Keeping housing affordable

As the planning minister, Matthew Guy says, the just released Plan Melbourne is meant to provide communities with clear directions about the future of their neighbourhood. In theory that is exactly what is required but in practice it certainly doesn’t appear to be making housing any more affordable.

By creating new zones that lock away huge parts of municipalities in suburbs with an established infrastructure they are driving development to very small pockets within suburbs. Smaller apartment buildings with less than 20-30 units will be almost impossible to develop and we will be left with high-rise buildings towering over our suburbs.

Further, any delays and policy shifts reduces developer confidence and increases costs. The zones left over for development will be hotly contested and developers will need to build bigger buildings if their investment is to be economically feasible. Those extra costs will invariably be passed onto the consumer.

It also means there will be no room for smaller developments where they are most needed – closer to the CBD where infrastructure and amenities are already established.

Smaller properties, be they townhouses or apartments, are becoming increasingly important with the rapidly growing ageing population looking to consolidate by downsizing. Naturally they want to have easy access to amenities, which are inevitably found in established suburbs closer to the CBD. Increasingly it looks like their only option to find smaller, more convenient housing is in high-rise buildings that typically do not appeal to or suit their lifestyle.

While it is good to have a dedicated planning authority to implement a long-term strategic vision for Melbourne, the key will be their ability to implement their commitments. And it is hard to know how they can do this if many of the councils have still not submitted a proposal. Even more worrying is that other councils have had their submissions rejected by state government, so their commitment to the whole plan is still very much up in the air.

In our experience most developers work within the local government residential code for their building approval. The trouble is that too often councils reject applications to keep their local constituents onside effectively passing the responsibility to VCAT. This generally leads to at least another six-month wait for approval and increased legal and planning costs. In the end all this uncertainty and delay is a cost added onto the purchase price.

Of course councils should still be responsible for policing the aesthetic standards and residential codes but not at the expense of the grander vision of the city. The residential code should be sacrosanct and councils should not be able to overrule the size or type of building if it meets that code.

There needs to be clarification about the role and power of councils in development applications. An important step to creating confidence amongst developers and builders is to establish certainty and clarity in the application process. That can only make the development process quicker, and those savings will be passed onto the consumer.

Unfortunately Plan Melbourne has not yet addressed these important issues and in the end it is the consumer who is going to pay.