Proportion of new one-bedroom (top) and two-bedroom (bottom) apartments currently under construction or being marketed in Greater Melbourne, by size and median sale price

Victoria’s Planning Minister, Richard Wynne, released a further report last week on improved design of apartments, Better apartments: Minister’s forum context report. (1)

It’s a “companion” document to the Better Apartments discussion paper released in May. The earlier paper canvassed a number of proposed improvements to apartment buildings, like increasing the floor area, height, access to daylight, and outlook of units.

The new report provides a lot (but by no means all) of the contextual information that unfortunately was missing from the earlier discussion paper.

For example, it explains that apartment residents are mostly young and see their sojourn as temporary. It explains that the minimum internal floor area in NSW is 50 sq m for a new-build one bedroom apartment and 70 sq m for a two bedroom apartment.

But it really hits the mark – although perhaps not quite in the way the Minister intended – with some key numbers on apartment size. It draws on data from a sample of 10,373 apartments across 110 projects currently being marketed or under construction in metropolitan Melbourne.

As the exhibit shows, around 80% of one bedroom apartments have an internal area that is less than the 50 sq m minimum in NSW. The smaller ones tend to be in the city centre where the median size is 45 sq m.

Similarly, around 75% of two bedroom apartments are smaller than the 70 sq m minimum in NSW. Again, the median size is smaller in the city centre; around 60 sq m.

What do these extraordinary numbers tell Victorians? One reaction might be to cringe with embarrassment that so many “dogboxes” are being built in Melbourne compared to Sydney and NSW generally.

A more logical conclusion, though, is that the vast majority of buyers and renters in Melbourne are happy with the trade-off between space/amenity on the one hand, and the price they’re paying – whether in purchase price or weekly rent – on the other.

They’re sentient beings who know they can’t have everything. Given what they have to pay in order to live in an accessible location like the city centre, they’re overwhelmingly choosing apartments that are smaller than the minimum the law allows in NSW.

I don’t doubt almost all of them would prefer to live somewhere bigger, but they either can’t afford to or, more likely, they’re choosing to live in a smaller apartment so they have more money for other things, like enjoying all that activity on their doorstep.

If they really thought a sub 50/70 sq m apartment is as unliveable as the Minister contends then they could have chosen to live elsewhere.

For example, they could’ve chosen a larger apartment in the city centre; but that would cost more! Or they could’ve chosen a terrace, town house or detached dwelling; but that would’ve been in a less accessible/exciting location and might’ve required sharing.

If Mr Wynne wishes to regulate minimum apartment sizes (and his use of the term “dogbox” suggests intent) he needs to explain why three quarters of buyers/renters in Melbourne are selecting new apartments that are smaller than the prescribed minimum in NSW.

He needs to convince them that the trade-off they’re making between price and space/amenity is bad for them; and that they should expect to pay more in the future if he decides to follow NSW’s example.

Mr Wynne should also take note that dwelling supply is a lot more restricted in Sydney than it is in Melbourne and that comparable apartments cost considerably more in the harbour city (see Does housing supply impact on inequality? and Is NSW keeping up with Victoria on housing supply?).

While the data on size is very useful, this new report unfortunately still doesn’t provide the sort of evidence on other key issues that is necessary to underpin a genuine consultation program (see Apartment standards: is this sham consultation?).

Like the earlier discussion paper, there’s still nothing:

  • Establishing that those who are actually choosing to live in these apartments feel there’s a serious problem with internal amenity. There’s nothing showing they’d be prepared to pay more for higher standards. Those who’re outraged by “dogboxes” aren’t the ones who’re actually living in them.
  • Showing how the proposed changes to apartment design standards would ultimately affect costs, prices/rents, and dwelling supply. Yet the newly released NSW report on SEPP 65 acknowledges that the “cost impacts of the current Residential Flat Design Code vary significantly depending on a range of factors associated with an individual development including location, land cost, site constraints and design characteristics of the building”.
  • Demonstrating that residents supposedly suffer in terms of health and wellbeing from the low internal amenity of their apartments (see Should natural light in apartments be more tightly regulated?). This is an entirely evidence-free assertion; it seems to say more about the paternalism of critics than the overall wellbeing of residents. (2)

Understanding these issues and claims is critical to making a sensible judgement on what further action, if any, is justified in relation to the questions posed by the discussion paper. Mr Wynne should ensure the information is provided as soon as possible. (3)

The bottom line is apartment residents in Melbourne are making trade-offs between price, location, space and internal amenity that suit their preferences. If Mr Wynne follows the NSW model in relation to minimum apartment sizes he’s effectively saying three quarters of residents don’t know what’s good for them – but he does.

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  1. The significance of the term ‘forum’ in the title is unclear; it’s not mentioned in the body of the report.
  2. The City of Melbourne’s submission to the Government on Better Apartments implies the UK Marmot Review provides evidence to support the idea that apartments with “poor” internal amenity are bad for the health and wellbeing of residents; but when you read the latter it says nothing about internal amenity.
  3. The Minister could make a really useful contribution if he commissioned an independent evaluation of how the changes proposed in the discussion paper would’ve impacted the supply of apartments in Melbourne if they’d been in place since (say) 2001.