[+] ‘Drawbridge Mentality’ Holding Back Housing Crisis Solutions

In 2014, then Victorian planning minister Matthew Guy approved several Growth Area Plans for the Boroondara, Stonnington and Bayside councils. While the move seemed innocent enough, the plans prevented developers from building anything higher than two storeys in several key suburbs across these council areas. Places such as Kew, Hawthorn, Brighton, Sandringham and others were now a no-go zone after a long campaign by residents. But event at the time, this was creating a problem. Planners recognised the issue: the richest suburbs were being protected and new development could not happen where there was already existing infrastructure and services that new residents could access. It also prevented a middle ring of suburbs being developed so more people could live closer to work and the CBD as demand for housing increased. Fast forward nearly a decade and that remains a bit problem. “It’s the missing middle,” Charter Keck Cramer’s director Richard Temlett says. And the housing crisis has only deepened. “Melbourne needs 1.3 million new homes in the next 30 years,” Ratio’s executive director Colleen Peterson told The Urban Developer’s Melbourne Residential Summit. Peterson says the Victorian Planning Authority’s proposed split of building 70 per cent of the new housing in established suburbs and 30 per cent in greenfields is only going to yield 932,000 homes. But the delivery of this housing is slow and the need for housing continues to increase . Even in the few weeks since Peterson’s estimation of 1.3 million, the news of increased migration has changed the outlook on how much will be needed. Around 1.5 million people are expected to arrive in Australia within the next five years with 70 per cent of them bound for Sydney and Melbourne. Temlett conservatively estimates that Melbourne will need to build 175,000 build-to-sell and build-to-rent apartments over the next decade to meet the demand. “Part of this is about catching up,” Peterson says. ▲ Ratio director Colleen Peterson presenting at The Urban Developer 's Melbourne Residential Summit. Planning system obstacles But not only are construction costs and material shortages forcing developers to pause projects, Victoria’s planning system is delaying projects being approved, built and ready for residents who desperately need them. Peterson points to NIMBYism as the biggest factor affecting planning decisions but also thinks it could provide the biggest opportunity for reform if the political courage was there. In Boroondara in 2014, 76 per cent of the council area, covering Kew, Hawthorn and Camberwell, was not open to any development higher than two stories while in Bayside 83 per cent of the area was protected from high-rise development. The City of Stonnington has had more development over the years with only 38 per cent of its council area restricted. But Peterson also points to other factors, including that the Urban Growth Boundary set up in 2002 needs to be expanded to allow for more space for not just housing but also industrial and commercial uses particularly within key growth and transport corridors . Precinct Structure Plans, the planning processes for greenfield development, should take three years—instead, they are taking five. The Victorian Planning Authority is currently reviewing the process. Peterson says permits are being extended as developers try to navigate the market, and projects being revised, usually around a change of use, as all the while infrastructure playing catch up. ▲ A render of the new Metro station at the Arden Precinct in North Melbourne. She also says that large precincts such as the Arden precinct are far from having residents move in and that the Suburban Rail Loop precincts will only contribute 12 per cent of the housing necessary. “It’s a drop in the bucket,” she says. “The biggest planning challenge ahead is the need not for policy change but reform of the planning system.” New Melbourne, new planning system But what would that look like? Infrastructure Victoria’s latest report says that many people cannot afford to live where they want to but would consider apartment living in order to be closer to work, services and transport. Meanwhile the Monash Commission has called for decentralising the notion of a CBD— if there are factors preventing people living near the CBD, perhaps there should be intermediary cities or nodes of central services and work, with infrastructure connecting them and housing around them, to provide everyone with access to what they need. ▲ A render of proposed social housing at Bangs Street in Prahran. Source: Homes Victoria In Sydney, planning has revolved around the notion of three different CBDs for a some time. Both ideas would mean changes to the planning system and Plan Melbourne’s strategy which is being reviewed and updated. Peterson says there are options for reform already. She says city councils could offer extra height if affordable housing was added on to projects, allowing housing needs to be incentivised in development. ULI Australia also agrees that councils need to be incentivised to help create a proper mix of densities and services. A need to stop offering housing incentives that raise prices was also important including first homebuyer grants as well as setting housing targets for local government authorities. She also proposed creating a new code similar to NSW’ Low Rise Housing Diversity Code to help streamline approvals for medium density housing. The NSW code has created housing that is 25 per cent cheaper with permits approved in 20 days with most housing semi-detached. Such a code and additional reforms would mean that smaller developers would find it more feasible to build much needed low-rise housing in what many have long called the “missing middle ring”. But it requires government at state and local levels to step up, according to Peterson. “There are plenty of challenges ahead and significant opportunities,” she says. “We have a very popular Labour government in Victoria who are ahead in the polls.” “I think it is the time for them to risk some of that collateral.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] ‘Drawbridge Mentality’ Holding Back Housing Crisis Solutions

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