How Melbourne's CBD is changing (source: Michael Yardney)

Fairfax columnist Shane Green is hopeful Victoria’s new Labor government will bring an end to the “era of the skyscraper” let loose by former Planning Minister – and now Leader of the Opposition – Matthew Guy.

On Minister Guy’s watch, we saw the city reach skywards, and become a place that looked Dallas-like impressive from a distance, but overpowered and cold at street level. As City of Melbourne planning guru Rob Adams has noted, we are in danger of becoming Hong Kong but without the spectacular setting.

Mr Green takes comfort from Labor’s election promise to establish a Victorian Planning Authority to consider all proposals in the city centre larger than 25,000 sq m in conjunction with Melbourne City Council and the Victorian Government Architect. (1)

A dystopian vision of a Melbourne ruined by towering “slums of the future” is one of The Age’s standard tropes, along with greedy developers, mercenary (Asian) investors, vertical sprawl, and dogbox-sized apartments. It’s familiar territory for Mr Green too, e.g. Apartment towers are killing the world’s most liveable city and High-rise living comes at a cost.

It’s easy to construct a story that portrays high-rise apartment towers as soulless behemoths that dominate the urban skyline; disconnect residents from real life at ground level; block out sunlight; generate strong winds at ground level; and, of course, deliver excessive and undeserved returns to avaricious developers.

But contrary to this crudely crafted narrative, most of these aren’t certainties or inevitabilities; they’re risks that can and should be managed. More importantly, it ignores the benefits that residential towers in the CBD provide to the community, especially in terms of affordable housing.

The Andrews government needs to take a much bigger and more sophisticated view of city centre apartment towers than this account acknowledges. As I’ve noted before, there are some important issues it must ensure it takes into account:

  • High-rise residential towers are a response to demand. When supply is constrained it increases prices and excludes many of those who want to live in the centre, starting with those who have the least financial resources.
  • Part of the reason for the high demand in and around the CBD is that alternative housing options in most of the inner city and middle suburbs are limited by opposition from residents. That restricts housing supply and increases prices, but State governments are too scared to act.
  • Higher housing supply in the city centre has a knock-on effect; it helps to lower housing prices elsewhere in the metropolitan area by absorbing some of the excess demand.
  • City centre living scores highly on sustainability. Residents live in small, well-insulated apartments and, although they use electricity for elevators, they use sustainable ways of travelling.
  • Residents save public spending on big-ticket infrastructure, especially on transport. They are much more likely to walk, cycle and use counter-flow public transport – and much less likely to own a car – than other residents.
  • Unlike Hong Kong, only a miniscule part of the metropolitan area is slated for high-rise towers. The vast majority of the apartments are occupied by middle income singles and couples, not by families as they are in Hong Kong. (2)
  • Residents add to the vibrancy of the CBD. They help create the demand that supports diverse CBD businesses and “activates” streets.
  • The CBD isn’t the suburbs. It’s always had taller buildings so that firms, with the support of mass transit, can reap agglomeration economies. The benefits of high density necessarily come with some compromises.
  • The internal size of apartments is a matter for the buyers and renters who freely choose to live in them and who in most cases can’t afford anything bigger in such a sought-after location (see here and here). These are not public housing tenants who have limited choice about what they live in.

There is undoubtedly scope at the margin to improve new apartment towers, especially in the way they relate to the public realm and the provision of community facilities. This is an area where the new government can make real improvements.

However any changes it has in mind ought to be assessed in the context of the wider social, environmental and economic implications. Those of a progressive bent should understand the benefits of increasing housing supply in the CBD e.g. see Does housing supply impact on inequality?

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  1. It’s not clear that the Andrew’s government has really committed to doing things all that differently to what the previous government did, as Mr Green seems to think. The former Minister referred large development proposals in the city centre to the planning department for its “consideration”; nevertheless, he ultimately made the decision. How is Labor’s promise substantially different?
  2. High rise towers cover a few square kilometres at most out of Melbourne’s total built up area of circa 2,500 sq km.
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