Melbourne's skyline viewed from Shrine of Remembrance in January 2015

I wasn’t surprised to see Victoria’s new Minister for Planning, Richard Wynne, running the usual “scaryscrapers” line in an interview run in The Age on Sunday (Planning Minister: skyscrapers make Melbourne’s CBD hostile). (1)

Predictably, Mr Wynne is quoted in the opening para worrying about the negative impacts of skyscrapers. Then he goes on to tell us how he won’t stand for people choosing to live in tiny apartments:

I can take you to developments very close by where the whole apartment is no bigger than [a small] room. Where I could barely get into the bathroom. Where the shower was over the toilet. And this is selling for $300,000-plus. And you think, ‘Is this the quality that we want?’ The answer is absolutely no.

Well, it’s obviously not “the quality” you personally want Minister; and it’s therefore fortunate no one’s actually asking you to live in a 45 sq m one bedroom apartment in the city centre.

But included in “we” are many young singles who’re prepared to accept what by conventional suburban standards are very small spaces. That’s because the diminutive size of city centre apartments makes living in such an exciting location affordable; and their occupants are far more interested than earlier generations in what’s “out there” than how much space they’ve got “in here”.

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The reason I’m not surprised is because I know Mr Wynne expects to struggle to win his inner city seat (Richmond) at the next election in the face of growing voter support for the Greens.

The easy narrative to pedal here is the one about jerry-built skyscrapers lining the pockets of greedy developers and venal (foreign!) investors. It’s the way The Age editors like to frame their regular “scaryscraper” stories (here’s last month’s instalment).

I was very disappointed however to see Mr Wynne makes no mention whatsoever of how the supply of central city housing impacts on both local and metropolitan-wide affordability. Nor is there any comment from him on the high levels of environmental sustainability attained by city centre dwellings.

Planning controls that protect the amenity of existing residents very often limit the development potential of a site. They’re a key constraint on the supply of new dwellings in established areas and a key reason for high housing prices.

Importantly, they’re one of the variables affecting housing affordability that Mr Wynne, as Minister for Planning, can actually do something about if he has a mind to.

Much further down in the article (after we’ve read a puff piece about his favourite buildings), Mr Wynne says he’s not going to “tear up the Napthine government’s Plan Melbourne strategy for the city”; rather, he’s going to review it.

He should therefore know what an important contribution to future metropolitan dwelling supply Plan Melbourne envisages the inner city will make. It’s the only part of the existing urban fabric that the strategic plan says will actually increase its share of the metropolitan population between now and 2031 (see Does this strategic plan really spurn sprawl?).

The inner city has 11% of metropolitan population, but is slated to take 19% of the projected growth to 2031. So it’s absolutely vital that dwelling supply via redevelopment in the inner city isn’t needlessly or carelessly suppressed. (2)

Mr Wynne should also know that Plan Melbourne envisages the inner and middle suburbs will both lose share over the period to 2031. They currently have a combined 66% of metropolitan population but are projected to take only 30% of growth.

There are legitimate planning issues in central Melbourne that Mr Wynne should rightly be concerned about. I’ve mentioned these many times before, particularly matters like the distance between towers and how they relate to the street e.g. see here and here.

But he also needs to appreciate that he has a bigger role in managing the affordability of dwellings in Melbourne. The supply of dwellings matters; it has obvious equity implications but it also has important ramifications for the state budget and for the competitiveness of the city as a location for business activities.

So he should always be aware of how his rulings affect housing supply and affordability. He should also understand that imposing minimum size and amenity standards on apartments almost always increases development costs and lifts the entry price/rent.

Mr Wynne might care to take a look at this recent report from New Zealand (Impacts of Planning Rules, Regulations, Uncertainty and Delay on Residential Property Development). It says:

For affordable apartments, building height limits and balcony requirements can each have cost impacts of over $30,000 per apartment; conforming to council’s desired mix of typologies and increased minimum floor to ceiling heights can each add over $10,000 per apartment. Minimum floor area requirements reduce the supply of affordable units.

If Mr Wynne is determined to make major changes to planning in the city centre, he should explain not only how he’s improving amenity, but also how the changes impact on dwelling supply and affordability. As Planning Minister, he’s one person who should take special care not to overlook the wider consequences, however inconvenient.

Mr Wynne seems happy to focus largely on the city centre, but he should explain what he’s going to do to increase the proportion of new housing that’s accommodated in the inner and middle ring suburbs. That’s where the greatest potential lies, but it won’t be realised if Mr Wynne sticks too closely to the agenda in Plan Melbourne e.g. see Will “protecting” the suburbs safeguard affordability?

Many observers will also be interested to know if he intends to do anything about Plan Melbourne’s strategy of locating 51% of metropolitan growth on the urban fringe.

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  1. “Scaryscrapers”: lost lyric from ‘Density is not a dirty word’ by 1970s Melbourne band, Skyscrapers
  2. Plan Melbourne invented its own definition of the inner city i.e. the municipalities of Melbourne, Yarra, Port Phillip, Stonnington, Maribyrnong.
The city centre is one thing, but the really big housing issue is what the new Planning Minister intends to do about expanding housing supply in middle ring suburbs. It will be even more important if he turns down supply in the centre.