful cities, global cities are the pinnacle of prosperity and compete with other cities to attract the benefits of hyper-mobile capital. Global Cities utilise their competitive advantages, or ‘what they are good at’, to compete with one another, not only to capture investment, but to also influence the geographical and locational decisions of firms, the skilled and educated transnational class and tourists. Global cities must satisfy certain criteria to be categorised within the global city hierarchy. Generally, this criterion includes: (PWC 2015; AT Kearny 2015; For-eign Policy 2012).

+ A high number of multinational firms + Provide a good environment for the advancement of technology, enterprise and innovation + Provide a good environment for research and development + A high level of liveability and cultural experience + Have good transport and communication infrastructure + Environmental sustainability + Be politically significant and stable

3.2 Global SydneyAs Australia’s only global city, Sydney is in competition with other global cities, especially in a re-gional context, and aspires to excel in the global city criterion. As a result of the reduction of trade protectionism policies and financial deregulation in the 1990’s, coupled with the rise of a neo-liberal agenda, Sydney attracted a proliferation of financial and service sector firms. Like other emerg-ing global cities at the time these firms created agglomeration economies, represented by dense and vertical Central Business Districts. Governments responded to the new economic world order through developing urban policies that were conducive to capturing the new waves of foreign capital (Stilwell 1998). While the CBD of central Sydney grew in tandem with the ascendancy of financial capital, the inner city suburbs began a process of urban regeneration and deindustrialisation, with the industrial shells of manufacturing structures and warehouses converted into expensive apart-ments for the new highly paid workforce needed to sustain the high value business core. Gentri-fication of inner ring suburbs by highly paid professionals displaced the traditional working class and immigrant residents, while major redevelopments of former industrial estates commenced at

A Snapshot of Global Sydney

EmmanuelSmith3347531 28A Snapshot of Global Sydney

harbour front locations, such as Darling Harbor, Pyrmont and Ultimo (Searle 1996). This pursuit of capital began reducing the economic and socioeconomic diversity of the CoS, as spatial competition grew, so too did land values. Although this urban transition was not unique to just Sydney, the city out competed other cities in the region in attracting the most multinational firms, and major domestic financial businesses and institutions (Stilwell 1998).

Sydney’s standing as a global city has continually been growing from the 1990’s, and the city is now positioned within the second tier of global cities, and complements the constantly pre-eminent global cities of London, New York and Tokyo by filling advanced producers service niches (GaWC 2015). Sydney’s success as a global player is largely due to its proximity to large markets located in South East Asia. According to the most recent PWC Cities of Opportunity 6 (2015) report (Figure 4), which rates thirty cities on their economic and cultural significance, Sydney rates ninth globally. Within this index Sydney scores highest in the categories of sustainability and the natural environment, demo-graphics and liveability, and particularly well in health, safety, and security and places third in terms of relocation desirability.

The majority of Sydney’s global function is centered in the Central Business District, with the State Government identifying formalising this area as ‘global Sydney’. As shown in Figure 5, global Syd-ney is located within the broader theoretical area of the ‘Global Economic Corridor’ that is described by Planning and Environment as:

“A corridor of concentrated jobs and activities in strategic centers, transport gateways and industrial lands extending from Port Botany and Sydney Airport, through Global Sydney, Chatswood to Parra-matta and the Norwest. The corridor includes high-value road, rail, health, arts, cultural, educational and other public investments; high-amenity areas; and high land values. It will remain the power-house of Australia’s economy” (pp. 137 – 138, 2014).

1 London2 New York3 Singapore4 Toronto5 San Francisco6 Paris7 Stockholm8 Hong Kong9 Sydney10 Chicago

Figure 4: PwC Cities of Opportunities 6: 2015 City Index


Global Economic Corridor Global Sydney

Figure 5: A Plan for Growing Sydney (Figure 2)Source: A Plan for Growing Sydney (2014)


3.3 The City of Sydney Global Sydney is located within the local government areas of the City of Sydney and North Sydney councils. However, as outlined in Chapter One, this research will only investigate the thesis state-ment in relation to the CoS. Located in the east of greater Sydney, the CoS LGA covers an area of 27km2, and is surrounded by harbour or to the north and adjoins six other inner-city local gov-ernment areas (Figure 6). The CoS has divided its area of governance into ten key villages based around key main streets and hubs that the service 33 suburbs (CoS 2013). According to the CoS, the city’s villages reflect and respond to the area’s diversity, with each village being a unique social, economic and environmental space (CoS 2012). The Central Business District serves as the city’s primary employment location accounting for over 52% of the LGA’s workers followed by Chinatown, accounting for 14% of workers, and businesses within the city’s remaining villages accounting for almost 35% of employment (CoS 2013).

Figure 6: The City of Sydney Local Government AreaSource: Sustainable Sydney 2030 Community Strategic Plan 2014 Adapted: Author 2015

SYDNEY CBD


The City of Sydney’s Economic Mosaic The CoS serves as the country’s economic powerhouse contributing over 7.5% of GDP to Austra-lia’s national economy, over 30% to the Sydney metropolitan economy and accounts for almost one quarter of the entire GDP for NSW (CoS 2015). Between 2007 and 2012 there was a 10.5% increase in businesses operating in the CoS from 19,579 to 21,644 total operations (FES 2012). The top six industries by number of establishments that operate out of the city include, Professional and Business Services, Retail and Personal Services, Food and Drink Outlets, Creative Industries, Finance and Financial Services and Tourist and Cultural and Leisure and make up 69.9% of total industries (Figure 7). From 2007 to 2012, Professional and Business Services grew at the highest rate compared to all other industries, overtaking Retail and Personal Services as the largest industry operating in terms of establishments.

The CoS commands a sizable portion of employment within Sydney, with 20% of all employment for the city located with in the LGA. The workforce in the city increased nearly 14% between 2007 and 2012, adding an extra 52,306 employees. This represented 40% of the total workforce growth for the same period for greater Sydney. Out of 437,727 people employed in the CoS in 2012, 40% are employed in both Finance and Financial Services and Professional and Business Services. Fi-nance and Financial Services employed 22% of workers in the city, with employment in the industry growing the most, 6.1% from 2007 to 2012. The second fastest growing employment providers in the city, Professional and Business Services, was also the fastest growing industry by number of firms, with 40% of all new growth coming from the sector. The largest six employers by industry in-clude Finance and Financial Services (22%), Professional and Business Services (17.6%), Creative Industries (8.1%), Food and Drink (7%), Information and Communication Technology (6.1%) and Tourist and Cultural and Leisure (6%), employing 66.8% of workers in the Central Business District. Of these large employers, Finance and Financial Services, Creative Industries and Information and Communication Technology decreased their overall percentage share between 2007 and 2012. Industries that experienced an overall decline in employment during that period included Biotech-nology (-7.8%), Manufacturing (-9.6%), Natural Resource Based Industries (-27%), Property Devel-opment and Operation (-3.6%), Transport and Logistics (-3.9%), Utilities (-37.7%) and Government (-7.8%).

Figure 7: 2007 Percentage of Total business (COS)

Retail and Personal Services

Professional and Business Services

Food and Drink

Creative Industries

Financial and Financial Services

Tourist, Cultural and Leisure

Other Industries

32.1%

8.6%9.3%

14%

14.5%

15.7%

5.9%

2007

Figure 8: 2012 Percentage of Total business (COS)

Professional and Business Services

Retail and Business Services

Food and Drink

Creative Industries

Financial and Financial Services

Tourist, Cultural and Leisure

Other Industries

2012

30.1%

7.8%8.7%

15.5%

16.5%

15.2%6%


The City of Sydney’s Social Mosaic In 2014, the city’s resident population was 198,331, representing 4.1% of greater Sydney’s total population (CoS 2014). The city has seen continuous population growth, with a 30% increase in res-idents in the ten years between 2004 and 2014, compared to 16.1% for greater Sydney, and 13% for New South Wales (CoS 2014). The city’s growth is forecast to continue, reaching an estimated total of 280,964 by 2036 (Forecast i.d. 2013). However, the rate of growth is expected to decrease as residential growth becomes restricted by the amount of land made available for development, from subdivisions in existing neighborhoods, by the rate of conversion of industrial or commercial zones to residential zones and the capacity of densification of the built environment (Forecast i.d. 2013).

100000

150000

200000

250000

300000

20362031202620212016201120062001

Complimentary to residential growth, the numbers of dwellings has also increased 101.4% in the twenty years from 46,843 in 1991 to 94,346 in 2011, and are expected to increase to 146,016 in 2036. (Fig-ure 9). While the numbers of separate houses and medium density dwellings have stayed relatively stable throughout this period, the percentage of high-density dwellings have increased 187.9%, from 23,006 in 1991 to 66,249 in 2011. The highest rate of growth in high-density dwellings took place be-tween 2001 and 2006, with an increase of 31%. In 2012, 70.5% of dwellings were set across just un-der 2000 multi-storey apartment blocks, and 18.4% in just under 17,000 terrace houses (FES 2012). However, this data does not account for significant residential projects that had been approved by not developed, including developments in Green Square and Victoria Park, Barangaroo and Central Park (FES 2012). The structure of housing tenure within the CoS has also changed in response to the contemporary economy. In 2001, 15.5% of households were fully owned, 13% were mortgaged, 53.9% were renting, and 16.6% were not stated. In contrast, in 2011 12.4% of households were fully owned, 20.3% were mortgaged, 53.1% were renting, and 14.1% were other tenure types or not stated.

Figure 9: Population Growth in the CoS to 2036Source: Forecast I.d. (2011)


Most interestingly, the make up of rental tenure saw the biggest variation, with a decrease in the pro-portion of social housing, reducing from 18.9% of all rentals in the city in 1991 to 8.6% in 2011. How-ever, the proportion of social housing in the CoS remains higher than 5% across greater Sydney.

30000

60000

90000

120000

150000

2036203120262021201620112006200119961991Figure 10: Dwelling Growth in the CoS to 2036 Source: Forecast I.d. (2011)

Table 6. outlines the age demographic for the city of Sydney, compared to the age structure across greater Sydney for 2011. As a proportion of total residents, the CoS has considerably less babies and preschoolers, primary schoolers, secondary schoolers (0 – 17 year olds) than greater Sydney, and likewise has less older workers and pre-retirees, empty nesters and retirees, seniors and elderly aged (50 years and over). The city has more tertiary education and independence aged people (19 – 24 year olds), young workforce and parents and homebuilders service age groups than greater Sydney (18 – 49year olds). The young workforce (25- 34 year olds) is the biggest proportion of ser-vice age groups in the city, making up 32.6% of total residents.

Age Group City of Sydney % Greater Sydney %Babies and pre-schoolers (0 to 4) 3.6 6.8Primary schoolers (5 to 11) 2.6 8.7Secondary schoolers (12 to 17) 2.0 7.4Tertiary education and independence (18 to 24) 14.8 9.5Young workforce (25 to 34) 32.6 15.4Parents and homebuilders (35 to 49) 23.1 21.9Older workers and pre-retirees (50 to 59) 9.5 12.2Empty nesters and retirees (60 to 69) 6.5 9.0Seniors (70 to 84) 4.3 7.2Elderly aged (85 and over) 0.9 1.8Total population 100 100

Table 6: Age Ranges in the CoS and Greater Sydney 2011Source: Profile I.d. (2011)


In 2011 a higher proportion of residents in the CoS have attained a bachelor or higher degree (40.2%) than residents in greater Sydney (24.1%). A smaller proportion of CoS residents had an ad-vanced diploma or diploma or vocational qualification (16.7%) compared to greater Sydney (24.1%). Just over a quarter of residents reported no qualifications, in contrast to just over 40% of residents throughout greater Sydney. The levels of qualifications are also reflected in the occupations and incomes of residents in the CoS. Managers and professionals make up 55.3% of resident’s occupa-tions, compared to 38.8% in greater Sydney.

The number of people participating in the workforce in 2011 was 102,736, (65.2% of the population), and was a significant increase from 2006 with a 56.3% participation rate. In 2006, the participation rate in the CoS was lower than that of greater Sydney (60.7%), however in the period to 2011 the area’s participation rate eclipsed that of greater Sydney of 61.7%. The unemployment rate in the CoS (5.8%) is similar to the greater Sydney unemployment rate of 5.8%. The unemployment rate in both statistical areas grew from 5.3% in 2006. A lower proportion of CoS residents were employed in lower value occupations compared with greater Sydney (33.6%), in jobs such as technicians and trades workers, clerical and administrative workers, sales workers, machinery operators and drivers and laborers, compared to greater Sydney (50.4%). Between 2006 and 2011, the proportion of res-idents that lived and worked within the local area grew from just under 50% to approximately 65%. As illustrated in Figure 11, 41.7% of CoS residents belong to the highest income quartile earning $1,094 and over per week, and 22% of residents belong to the medium highest income quartile earning between $561 and $1,093 per week. The remaining 36.3% residents belong to the lowest and medium lowest quartiles (19.6% and 16.7% respectively) earning between $0 and $560 per week. In contrast, there is more equal representation across income quartiles within greater Sydney.

0

10

20

30

40

50

Figure 11: Individual Income Quartiles 2011Source: Profile I.d. (2011)

Lowest Group$0 - $266 per week

Highest Group$1,094 and over per week

Medium Highest$561 - $1,093 per week

Medium Lowest$267 - $560 per week

City of Sydney

Greater Sydney


The amount of resident’s income that is available for rents and sales within the city has a direct im-pact on the housing market. Table 7. compares amalgamated rental data for all dwellings between the inner ring local government areas within Sydney in 2015, and shows there is a high demand for rentals within the CoS (FACS 2015).

Area One Bed $ Two Bed $ Three Bed $ Four Bed $Greater Sydney 460 500 500 610Inner Ring 500 650 900 1200Ashfield 370 450 630 880Botany Bay 530 640 720 925Lane Cove 495 523 770 1200Leichhardt 440 650 850 1195Marrickville 390 525 765 975Mosman 460 633 1150 1975North Sydney 500 650 895 1440Randwick 480 600 850 1260Sydney 525 720 960 1100Waverley 515 680 973 1450Woollahra 480 700 1195 1600

Table 7: Rental Prices for Inner Ring Suburbs and Greater Sydney (March Quarter 2014)Source: FACS (2015)

In the CoS the median weekly price for a one bedroom dwelling is $525 compared to $500 across the inner ring suburbs and $460 in greater Sydney. The difference between the CoS, inner ring sub-urbs and greater Sydney is greatest between two bedroom dwellings, with the median rent in the CoS costing $720 in compared to $650 in the inner ring suburbs and $500 across greater Sydney. To a lesser extent this is also the case for three bedroom dwellings with the median rent in the CoS costing $960 compared to $900 in the inner ring suburbs and $500 across greater Sydney. However this might have to do more with supply issues. Demand for 2 bedroom flats or units are currently higher than separate houses within the city, with prices $40.50 on average per week higher between March 2013 and June 2015, as illustrated in Figure 12. Although the CoS had higher sale prices across all dwellings in 2015 than greater Sydney, the area’s sale prices are lower than the majority of inner ring suburbs, the fourth cheapest area at $800,000. This has been a consistent trend from December 2012 through to March 2015. Nonetheless, over this period CoS sale prices were on av-erage $114,000 higher than greater Sydney.


Area / Local Government Median Sale Price 000 Annual Change %Greater Sydney 679 10.4Inner Ring 887 6.7Ashfield 723 6.7Botany Bay 772 9.7Lane Cove 771 -0.2Leichhardt 1205 19.9Marrickville 873 11.9Mosman 1228 39.9North Sydney 908 5.6Randwick 810 -0.6Sydney 800 5.6Waverley 1200 24.4Woollahra 1490 10.4

Table 8: Median Prices for Inner Ring Suburbs and Greater Sydney (December Quarter 2014)Source: FACS (2015)

3.4 Conclusion The chapter has presented key economic and socioeconomic statistics that illustrate the predomi-nance of particular groups situated within the CoS. It is evident that the Finance and Financial Ser-vices has a key role in the city, along with other high value industries from the professional and finan-cial sectors. This represents a degree of specialisation within the study area that may be susceptible to future global market volatility. The young and talented workforce that are driving these industries are choosing to live closer to their place of employment, seen through the 15% increase in residents in the CoS who also work within the LGA between 2006 and 2011. The combination of the global influences and the ‘self destruction of diversity’ is contributing to increased city homogenisation, with keys areas such as creative industries, government and information and communication technology decreasing their share in employment over 2007 and 2012. This assumption may also be drawn by the smaller proportion of people on a low and low to moderate, less educated and who are likely to have less disposable income (young persons, families and the elderly) compared to that of greater Sydney. This is also reinforced by the high rental and sales prices throughout the area.

EmmanuelSmith3347531 37The Importance of Diversity in Global Sydney

In global city discourse diverse cities are rarely mentioned in favour of more popular global city chal-lenges, such as the provision of transport, affordable housing and sustainable development. The purpose of this chapter is to argue that the issues associated with the lack of diversity within city regions is just as important as other 21st century planning challenges. This chapter aims to discuss economic diversity within cities, and focuses on various challenges that are specific for the CoS, including economic specialisation versus diversification, adapting to the changing global economy through encouraging innovation, and ensuring the CoS is accessible to a diverse range of people from different socioeconomic groups.

4.1 Diversity for Economic Resilience At the risk of simplification, two primary debates have been at the centre of what the economic con-stitution of a city should look like; a city that specialises and excels in a specific aspect of the econ-omy or a city that is economically diverse and reflects a broad range of economic activity (Feldman & Audretsch 1998). This question is often expressed through urban policy strategies and debates, with either economic vision driving strategic urban policy. However this dichotomy does not exist in reality as cities more truly belong somewhere in between both specialised and diverse. A common assumption exists that positions bigger cities as more diverse economically than smaller ones. According to Duranton and Puga (1999), while there is a positive correlation between city size and relative diversity, the link that exists is not particularly strong. The authors give the example of large cities that reflect a diverse economy but that also specialise in certain economic activity, such as Los Angeles that specialises within the entertainment industry, and New York that specialises in busi-ness services. Henderson (as cited in Duranton and Puga 1999, p. 8), expands on this further and suggests that within a contemporary context, city size and its relationship with economic diversity is dependent on industrial type, with larger cities specialising more in advanced producer firms, as opposed to manufacturing, and smaller cities specialising more in secondary industry types, such as manufacturing. As discussed in Chapter 2, some academics suggests that for an economic region to be diverse, it should reflect a similar economic base as the city or country that it sits in. As identified in Chapter 3, the CoS economic make up represents a different composition to greater Sydney, with its agglomeration of advance producer firms. Arguably, Sydney’s economic composition will contin-ue to reflect a different economic and socioeconomic context, as that is the function of a CBD. Nev-ertheless, this raises a question of risk, and whether the degree of economic specialisation found in the CoS is too exposed to global economic volatility, whether it is right economic composition to adequately respond to a changing economy and encourage innovation, and whether it provides op-portunities for all socioeconomic groups.


Economic specialisation in global Sydney is promoted by government and industry as a competitive advantage in order to develop this particular economic pattern developing further. The well-known rationale behind this infers that countries and cities that have substantial financial sectors tend to have wealthier residents, present a wider range of opportunities and often grow faster in contrast to regions that do not have strong financial sectors (Pearson 2015). Sydney’s global attributes of having a strong agglomeration of financial service firms and proximity to Asian markets, has shaped the CBD has become a focal point for specialised services, and also for the businesses that provide supporting or complimentary functions, such as business and professional services. Global Sydney’s economic transformation over the past thirty years includes both a macroeconomic transformation, and a transformation of particular industrial sectors that are intricately linked to global conditions. Similar to other western nations, this transition has shifted the focus of cities away from manufactur-ing, to a post-industrial knowledge and information centric economy, with the rise of industries such as finance, banking, insurance, accountancy, advertising and marketing, management consultancy and law, and particularly real estate, and insurance and investment services in global Sydney (Hu 2015). The OECD (2006) posit that this type of specialisation or ‘economic similarity’ is strongly associated throughout the hierarchy of global cities, with the flows (information, capital and commu-nication) between global cities needing extensive links with similar and complementary conditions throughout the global network.

Detroit, Michigan – A Template for Urban DecayA modern example of the risks associated with economic specialisation is the demise of Detroit. The fourth largest city in the United States of America in the 1950’s, Detroit was a thriving metropolis and was home to three large car manufacturing companies, and their satellite industries (Padnani 2013). However, a series of events changed the fortunes of the city considerably, with decentralisation, industrial strikes, economic re-structuring and social and leadership issues decimating the local economic and social structure. The city fabric decayed as a result of massive out-migration, with the popu-lation decreasing by 25% in the ten years to 2011 (Smilovitz 2011). In 2003, Detroit city was declared bankrupt, with the city owing over 100,000 individual creditors an estimat-ed 18 Billion dollars (Woods 2013). Although many see future opportunities for the city, Detroit is seen as the poster city for modern urban collapse, leaving a legacy of social disadvantage, racial tension, urban decay and a bankrupt city.

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Common economic theory suggests that the specialisation of economies leads to stronger growth and greater economic outcomes through efficiencies brought about by agglomeration economies and economies of scale (Boundless 2015). Historically, this economic composition has been largely been advantageous in creating wealth, knowledge exchanges and the growth of cities as a whole. However, concentrating economic activity poses some risks, with exposure to volatility from an internationally integrated city system greater than a system that is domestically driven. Although the Global Financial Crisis deserves much deeper analysis than what is afforded in this thesis, this example is used to highlight the risk associated with the integration of finance institutions and capital around the globe. As recent as 2008 - 2013, 250,000 jobs disappeared from the Australian economy due to the Global Financial Crisis. Global integration of financial services meant losses of over 4.1 trillion dollars reverberating around the world. Although Australia was able to weather this crisis relatively well compared to other advanced economies, the amount of unemployed residents in NSW peaked at 224,800, representing one fifth more than at the start of 2008 (Bita 2014). Due to the nature of globalisation, impacts of such crises are not just felt through financial systems, due to the importance of finance in relation to, for example, environmental protection, state welfare, subsi-dies, inequality and government spending. Moreover, the Global Financial Crisis impacted countries differently, causing some to reconsider their financial liberalisation policies and others to reconsider their place within the world, and shifted power between countries such as the United States of Amer-ica and China (Pearson 2015). Australia’s weathering of this crisis was down to a complex set of conditions; however, due to the country’s diverse economy, increased and sustained consequences from the global crises were avoided (Austin 2013). However that said, Black (2011) notes that in the year to August 2011, unemployment ‘erupted’ in the professional inner city suburbs of Sydney with the rate of unemployment in the area increasing from 2% (under half of the national unemployment rate) to 5.5% (or 0.4% higher than the national average), and argues that due to the 1.5 percentage point unemployment growth within a year that technically meant, inner Sydney fell into a recession.

Beckstead and Brown (2003) argue that city economies which represent a diverse industrial base are more resilient to external shocks, for example, from global financial volatility or natural disasters, and as such, increasing industrial diversity should be an objective of urban policy and decision mak-ers. The authors note that economic health indicators tend to ignore a region’s economic diversity, and instead focus on growth indicators, such as rates of employment and wage growth, in addition to GDP. A common reflection in relation to this argument presupposes that there is usually a trade-off involved between fostering economic stability through diversifying the economic structure of the city, and enhancing growth through specialisation (Felix 2010). However, city growth models anal-ysed by Quigley (1998) indicate that diverse economic activities of city regions actually enhance city efficiency and impact positively on economic growth. Furthermore, King et al (2010) cite numerous authors who contend that compared to specialised regions, economically diverse places in most cases are likely to be more dynamic, create more prosperity and encourage economic synergies.


Knowledge spillovers or transfers, key aspects of economic growth and innovation, are maximised when they happen across comparable industries with in an agglomerated environment (Glaeser et al 1992, as cited in King et el 2010). However, Feldman & Audretsch (1998) argue that regional spe-cialisation in economic activities does not necessarily yield better economic outcomes in terms of innovation, research and development, and instead posit that innovation develops further between diverse industries that are complimentary. King et al (2010) however find the middle ground and contend that rather than intra versus inter industry knowledge transfers, attention should be given to harnessing ‘related variety’ and ‘optimal cognitive distance’ as a way of maximising economic growth. Nooteboom et al (2007, p. 1017) describe optimal cognitive distance within an urban context as “…when people with different knowledge and perspectives interact, they stimulate and help each other to stretch their knowledge for the purpose of bridging and connecting diverse knowledge… Thus, cognitive distance yields opportunities for novel combinations of complementary resources… The challenge then is to find partners at sufficient cognitive distance to tell something new, but not so distant as to preclude mutual understanding”. Therefore, finding the right balance of industries, rather than specialising within a narrow economic field or over diversifying, is critical for promoting growth, ensuring resilience and fostering innovative conditions.

4.2 Diversity for Innovation Supporting a diverse economy within global Sydney however, may be more important now with the Australian economy heading into a significant structural transition. The Lowy Institute (2015) remark that with the continued decrease in the manufacturing sector, and the peak of the mining sector hav-ing passed, coupled with international monetary policies following the global financial crisis, the need to diversify the economy further is important to ensure it is less to susceptible to market volatility, and to ensure future growth. PwC (2015) suggests business, governments and academics understand the need to transition the economy, which depends on harnessing the knowledge and innovation economy, particularly the digital and technology sector. According to Start-up Muster (2015) New South Wales led the way for new start-ups in 2014, accommodating 48% of national start-ups. Also nationally, the Central Business District accounted for 12% of start-ups, with 53 start-ups in 2013 growing to 66 in 2014. However, in contrast to other developed economies, Australia is falling behind in investing in ‘start-up’ ecosystems, which is subsequently contributing to a ‘technology brain drain’ as disenfranchised talent is attracted to better conditions overseas, including the United Kingdom, the United States, Singapore and New Zealand (Kinner 2015). The StartupAUS board, made up of prominent Australian business experts, attribute this to “…several areas of market failure relating to culture, skills, markets, funding and regulation.”


The potential of this new knowledge based economy is significant, and reflects the direction that many advanced economies are heading, with many global cities focusing metropolitan strategies around fostering start up ‘eco-systems’. Encouraging start-up ecosystems has implications for the built environment, as the way start-ups utilise space is different from contemporary businesses. PwC (2015) agree that the success of start-ups depends heavily on the built environment, and in particular state that leading edge anchor or community institutions, proximity to research and de-velopment and education facilities, accessible public transport, compact communities and mixed housing, office and retail are critical factors in creating successful eco-systems. These aspects of the built environment nurture optimum cognitive distance, as discussed by Nooteboom et al (2001), where knowledge and ideas are shared, manipulated and expanded upon to create future technol-ogies and innovations. Figure 12, adapted from the North Sydney Planning Study (2015), illustrates the three typical stages of start-ups and their likely workplace scenarios. Each stage of the start-up evolution is dependent to varying degrees on the four popular theoretical approaches to under-standing economic development, as discussed by Musterd and Murie (2010) in Chapter Two. Stage one is perhaps more reliant on personal networks theory, to discuss and explore ideas and to make initial business decisions, these activities require informal meeting places due to business scale and inadequate financial situations to secure formal spaces. As start-ups progress to the implementation stage and begin to acquire an income, personal location theory and classic location theory become more relevant as office space is needed. This may include a ‘co-share space’ as it provides location-al and network advantages, as well as providing potential optimum cognitive distance. Additionally, to some extent, economic cluster theory may also become relevant, due to the benefits associated with economic clustering. Should a start-up be successful, the four popular theoretical approaches become relevant, including settlement theory, where the focus broadens outside of the ‘company’ and focuses on factors such as urban amenity to attract skilled staff. Also at this stage adequate built structures are required to match the scale and needs of the company. However, this may not necessarily mean the contemporary style of vertical office spaces seen in the CBD currently (Wil-liams 2015).

1 32Ideas, conversations

and networking

Informal meeting places, events and

soft networks

Implementation and Income

Formal spaces, co-shared offices, hard newtorks & clusters

Success and growth

Independent Offices, clustering & large

spaces

Sta

g

e

Figure 12: Start-Up Lifecycle and the Built EnvironmentSource: North Sydney Planning Study 2015. Adapted: Author 2015


4.3 Diversity for Access to Opportunities Central to any argument on urban diversity is the capacity of a city to accommodate low value ac-tivities and low to moderate-income earners, in contrast to only setting the right conditions to attract and accommodate individuals of high monetary worth, education and desirable talent. Arguably, since market deregulation Australia has become less equitable. Ziller (2013) states that in western societies equitable cities are more about looking back into the past, or representing a hope for the future rather than reflecting contemporary egalitarian Australia. An unintended cost of the global city agenda, whether through the large clustering of financial and business services firms operating in the city, or through creating the right conditions for the start-up culture, is spatial competitiveness and subsequent unaffordability of both commercial and residential spaces. Not entirely due spatial competitiveness, Sydney’s unaffordability issues are also exacerbated by workforce and population increases, tax concessions, low interest rates that fuel investment and limited land supply (CoS 2015). However, Barehams’s (2014) audit of accounting and finance jobs in Sydney (permanent salaries only) found that the average salary for a newly qualified role was worth between $80k and $100k per annum, the average for a Manager was worth between $120k and $140k and the average

Denver, Colorado – A Template for Progressive City Policy Not the first city that comes to mind when thinking about innovative cities, Denver has positioned itself as a pre-eminent city for innovation in the United States. Following the legalisation of retail and medical marijuana and harnessing a crowd funding revolution to finance civic amenity, the city has focused its attention on fostering conditions for nur-turing start-up technology businesses, and the progressive culture needed to attract a young and talented workforce by promoting the cities natural advantages. Through col-laboration by the city, state and private enterprise, science, technology, engineering and mathematics (STEM) jobs have grown more than 34.5% in the ten years to 2014. The city has used utilised planning instruments to develop affordable housing and mixed-use neighbourhoods to encourage diversification of jobs, in addition to implementing active and public transport initiatives. The city also finances grants to encourage start-ups at various stages of the start up evolution. Denver Startup Week 2015 is testament to the city’s commitment to innovation, through nurturing soft conditions of economic develop-ment, such as creating networks of innovators, with keynote speakers, expert panels and workshops dedicated to growing start-up ecosystems (Denverstartupweek 2015). Denver has identified its differences with other innovation-based cities and has built on these differences to attract talented residents and successful businesses. (Adapted from Kozioff & Calabrese 2015)

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Disadvantage by LGA

High Low

for a Manager was worth between $120k and $140k and the average for a General Manager was worth between $220k and $350k. These figures are in stark contrast to the lowest Centrelink pay-ment of $13.5k for a Newstart Pension or $22.5k for a Support Disability Pension per annum, and the average salary across NSW of $77.5k per annum (ABS 2014; FACS 2015). As illustrated in Figure 13, it is evident that metropolitan Sydney’s population is being spatially divided in terms of relative disadvantage; with the geography of the metropolitan region prescribing where people can live depending on their relative wealth. Historically, inner city Sydney has been made up of work-ing-class neighbourhoods, however high quality urban amenity, and proximity to high paying em-ployment is resulting in higher migration rates of higher income households towards the inner city contribute to gentrification (CoS 2015). Furthermore, this process, which is also happening in other inner ring local government areas, is increasing the concentration of relative disadvantage further west of the CBD. This displacement and subsequent social polarisation is creating areas of homo-geneity in greater Sydney, with pockets of low income households and low value activities, located adjacent to areas of high income households and high income activities.

Figure 13: Disadvantage Across the Sydney Metropolitan Region Source: PHIDU SEIFA Index (2015)


Shaw (2002) chronicles the ‘stage’ process of gentrification typical of inner city Sydney: Inner city low income households access lower value neighbourhoods due to lower price points, mainly in rental accommodation. Well educated but poorly paid professionals, artists and ‘counter cultural’ types are attracted to locality and cheaper accommodation. ‘Cultural’ professionals are also drawn to locality and amenity, according to Shaw (2002), this cohort are the early gentrifiers and may rent or purchase. Following this group, investors and developers identify neighbourhoods for renewal and redevelopment, in addition to people on a higher income that usually buy, renovate and occupy Victorian terrace housing and warehouses that express their attachment to cultural heritage and dif-ferences from their suburban counterparts (Bridge & Dowling 2001). It is at this stage when original residents and early gentrifiers are displaced, and the socioeconomic diversity of the neighbourhood is compromised. Shaw (2002) then describes the final stage of gentrification where properties are then brought and sold at considerably increased market prices to other high value households, resulting in neighbourhoods where high income individuals and activities are the only groups that can afford land prices. The relationship between gentrification and diversity is illustrated in Figure 14 and requires a balancing of low and high income households, and all in between to maximise socio-economic diversity. Although gentrification ultimately leads to the displacement of low-income households, this process also has a positive impact in terms social diversity of a neighbourhood to a point, where both low and high value activities and low and high income individuals are situated within the same area. However, this needs feedback mechanisms (policies) to ensure this balance is sustained.

Low income neighbour-hoods and

activities

High income neighbour-hoods and activities

Well educated and eco-nomically struggling types

(students, artists, bohemian, counter cultural)

Cultural professionals: public and the arts sector,

marginal gentrifiers, tend to have liberal values of tolerance and

egalitarianism

Professionals with higher incomes, developers and investors (buy and sell at increased market prices

Most affluent buyers move to area (buy

and sell)

> > > > > > > > D I V E R S I T Y > > > > > > > >

Low quality, cheap dwellings mainly

rented

Low quality, cheap dwell-ings rented or owned,

symbolic attachment to older buildings Dwellings renovated

and occupied. Urban ‘regeneration, rehabili-

tation and renewal’ Unaffordable property, highest and best use is

residential.

Displacement of lower income households and activities

Uncompetitive and Inequitable Cities

> > > > > > H O M O G E N E I T Y > > > > > > >

Competitive Urban Policies

Gentrification

Developments direct-ed at high income

earners and activitiesLoss of vibrancy and

heritage: homo-genised experiences

Built environment addresses a nar-row set of needs for a specific demo-

graphics

Economic special-isation risk from

volatile international

conditions

Limited space for innovation and

creativity

Figure 14: Conditions that Support Homogenised Cities


Although, this does not necessarily equal social integration, as argued by Zukin (1987), who sug-gests that these interactions are of a superficial nature, with what might appear to be social mixing, actually being segregated enclaves at a neighbourhood, block or building level. The author states “For their part, existing residents may resent the superimposition of an alien culture-with different consumption patterns and an accelerated pace of change on their community” (Zukin 1987, p. 133). The impact of gentrification is not only restricted to residential spaces, as the consumption practices of higher income households are reflected throughout the commercial spaces of gentri-fied neighbourhoods. Similarly, this may also result in the increase diversity and diverse activities. Hage (1997, as cited in Bridge and Dowling 2001) states the consumption practices of the (usually) white, high-income gentrifiers preference the ‘multi-cultural’ other, with a desire for multi-cultural food and cultural diversity within their neighbourhoods. Usually, gentrifiers also have an apprecia-tion for artists and bohemian and counter-cultural types seen with early gentrifies, and understand the cultural and financial value these groups of people have to their lived experience and property values. However, ensuring that the city is a diverse place for people of all socioeconomic groups is an important cornerstone for tolerant and equitable societies. King et al (2010) argues that socioeco-nomic diversity fosters a more dynamic, inclusive and just society, and helps to alleviate locational disadvantages, and segregated cities.

4.4 ConclusionThis chapter has attempted to highlight the importance of economic and socioeconomic diversity by drawing on conceptual arguments and practical examples. Although arguments exist for both eco-nomic specialisation and diversification, there is also an argument for promoting the right balance in industries within a region. Future prosperity and innovation rests largely on the ability of a global city to respond to changes in the global economy. Perhaps a new approach to harnessing the prosperity and influence of global cities is needed, that involves the specialisation of multiple industries that are both responsive to changes in future technology and disruptive to future industries. However as discussed, access to opportunities, employment and spaces within the city for people from all socio-economic groups is important to the conversation of economic diversity, not only for the functioning of the city, but for the production of equitable, cohesive and tolerant societies. Economic prosperity should not be at the exclusion or expense of certain groups of people.

EmmanuelSmith3347531 46Governance and Diversity

Control and governance are important considerations in determining the strategic direction and management of global cities. However, as established in Chapter Two power and control within the global city is not straightforward. This is especially the case with the current governance structure in place for the Sydney metropolitan region, and also global Sydney. This Chapter aims to examine the current governance framework and planning instruments that are utilised to deliver economic and socioeconomic diversity in global Sydney and their relationship to delivering diversity.

5.1 Governance in Global SydneyGlobal Sydney is an area of strategic importance. As well as being the engine room for wealth for the metropolitan region, the area is also of immense historical and symbolic significance to Austra-lia. Global Sydney provides the location for many state significant heritage buildings, entertainment venues and transport infrastructure and is the focal point for most tourist activities within the metro-politan region. Rather than a clear and cohesive metropolitan governance structure, Global Sydney is governed by State Government, State Government agencies and a series of local authorities. Un-der global Sydney’s current governance structure, the State Government and the CoS are the major authorities in the area. Within State Government many sub agencies also operate within the area managing significant infrastructure, such as Transport for NSW, Roads and Maritime Services, Syd-ney Harbour Foreshore Authority, Barangaroo Delivery Authority, the Royal Botanic Gardens and Domain and the Sydney Opera House Trusts, and the newly formed Greater Sydney Commission to develop the strategic outcomes highlighted in the latest metropolitan planning document (Korn-berger and Clegg 2011). This governance arrangement has given rise to some tension and conflict, with the City of Sydney being the subject of State Government intervention. Ultimately, through the creation of the Local Government Act 1993 (and its amendments) the state effectively controls local governments and legislates how much control local councils have to govern their neighbourhoods, with more specific legislation existing for the CoS (City of Sydney Act 1988). The approval body for major CBD developments, the Central Sydney Planning Committee (CSPC) is controlled by state government with local government representation. Since the 1950’s the boundaries of the CoS have been manipulated four times, with the latest boundary change occurring in 2004 by the then Labor Premier Bob Carr through an amalgamation of the City of Sydney (with its authority primarily based primarily with in the CBD) and South Sydney Council (the southern area of the current CoS). Korn-berger and Clegg (2011) suggest that this was a political move to include voters from the traditionally labor voting area south of the CBD. However this strategy backfired with current Mayor, and then State Representative for Sydney, Independent Clover Moore gaining over 40% of the vote. Most recently, the State Government has suggested that it will enact legislation making local government voting mandatory for the city’s 80,000 businesses at the next local government elections (Partridge 2015). Some critics of this move suggest this more about removing the current administration for political gain, rather than any meaningful electoral reform.


In October this year the IPART released the ‘Fit for the Future’ Report, an inquiry into the future ca-pacity of local governments across the state, commissioned by the State Government. The report found that the CoS Council was ‘not fit as a global city council’ and recommended a merger with the adjacent councils of Woollahra, Waverley, Randwick and Botany. Although the CoS satisfied all financial criteria (sustainability, Infrastructure and Service Management and Efficiency), the tribunal stated; “The council does not satisfy the scale and capacity criterion when compared to the ILGRP’s option of a Global City Council…” The attributes of a global city council identified in the ILGRP’s ‘Revitalising Local Government’ Final Report (2013), include:

+ Physical size: the area should encompass a broad area and cross-section of inner metropolitan suburbs, including iconic locations of global significance

+ Hierarchy: the area should include major infrastructure and facilities that are at the peak of the hierarchy for that function (government, transport, health, education, business, recreation, cul-ture etc)

+ Leadership: it should be the ‘first amongst equals’ of metropolitan councils due to the importance of its decisions, geographic scale, budget and responsibilities, reputation and profile, and rela-tionship to political, business and civic leaders

+ Strategic capacity: it should have the ability to manage major regional facilities and to undertake or facilitate major economic and infrastructure development to address the changing needs of the inner metropolitan region

+ Global credibility: it needs to be able to be a leader in the Asia Pacific and to maximize oppor-tunities to partner or compete as required with other global capital cities in the race for capital investment and international reputation

+ Governability: it should attract the best of candidates for political leadership, with a broad, di-verse and balanced constituency that will facilitate good governance

+ Partnership with the State: it should not be so large as to challenge the primacy of the State, but have the stature, maturity and skills to be a respected partner and to develop productive working relationship with State and federal agencies

The IPART and ILGRP reports both indicate that a larger local government area for the CoS would be more conducive for the integration of planning and development outcomes as the CBD expands. Interestingly, the IPART report also recommends that a new global city coun-cil should be given authority over other state significant developments such as the Sydney Op-era Housing, Barangaroo, Circular Quay and Darling Harbour, in addition to enhancing the City of Sydney Act 1988 to encourage and sustain the growth of the CBD. The report states “…a greatly enhanced city that takes in all iconic locations and features that contribute to Syd-ney’s global identity” (Davies 2015). The release of the IPART report coincides with Premier’s Baird’s announcement advocating council mergers before the end of the year (Saulwick 2015).


However, opponents of the IPART’s recommendations criticises the reports methodology and sug-gests it is too simplistic and focuses too heavily on quantitative measures, ignoring qualitative inputs such as community oppositions, local identity and loss of governance and accountability (Davies 2015; Grennan 2015; McKenny 2015). Moore (Lord Mayor) concurs, and questions whether the evidence that a geographically bigger global city council would translate into lower costs and bet-ter council management, especially if there is not plan to enhance the remit and authority of local governments to include housing, transport or other utilities (Davies 2015). Although the State Gov-ernment is pushing for local government reform, at this stage it is unclear how this will progress in the short term. Global cities such as London and New York have also considered how metropolitan governance can be improved. Rather than only amalgamating local councils, they have devolved both powers and responsibilities. The IPART report does not appear to consider this and is arguably out of step with international best practice, both in the US and UK.

5.2 Planning Governance According to the Commonwealth of Australia Act Section 51, planning and urban management is the responsibility of the state, with the NSW Government department of Panning & Environment responsible for environmental planning across the state. According to the department’s Corporate Plan 2015 – 2017, Planning and Environment is poised to lead the state in its response to growth and cementing the status of global Sydney through urban renewal. The department plays a pivotal role in delivering the following NSW 2021 goals:

Rebuild the NSW Economy Goal 3 Drive Economic Growth in regional NSW

Goal 4 Increase the competitiveness of doing busi-ness in NSW

Goal 5 Place downward pressure on the cost of living

Renovate Infrastructure Goal 20 Build liveable centres

Restore accountability to government

Goal 29 Restore confidence in the planning system

Goal 32 Involve the community in decision making on government policy, services and projects

Table 9: NSW 2021 Goals for Planning and EnvironmentSource: Planning and Environment (2015)

To deliver this, Planning and Environment have set three internal goals that will be met under the current legislative framework of the Environmental Planning and Assessment Act 1979, and include:

+ Accelerate Improvements to the planning system + Drive strategic planning and coordinated delivery + Value and develop our people to achieve results


The Corporate Plan 2015 - 1017 makes no mention on economic of socioeconomic diversity, how-ever on numerous occasions mentions global city competitiveness. This is perhaps due to the high level nature and broad overview this document provides.

5.3 The Metropolitan Strategy The most recent iteration of the current metropolitan strategy was released in December 2014 by Planning and Environment. Minister Goward (2014), states that the plan “…will guide land use plan-ning decisions for the next 20 years; decisions that determine where people will live and work and how we move around the city. Future land use planning will shape the productivity of our business-es, the choice of housing we have, the services and facilities we have access to, the liveability of our communities and the quality of our built and natural environment”. With a tagline of ‘a strong global city, a great place to live’, the plan makes clear the emphasis placed on enhancing global city status. Delivery of plan is driven and coordinated by the recently created Greater Sydney Commission, and in conjunction with the State Government’s ‘Long Term Transport Master Plan and Rebuilding NSW - State Infrastructure Strategy 2014’. The plan is also to be delivered through subregional planning, local environmental plans and community strategic plans. The State Government has also issued local councils with local planning directions to ensure future planning and growth is aligned to the plan. The plan will be monitored and reported on through an Annual Report Update, and Outcomes Report every three years and a Review of the Plan every five years, none of which were available during the development of this thesis.

The plan consists of four goals, including: + Goal 1. A competitive economy with world-class service and transport + Goal 2. A city of housing choice, with homes that meet our needs and lifestyles + Goal 3. A great place to live with communities that are strong healthy and well connected + Goal 4. A sustainable and resilient city that protects the natural environment and has a bal-

ance approach to the use of land and resources (Planning & Environment 2014).

Goal 1. A competitive economy with world-class services and transport This goal will have the most impact on planning for future economic diversity within the within global Sydney. This particular goal aims to build on the success of global Sydney as a global commerce, business and investment hub for the region, and propose the CBD to be expanded to achieve this. The plan also proposes enhancing the Parramatta CBD, extending the global economic arc through to Parramatta, Olympic Park and the North West, developing the second Sydney Airport at Badg-erys’s Creek, improving transport connections to the West of metropolitan Sydney, and supporting key economic industries. Two of these directions relate specifically to global Sydney.


Direction 1.1: Grow a more internationally competitive Sydney CBD + Action 1.1.1. Creating new and innovative opportunities o grow Sydney CBD office space by

identifying redevelopment opportunities and increasing building height in the right locations + Action 1.1.2. Create new opportunities to grow Sydney CBD office space by expanding the

CBD’s footprint in the right locations + Action 1.1.3. Diversify the CBD by enhancing the cultural ribbon which connects the new

and revitalised precincts including Barangaroo, Darling Harbour, Walsh Bay and the Bays Precinct

+ Action 1.1.4. Deliver on the Government’s vision for Sydney Harbour, incorporating the new and revitalised precincts of Barangaroo, Darling Harbour, Walsh Bay and the Bays Precinct and surrounding foreshore lands

Direction 1.1 has been developed under the premise the more space is needed in the CBD over the next 10 – 14 years, and posits that the new hub for the city’s financial and professional services will shift west to Barangaroo. Limited availability of large sites for future developments means the city must grow its capacity by building upwards and extending to the south through to Erskineville and Macdonaldtown. The State Government suggests that this will be achieved through collaboration with the CoS (and North Sydney Council), by changing current planning mechanisms, undertaking capacity and massing studies, exploring changes to building heights and floor space ratios and utilising commercial core zoning. Actions 1.1.3 and 1.1.4 are concerned with diversifying the CBD, however the diversity mentioned in these two actions relates to enhancing global Sydney’s attri-butes to appeal to tourists, international exhibitions and provide enhanced neighbourhood amenity within the city.

Direction 1.9: Support priority economic sectors + Action 1.9.1. Support the growth of priority industries with appropriate planning controls

The rationale behind Direction 1.9 is to support and develop industries to form clusters. All of which play a strong role in the CBD, apart from minerals and agriculture. The Eight priority industries have been identified, including:

+ Tourism + Creative Industries + Digital Economy + Professional Services + Manufacturing + Minerals + International education and research, and + Agriculture


Furthermore, key knowledge hubs have been established as state significant industry concentra-tions, including:

+ Creative digital technology Pyrmont + Financial Services CBD + Medical Technology Macquarie Park + Transport and Logistics Redfern

The State Government notes that it will collaborate with industry to support the high value and prior-ity industries by ensuring planning controls create the right conditions to foster growth.

Goal 2. A city of housing choice, with homes that meet our needs and lifestyles As discussed in Chapter Four affordable housing provision is crucial in the discussion on economic and socioeconomic diversity. Goal 2 is wholly concerned with increasing housing stock and pro-viding a greater choice of dwelling type to deal with the increasing and changing populations. The NSW State Government’s rationale behind this includes enabling residents to live in close proximity to work, educational and social activities and to be able to age at home. Although the plan states that housing unaffordability is due to market demand, it also recognises the role of government to put downward pressure on prices, which is also a goal of Planning and Environment corporate plan. Directions and actions relevant to diversity in the CoS of this goal include: Direction 2.1 Accelerate housing Supply cross Sydney

+ Action 2.1.1. Accelerate housing supply and local housing choices + Action 2.1.3. Deliver more housing by developing surplus or under-used government land

Direction 2.1 outlines the government’s ambition to facilitate 664,000 new dwellings by 2031, and proposes to collaborate with councils, Urban Growth and the Greater Sydney Commission to achieve this target. Regions that have good access to transport and jobs will be targeted as areas for denser residential developments, with subregional planning driving housing supply. The direction also sug-gests Green Square, Central to Eveleigh and the Bays Precinct as possible government owned land to be contributed to future housing.

Direction 2.2 Accelerate urban renewal across Sydney – providing homes closer to jobs + Action 2.2.1. Use the Greater Sydney Commission to support council led urban infill projects + Action 2.2.2. Undertake urban renewal in transport corridors which are being transformed by

investment and around strategic centres The plan identifies that a significant amount of new dwellings will be realised through infill project led by local councils. It is suggested that state and local government will work together to increase housing production, and further work will be done to increase collaboration between state, local government and the private sector. This direction also focuses on strengthening the link between transport infrastructure high employment areas, such as the CBD.


Direction 2.3 Improve housing choice to suit different needs and lifestyles + Action 2.3.1. Require local housing strategies to plan for a range of housing types + Action 2.3.2. Enable the subdivision of existing homes and lots in areas suited to medium

density housing + Action 2.3.3. Deliver more opportunities for affordable housing

Crucial to a socially diverse city, is diverse housing options that accommodate individuals and households at different times in their lifecycles. This direction will require local councils to develop an area specific local housing strategy considering different dwelling and household types and the affordable housing needs, in addition to responding to local demand. The state government has committed to developing an approach that includes all affordable housing stakeholders and provide affordable housing in sate led urban renewal initiatives.

5.4 LEPs and SEPPs Amongst other Environmental Planning Instruments in New South Wales, LEPs are the primary tools that consent authorities utilise to control land use zoning. Although managed by the individual councils, LEPs are ultimately a tool controlled by the state in accordance with the EP&A Act. A stan-dardized approach was adopted to local planning in 2006 and a streamlined approach to LEPs was built in order to provide a sufficient amount of land resources for employment and housing, and to ensure efficiency managing natural, environmental and cultural resources (Planning & Environment 2014). The process has replaced some 3100-land use zones and 1700 land use definitions with 35 land use zones and approximately 250 land use definitions across the state (Planning & Environ-ment 2014). Land use zones that are applicable under the Sydney Local Environmental Plan are illustrates in Table 10.

Residential Zones R1 General ResidentialR2 Low Density Residential

Business Zones B1 Neighbourhood CentreB2 Local CentreB3 Commercial CoreB4 Mixed UseB5 Business DevelopmentB6 Enterprise CorridorB7 Business ParkB8 Metropolitan Centre

Industrial Zones IN1 General IndustrialSpecial Purpose Zones SP1 Special Activities

SP2 InfrastructureRecreation Zones RE1 Public Recreation

Table 10: Land Use Zones in the City of SydneySource: City of Sydney LEP 2012


Following approval from the State Government, the CoS’s current LEP was adopted in 2012. The state has also endorsed other LEP’s within the city to manage significant development sites, such as Green Square, Frasers Broadway (Central Park), Harold Park and the Glebe Affordable Hous-ing Project. While land use zoning is the primary mechanism for the allocation and management of land uses in New South Wales, land use objectives can also be reached through other direct and non-direct government intervention. SEPPs also impact on land use planning and are developed in response to a particular land use issue. Table 11. outlines SEPPs that have the potential to impact on economic and socioeconomic diversity.

SEPP Aims of Policy Potential implication on eco-nomic and social diversity

State and Regional De-velopment 2011

Identify developments that are of state significance deemed im-portant on a state level and refer functions of assessment to plan-ning panels

Large developments have signifi-cant an impact on the built mosa-ic. May encourage city economic and social homogeneity through scale and cost

Urban Renewal 2010 Establishes a process for assess-ing and identifying potential urban renewal sites for economic de-velopment and redevelopment in strategic locations

Strategic locations may loose eco-nomic and social diversity through economic restructuring and be-come less diverse

Affordable Rental Hous-ing 2009

Provides a planning regime to deliver affordable housing for workers close to places of em-ployment, as well as for homeless and other disadvantaged groups

Affordable housing developed in areas that are traditionally prohib-itive due to cost, and expand the role of non government organisa-tions in the delivery of affordable housing

Infrastructure 2007 Provide greater flexibility where and how infrastructure can be developed and to enable govern-ment to develop, redevelop or dispose of surplus government owned land

Government intervention with-in built environment can ignore highest and best use principle and deliver projects the enhance diversity and innovation

Major Development 2005

To facilitate the development, redevelopment and protection of significant urban sites of econom-ic significant that are benefit the state

Potential for developments to encourage diversity, and protect areas that are economically and socially diverse (Redfern Water-loo/ Australian Technology Park, Barangaroo)

Housing for Seniors or People with a Disability 2004

Increase supply of and diversity of dwellings for seniors and people living with disabilities

Increases the diversity of people who maybe on a low income with the CoS through housing provi-sion

Table 11: State Environmental Planning Policies for DiversitySource: Planning & Environment (2015)


5.5 Planning Tools for Acquisition, Regulation and Persuasion Perhaps the most direct method available to the State Governments is through public acquisition and/or land purchase, which is administered in accordance with the EP&A Act 1979, the Land Acqui-sition (Just Terms Compensation) Act 1991 and other cognate pieces of legislation. Wiggins (p.55) suggests that rather than restricting land use and thus development, governments can acquire property rights to initiate, dispose or transfer rights of developments or uses. For example, a public authority may acquire property rights to provide access arrangements, or to buy property rights to resell at a lesser price in order to assist a private organisations are economically desirable. Through this method of land use control, governments aim to justly compensate landowners in order to ac-quire their properties by considering the market value of the land, any special value to the owner, loss attributed to severance, loss attributed to disturbance, loss attributed to non-financial disadvan-tage and any increase or decrease of value in a piece of land owned that is adjoined or is severed by the acquisition process (Valuer General 2013, pg. 1).

Another direct method government can use to intervene in land use is through regulation, which is the mechanism used for land use zoning in New South Wales. Regulations on private property rights and land use are enacted through the Environmental Planning and Assessment Regulation 2000, made under the Environmental Planning and Assessment Act 1979. These regulations are auxiliary legislation created as an act of parliament, and are often made in relation to processes, procedures and fees in terms of controlling how the Environmental Planning and Assessment Act 1979 is admin-istered (DTPLI 2010). In addition to land use zoning, governments can also regulate in other ways to determine development outcomes, for example through State Environmental Planning Policies, through other Local Environment Plan provisions, building regulations and development and plan-ning standards (Wiggins, p.55).

The State Governments can also influence private property rights and land use outcomes through persuasion by way of fiscal policies and incentives, although Williams (2014, p.5) indicates that this option is relatively undeveloped in NSW. These policies may come in the form of financial incentives to property owners to develop in a particular way, income tax deductions, policies to stimulate certain occupational types (such as those in digital Start-up industries), easing trade re-strictions to stimulate foreign investment in the urban environment, developing private industry by assisting financially, joint ventures (such as public private partnerships), preferential assessments through development assessments and fast tracking development and incentive zoning, such as providing development standard bonuses (Wiggins p. 60). Two popular forms of financial inter-vention used in New South Wales include incentive zoning and transferable development rights. Incentive zoning is used in order to increase the provision of public goods and economic uplift.


For example, zoning, height and floor space ratio restrictions can be eased or increased in order to resolve land use conflicts between adjoining existing uses of land (for example between commercial and residential) or to encourage site consolidation and redevelopment (Rockdale Local Environ-mental Plan 2011). Volunteering Planning Arrangements are a common way consent authorities enter into agreements with developers that forms part of developer contributions through incentive zoning. Tradable development rights are market-based instruments that allow development rights to be transferred from one parcel of land to another (Karanja & Rama 2011).

5.6 Sustainable Sydney 2030 The CoS’s statutory powers were removed by legislation through the City of Sydney Act 1988. Al-though the council administers its LEP, it must get State Government Approval to alter or amend it. However, the city’s latest Strategy ‘Sustainable Sydney 2030’ provides a ‘big picture’ strategy for the city. This strategy is a departure from previous plans that focused purely on administration and geographical boundaries (Kornberger & Clegg 2011). Strategies developed from Sustainable Sydney 2030, include the city’s Economic Development Strategies, The Affordable Rental Housing Strategies and Community Strategic Plans. Table 12. outlines the three themes the Sydney 2030 covers and their potential implications on economic and social diversity.

Theme Description Potential implication on economic and social diversity

Green Concentrating on growing Sydney’s green credentials and encourage new, innovate and green industries to drive economic growth

Future innovative Start-ups created for green and renewable industries

Global Ensuring that Sydney continues to be a global city and international gateway by ensuring space for business, improving city amenity and providing space for inno-vation and creativity

Reduced socioeconomic diversity due to heightened spatial competition from ‘world class business facilities’ and in-creased neighbourhood amenity

Spaces created for innovate and creative industries

Connected Ensuring the city is connected by public and active transport and building on the success of the city villages

Ensuring industries located outside of the CBD are accessible and ensuring people are connected to the CBD

Table 12: Sustainable Sydney 2030 for DiversitySource: City of Sydney 2014

Affordable housing is a key aim of Sustainable Sydney 2030, with the CoS aiming for a target of 7.5% social housing target and 7.5% affordable housing by 2030. The CoS proposes that this will be done through planning arrangements (which must be negotiated through State Government), part-nerships and financial and advocacy actions. The CoS also aims to directly supply 2,900 affordable rental properties by offering land, site specific planning controls and through negotiating affordable housing on major development sites.


The CoS have also released a draft Tech Startups Action Plan (2015:2) for comment and which fo-cuses on five key themes, including:

+ Building a strong entrepreneurial culture and community + Creating skilled and connected entrepreneurs + Increasing the startup ecosystem density + Support access to funding, and + Developing technology entrepreneurs’ market access

Proposed projects to support the city’s start-up scene include: + investigating the need for an entrepreneurship centre, to provide a critical mass of office and

event space for entrepreneurs in tech startups and the organisations that support them + creating an awareness campaign focused on Sydney’s entrepreneurs and the tech startup

ecosystem + creating a Sydney tech startup festival to celebrate and promote the ecosystem + including digital technology education activities in the City’s programs, such as providing ses-

sions on how to code in our youth and library programs + hosting ‘Startup 101’ business seminars to inform the Sydney community about the tech

startup ecosystem, how to found and grow startups, and enable them to network with others + using our engagement and communication channels to discuss and debate the impact of

innovative technology, and to showcase tech startups + implementing the City’s Knowledge Exchange Sponsorship program to support education

and networking activities coordinated by the entrepreneurial ecosystem + creating a visiting entrepreneur program to fast-track the business skills of technology entre-

preneurs + collaborating with partners to develop business and entrepreneurship education and mento-

ring opportunities + assisting ‘angel’ investor associations or other members of the ecosystem to hold investor

recruitment education events + leveraging the international sister-city relationships to strengthen knowledge and investment

exchange.City of Sydney (2015:2)

Other key achievements relating to the improvement of economic and socioeconomic diversity from Sustainable Sydney 2030, include:

+ The provision of grants to businesses and other organisations focussed on ‘fine grain’ busi-nesses shop front improvements and business partnerships that benefit the local economy and employment (2012/2013)


+ Rented 18 city owned office and retail spaces to foster a cultural and creative hub at subsi-dised rates on Oxford Street

+ Advocating for a change in small bar liquor licensing laws to be changed resulting in 70 new small bars in the CoS (2012/2013)

5.7 Conclusion The chapter has examined the current governance structure for global Sydney, and highlighted some key challenges in terms of the relationship between the two main authorities responsible for area’s development. Changes to this governance space will not only happen through the State Gov-ernments agenda of council amalgamation, but also through the newly created Federal Minister for Cities. However, currently the statutory and strategic state planning framework has the capacity to deliver positive economic and socioeconomic outcomes, although these need to be integrated into other competitive urban policies and planning instruments. The CoS also has a clear direction from the Sustainable Sydney 2030 document to deliver a more divers and inclusive city, however this also needs to be supported by legislative frameworks to truly be effective.

EmmanuelSmith3347531 58Findings and Discussion

The previous chapters of this thesis have attempted to present a case arguing the importance of integrating policies that promote economic and socioeconomic diversity with competitive urban policies. The intent of this chapter is to present the findings of the six in-depth interviews and to dis-cuss their expert opinions and experiences on how planning could better encourage economic and socioeconomic diversity within the CoS. This chapter will begin by discussing the concept of city homogeneity within a Sydney context, followed by exploring the three themes that featured strongly throughout each interview, including spatial competition within the LGA, the governance of global Sydney, and planning instruments that encourage diversity.

6.1 Homogenisation of Global SydneyChapter One and Four outlined the risks brought about by city homogeneity, arguing that economic and socioeconomic diversity was important from three primary perspectives; reduced exposure to market volatility, increasing innovation and responsiveness to global market conditions and improv-ing access to opportunities to all socioeconomic groups. Although not all interviewees acknowl-edged that Sydney was at risk or on a scale of homogenisation, there was consensus in relation to many of the issues associated across global cities. However, Williams (2015, pers. comm., 15 Sept.) places city homogenisation within a broader context, stating “… in this era of mass communication we have far better platforms for seeing what other people are up to and we are much less in our national and cultural silos… the intermingling of cultures is a real event leading to some models emerging which support this… so why wouldn’t the built environment be a part of this… there is a broader homogenisation going on” Fensham (2015, pers. comm., 7 Sept.) agrees with the premise of city homogeneity, but suggests that this concept is less understood from the perspective of eco-nomic and social occurrences, and notes that although evidence of this is limited, instinct tells us that it is happening. This assertion from Fensham is supported by the lack of literature that explores the economic and socioeconomic homogenisation of Sydney, and global cities generally. The inter-viewee states that global cities are becoming conscious of the fact that they are becoming more ho-mogenous however, which is often expressed through discourse around the rampant unaffordability of residential and commercial property within the city. ABS (2011) and FACS (2015) data illustrates this unaffordability problem, with the median rent prices in the CoS being the highest compared to other inner ring suburbs. Anonymous (2015, pers. comm., 18 Sept.) agrees that there is a level of economic specialisation happening within the CoS, but also raised the point that economic cluster-ing is an important aspect to successful employment and business outcomes. The interviewee also stated there is still a high degree of diversity with the CoS, pointing out the suburbs of Green Square, Alexandria and Pyrmont.


6.2 Spatial Competition All interviewees agreed that within the CoS spatial competition is causing rampant unaffordability, with Williams (2015) stating that high rents have essentially wiped economic diversity. This sentiment was echoed by Fensham (2015) who also stated spatial competition within global cities is intense, resulting in low-income people and activities being pushed out of the inner city with homogeneity emerging as a result. Interviewees discussed both residential and commercial spatial competition.

Doutney (2015, pers. comm., 27 August.) recognises that Sydney’s historically diverse population of people from all socioeconomic backgrounds is slowly disappearing, reinforcing the high cost of living and housing as the cause for the displacement of the city’s ‘vibrant and colourful characters’. The Councillor’s concern is that Sydney will become and enclave for the rich, and highlights developments such as Barangaroo that only accommodate for high end users and activities as part of the problem. Doutney stated, “You can see it changing before you eyes – the closing of businesses, but diversi-ty is more important than gentrification. For a city to be successful, humane and civilized it needs that diversity, we need to see people who aren’t perfect…” Williams (2015) notes that the tastes of people are changing, and people no longer want to live in suburbia under a nuclear family structure “…people are trading scale for amenity in their cultural and working life so that will have a massive impact on the built for going forward”. This is reflected in results presented in Chapter Three, with the expansion of stereotypical knowledge worker demographics; including smaller household sizes, less children and younger people (couples without children), and an increase in education levels and higher incomes. The increase in knowledge workers to the inner suburbs, or as Williams (2015) terms it ‘brightflight’ subsequently fuels property demand and raises prices. Understandably, there is high demand for property within the CoS due to the high quality amenity, public transport links and proximity to the CBD. Arguably, competitive urban policies aimed at attracting a skilled workforce with little consideration for other socioeconomic groups have contributed to the homogenizing of the CoS in this respect. From a community-based perspective, Barchet (2015) accepts that gentrifica-tion is a reality in inner Sydney, and suggests that while we should be making spaces for upper mid-dle class professionals, that doesn’t mean we should just forget about people who do not fit within that demographic. This does not mean just protecting pockets of the city from gentrification, as that would most likely lead to community tension, but taking a more creative approach to this problem.

Anonymous (2015) agrees that high residential demand is an issue not only because of unafford-ability but also due ‘residential use’ being the ‘highest and best use’ for developers, stating “Highest and best use is an economic term, it doesn’t give you any measure of a good outcome or long term strategic vision. It is all about (financial) returns for individuals. I am not against that either, people using their land for highest returns they can get on their site, but I have problems with it supersed-ing a rational allocation of land over the strategic…” The primary concern that was examined with


Anonymous, was the concern that land is not being protected for low value uses, and instead it is be-ing developed into residential dwellings due to highest and best use. Industrial zoned land at Green Square and Alexandria was of particular concern to the CoS, as it is some of the last non-residential land in the LGA and serves an essential function to the CoS and the broader region. Anonymous suggested that there was not enough being done to protect this area and adjoining areas by the State Government. This was of particular concern due to the rapid changes in the Botany and Mar-rickville LGAs which are going through an intense period of residential development. Traditionally, these areas have accommodated industries (and workers) that have supported the growth of Port Botany and also the Airport, primarily transport and logistics, manufacturing and other low value industries. Anonymous stated “… land is always being rezoned for residential all the time, and pro development councils who probably don’t have the nuance to understand what that means in the long term, lack long term strategic vision and instead see opportunity for development and jobs in their areas.” Doutney also highlighted the problem of highest and best use within the CBD, especial-ly as a result from major tenants moving to Barangaroo causing mass commercial vacancies. This is supported by Colliers International (2015) who asserts, “The biggest occupiers in that city are PWC, KPMG, Westpac, Macquarie and Commonwealth Bank. All of these tenants, with the exception of Commonwealth Bank, have committed to major moves. All are moving to Barangaroo, with Macqua-rie the only exception. Overall this is unlikely to lead to a major change in net absorption however it will leave backfill space.” Doutney forecasts that this ‘backfill space’ will encourage building owners to adapt the use of their buildings to a residential use or hotels, where the highest and best use falls at the moment. This would be achievable within the objectives of the B8 Metropolitan Centre and B4 Mixed Use zones, commonplace throughout the LGA. Anonymous (2015) suggests this particular zoning poses problems for diversity as it basically allows the market to implement the highest and best use principle, with no consideration for what is actually needed within the area.

On a similar note, Fensham (2015) explains that a lack of economic and socioeconomic diversity can also be attributed to the way urban renewal is done. “On one end of the spectrum, you have competition with all these requirements (from government) around it, such as having to fund a head-land park and all the rest of it, and you load up all the costs on to the developer, you instantly rule out smaller players and only have two or three players that could possibly compete. Naturally enough they expect top dollar… and they are also loaded up with having to do site contamination, some of the investment in public transport provision and contributions to other public infrastructure… the developer will demand more and more yield for their investment, and community then runs the risk of not getting a diverse or interesting precinct that you would otherwise get delivered through a more traditional or more public interventionist style or approach.”


6.3 Governance in Global Sydney

Governance within global Sydney has been a strong theme throughout this research, with each interviewee having a distinct perspective of the current arrangements. Williams (2015) strongly sup-ports the newly formed Greater Sydney Commission, which he recently shared through an option piece through the Daily Telegraph, describing the announcement as an historic policy innovation and structural reform, which brings together state government and its agencies, local government and leaders from across the city to form the four commissioners on this new governance structure. In alignment with the OECD’s (2010) suggestion that global cities are becoming analogous, Williams notes that these ‘bland’ outcomes are a result of market failure and a diminished planning sector, and asserts that good governance is the only way a city can really express itself, explaining that governance is critical in trying to shape the forces that are operating within cities, and therefore the degree of economic and socioeconomic diversity also. The current governance structure, with a central silo government and 41 fragmented councils with too few powers, is the problem with Sydney’s governance (Williams 2015). The interviewee compared the Greater Sydney Commission with London’s current structure, noting it is a good model of city governance where a proper plan-ning hierarchy was installed between the 32 London boroughs and the Mayor through the Greater London Authority, adding “it is a hugely better place than it was 20 years ago, so the evidence is accumulating that you need good government to make good cities”. Griffith (2015, p. 4) outlines the Greater Sydney Commission as:“The Greater Sydney Commission is a dedicated new body, tasked with the responsibility to drive the implementation of the Plan (A plan for Growing Sydney). It is the first time an independent entity will take ownership of the delivery of a metropolitan plan. This will effect a step change in the way the Government’s urban infrastructure and planning priorities are delivered across Sydney. The Com-mission will work with councils and state agencies to ensure that growth is aligned with infrastructure and delivered in the right places at the right time.”

Global cities such as London, have considered how metropolitan governance can be improved. The devolution of power from the central government to the Mayor of London and London Boroughs has im-proved local regional development, and global city challenges such as affordable housing (Katz 2015). For example, affordable housing provision in London is delivered at a local level, with a wide range of affordable housing products being made available throughout the city (GLA 2015). As discussed in Chapter Five, the IPART report does not appear to consider devolution of power and is arguably out of step with international best practice. Fensham (2015) looks beyond the current governance structure of global Sydney, and discusses the function of government in delivering diversity outcomes. Fensham suggests there has been a legacy problem from the emergence of neoliberal market orientated views impacting on successive state government and its capacity as a developer and market interventionist.


Fensham states that this has contributed to the lack of innovation and risk taking by government required to produce a desirable amount of diversity. The interviewee describes the German model of urban renewal as good practice to control the amount of diversity within the built environment, “…the state accepts the risk with urban renewal because it wants diversity and to control some of the outcomes around affordability, infrastructure provision and public transport… the state will reap the benefits in the long term, in terms of the land value and the wider economy and community in general.” However, Fensham states that this is difficult within the current climate. Firstly because of the diminished role of state developers, such as Landcom and the land commissions of the 1970’s, which were important in providing market diversity through the built environment in contrast to de-velopers that have a tendency to towards ‘cookie cutter’ urban renewal. Fensham explains that this diminished role in development and the limited capacity of the State Government to manage re-newal projects with long term vision and outcomes is largely because of the constitutional limitation placed on the states to raise their own revenue, creating a situation of dependence on the Federal Government for tax transfers.

Doutney (2015) alluded to a degree of conflict within the current planning system, by describing the power struggle between state and local government, industry and the community, that was briefly discussed in Chapter Five. Doutney (2015) notes the conflict between the CoS, and the State Gov-ernment and large corporations such as banking and financial organisations, which are influencing planning decisions within the CBD. The councillor suggested that this has gone as far as the peak body for developers in NSW lobbying for Green councillors to be banned on voting on develop-ments, due to the claim that they are backed by anti-development community groups. Likewise, when asked about the relationship between the State Government and the CoS, Anonymous (2015) mentioned that there is currently a (Shooters and Fishers) planning bill in parliament seeking to take away planning controls from the CoS. This situation is similar to the conceptual arguments about governance in a global city context presented in Chapter Two, with this tension highlighting conflict-ing interests that each actor perceives are important to their place with in global Sydney.

6.4 Planning Instruments that Encourage Diversity The primary mechanism for increasing the socioeconomic diversity in the CoS discussed in the inter-view was through the provision of affordable housing. Anonymous (2015) explained that to date, the CoS is not achieving their affordable housing targets, which are set by the State Government. Although the interviewee asserts that the council is doing all that it can both inside and outside the planning frame-work, achieving their targets was difficult given the current mechanisms in place. However, examples of where they have been successful in providing affordable housing within the current planning frame-work were discussed, and included the three inclusionary zoning projects of Pyrmont and Ultimo, Green Square and the newest inclusionary zone since 2002, within the employment lands of Alexandria.


Anonymous (2015) stressed that unfortunately the CoS can not implement inclusionary zoning proj-ects ad libitum and must seek support from or lobby for the State Government to legislate through the planning framework. Currently, only three councils can deliver inclusionary zoning projects in Sydney through SEPP 70 (Affordable Housing); the CoS, Leichhardt Council and Willoughby Coun-cil. This underscores a problem in achieving affordable housing within the CoS, as there have only three successful examples of inclusionary zonings that have been endorsed by the CoS and legis-lated on by the State Government. Asked about the small number of inclusionary zoning projects, Anonymous stated that “Local government operates at the will of the State Government and the State Government does not support inclusionary zoning and hasn’t for a long time… we put an inclusionary zoning project up in 2009… and the State Government said no, (stating) the GFC is here we don’t support inclusionary zoning as it would have an impact on jobs.” Doutney (2015) also advocates for inclusionary zoning across the LGA, stating it is crucial to developing an adequate number of affordable housing dwellings, however she also states that getting developments to in-clude affordable housing is extremely difficult, suggesting that both State Government and private developers are inhibiting any real progress being made. Anonymous (2015) concurs that State Government are very unlikely to support and LGA wide scheme. Anonymous (2015) detailed some progress that has been made in protecting industrial space and also providing the conditions for de-veloping affordable housing within the Alexandra area. The CoS kept land in this area zoned B6 and B7 but allowed for a greater range of commercial and industrial uses for this area, this enabled the industrial businesses that were there to adapt somewhat, so they could now include a show room or include some manufacturing activity within their premises. The CoS also included three mecha-nisms within this zone to encourage the development of affordable housing, including:

+ Allowing only community housing providers only to develop affordable housing in these areas + Allowing businesses that do not use all of their FSR to enter into an agreement with a com-

munity housing providers to buy their additional floor space to provide affordable housing + A spot rezoning is negotiated with a landowner to a B4 zone and a portion increase in value

will be charged and used for affordable housing provision

Although the overarching message is that this land is primarily for low value employment and activi-ties. The CoS is also investigating how it can develop land owned by the council for affordable hous-ing, or to pass it on to an affordable housing provider at a small cost. This was successfully achieved with the South Sydney Hospital site at Green Square that the CoS owned and sold to a community housing provider. Another way this might be achieved is through restricting the redevelopment of sites to preserve the built environment while also preserving low value economic activity. To achieve this, Fensham (2015) notes that there is a need for the State Government to encourage innovations in tenure. This includes allowing light industrial spaces to operate within a residential setting, as much of the noxious industry has moved on. Residential uses too could move into industrial settings, providing that this does not risk the pricing out of other uses.

EmmanuelSmith3347531 64Conclusion and Recommendations

This thesis has presented a challenge that faces Sydney as it pursues competitive urban policies and a better position within the global city hierarchy. While there are many planning challenges that as a global city Sydney must solve, perhaps the most important one is how the planning profession ensures that the city is both economically and socioeconomically diverse. This depends on getting the right balance of opportunities for high value activities while ensuring there is provision for low value activities also. The primary function of this research was to investigate the role planning has in achieving this goal. This research has attempted to address the research statement:

► How planning can better contribute to an economically and socioeconomically diverse Global Sydney

7.1 Conclusion Through the literature review in Chapter Two, this thesis has highlighted previous research that has been conducted in relation to globalisation and the global cities phenomenon. In the absence of global city discourse that focused on economic and socioeconomic diversity, this thesis attempt-ed to draw parallels between the literature on competitive advantages and diversity within a city context generally. The chapter identified a gap within global city discourse that presents future re-search opportunities, especially in a Sydney context. Chapter Three provided a snapshot of Syd-ney as a global city, and attempted to maneuver the research from its theoretical underpinnings to a more practical platform. This chapter identified the evolving nature of Sydney’s economic and socioeconomic mosaic. This included presenting data that indicates Sydney’s increasing its pro-portion of high value activities, and high-income individuals, compared to the greater Sydney area. Further in-depth research would be needed to present a definitive hypothesis on these trends how-ever. Chapter Four argued the case for economic and socioeconomic diversity to be considered as an important topic for future discussion on global cities, most notably in relation to the eco-nomic risks related to heightened exposure to global conditions, the benefits associated with in-novation and economic adaption, and the importance of enabling access to high value areas of global Sydney to all socioeconomic groups. The intent of Chapter Five was to explore, in brief, the current governance structure that is currently in place to manage global Sydney. The research found that although the current governance structure is quite fragmented, this is an area that is currently being explored by the State Government and other independent bodies. This should be done for the benefit of global Sydney rather than from an ideological platform, with all options, such as amalgamation and devolution of power objectively explored. In addition, this chapter also identified key strategic and statutory planning tools that have the potential to deliver further economic and socioeconomic diversity for Sydney under the current governance arrangement.


This research attempted to corroborate arguments made throughout this thesis in Chapter Six. Although not all interviewees agreed that Sydney was in a state of homogenisation from global city status, their acceptance intense spatial competition which has resulted from high value uses. Interviewees discussed the governance model in global Sydney as having a major impact on the ability of various actors to increase the amount of diversity within the city. The primary tool to achieve socioeconomic diversity, discussed by all interviewees, was improving the provision of affordable housing. Additionally, interviewees indicated that further state intervention was required to increase economic and socioeconomic diversity.

7.2 Research Findings The intent of this research was to respond to key research objectives outlined in Chapter One.

+ Provide an overview of the current statistical make up within the geographical study area Chapter Three has discussed the economic and the socioeconomic composition of global Sydney through the analysis of statistics specific to the CoS. A more accurate snapshot of global Sydney would include the CBD area of North Sydney Council. However, this area makes up a minimal portion of the overall area. This research indicates that economic and socioeconomic diversity is reducing within the CoS. Although Finance and Financial Services has reduced in the number of businesses and its overall share employment in the city from 2007 to 2012, it is still the biggest employer in the city at 23.6%. In contrast, another high value industry Business and Professional Services, has increased its share of overall busi-nesses and employment over the same period. Together, these industries make up 40% of businesses, and 90% of the total economic output in the CBD. According to literature outlined in Chapter Two, these high value industries have a direct impact on property value within the inner city. This increase in demand caused by households and individuals with more dispos-able income, and the integration of Sydney as a global city, have ultimately led to the highest rental prices and relatively high sales prices in the metropolitan region. Additionally, just over 40% of CoS residents belong to the highest income quartile, compared to 28% across greater Sydney. In contrast, the LGA has fewer individuals within the low, medium lowest and medi-um highest income groups.

+ Better understand the importance of economic and socioeconomic diversity and their rela-tionship with healthy city systems This research has identified three primary issues linked to economic and socioeconomic homogeneity. Firstly, this research advocates for economic diversity in order to mitigate the risk of global economic conditions. This is particularly important as the Australian economy faces structural decline if current economic conditions extend into the future. As discussed,


Castle (2012) states the OECD predicts that another GFC is likely given current global eco-nomic conditions. Jericho (2015) also provides a sobering short term economic outlook by noting the poor growth rate of 0.5% for the December 2014 quarter, annualised to 2%, and arguing that the economy needs to grow at least 3.1% per annum to stop the unemployment rate from rising. The evidence accumulated by this research indicates that economic diversity is important to providing other economic or employment opportunities in the event of eco-nomic downturns. The second understanding related to economic diversity is the capacity of the city to adapt to global economic changes, through technological and market advanc-es. Planning has a role in this by providing spaces within the CoS that are responsive and encourage new ventures and start-ups. The planning sector plays a pivotal role in creating places that encourage a responsive and resilient economy that is not only diverse, but sim-ilar to the current economy, provides significant benefits in terms of wealth for the Sydney community. Lastly, the intent of this research was to understand how planning could better accommodate people in the CoS from all socioeconomic groups. This research found that af-fordable housing and further intervention from the State Government could benefit economic and socioeconomic diversity, primarily through the provision of affordable housing and also in the built environment. This includes changing how major developments and urban renewal projects proceed.

+ Provide an analysis of the governance structure and planning framework for delivering eco-nomic and socioeconomic diversity The research indicates that the current governance structure for global Sydney does not re-flect best practice internationally. This is not only due to the fragmented nature of governance in global Sydney, but also due to limited statutory authority available to the CoS to address diversity issues locally. Although the CoS may not have been classified as having the appro-priate scale and capacity for a global city authority, this should not immediately rule out other governance approaches, such as the devolution of powers found in other global cities such as London and New York. International Research suggests that this approach can enhance economic and socioeconomic diversity. Consideration of planning tools that aim to leverage off private gains from increasing land prices, like the mechanism implemented into B6 and B7 businesses zones by the CoS, is under utilised. Research into using current planning mech-anisms creatively to increase diversity is being conducted by CoS, however need to be sup-ported by the State Government to have an significant impact. However that said, the Greater Sydney Commission is a positive step in relation to governance for the whole metropolitan region. Likewise is the recent announcement regarding the appointment of the Minister for Housing in the Federal Government, Although it is too early to tell at this stage what impact both of these additions will have in terms of economic and socioeconomic diversity.


+ Provide recommendations based on research findings and expert opinions about how to best achieve an economically and socioeconomically diverse city that could be applied to the broader Sydney metropolitan region

Recommendation One: The State Government investigates other global city governance models in addition to council amalgamations that are efficient at managing pressures from the global marketplace while also encouraging local economic and socioeconomic diversity.

Recommendation Two: The Greater Sydney Commission makes affordable housing provi-sion a priority under the actions set out by the metropolitan strategy and works closely and creatively with local councils to reach their targets.

Recommendation Three: Assess how urban renewal outcomes are delivered and whether they are conducive to economic diversity and innovation. This perhaps means an enhanced role for the state in providing financial incentives, administering controls to change scales and developing further planning regulations to sit in the EP&A Act framework.

Recommendation Four: Further protection of low value land, like the example set by the CoS in Alexandria, to support the function of a healthy city system and to protect low value jobs in inner city.

Recommendation Five: A broader discussion takes place about what it means to be a global city in a contemporary context with local, state and federal government, industry and the wid-er Sydney community

Competit ive Urban Policy

Collaboration between State and Local Government

Diverse and Resil ient Global Cit ies

Protecting and enabling urban spaceslow value uses

Providing spaces for Innovation

Increased Affordable Housing

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EmmanuelSmith3347531 75Appendix A

BE HREAP FORM 3 – PROJECT INFORMATION STATEMENT September 2014 page 1

Complaints may be directed to Research Ethics and Compliance Support (RECS), The University of New South Wales, SYDNEY 2052 AUSTRALIA (phone 02 9385 7257, email : [email protected]).

PROJECT INFORMATION STATEMENT Date: 26 August 2015 Project Title: Global Sydney: A Race to the Same. Approval Number: 145066

Participant selection and purpose of study You are invited to participate in a study of the homogenisation of global Sydney, and how planning activities might encourage a more unique and diverse city. You were selected as a participant in this study because of your knowledge of Sydney, its position within the global city hierarchy, and the challenges the city is faces due to the economic and social costs associated with a homogenised city landscape. It is anticipated that the outcomes of this study will be used to inform further investigation into the impacts of city homogenisation. Description of study This research argues that because of the internationalisation of cities and their desire to attract the same kind of capital, business, talent and tourism, global city landscapes are becoming homogenised. Through this interview I aim to investigate how planning activities can encourage a more unique city landscape, through both industrial diversity (business types and sizes) and neighbourhood diversity (demographics and land use). This project seeks to do this by exploring the theme of the homogenisation of city landscapes as a concept, the costs associated with a homogenised city landscape, how planning regulation helps or hinders city uniqueness and government responses to city uniqueness and diversity (such as, through the metropolitan strategy ‘A plan for Sydney’ and other City of Sydney strategies). If you decide to participate, I will facilitate an in-depth interview about the aforementioned topic. The knowledge you impart through this interview will be synthesised with other expert knowledge and data, and expressed in my thesis. I will ask some guiding questions, but I am hoping that this interview will be more of a fluid conversation to help explore some themes that I may not be aware of. I understand that you must be very busy, so this interview should not take longer than 60 minutes of your time. I cannot and do not guarantee or promise that you will receive any benefits from this study. Confidentiality and disclosure of information Any information that is obtained in connection with this study and that can be identified with you will remain confidential and will be disclosed only with your permission, or except as required by law. If you give us your permission, we plan to publish the results and the thesis through the UNSW School of Architecture and Design, and will be publically available. Recompense to participants No recompense will be available or offered in exchange for your participation. Your consent Your decision whether or not to participate will not prejudice your future relations with The University of New South Wales or other participating organisations. If you decide to participate, you are free to withdraw your consent and to discontinue participation at any time without prejudice by completing the statement below and returning this entire form to: Emmanuel Smith, C/- UNSW, School of Architecture and Design, UNSW Australia, NSW 2052, Australia If you have any questions, please feel free to ask Emmanuel Smith, on 0488310438 or email [email protected]. If you have any additional questions later, Dr Christine Steinmetz, Course Convener, will be happy to answer them on 02 9385 7417 or email [email protected] at the University of NSW. Emmanuel Smith

EmmanuelSmith3347531 76Appendix A

REVOCATION OF CONSENT.

Project Title: Global Sydney, A Race to the Same

(Please send this entire form to the above address.)I hereby wish to withdraw my consent to participate in this research project. I understand that such withdrawal will not jeopardise my relationship with The University of New South Wales, other participating organisations or other profes-sionals.

…………………………… ……………………………………………..….… …………………..…………Signature Please PRINT name Date

EmmanuelSmith3347531 77Appendix B

BE HREAP FORM 4 – PROJECT CONSENT FORM September 2014

PROJECT CONSENT FORM Project Title: Global Sydney, a race to the same

You are making a decision whether or not to participate in a research project. This PROJECT CONSENT FORM enables you to indicate your preparedness to participate in the project. By signing this form, your signature indicates that you have decided to participate. You will be given a PROJECT INFORMATION STATEMENT that explains the project in detail, and that statement includes a revocation clause for you to use if you decide to withdraw your consent at some later stage. The PROJECT INFORMATION STATEMENT is your record of participation in the project. This PROJECT CONSENT FORM will be retained by the researcher as evidence of your agreement to participate in this project. Please complete the information in this box. Please indicate which of the following options you agree to by ticking one of the following options:

! I consent to being quoted and identified ! I consent to being quoted but I do not want to be identified

…………………………………………………… Signature of Research Participant

…………………………………………………… Please PRINT name

…………………………………………………… Date

Name of researcher: Emmanuel Smith

emmanuel_smith_final

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