Habits of hibernation could be here to stay
The coming of the coronavirus has profoundly affected the Australian way of life.
New concepts such as lockdown and social distancing, as well as old ideas such as working from home, are the pivots around which the coronavirus threat revolves. The question is the extent to which these new behaviours might reshape the way we live, work and play in the future. Will the push to work from home gather momentum? Will we feel comfortable eating and drinking cheek by jowl in pubs and cafes? How comfortable will we feel cramming into train carriages?
The coming of the coronavirus has profoundly impacted the Australian way of life.
New concepts such as lockdown and social distancing, as well as old ideas such as working from home, are the pivots around which the coronavirus threat revolves. The question is the extent to which these new and reimagined behaviours might reshape the way we live, work and play in the future.
Will the push to work from home gather momentum? Will we feel comfortable eating and drinking cheek by jowl in pubs and cafes? How comfortable will we feel cramming into train carriages, not so much later this year but throughout the 2020s? How many of the protocols that we followed to ward off contagion might carry into the future, and for how long?
These are important questions because they go to the nub of the Australian urban life. And nowhere are the implications for the Australian way of life greater than in the central business districts of our largest cities. If work from home gathers momentum, as I think it will, then what becomes of city office space? And if people don’t feel comfortable using public transport, how will we get about the city?
As for those trendy cafes and bars where congestion and tight tables are part of the atmosphere, well, we didn’t quite realise the extent to which they operated on the assumption that no one in there might carry a deadly infection.
And therein lies the problem.
Deep down we know that the COVID-19 pandemic is unlikely to be a one-off. The greater the volume of air travel between cities in a globalised and increasingly middle-class world, the greater the risk of contagion.
During the 21st century, Australia must become adept at managing pandemics to the extent that town planning techniques, budget provisions, grocery items, public transport and the healthcare industry all have a role to play in containing risk.
Building in protection against possible contagion is a bit like building backyard bomb shelters in the 1950s to manage the risk of nuclear fallout. Eventually, by the 1990s, after the collapse of the Berlin Wall, the threat of nuclear annihilation subsided, although other threats such as asymmetric warfare via terrorism emerged to take its place.
With the advent of a vaccine or effective treatments, we will move on from the threat of contagion and worry about other threats to human existence.
But not before setting in place coronavirus-inspired behaviours that will be carried forward. Those who remembered the Great Depression, even as young kids, were frugal all their lives, including up to 80 years later amid a time of excess and plenty.
Perhaps the place with most to lose from a ramping-up of our determination to avert outbreaks is the CBD. The most densely populated parts of the Australian continent flank the CBDs in all capital cities. It’s hard to social distance in places such as The Rocks and Kings Cross in Sydney, or Prahran and Southbank in Melbourne or Fortitude Valley in Brisbane.
The attraction of the inner-city lifestyle isn’t just walking-distance proximity to CBD workplaces, but the sense of being at the centre of things. All that buzziness and all that busyness, once so much a real-estate asset, now looks like a liability. Maybe millennials won’t clamour for minimalist apartments in nearby Paddington but will seek out the space and the salubrity of distant Hornsby?
The CBDs of Australia’s biggest cities act like portals to the global economy; they are filled with glittering towers, knowledge workers, overseas tourists and, most lucratively, an abundance of foreign students.
The best of Sydney, Melbourne and Brisbane is showcased to our worldly visitors in the CBD and its most glamorous precincts including the cafe, bar, entertainment and gaming precincts. Here is a fusion of congestion, global connectivity and hedonistic spending that must be harnessed and made to comply with the new rules of the post-corona world.
Indeed, in this brave new world the city, the CBD, and its fringes, must change. For the balance of this year at the very least, there will be no students, no tourists and possibly fewer knowledge workers and shoppers to spill like mortar between the corporate towers. In this world the CBD becomes more measured; less buzzy; less busy; a public place to be navigated tentatively, gingerly, and which is at odds with its frenzied pre-corona persona.
In the longer term, however, and especially if Australia can manage the recovery as well as we have the lockdown, overseas tourists and foreign students will surely regard our nation as a safe destination and come in even greater numbers. And especially when Australia is compared with Britain and the US.
Smashed avo for $32
But even so, the chichi cafes of the inner city must rein in and then space out their seating to reassure customers jumpy about the possibility of infection.
I am not convinced that the economics of restaurant businesses built on the logic of densely packed tables can work with fewer tables in a looser layout. If cafe operators need more turnover from fewer customers, then expect smashed avocado with crumbled feta on five-grain toast to be priced at $32 a pop as opposed to $22.
At the time of the last census there were about a third of a million jobs in the Sydney CBD north of Park Street. The Melbourne grid at this time (excluding Docklands) contained about a quarter of a million jobs. The shift to working from home will affect a proportion of the knowledge worker component of this workforce.
Since the late 1990s, barely 4-5 per cent of the Australian workforce has worked from home. The next census, due to be conducted in August next year, will show perhaps 10 per cent working from home. I think this number can be shaved off the CBD office market, and elsewhere, without necessarily devastating property values, and especially in premium buildings in prime locations in a growing economy.
Lesser buildings in off-prime locations, with more marginal tenants, in a contracting economy, are a different story, especially if the work-from-home push jumps to, say, 20 per cent of the workforce. That’s when CBD office towers might stand like hollow trophies to another time.
Off the buses
The greater impact, I think, is likely to be felt on the trams, trains and buses, which form the basis of the public transport network. Our roads simply cannot operate with, say, 10 per cent (or more) of public transport users switching to private cars. Staggered starting hours might be part of the solution; so too working from home a day or two a week. This could manifest in corporate entities re-leasing, say, one less floor next time round.
In this world, the CBD struggles to attract workers uncomfortable with commuting and shoppers are now increasingly drawn to flagship stores in large enclosed suburban centres, where mass temperature checks give everyone comfort. Who knows what contamination might flow into and out of the CBD’s activated streets?
Urban life forms
Nevertheless corporates need a flash address, naming rights, an elegant entrance and a critical mass of staff to project the sense of the brand. But the back office, the consultants, the contractors, can be flung out of the CBD, propelled by centrifugal forces to hidey holes in the suburbs and to fast-evolving work-near-home collaboration spaces. It’s not so much a wrenching of the existing office workforce out of the CBD as it is a siphoning-off of future growth.
The CBD has been riding high for more than a decade and so too have the life forms that sit tight and close, like a tea cosy, including the hipsters, the knowledge workers, the international students, the visitors and the downshifting corporate elites strung out along St Kilda Road and bunched up in Potts Point.
Safety in the suburbs
By the time of the 2016 census, a social/cultural divide had surfaced between the inner city and suburbia at the 5km mark. The allure of the CBD sought out and admitted the young, the educated, the childless and indeed the godless into its confines. In the post-corona world, this cultural divide must weaken as the human geography of Australian cities is pulled towards the safety of suburbia, which is at odds with recent trends. This isn’t so much a tectonic shift as it is a process of shifting sands.
Thus far in the 21st century as the economy accelerated towards knowledge work, as the nation globalised and outsourced to China, the premium attached to the CBD and its attendant inner suburbs escalated. Property prices skyrocketed. The best jobs, the most prestigious corporates, were all in the CBD and the inner city.
Goodbye to arrogance
In the post-corona world, the CBD is still the focal point — it has an unassailable critical mass — but it never quite regains the oomph, the dominance, the haughty arrogance that it had during the 2010s. In this new world the suburbs are reimagined as tetchy, safe, cool places: more like Silicon Valley, less like New York City.
And the city centre, though still important, is buffeted by the winds of change. It still attracts the corporates, the administrators, a dedicated band of shoppers and workers. But at night in the small hours it’s a different world that attracts the unanchored remnants of corona’s big bang, namely the disconnected and the disenfranchised who seem drawn to this once powerful place that stood at the apex of Australian urban life.
Investa group executive Sally Franklin and general manager Chris Molinaro in one of the company’s office lifts in Collins Street, Melbourne