Creating Suburban Villages in a Matter of Weeks?
White-collar workers usually commute to large employment hubs, but not now, which means there has been a substantial contraction in spending in employment hubs (on lunch, coffee, and so on). Some of this spending has been redirected back into residential neighbourhoods. For the top 20 dormitory suburbs in Greater Melbourne, that could mean $1.65 million a day for local goods and service providers. And even if just a small proportion is retained in a post-COVID-19 landscape, it could be enough of a catalyst for creating a real 20-minute city.
In 2019 I wrote a post about commuter discretionary expenditure in the City of Melbourne. According to Spendmapp, in-commuters tipped about $3.8 billion per year into the City’s economy: an average of $4,700 per person. And that’s just discretionary spend. And as my colleague Dean recently wrote, the current social distancing rules could be costing the City this spend and more, maybe $15 billion in GRP.
But some of that economic activity may not have been destroyed. It might have just been relocated.
And it could be to places like Mill Park, Cranbourne and Noble Park.
Most planners and spatial economists call these dormitory suburbs. Figure 1 shows the 20 most ‘dormitory-like’ Statistical Area 2s (SA2s). Each day 93% of the total resident workforce from these 20 places (that’s around 90,000 commuters) travel to some other part of the metropolitan area for work — mostly to the five employment hubs also shown in the map.
The map highlights the top 20 dormitory SA2s where an average of 93% of resident workers commute elsewhere for work. Source: Geografia, 2020
But not today. Right now, if we still have a job, many of us are working from home and not doing much else (outside at least).
These sudden changes have created a lot of problems for all of us: social and economic, including an increase in unemployment; a major shock to the retail sector; and for many enterprises, a productivity loss resulting from having to manage workforces at home¹.
But there may be another part of the story unfolding in the suburbs. Here we will have seen a very sudden and dramatic change in the local daytime social and economic landscape. There are far fewer traffic jams, more people buying takeaway coffees and lunch at local stores; more demand for space at the park; for bandwidth in households, and for a multiplicity of other things that, until recently, we purchased or used in places like the Melbourne CBD.
Today, Resident Escape Spend² has dropped to almost zero. But that doesn’t mean all of it has disappeared, some of it has been transferred to what we call Resident Local Spend³.
Just counting white-collar jobs, in those top 20 dormitory SA2s alone, there will have been a net increase in the daytime population of about 65,000. That’s almost a four-fold increase. And that doesn’t include workers like teachers, those in the health sector, construction workers and others not working from home (yet).
Assuming these workers are still outlaying about 80% of their typical lunchtime spend (they have to eat after all), then we are looking at $1.65 million per day being spent nearby ($80-$85,000 per day per SA2). Annualised that is $380 million. Across the entire metropolitan area, there could be $21 million that has been redistributed from the larger employment hubs to local precincts across Greater Melbourne (annualised that’s $4.7 billion).
If you think about it, one of the obvious features of dormitory suburbs is they don’t have much in the way of café and service strips. There just isn’t a large enough daytime population to support them. That’s why in those top 20 dormitory SA2s, only about 1,000 people are working in these businesses. While cafés and restaurants have been amongst the hardest hit by social distancing, if even a fraction of the Resident Escape Spend is now back in the local economy, then maybe some suburban cafés and other shops have a chance to sustain themselves through this period. Who, after all, is going to capture that additional $80–85,000 per day per SA2? It can’t all be going into the weekly shop at the supermarket.
From this crisis period, several trends are likely to eventuate:
- Some people may see an opportunity, quit their job and start up a business from home;
- Some may maintain the new pattern of buying their lunches locally before heading to the office; and
- A small number may continue to work from home a day (or more) a week.
Starting from $80,000 per day, the cumulative effect might be just what is needed to build the suburban villages of our 20-minute city.
¹ Many enterprises have retreated from allowing working from home because, in reality, only a minority of people can work from home productively. It depends on things like seniority, the type of work, and the setup they have at home.
² The money ‘leaking’ out of where people live to where people work or visit.
³ The money spent by households and businesses within the area they are located.
