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Housing density and road maintenance costs for Councils

Road maintenance/renewal is typically the one of the largest components of Council budgets in NSW and represents a substantial cost for ratepayers.


This post examines the relationship between the density of suburbs and road maintenance costs. Do lower density suburbs concentrated with detached dwelling houses on large blocks lead to higher road maintenance costs for Council's compared to higher density suburbs that may contain a range of housing types eg. residential flat buildings, multi dwelling housing, dual occupancies etc)?


The short answer is yes. Evidence suggests that lower densities - all things being equal, lead to greater ongoing road maintenance costs.


An example of road maintenance costs for a typical Council can be found in Campbelltown Council's 2021-2022 operational plan. The plan sets aside $8.99 million for road renewal/maintenance, plus another $0.8 million for kerb and gutter and $1.03 million for footpaths. This represents over half of the total renewal/maintenance budget and around 10% of the $123.88 million that the Council expects to collect in rates and annual charges for the year.


Cleveland, Dec and Rainham examined the relationship between density and road length per resident within and between cities in a paper. They found that road length per resident varies non-linearly with density for the subgeographies of cities, and in a manner relatively consistent across cities. The research also suggests that municipalities should avoid approving developments in the lowest category of density, below 10 residents per hectare, where the road length per resident tends to be many times higher than in other suburban neighbourhoods.


There are also other infrastructure costs, the maintenance of which must be paid for publicly. Water and sewer assets are largely managed by local government in regional areas of the state and by state owned corporations in Sydney, the Illawarra and the Hunter.


The OECD published a paper in 2018 titled "Rethinking Urban Sprawl - moving towards sustainable cities". This paper references a number of other studies on the relationship between urban form and the cost of providing public services.


Carruthers and Ulfarsson (2003, 2008) found significant economies of density in capital facilities. Duncan and Associates (1989) found water provision costs in compact development are 60% of those in spread-out patterns. Frank (1989) found that sewer costs in compact development are 66% of those in spread-out patterns. Hortas-Rico and Solé-Ollé (2010) found that low-density development patterns inflate the provision costs of several local services and RERC (1974) found that the cost of providing schools, roads and utilities under high density may be 17-30% of provision costs under low density.


Kurvinen and Saari examined the relationship between housing density and infrastructure costs. They found that infrastructure costs per capita are the highest in low-density areas and the lowest in high-density areas, if parking is excluded. However, if also construction costs of parking structures are included, the costs per capita can be the highest in very high density areas.


Making the decision to accommodate our population growth by paving over farm land in remote areas and building lots of large detached dwellings is often "easier" over the short term, however the above does show that there are additional long term costs for government and society to consider. This is before we start thinking about other issues such as car dependency, social engagement, greater energy consumption, loss of biodiversity, loss of agricultural land etc.

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