If Australian cities want to remain competitive in terms of innovation and startup success, they have to consider housing affordability, according to a report from the Australian Housing and Urban Research Institute (AHURI) and the University of Sydney.
Commissioned by AHURI and completed by researchers from the University of Sydney, the report assesses the success of various innovation districts within so-called ‘smart cities’ around the world.
More and more, local governments are designing cities focused on innovation-led employment, particularly centring science and tech firms in designated innovation districts.
Those that were the most successful, the report found, were those that offered diverse accommodation options, including long-term affordable housing suitable to penniless, ramen-eating, early-stage entrepreneurs.
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As is seen in Silicon Valley, where housing prices are famously extortionate, the very existence of an innovation district can be linked to a lack of affordable housing.
“In attracting knowledge and creative workers, and the services they desire, these linked-in districts are gentrified further as they become even more attractive to well-paid workers,” the report says.
“In this respect, innovation districts are known to reduce housing affordability and displace many lower-income earners and long-term residents.”
In order for such innovation districts to remain innovative and competitive, governments have to plan for this, and make early interventions in order to mitigate this shift, and remain attractive to bright-eyed and bushy-tailed entrepreneurs working on new ideas and businesses.
That also means opportunities in these sectors are more inclusive to those from different socioeconomic backgrounds.
“Inclusive planning is central to urban productivity,” the report says.
Fledgling entrepreneurs with skills and big ideas, but little income, are less likely to seek employment or set up businesses in innovation districts if they can’t find affordable housing, the report suggests.
That then reduces the competitiveness of those districts, and the cities they sit within.
All over the world, so-called ‘smart city’ initiatives are being designed in a bid to bring economic benefits to the cities and their governments, as well as the businesses and individuals who live there.
But, while the focus is often on technological infrastructure, such cities also need essential public institutions such as hospitals, schools and universities and cultural institutions in order to succeed, the report notes.
“We found that across the world successful innovation districts are socially, culturally, and economically diverse places, with a diverse range of housing types, tenures and prices,” lead researcher Professor Robyn Dowling said in a statement.
“However, the research also shows that without mandating places for low-income workers to live through inclusionary zoning or other regulative measures, market pressure can quickly reduce housing affordability in knowledge economies.”
The report held up Tonsley in South Australia as an example of a smart city doing it right, with high-speed internet connections and affordable homes leading to a more connected community of tech entrepreneurs and scientists.
“Indeed, regional and non-metropolitan areas that are well connected and have the necessary infrastructure to accommodate innovation districts may have significant potential contributing to innovation-led employment strategies due to a larger supply of affordable housing,” Dowling explained.
However, she stressed the importance of housing remaining affordable, in the long term.
“This affordability is not guaranteed over time, and when governments are planning for such areas they should plan to supply affordable housing into the future.”