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Growth Areas

Mar 20, 2017

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The expansion of Melbourne’s urbanised footprint over 132 years, from 1883 to 2015 (source: Plan Melbourne 2017-2050)

Victoria’s Minister for Planning, Richard Wynne, indicates in the foreword to Plan Melbourne 2017-2050 that one of the primary objectives of the strategy is “stopping Melbourne’s urban sprawl”. The plan itself tells readers Melbourne already “covers approximately 9,000 square kilometres”. It goes on to say:

It is unsustainable to keep expanding Melbourne’s outer-urban growth areas. If the city continues to expand, the natural environment will be impacted, commute times to employment and services will grow longer, and socioeconomic disparities across the city will increase.

The document offers little evidence to support these claims; it seems sprawl is so self-evidently a bad thing that opposing it doesn’t require the bother of substantiation. But looking forward from today to 2050, is sprawl still the defining issue it’s been in strategic plans for the last 50 years or so?

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The exhibit, which is also taken from Plan Melbourne 2017-50, suggests it’s time to review the old ways of thinking. It provides three important pieces of information.

First, the claim Melbourne already “covers approximately 9,000 sq km” is grossly misleading. That’s a measure of the area within administrative boundaries; these extend well beyond the built-up area and include the “green wedges”. As the exhibit makes clear, the urbanised or built-up area of Melbourne is much smaller, around 2,500 sq km (if areas with fewer than 4 persons per hectare are regarded as non-urban, Melbourne covers just 1,714 sq km).

Second, it’s evident Melbourne has a long history of outwards expansion that pre-dates the car. The construction of most of the state’s extensive rail system in the late nineteenth century and the subsequent electrification of the metropolitan system by the 1930s, fuelled strong fringe growth between 1883 and 1954. Increasing car ownership after WW2 saw even stronger peripheral development between 1954 and 2001, but it was already an entrenched phenomenon.

Third – and this is the important bit – the exhibit indicates fringe expansion slowed dramatically over the 14 years from 2001 to 2015. To get an idea of the scale of the change, compare the 17 years from 1954-1971 to the most recent period. The length of the intervals is similar but the area of land developed for urban use in the earlier one is much larger than in the latest period.

Although there are a number of factors contributing to the declining scale of sprawl, a key one is the increasing preference for living in established areas. Since 2001 only around one third of new dwellings were built in Melbourne’s fringe Growth Areas. Plan Melbourne 2017-2050 expects the trend will continue; 65% per cent of new dwellings constructed in Melbourne over 2015-2050 are projected to be in established areas.

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But not only is the fringe less important than it was in the era when the term ‘sprawl’ was coined, new outer suburban developments are very different from those of the past. Plan Melbourne notes that in recent years, average residential densities in the fringe Growth Areas have increased to around 18 dwellings per hectare. Medium density housing – like these townhouses in Mernda – is increasingly common in new outer suburbs.

The structure plan for the new outer suburb of Rockbank is replete with references to transit-oriented development, cycling and pedestrian movement, promotion of high and medium density housing close to the town centre, walkability, neighbourhood hubs, and tree-lined streets. The average population density of Rockbank will be the same, or higher, than some of Melbourne’s old inner suburbs at the last Census.

The structure plan envisages at least 25% of housing will be at medium or higher density; that will provide a similar proportion of detached housing as inner suburban Coburg. The size of lots in Rockbank will also be modest; based on current development patterns, the great bulk will be relatively evenly distributed between 325 and 525 sq m (a quarter-acre block is 1,000 sq m).

The diminished scale and increasing density of fringe development means the negatives routinely attributed to “sprawl” – like impact on the natural environment and longer travel times – aren’t as big an issue as either the Minister or Plan Melbourne claim. They’re in any event grossly over-stated.

The focus of new fringe development in Melbourne is now in the north and west where the “natural environment” was degraded long ago by low value agricultural and recreational uses (see Is sprawl a serious threat to food security?). Moreover, the average journey to work trip time is much the same in Melbourne’s outer ring suburbs (38 minutes) as it is in the middle ring suburbs (37 minutes) and inner ring suburbs (37 minutes). The average trip time for all purposes is also much the same i.e. 22-23 minutes. (see How big is the “transport divide” between inner and outer suburbs?).

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Every city in history has expanded to a greater or lesser degree at the fringe. Land is cheaper on the outskirts, it costs less to build low-rise, opposition to development is limited, and some residents value space over accessibility. It’s no surprise fringe development has traditionally provided a relatively affordable housing option for first-home buyers and households who want lots of space.

Melbourne will inexorably and necessarily continue to expand at the fringe, but recent history and current projections indicate it will be at a much lower rate than in the second half of the last century. Fringe development comes with issues – like high car orientation and initial service deficiencies – but it’s apparent “sprawl” isn’t as big a public policy issue as it once was.

City policy-makers need to reassess their priorities. They could start with improving the delivery of services on the fringe and giving more attention to increasing opportunities for Melburnians to live in established suburbs (e.g. see Is 16 storeys OK in the inner city?). It’s also timely to undertake a sober assessment of the increasingly fashionable option of sending growth to regional centres; it’s likely to produce worse outcomes than “sprawl” (see Is Regional sprawl better than suburban sprawl?).

Planning

Mar 15, 2017

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Improvements to transport infrastructure – committed and potential (source: Chapter 3, Plan Melbourne 2017-50)

The exhibit is from the transport chapter of Plan Melbourne 2017 – 2050, which was finally released by the Victorian government on the weekend. According to Planning Minister Richard Wynne, the new strategic planning document is a light “refresh” of the original Plan Melbourne published in May 2014 by the former Napthine government.

The exhibit purports to show “committed and potential” improvements to transport infrastructure in the metropolitan area out to 2050. It includes several “committed” Andrews’ government projects like the Melbourne Metro rail tunnel, the Mernda rail extension and various motorway upgrades.

But there aren’t many “potential” projects shown on the map. In fact, the proposed outer ring road and a freight terminal are the only ones. That seems extraordinary given the time frame of Plan Melbourne 2017-2050 is 35 years; and given the expectation Melbourne’s population will grow from 4.5 million in 2015 to 7.9 million by 2051.

I’ve consistently argued that the priority should be to use existing infrastructure more efficiently before embarking on new projects, but I don’t imagine for a moment that a city could nearly double in population without having to build new infrastructure such as rail lines and motorways.

Where, for example, are the future stages of Melbourne Metro, like the proposed Clifton Hill – Newport rail line running via Fishermans Bend? Where is the North-East Link motorway the government is making positive noises about? Where is the rail line to Melbourne Airport that Infrastructure Victoria reckons will be required within 10-30 years?

It’s not just mega projects. Where’re the smaller scale possibilities, like new fast orbital public transport routes – whether BRT or rail – that will be needed well before 2050? Where’s the network of bicycle super highways? Where’s the inner-city congestion pricing cordon? Where are the extensions to the tram network? Surely by 2050 the CBD will require extensive street closures to support its role as the key production and consumption place in the state?

My point isn’t about the merits of specific projects; it’s the virtual absence of the idea of long-term projects from a document that purports to show how Melbourne is going to grow over 35 years. Looking no further than the restricted horizon of the current government’s budget outlook (i.e. committed projects) isn’t the purpose of a strategic plan; it should be looking long-term.

I’ve criticised strategic plans for being overly focussed on physical actions like land use and infrastructure to the exclusion of intangible policies like road pricing. But Plan Melbourne 2017-2050 fails on both counts. For example, notwithstanding its long timeframe, it proposes no policies to manage the way roads are priced. It also blithely acknowledges new technologies such as self-driving cars “will change the ways people live and work between now and 2050” but proposes no consequential actions.

A document like this should give us the good news and the bad new upfront. It should set out the specific adaptations – both policies and projects – that currently seem necessary to deal with the forces driving long-term change. It should have statements that go something like, “given the assumptions about change, it’s expected this rail line (or this policy) will be needed at this time and at this cost”.

I should be able to see scenarios for 2030, 2040 and 2050 showing where population might be distributed, what infrastructure might be built, and what policies might be needed, to support that scenario. I should, for example, be able to see what a fully segregated cycling network needs to look like in order for Melbourne to function effectively under various scenarios. In short, I should be able to see a long-term plan.

Of course, those adaptations must necessarily be provisional; we can’t be sure from today’s perspective whether the demographic, technological and economic changes will happen in the way we’re anticipating. We can’t know if there might be higher priorities in the future, perhaps in education or health. There’s a risk too that governments might simply draw up impossible wish-lists of projects like advocacy groups tend to do without regard to cost or who wins and who loses.

But we shouldn’t settle for virtually nothing; setting down concrete ideas would help build a long-term consensus across the political spectrum around which projects and policies will be required to support the city’s development. It would help in a practical sense too e.g. reserving land. A key reason we don’t have them, of course, is governments don’t want to buy a fight over an idea that will only happen well after they’ve lost power.

Plan Melbourne 2017-2050 has other failings I’ll discuss another time, but the biggest one is obvious: it’s not a plan! It took eons to undertake the light “refresh” of the original Napthine government document (from 2014 until 2017), but we still don’t have a real plan. It’s mostly a confection to market the Andrews government’s budget program for the remainder of its current and, it hopes, next term.

As it stands, it’s hard to see what value this vague and glossy document adds to policy-making and debate in Victoria; perhaps the Minister’s decision to keep it in “refreshing” status for 27 months of its 34 month life is the best evidence of its limited practical value. It might be time to give Infrastructure Victoria a bigger role in preparing draft plans for public consideration.

Housing

Aug 15, 2016

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apartments2
The Victorian government is proposing apartments with a single aspect should have a maximum depth of 8 metres (5.7 metres if south-facing) at a ceiling height of 2.7 metres

Victoria’s Minister for Planning, Richard Wynne, finally released the government’s draft “design” standards for apartments yesterday. Even though work on the standards began way back in 2014 under the former state government, the government’s draft proposals are out for consultation for a mere five weeks. According to the Minister:

Better Apartments is part of the Andrews Labor Government’s ambitious planning reforms, targeting higher standards while maintaining affordability and encouraging investment. More people are choosing to live in apartments, but not all buildings meet essential needs such as natural light, ventilation and storage.

Although modelled on NSW’s strict rules, the big surprise is Mr Wynne hasn’t followed through on his initial impulse to mandate minimum floor areas. But in a city where practically every decision-maker grew up in a spacious – usually detached – house, he’s nevertheless found plenty of other problems with what he’s christened “dogbox” apartments.

He’s on relatively firm ground with those changes that concern how apartments relate to neighbouring developments e.g. minimum separation distances and noise transmission. These are issues residents can’t reasonably be expected to foresee or to understand fully in a technical sense.

But he’s on shaky ground with the majority of his proposals because they seek to codify something that’s difficult to capture in regulations; the internal amenity or internal quality of apartments. He calls his proposals “design” standards but they’re not about design in the creative sense; they’re standards, plain and simple.

Another reason it’s a difficult undertaking is because tenants and buyers can readily assess for themselves most of the attributes that contribute to internal amenity. Regulating internal amenity indirectly via standards inevitably limits the scope prospective residents have to make choices between apartments.

The key amenity regulations he’s proposing ban rooms that rely on “borrowed” light ; set a maximum room depth of 8 metres from a window (5.7 metres if south facing); mandate apartments must have balconies (with a minimum 2 x 4 metres in one bedroom apartments); specify a minimum 2.7 metre ceiling height; require 60% of apartments in buildings up to 15 storeys to have dual aspects; and decree a minimum amount of general storage space (6 cubic metres in a one bedroom apartment).

Of course we’d all like to live in an apartment with abundant light in all rooms, high ceilings, more than one aspect, generous storage, balconies large enough to use for entertaining, and cross-ventilation to deal with all those humid Melbourne days. (1)

In the real world, though, nicer apartments cost more and very few resident can have everything; almost everyone has to make trade-offs. One person might accept an apartment with a darker second bedroom because it’s cheaper and the saving means he or she can live (say) in a more exciting part of town. Another might prefer a slightly larger apartment (say) over having a balcony they don’t think they’re likely to make much use of.

The good news in this case however is the Minister claims his proposals will “maintain affordability”; so all the extras he’s forcing on prospective residents – like dual aspects, bigger balconies, more natural light and higher ceilings – come free! So why would anyone object?

The problem is he’s provided no information whatsoever on what impact his higher standards would have on dwelling supply and hence ultimately on affordability. He doesn’t know because he hasn’t done the analysis. Politicians find it very convenient to argue that standards can be increased without any impact on costs and ultimately on supply, prices and rents. Unfortunately that’s not the way it works.

Nor does he show what those who will live in these apartments – mostly tenants – think about having to pay more for attributes they might not value as highly as politicians think they should. Despite implying otherwise, he doesn’t have evidence that they think what he’s proposing is a more desirable trade-off than what they might otherwise decide for themselves.

The Minister says living in “dogboxes” is bad for the occupants’ health and wellbeing but he provides no evidence that residents suffer ill-effects. This is the same line of specious argument used in the past to justify slum clearance but has even less relevance now.

Residents of the sorts of apartments now being built in Melbourne choose to live in them and, moreover, can leave when they want. Mr Wynne fails to show that the much smaller apartments common in cities like Tokyo, London, New York, and Paris (less than 25 sq m) have led to health and wellbeing problems. Indeed, it’s possible any real damage likely to be done to peoples’ wellbeing will be due to policies like his that increase the cost of housing and thereby reduce residents’ locational choices and real incomes.

If they really were to come “free” I’d have few problems with Mr Wynne’s proposed standards. But he hasn’t even attempted to work out whether the net effect will be to make the future residents of new apartment buildings better off, or worse off, than they would otherwise be. That’s a poor basis for making policy given Sydney’s highly-regulated market produces apartments that cost around $100,000 more on average than comparable apartments in Melbourne. (1)

As it is they’ll make politicians feel good and they’ll make architects and planners who think design is mostly about applying standards feel good too. Mr Wynne hasn’t made the case though that they’ll make those who’re looking for housing better off. (2)

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  1. The proposal that 60% of apartments in buildings up to 35 metres high should have dual aspects to permit cross-ventilation is peculiar though. It makes more sense in humid Sydney than in Melbourne’s Mediterranean climate. And what about the other 40%? Why does cross-ventilation not matter for them?
  2. Although the AIA is unhappy the Minister isn’t insisting on minimum floor areas.

Housing

Aug 5, 2016

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IKEA’s model 36 square metre apartment is way smaller than the minimum 50 sq m applicable for new builds in Sydney and proposed for Melbourne. This one’s in Brooklyn but my local IKEA at Richmond has a 25 sq m one
IKEA’s model 36 square metre one bedroom apartment is way smaller than the minimum 50 sq m applicable for new builds in Sydney and now proposed for Melbourne. This one’s in Brooklyn but my local IKEA at Richmond has a 25 sq m one

The Age reported this week that Victoria’s planning Minister, Richard Wynne, earlier this year rejected a proposal by the City of Moreland to set minimum standards for new apartments constructed within the inner suburban municipality (Government dismisses Moreland Council’s proposed ban on ‘dog box’ apartments):

The council’s proposed new laws included a requirement for one-bedroom apartments to be at least 50 square metres, two bedrooms be 65 square metres and for three-bedders be at least 90 square metres in size. The proposed laws would also force developers to provide balconies of a minimum size, and to ensure “acoustic privacy” for tenants so noise from neighbours was not an issue.

There was the predictable reaction to the Minister’s decision, typified by Greens state parliamentarian Ellen Sandell on Twitter:

  • Disappointing to see Labor’s Planning Minister Richard Wynne side with developers on this one, against liveability.
  • We need affordable housing policies, and design standards so ppl aren’t forced into tiny dog boxes due to price

Ms Sandell is playing politics; it’s not at all clear the Minister disagrees with the spirit of Council’s request. After all, Mr Wynne has been talking about “dogboxes” for longer than most. Here he is soon after winning the 2014 election arguing that 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.

A more plausible explanation for Mr Wynne’s decision is that he’s (finally!) going to release draft apartment design standards this month. His Better Apartments policy has been gestating since the days of the former government. His refusal is eminently reasonable. It makes sense to wait for a draft policy that’s state-wide and has involved years of consultation rather than respond to the concerns of just one of Victoria’s 79 municipalities.

The Discussion Paper released in May 2015 by Mr Wynne as part of his Better Apartments policy considers possible minimum standards in a number of areas. They include floor area, ceiling height, mandatory balconies, orientation, access to daylight, access to sunlight, orientation, circulation, ventilation, and more.

But notwithstanding how or when it’s done, is setting minimum standards that are significantly higher than what the market is currently producing the way to go?

There’s a very strong argument that anything buyers and tenants can’t foresee or reasonably understand should be regulated by government; that’s things like structural integrity, water-proofing, noise from neighbouring apartments and buildings, fire risk, and distance from existing and future buildings. The Minister’s proposed central city built form controls is an example of how some of these matters might be regulated.

However, when it comes to matters within an apartment complex that prospective buyers and tenants can readily see and assess for themselves – like floor area, daylight, sunlight, ceiling height, balcony size, internal storage, length of corridors – the warrant for the government to regulate minimum standards is much less compelling.

As I’ve argued before, proponents of higher minimum apartment standards – like the City of Moreland, Ms Sandell and Mr Wynne – need to:

  • Demonstrate what effect increases in minimum standards will have on the price/rent of new apartments and how this will impact affordability.
  • Show how much of the average $100,000 premium apartment buyers pay in Sydney compared to Melbourne can be attributed to NSW’s minimum standards.
  • Explain why so many people are choosing to live in them when three quarters of all new apartments in Melbourne are already “too small” by NSW’s minimum floor area standards (the median new one-bedroom unit in Melbourne’s CBD is 45 sq. m).
  • Provide evidence that (a) existing buyers and tenants are unhappy with the trade-off they’re making between price/rent and amenity; and that (b) they’d be happy with being compelled to pay more for the greater amenity Mr Wynne, Ms Sandell and Moreland think they should have.
  • Demonstrate 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.
  • Explain why two of the three cities previously cited by Mr Wynne 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.
  • Explain why successful cities all over the world have created tens of thousands of 20-30 sq. m apartments by subdividing old buildings but residents have failed to suffer the health-related ill effects from living in these “dogboxes” that critics allege.
  • Establish that buyers and tenants are at a serious disadvantage relative to developers in terms of market power, notwithstanding there are around 17,000 approved/permitted apartments in the pipeline.
  • Show that alternatives to regulation, like giving buyers and renters access to better consumer information, wouldn’t provide a better net outcome.
  • Take into account 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”?

Hopefully the draft apartment design standards due to be released this month by Mr Wynne will present a more sophisticated proposal than we’ve seen to date. Meanwhile, in Kawasaki City Japan, there’s a proposal to increase the minimum apartment size from 18 sq m to 25 sq m. In New York, there’s pressure to lower the minimum size of new apartments to less than the present 400 sq ft (37 sq m).

Francis McCrae makes an excellent point in this piece, Don’t fear the shoebox, published Wednesday on New Zealand’s Transportblog:

If a cramped apartment is the best someone can find within their budget and other constraints, how would they be better off if that apartment didn’t exist?

Housing

Feb 9, 2016

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Micro apartments in a new development in New York range from 25 - 34 sq m
Micro apartments in a new development in New York range from 25 – 34 sq m. This one has plenty of height and daylight but might be problematic for consenting adults in Richard Wynne’s new vision for Melbourne: it’s a lot smaller than 50 sq m, has no balcony, and it might not get “enough” direct sunlight.

As part of his Better Apartments project, Victoria’s Minister for Planning, Richard Wynne, is currently preparing draft rules to give effect to his promise to increase the interior quality of small apartments in new developments.

Given his previous public comments about “dogboxes”, I expect the Minister is currently working up minimum standards for attributes like floor area, balcony area, ceiling height and access to daylight and sunlight.

As I’ve noted before, these are issues that seem to mainly worry the sort of people who don’t, or won’t, live in small apartments themselves, but know what’s best for those who will.

Tenants at the bottom end of the market who choose to live in “dogboxes” evidently value the ability to trade off a lower rent for the opportuntiy to live in a highly sought-after location like the CBD.

Mr Wynne should focus on what goes on outside apartments and acknowledge consenting adults know what they’re doing.

Prospective tenants have the smarts to decide for themselves if a 45 sq m apartment has enough interior space, interior light and interior storage to meet their needs; they can determine if it’s fair value at the offered rent/price.

What they don’t need is for Mr Wynne to set minimum standards (e.g. 50 sq m internal floor area as in NSW) that raise rents and consequently reduce their housing and locational choices. (1)

Where they really need his help is with matters that are beyond their control, can’t be foreseen at the time, or are highly technical. That’s things like noise transmission between apartments, noise from outside sources, and future developments on adjacent sites that might lower their amenity.

He should take note of the issues raised by this new resident lobby group, We Live Here, which seeks to represent the interests of residents of Victoria’s 250,000 odd apartments, units and flats.

According to local paper CBD News, the group’s inaugural meeting was held in December in the CBD. Guest speakers included Melbourne MLA Ellen Sandell, ALP federal candidate Sophie Ismail, City of Melbourne Councillor Rohan Leppert, Opposition planning spokesman David Davis, and academic Professor Michael Buxton.

Here are the issues CBD News reports were raised by We Live Here at the first meeting:

  • Short-stay accommodation e.g. Airbnb. Greens MP Ellen Sandell is quoted in CBD News as describing the short-stay issue as a “sleeping giant”.
  • Safety of building materials used in the construction of apartment buildings.
  • Privacy and amenity issues.
  • “The practice of developers setting up owners’ corporations and subsequently awarding lucrative, long-term contracts to affiliates”.

I hope the Minister and his Cabinet colleagues are giving more attention to these sorts of “external” issues than they are to the bedrooms of apartment dwellers.

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  1. In Kawasaki City Japan, there’s a proposal to set a minimum apartment size of 25 sq m. In New York, there’s pressure to lower the minimum size of new apartments to less than the present 400 sq ft (37 sq m).

Planning

Sep 7, 2015

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None of these projects will be affected by the new rules. Under construction (green), approved (blue), and currently being assessed (yellow). But where did the plan to underground the Yarra near the Tennis Centre come from?

Residents of the inner city Melbourne suburb of Clifton Hill concerned about the height of a redevelopment proposed in their neighbourhood by the Brotherhood of St Laurence might take some comfort from the Planning Minister’s secret Friday night gazettal of new built form rules for Melbourne’s CBD.

Mr Wynne announced interim planning controls, including height limits and plot ratio controls, are now in place for a 12 month period while he undertakes a review of central city planning rules.

The Brotherhood proposes to expand an aged care facility it owns on a 4,000 sq m site opposite Darling Gardens.  Although zoned General Residential with a heritage overlay, there is no height limit on the site.

The City of Yarra decided last week to ask the Minister to introduce a mandatory 9 metre maximum height. Despite misgivings about his close links to the Brotherhood, the residents might take heart from Mr Wynne’s clearly demonstrated determination to elevate urban amenity.

It’s an interesting parallel because, while the improvement in amenity provided by the new CBD controls look positive, they could come at some cost in terms of their social and economic implications.

Mr Wynne says he needs to take action in the CBD because of the unprecedented level of building activity, mostly residential towers. Otherwise, he says, the CBD will produce poor amenity outcomes, including:

  • “Poor building amenity due to closeness to neighbours (affecting light and privacy)
  • Impaired development opportunities on neighbouring sites (inequity)
  • Visual domination of historic and pedestrian scale streetscapes
  • Increased overshadowing of public space
  • Uncomfortable wind effects in public space, and
  • Pressure on the capacity of footpaths, plazas and public facilities”.

All of that, he says, “may damage investment attraction to the area”.

The main changes he put in place on Friday night are a maximum 24:1 plot ratio, minimum boundary setbacks, mandatory height limits in particular precincts to replace discretionary limits; and tighter controls on overshadowing of the river and public squares. The City of Melbourne’s defacto role as a referral authority – advice only – has also been made official.

Importantly, the new rules don’t apply to any projects submitted for approval prior to Friday’s decision (see exhibit). They also don’t apply to Docklands and Fishermans Bend.

Naturally, Mr Wynne hasn’t bothered to provide any data or analysis to support his contention that (a) the problem is serious enough to warrant such a dramatic action and (b) that the suite of changes he’s decided on is the best solution to his problem.

Nor of course does he bother to provide evidence of how the changes will affect the development pipeline, dwelling supply, and ultimately housing affordability. Yet The Age cited three recently completed buildings it says wouldn’t have been approved under the new rules.

The Australian Financial Review published a dramatic illustration on Saturday showing that a building currently under construction would only be around half its current size were it subject to the new 24:1 plot ratio.

It’s also disappointing the Minister put the interim rules in place without consultation.  The only reason he gives – that there’s a need for “prompt” action – is tautological and entirely unconvincing. Land owners, developers and buyers know the game has changed dramatically and permanently.

He seems unaware that this might not be a good time to be putting up further barriers to projects either. According to economist Professor Warwick McKibbin, there’s “a 50 per cent chance Australia will slide into recession in the coming year”.

All of that makes the Minister’s claim in the official documentation that the changes “will not have any significant…economic effect as the changes made are temporary” disingenuous at the very least.

It’s difficult to assess the implications of the changes on the information provided. The new overshadowing rules on specific public places like the Yarra could be especially problematic. They extend the existing test – that there be no shadow between 11 am and 2 pm on 22 June – to the entire six month period from 22 March to 22 September.

Yet subject to a more in-depth look, I suspect Mr Wynne has come up with a reasonable set of rules.

While he continues to provide no objective evidence that the scale of problems like “uncomfortable wind effects” warrants such dramatic action, something serious certainly has to be done about problems like “closeness to neighbours” and “impaired development opportunities”.

Plot ratio is a proven tool and 24:1 is a reasonable limit, especially given there’s still scope for bonuses if developers provide offsets (e.g. like community facilities). It’s a lot lower than the 35:1 average plot ratio of applications submitted over the last four years, but it’s still high compared to most other places.

In any event, as the exhibit shows, the main story here is that there’s no shortage of projects that will still be considered under the old rules. Given the increasingly gloomy economic outlook, there’ll probably be few new projects coming forward anyway.

In fact these look like Clayton’s changes; they’re not necessary in the current market because the fountain has already run dry. They’re essentially symbolic. Their effect – both positive and negative – might not be felt until the next major upswing of the property cycle.

Meanwhile, both the residents and the Brotherhood of St Laurence will no doubt keenly await the Minister’s determination on their respective arguments about the planned redevelopment in Clifton Hill.

Update: Don’t think the Premier will be very happy with the Planning Minister; looks like a stuff-up: New Vic planning rules plunge cbus Property’s Collins St scheme into uncertainty.

Housing

Aug 6, 2015

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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.

Housing

Jul 13, 2015

5 comments

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.

Architecture & buildings

Jun 22, 2015

5 comments

Buildings can incorporate sun control that admits warming sun in winter and blocks hot sun in summer. It works best on a north-facing aspect. This diagram is for the northern hemisphere but the principle is the same (source: Architectural Record)

One of the issues raised by the Victorian Government’s discussion paper, Better Apartments, is the “lack of controlled sunlight access to apartments”. Access to direct sun is different from access to natural light and these are treated separately in the Government’s paper (I discussed natural light last week; see Should natural light in apartments be more tightly regulated?).

Direct sunlight is important, the paper tells us, because it “promotes health and psychological wellbeing”. It can also directly affect the heating and cooling load on an apartment.

Providing for thermal comfort through the design of the building, rather than relying on mechanical services, can make the operation of buildings more resource efficient, reducing peak demand on energy infrastructure and improving resilience to climate change.

The paper notes that access to sunlight is primarily determined by an apartment’s orientation. It poses a very big question: “Should there be rules to ensure a majority of apartments receive sunlight?

The first thing to note is the “health and wellbeing” rationale for regulation is hyperbole. As I discussed last time in relation to daylight, while some minimum exposure to sunlight is doubtless generally desirable for human health, that’s not what’s at issue here.

The question on the table is whether or not significant numbers of apartment residents are likely to suffer ill health as a direct and sole consequence of living in dwellings that have little or no exposure to sunlight. A related question is whether or not regulating some minimum level would actually address any such deficiency in the residents’ state of health and wellbeing.

These are more specific – and more demanding – issues than simply stating baldly that sunlight “promotes health and psychological wellbeing”. Other factors need to be taken into account e.g. all the other ways residents are exposed to sunlight, such as on their way to work or school.

Another thing to note is that the apartments being built in Australian cities are already relatively thermally efficient compared to other dwelling types, especially the detached houses being built in the fringe growth centres.

That’s due to a combination of factors, including their small size (many are “dogboxes” according to Victoria’s Planning Minister!) and the fact that most are well-insulated by neighbouring units above, below and on up to three sides.

I’m also bemused by the idea that only “a majority of apartments” need to get direct sun. If the benefit of sunlight is so important that it warrants mandating some minimum exposure, it should apply to all apartments.

I’d like to know what it is about the other 49% that means they don’t need mandated sunlight. Anyway, does the Government even know what proportion of existing apartments receive sunlight? Could it be that a majority already get an acceptable level?

If it’s serious about having a meaningful debate on this issue, that’s the sort of information the Government should have provided in its discussion paper.

But when it comes to the big question posed by the discussion paper, I’m doubtful about the wisdom of bringing in rules mandating how much sunlight must fall on an apartment. The leaked draft of an earlier version of the discussion paper reportedly proposed that 90% of apartments must receive direct sunlight and all living areas must face north.

Residents who appreciate direct sun on their windows or balcony will seek out an apartment that offers this amenity (due north is best in the southern hemisphere) and pay a premium. But others will trade-off less sunlight for other attributes, perhaps a better street.

While it would depend on how much sunlight is defined as the minimum, these sorts of proposals have the potential to reduce the number of sites that could support a viable development. Moreover, they could reduce the yield from any given site.

It’s likely fewer projects would proceed, leading to a consequent deterioration in affordability; the biggest impact would be felt by buyers at the lower end of the market. Perversely, such a policy might encourage ever-higher towers so that more apartments could be in “clear air”.

So while I accept the proposition that orientation is the most important determinant of an apartment’s access to sunlight, I think the cost of regulating some minimum is way too high and the benefits are at best unclear.

I think there’s a stronger argument, though, for intervention aimed at improving the thermal efficiency and comfort of those apartments that actually do receive some direct sunlight. Western sun in particular can impose a large heat load on unprotected windows in summer, especially in the afternoon.

Owner-occupiers might elect to install air conditioning but that solution isn’t always available to tenants (who make up the majority of apartment residents). Even when it is, it adds to running costs and, as the paper notes, increases (largely coal-fired and peak) energy demand.

The debate the Government has started could usefully consider the benefits and costs of requiring mandatory sun control on new apartment buildings.

Architecture & buildings

Jun 16, 2015

5 comments

Proportion of dwellings in buildings of four or more storeys (source: Better Apartments discussion paper)

The Better Apartments discussion paper released recently by Victoria’s Minister for Planning, Richard Wynne, tells us that a key problem with Melbourne’s apartment boom is that some units lack adequate daylight.

The paper states that natural ambient light is “important for people’s health and wellbeing and also allows dwellings to be used and occupied without recourse to artificial lighting, thereby reducing energy consumption”.

It’s important to note that the discussion paper treats access to natural light and to direct sunlight as separate topics. This article is only about the former; I’ll discuss access to sunlight another time.

“Borrowed” light

The main issue that’s surfaced in the public debate is that some apartments have a bedroom without an external window; the bedroom relies on “borrowing” light via glass panels from living areas. There are also some with a “battle axe” bedroom that gets daylight via a narrow light corridor.

The discussion paper has a notional floor plan illustrating these problems (page 14). It rightly notes though that the level of natural light depends on a range of factors, including aspect, depth of the apartment, proximity of nearby buildings, ceiling height, and size of windows.

It also extends the public debate about natural light to new areas; it explicitly asks readers if they think daylight “should be required in secondary spaces such as corridors and bathrooms”.

Daylight is of course a very good thing. If they can afford it, buyers and renters are prepared to pay extra to get more of it. We all know dwellings with a north facing backyard command a price premium and those with a southerly aspect sell at a discount.

The point at issue here though is more specific; it’s whether access to daylight ought to be more tightly regulated; it’s whether some approaches taken by developers ought to be placed off-limits. (1)

This is an important issue of policy because it’s probable that tighter regulation would increase the cost of bringing apartments to market; some of that increase would likely be passed on to buyers.

How light enters a bedroom – whether it transits via a light corridor or is borrowed from a living area – really shouldn’t be an issue of concern for regulators.  It’s not as if it’s going to get contaminated on the journey past the TV! (2)

All that should matter is whether the amount of natural light that ultimately enters a bedroom is adequate. It should be the residents call whether they’re happy with how it actually gets there.

A key failing of the discussion paper is it provides no numbers on how many apartments are thought to lack adequate daylight. I expect there are are some battle axe bedrooms that actually do get reasonable natural light; there’d likely be some reliant on borrowed light that do too. (3)

On the other hand, I know there are some apartments that have a bedroom with a window – and in some cases even a living room – that nevertheless doesn’t get much light, perhaps because of a nearby building or a narrow light well e.g. see Living in the CBD: does it have to be this miserable?

It would make a lot more sense to focus the discussion around defining how much light is necessary within apartments before jumping direct to secondary solutions like regulating internal layout. (4)

Health effects

As any minimum daylight requirement would likely have cost implications, any decision should also be informed by a better understanding of the claimed negative health and wellbeing impacts. There’s no explanation of these in the discussion paper however; they’re just asserted.

I accept the proposition that some minimum exposure to daylight is a general requirement for good health no matter where you live; but that isn’t the issue here.

All that’s relevant in the context of this debate is whether or not some residents are likely to suffer ill health as a direct consequence of having a bedroom that receives a low level of natural light.

They might get adequate exposure to daylight in myriad other ways e.g. when their away from their apartment or when they’re relaxing in their living area. For most residents, bedrooms are places that are mainly used in the evening hours.

I’d really want to see some hard data on the health effects of dark bedrooms before I’d accept the proposition that battle axe or borrowed light bedrooms are a significant enough health threat to warrant further regulation.

For similar reasons, I doubt that reliance on artificial light is a significant issue either. In any event, these are invariably very small rooms; lighting them during the day with a 5w LED globe while they’re in use isn’t a big problem. The big users of power are heating, cooling and cooking.

As for bathrooms and corridors within apartments, residents spend so little time in them it’s hard to take this suggestion seriously; it looks like zealotry.

Wrap-up

I haven’t yet seen a compelling reason why additional regulation is required to increase natural light within apartments. More consumer information would help, but I think prospective tenants and buyers are perfectly capable of using their eyes to decide what’s acceptable to them.

As I noted recently, the focus of regulation should be on what future residents can’t reasonably know, can’t reasonably foresee, or is outside their control (see Will higher standards make apartment residents worse off?). Ensuring apartment blocks are separated by a reasonable distance from other buildings will do a lot to improve access to daylight.

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  1. The National Construction Code requires the area of windows must be at least 10% of the floor area. Borrowed light is permissible.
  2. “Borrowed” seems to be the wrong term – the living room isn’t denied the simultaneous use of the light and it’s not temporary (and it’s certainly not returned after use!). “Shared” or something similar would be a better term.
  3. Oddly, the discussion paper refers to bedrooms with a light corridor as “saddle pack” bedrooms. Presumably the authors mean “saddle bag”; but unless there are two such bedrooms in an apartment (and they’re set out as mirror images), I think “battle axe” is a more accurate term.
  4. That wouldn’t necessarily be simple; there could be demands to regulate not just minimum lumens but also other relevant factors like duration and time of day.