Hybrid state-capitalism in urban development: inside the black-box of infrastructural deal-making

Abstract: https://journals.sagepub.com/doi/full/10.1177/00420980211067906#abstract

It’s uncanny how collaborations can evolve without strategy or foresight. Sometimes, a research project finds you, rather than the other way around.

Our newly published critical commentary in Urban Studies had its genesis in a chance meeting in spring 2018, between Chris Gibson, Dallas Rogers and Craig Lyons at the Waterloo Future Methods Centre, a community-led planning space established as an alternative to the New South Wales State Government’s official plans for massive redevelopment in an area of Sydney long associated with Indigenous communities, working-class residents, and social housing. There, we discussed the state of Sydney’s boom-and-bust property market, government agendas to privatise high-value public assets, and the social injustices of real estate in this real estate city par excellence. 

Dallas was researching the eviction of public housing tenants as a consequence of large-scale urban development, imminent at Waterloo, but also earlier at Millers Point, an old wharf community on the edge of the city's central business district. At Millers Point, long-time residents talked to Dallas not only about the injustices of public housing evictions, but about the money and power behind the spectacular redevelopment of the Sydney Harbour docklands into a newly named place, Barangaroo, once a pivotal Indigenous site, but now destined to be filled with office towers, and an ostentatious casino proposed by Crown Resorts, owned by media and gambling mogul, James Packer.

Meanwhile, Chris was researching the politics of displacement from a major redevelopment in a different part of the city, earmarked for rezoning in concert with new transport infrastructure. Chris shortly sent Dallas an early draft of a paper seeking to conceptualise the perversion of regular planning processes in Sydney, unsure if his analysis made sense. In question was an obscure, technical, regulatory mechanism called the Unsolicited Proposal, which appeared to sit outside the conventional structures and processes of urban planning. The Unsolicited Proposal originated as a mechanism to procure private investment in infrastructure. But across the city, and at this key site, Barangaroo, the Unsolicited Proposal was adapted to facilitate fast-tracked approval of spectacular real estate developments without recourse to community consultation processes.

Inside the unsolicited

Chris and Dallas agreed to begin interviewing people in the planning profession about Unsolicited Proposals. Matters escalated quickly. Further instances of deals facilitated by the Unsolicited Proposals mechanism came to light (for high-rise towers, privately-built train stations, rail loops, tollways and even schools), and details surfaced in a public inquiry into Crown Resorts' fitness to hold a gambling license about the deal-making behind closed doors that led to the Barangaroo tower's approval. Dallas and Chris published an op-ed piece raising concerns over Unsolicited Proposals and the implications of the Barangaroo deal for planning in the public interest. Then a whistleblower came forward from inside the Unsolicited Proposals approvals realm—a person intimately familiar with the process and its key protagonists, but also deeply concerned about its implications for planning in the public interest.

An ‘Australian model’?

In response to our op-ed, it also became clear that the Unsolicited Proposal model had spread elsewhere, particularly to the Australian state of Victoria, where they are known as Market-led Proposals. Unbeknownst to Chris and Dallas, Crystal Legacy and her colleagues had been investigating similar deals over tollways and tunnels in Melbourne, growing increasingly alarmed about the direction of transport planning (private tollways rather than public transport), social justice implications, and lack of transparency and due process. It emerged that the same concept was being adopted internationally, and that key government and corporate people were circulating overseas promoting a so-called 'Australian model' of financing infrastructure and land deals (including advising both the Trump and Biden administrations).

The three of us then committed to writing a commentary together, seeking to draw attention to all this. Building on earlier collaboration between Dallas and Crystal on planning in the post-political city, our goals: to spur scrutiny among critical urban scholars to revised mechanisms of planning and infrastructure procurement that consecrate deal-making between elite government and private sector actors behind closed doors, and to theorize the emergence of urban governance modes that favour market actors, though which do not promote the neoliberal edict of market competition, instead granting monopolies to profit-seeking actors without public oversight.

Far from the state retreating or withering, we are witnessing certain state actors in collaboration with the private sector reassembling urban governance, and in so doing, developing a prototypical model of hybrid state-capitalist governance that is also a model of re-organising power. Governance capacity rests not simply with elected officials, but via institutional networks of career executives and experts with public and private sector experience, appointed to boards and key advisory and strategic positions. Elite government actors leverage the state's extant assets (land, utilities), tax receipts, and the constant social necessity for infrastructure, to strike exclusive deals, in confidence, with infrastructure and real estate corporations backed by global finance. Rather than view the state and private sectors as distinct, a hybrid state-capitalist mode of governance is finding expression in revised planning regulations, controlled by elites who circulate across the private and public sectors. As our whistleblower, quoted in the critical commentary, described, the implications for democracy and public interest planning are of deep concern.

Upon the release of this publication, we don't really know how widespread mechanisms such as the Unsolicited Proposal have become. Nor whether the so-called 'Australian model' will in fact gain traction in other places. What we hope is that our commentary assists other urban scholars in making sense of regulatory reforms that eschew public participation and transparency in favour of deal-making, providing concepts and strategies to identify similar manoeuvres being made among networks of government and corporate elites.

Read the accompanying article on Urban Studies OnlineFirst here.