Neighbourhood-Scale Development Benefits

By taking advantage of increased efficiencies, developing on a precinct or neighbourhood scale creates smarter and more liveable communities than thinking on a building-by-building level. Realising the benefits of this approach requires a combination of market forces, government facilitation and innovative governance models.

In Australia […], at Barangaroo in New South Wales and Tonsley Park in South Australia, developers and government land agencies are increasingly tackling the challenges of precinct development.

Outside Australia, precinct development at Treasure Island in San Francisco will recycle wastewater and compost on site, while in Copenhagen two district heating and cooling networks have been developed that are expected to save 14,000 tonnes of greenhouse gas emissions per year. And in the UK, Wembley City has just established an automated waste collection system across the district.

But with discussions to date centring on technologies and assessment methods, the focus of innovation must now shift to delivery models for sustainable precinct infrastructure.

Sharing services such as heat, waste collection and recycled water gives precinct-scale developments a clear advantage in cost and efficiency. For example, trigeneration – or combined cooling, heating and power (CCHP) – can be shared between buildings, with a single, efficient system replacing equipment in individual buildings.

Similarly, using vacuum waste chutes to collect waste centrally saves the significant amount of space normally allocated to bin rooms. It also means waste trucks do not disturb the surrounding streets. These systems can also make waste separation more effective, leading to more recycling.

Using recycled wastewater for garden watering and toilet flushing is also more efficient when implemented across a whole precinct. Economies of scale mean that a shared system saves time and money on maintenance.

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So increased scale generally leads to greater efficiency and cost effectiveness. But it also heightens ‘demand risk’ – the risk that infrastructure capacity is developed without subsequent uptake by individual building owners and tenants.

The key to delivery is to understand the different levels of market maturity for precinct systems. The most market-mature technologies – such as solar PV or solar hot water on individual buildings – are the easiest to deliver. For these, developers can specify the performance they want from consultants and suppliers because the solutions are familiar or off-the-shelf.

Harder but still achievable are technologies such as ground source heat pumps or a central services hub. For these, developers need early engagement with suppliers because the solutions often need project-specific commercial arrangements to make a business case.

The hardest technologies to implement at a precinct scale are the least mature. Apart from the perceived technical risks of new technology, developers may face unfamiliar international suppliers or long time horizons to recoup the cost of infrastructure investment. For technologies such as anaerobic digestion of waste for energy and sewer mining for water, developers may just identify the opportunity and allow the market to fill the gap. Some technology suppliers might seize the opportunity to showcase systems that are used in other countries or in other industries. And others may have the support of innovation grants, which developers do not have access to.

There are at least two ways governments can facilitate private infrastructure investment in precincts. The first is to use planning regulations to require buildings to be capable of connection to future systems, supporting market certainty. The second is to provide bridging investment in the early phases of development. Victoria is pioneering this in Australia on the the Dandenong Precinct Energy Project.

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But I think the most significant innovations to be made are in governance models for infrastructure. Around the world, cooperatives and development trusts own and manage both hard and soft community infrastructure. Community structures provide trustworthy mechanisms for engaging and rewarding sustainable behaviours, which are fundamental for the actual performance of a precinct.


This feature originally appeared in Arup and Joan Ko.

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