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Logistics

The future of Australian cities/regions in a post-pandemic world

future of Australian cities

This study will look at attraction and retention of businesses and households to regional cities and assess the long-term impacts of COVID-19 on spatial patterns of employment and residential settlement across regional and capital cities.

It will do so by:

  1. Examining the primary determinants of firm and residential location patterns across Australia;
  2. Identifying key drivers of or barriers to attracting and retaining businesses and households to regional cities;
  3. Analysing possible long-term impacts of COVID-19 on firm and residential location decisions across metropolitan and regional cities; and
  4. Predicting the resulting spatial patterns of employment activity and residential settlement within and across these cities under different future scenarios.

Participants

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Project background

The Australian settlement pattern continually evolves in response to economic, social, and technological change: the context within which people choose where to live and work.

In the long-term, this evolution has been characterised by the concentration of population in the capital cities, the growth of regional cities and coastal areas, and the decline of many smaller inland towns (BITRE 2014).

The COVID-19 pandemic’s impact across the economic, social, and technological spheres has the potential to create long-term change in location decisions: in the short-term, it has disrupted established patterns of firm and household location, through its far-reaching impacts across all aspects of daily life.

We have already seen the impact on where people locate. For the first time since 1981, regional population growth has outstripped the capital cities, and net internal migration to regions from the capitals was greater in the year to June 2021 than the previous two years combined (ABS 2022).

Many businesses have allowed employees to work from home, whenever possible, although practice has varied between locations and between economic sectors. Schools and universities have partially or fully shifted to online teaching, and homes have become the educational environment for children as well as places of work.

Household shopping behaviour and consumption patterns have shifted rapidly, with greater dependence on online shopping and e-commerce than before the pandemic. Combined with other sociotechnical changes, these short-term disruptions due to COVID-19 could be indicators of more long-term shifts in preferences, with profound implications for extant land use patterns.

For example, business surveys in the US find that more than half have permanently closed some or all of their office spaces since March 2020, when the pandemic first broke out (e.g. Zackzkiewicz, 2021), and it remains unclear if analogous trends are likely to be observed across Australian cities.

However, evidence seems to be ambiguous on the magnitude and persistence of these effects of the pandemic on where people live and work. For example, in their analysis, the Commonwealth Centre for Population finds that:

[our] central projection scenario sees a net shift in migration away from capital cities in favour of regional areas in 2020-21, before gradually returning towards the long-run average… Underscoring the uncertainty surrounding this topic, surveyed experts were split on the impact of COVID-19. Approximately half expect it to have no impact on migration patterns between cities and regions, with the other half expecting a slight shift in favour of migration from capital cities to regional areas.

CP (Centre for Population) (2021) Migration between cities and regions:

A quick guide to COVID-19 impacts, Canberra.

In summary, we are facing an unpredictable future that requires a resilient approach to urban and regional planning that insulates our cities and towns from similar future shocks. As the world has become increasingly urbanised and globally interconnected, it is prudent to assume that the ongoing pandemic will not be the last. Neither can it be assumed that the current COVID-19 pandemic will end soon or in a predictable way.

This project seeks to understand how firms and households choose where to locate, the long-term implications of the pandemic on the distribution of employment and population, and what this means for the growth of our regional and capital cities.

Project objectives

Specifically, this project will examine the following four research questions:

  1. What are the primary determinants of firm and residential location patterns across Australia?
  2. What are the drivers of or barriers to attracting and retaining businesses and households to regional cities, and how do they differ based on characteristics of businesses, households, and regions?
  3. What are the possible long-term impacts of COVID-19 on firm and residential location decisions across metropolitan and regional cities?
  4. How are these impacts likely to influence resulting spatial patterns of employment activity and residential settlement within and across these cities?

REFERENCES

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