Planning Tangle Trips Up Senior Living Sector

Given the focus on Australia’s rapidly ageing population, you could be forgiven for thinking retirement communities would be a priority. But fresh research from the Retirement Living Council and Urbis says retirement villages take 365 days on average to be assessed by councils, with 67 per cent taking more than 12 months to receive a determination—and 23 per cent take more than two years. In comparison, for one state at least, residential applications are about 100 days. Urbis associate director Belinda Thomas says that retirement living is struggling to compete with other land uses, with higher upfront costs and complexities in design and built-form requirements. “From the planning side, the key issues are lack of resourcing, ongoing requests for additional information, a lack of education for planning officers and politicised community interest,” she says. “Retirement developments can really become poisoned chalices.” While one in six Australian—4.2 million—are aged 65 years and over, up from 1 million in 1970, posing a challenge for authorities and developers alike, retirement communities are still something of a black sheep in the development family. Founding director of property investment and management group 9Springs Belinda Bentley says that developers need to tell a story around why seniors housing is so important from the earliest stages of a development. “There’s always room for improvement with the speed of the assessment process, but you also need to demonstrate you have genuinely done everything you can with your broader multi-disciplinary team to put these applications together, to do the right thing,” she says. “We’re all trying to address the housing crisis, but it’s a diverse housing crisis, with one of them being a shortage of seniors housing.” Winners and losers According to the most recent figures from the Australian Institute of Health and Welfare, the proportion of those in the 65 years and older cohort is quite standard across the nation, from Tasmania with 20 per cent Australia’s highest, followed by 19 per cent in South Australia and 17 per cent in NSW. The latter is the only state to consider retirement living and seniors housing in its planning policies but, despite this, assessment times in NSW have blown out far further than any other state. ▲ Retire Australia’s proposed vertical seniors development at Lane Cove, Sydney, was rejected after a six-year process. In NSW, 33 per cent of retirement living communities take two years to receive a determination. In the state in 2022-23, average assessment timeframes for multi-unit residential homes was 182 days. “Big inner-city councils such as the City of Sydney and Parramatta are better equipped, however, they can still cause significant delays and there is anti-development sentiment in some of those locations,” Thomas says. “Even in big areas in the Northern Beaches it’s very challenging to get seniors housing development through in terms of resourcing and political and community interest.” In Sydney, councils and authorities have rejected substantial retirement plans, including a $50-million redevelopment of the Hills District Bowling Club offering senior living units. And a $51-million Lane Cove development by Retire Australia was knocked back by the Sydney North Planning Panel last year after a six-year development and assessment process . ▲ A render of the rejected a $50-million redevelopment of the Hills District Bowling Club. Retirement Living Council executive director Daniel Gannon says the State Government’s league table for council assessment timeframes of residential applications is 107 days—more than 600 days faster than many retirement village applications. “While NSW has previously been heralded for its progressive attitude toward age-friendly developments like the former Seniors Housing SEPP, it’s questionable whether its planning system is ‘retirement ready’,” he says. And other states are not much better. Avid Property Group was revealed to be taking the Sunshine Coast Council to Planning and Environment Court last month after it refused its application for a Palmview retirement community largely over bushfire management. “Unfortunately, inconsistency across [Queensland] councils was the only consistent feedback received while compiling this report card, with operators indicating vastly different experiences depending on which council you were in and who was assessing your application on the day,” Gannon says. ▲ Render of Avid ’ s Aveo Newstead project. Avid had planned for the retirement community operator to come on board its Sunshine Coast Harmony development. “More red tape and complexity in planning systems won’t help build the homes that older Queenslanders need but they can dampen supply very easily.” Victoria is experiencing similar issues, Thomas says. “Assessment times have been blowing out in Victoria as well, which goes back to the resourcing issue,” Thomas says. “There is a shortage of planners, in government and private sector as well, who are competing for the same talent so the assessment workload for councils in Victoria and NSW where development is more intense as WA or SA, they’re under pressure.” The issues choking supply The retirement sector is experiencing many of the same problems as other sectors, including escalating construction costs. But, independent living unit prices tend to be lower than median house prices (see PwC chart below), so developers have higher upfront costs and initial margins can be slim, adding to the list of sector-specific issues developers must deal with. “There’s a lack of education among assessing officers over the product of retirement living communities or ILUs, they have different accessibility options for instance,” Thomas says. “There is also a big anti-retirement living quest from the public, and so when an application goes through council, it can be distorted in terms of response. “Issues range from noise—from ambulances and increased traffic—to issues such as height bulk and scale of the proposals, even when they are consistent with planning controls, because they might need to have bulkier form due to accessibility requirements.” Cost comparisons by state ▲ Price difference of average two-bedroom independent living unit compared to median house (in same postcode). Source: 2023 PwC / Property Council Retirement Census “Then when development applications are referred out to other agencies, whether it’s bushfire, water or traffic agencies, there are lots of delays from that end, and there is seemingly never enough information that they can ask for.” Belinda Bentley says the public image problem retirement communities can have needs to change. “In a city like Sydney we have the responsibility to provide intergenerational communities and we should be moving away from a gated seniors community model, because being over 55 is not old. “A lot of people forget the amount of upfront strategy and work required to get the narrative right. We need to be clear about why we are all doing this in the first place– it’s the need for more diverse housing, to be able to age in place. “Part of the narrative which needs to be is considered is how does an ageing population affect people of all ages?” It’s a pressing question, and one of many plates that are spinning for developers in this space including the new Aged Care Act being introduced, which means that especially those who focus on a ‘continuum of care’—not just retirement living but the next stages as well—are facing a triple threat. Given that many developers are also landowners, the chances of them backing out are slim, Urbis associate director Kylie Newcombe says, but this could have wider-reaching implications. “Established ... developers and operators, if they own a site, they’re usually committed to eventually developing there given that there are many not-for-profit businesses in the industry and it’s the charter of their organisation to successfully develop retirement living,” Newcombe says. “In some social and affordable housing projects, however, it’s important to have retirement living that can fund other activities. “But there are additional costs, especially in vertical retirement living, compared to standard residential apartments as they often have more in the way of community spaces, apartments are bigger for accessibility, more front into the common spaces compared to standard residential development. Learn more about the $12-billion lend lease sector at The Urban Developer’s Land Lease Communities Summit on Thursday, September 19. Click here to find out more. “What we need is to even out the playing field between standard residential and retirement living.” Perhaps then, this sector will be in a position to meet the ever-growing demand from ageing Australians for homes right for them. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

Planning Tangle Trips Up Senior Living Sector

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