New 25 - 33 sq m "micro apartments" are being built at Kips Bays NYC at the behest of former Mayor Michael Bloomberg who recognised the City's minimum size has a negative effect on affordability

Now that the consultation period on the Better Apartments discussion paper is over, Victoria’s Planning Minister, Richard Wynne, can get on with preparing the changes to “amenity” standards he seems intent on implementing.

Even prior to releasing the discussion paper he made his intentions clear. Back in March he told The Age:

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.

At the start of June he publicly labelled small apartments in the city centre as “dogboxes”. He reckons the growth in construction in Melbourne has “thrown up a red flag” around standards.

While I’ve seen some great apartments, I have also seen some dogboxes – poorly designed with little access to natural light, airflow and storage.

Judging by the standards in NSW cited in Mr Wynne’s supplementary discussion paper, there are a lot of “dogboxes” being built in Melbourne.

Around 80% of new one bedroom apartments in Melbourne have an internal area less than the NSW 50 sq m minimum. Similarly, around 75% of two bedroom apartments are smaller than the 70 sq m minimum in NSW.

Maribyrnong Council planners seem to think the discussion paper is already law; last week they recommended this 939 unit apartment development at 4 Hopkins St Footscray be rejected, in part because:

It has no regard to the Better Apartment Discussion Paper May 2015 released by Minister for Planning which seeks to achieve, sustainable, high quality apartment living opportunities.

So I expect Mr Wynne is intent on taking a swag of changes to Cabinet that set rules for matters like floor area, ceiling height, access to daylight/sunlight, and aspect. He’ll probably want to outlaw bedrooms that rely on borrowed light too.

So in the event they come to consider a submission from the Minister on this matter at Cabinet, I’d ask the Premier, the Treasurer and Mr Wynne’s Cabinet colleagues to consider if he has:

  • Demonstrated what effect increases in minimum standards will have on the price/rent of apartments.
  • Indicated he understands this isn’t tinkering at the edges; more than three quarters of all new apartments in Melbourne would be “too small” by NSW’s minimum floor area standards.
  • Provided evidence that (a) existing buyers/tenants are unhappy with the trade-off they’re making between price/rent and amenity; and that (b) they’re happy with being compelled to pay more for greater “amenity”.
  • Demonstrated that buyers and tenants simply aren’t sophisticated enough to determine for themselves whether or not an apartment is big enough, high enough or has enough daylight.
  • Provided conclusive scientific evidence that bedrooms relying on borrowed light really have a measurable negative impact on the health and wellbeing of residents.
  • Provided real data that measures the extent of the “problem” e.g. showing how many apartments in Melbourne actually have poor access to daylight (this sort of basic data is missing from the discussion papers).
  • Explained why two of the three cities he cites as benchmarks for minimum standards – London and Sydney – have some of the highest apartment prices in the world; while the other city he cites – Adelaide – struggles to attract and retain population.
  • Explained why successful cities all over the world have created tens of thousands of 20-30 sq m apartments by subdividing old buildings but have not suffered ill effects (the median new one bedroom unit in Melbourne’s CBD is 45 sq m).
  • Shown that buyers/tenants are at a serious disadvantage relative to developers in terms of market power, notwithstanding there are currently 17,000 approved/permitted apartments in the pipeline.
  • Considered alternatives to regulation, like giving buyers and renters access to better consumer information.
  • Thought through how developers, investors and residents might respond to more stringent minimum standards. For example, would the number of 37 sq m studios increase on the basis they could be retro-fitted with lightweight transparent screens to create a “bedroom”?

Cabinet should also ask if Mr Wynne’s preoccupation with “amenity” means he’s failed to give enough attention to other areas where there’s a stronger prima facie justification for further government intervention, like:

  • fire safety.
  • Construction standards.
  • Noise transmission between apartments.
  • Distance between apartments blocks and neighbouring buildings.
  • Behaviour and accountability of bodies corporate.

Mr Wynne’s consultation process was deficient because he didn’t ensure that basic analysis on key issues like the implications of higher standards for affordability was put in the public domain; in fact there’s no reason to believe it’s even been done within the Government!

The Premier, Treasurer and Cabinet should make sure any proposals to increase apartment “amenity” standards in Victoria are subject to proper evaluation and aren’t approved unless they show a net social benefit.