Land value and the value of land: understanding the determinants of land use transition in Melbourne's peri-urban region.

Peri-urban regions world-wide are experiencing transition from agricultural use to multifunctional uses; predominantly residential development. In Australia, the peri-urban regions happen to occupy some of the continent’s most fertile and well-watered land.

Victorian planning policy ostensibly recognises the value of agriculture, and preservation of farmland is an objective of the State Planning Policy Framework. However, planning practice belies policy. Amenity consumption of land is enabled within a discretionary, performance-based land use allocation model consistent with market-driven neoliberal doctrine.

This thesis synthesizes empirical findings with existing theory to explain the mechanisms of the peri-urban land market assemblage. Quantitative and qualitative methods are employed to reveal the tension between the value of land arising from market activity to produce its highest and best use, the value of land as an input factor for agricultural production, as a rural social and cultural domain, and as an important environmental resource.

A case methodology is employed to examine the outer peri-urban local government areas (LGAs) of Baw Baw, Yarra Ranges and Macedon Ranges. Quantitative investigation discovers the spatial distribution of land parcel sizes, zoning, dwelling permit activity, and agricultural production, and a ‘price-earnings ratio’ derived from land value and agricultural production is determined. The quantitative findings characterize the commercial domain in the case LGAs to enable evaluation of the efficacy of state and local planning policies and their capacity to respond to ‘objectives’ in the State Planning Policy Framework.

Qualitative investigation comprises semi-structured intensive interviews of the land market and planning assemblage participants, review of planning documents and a critical examination of ‘actually existing’ planning, referencing contentious planning episodes in each of the case LGAs.

The thesis finds that planning policy and its discretionary mode of implementation is a causal contributorto land use transition in the peri-urban regions investigated. It also concludes that the planning complex is purposefully crafted to permit land use transition away from agriculture to conform to the neoliberal resource allocation model determined by market activity and highest and best economic use. Additional land use transition ‘influences’ are discovered and ranked.