New challenges for urban renewal... Patrick Fensham Principal SGS Economics and Planning

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1 New challenges for urban renewal... Patrick Fensham Principal SGS Economics and Planning 27 March 2013

2 Housing supply a problem...

3 The housing shortfall (gap) increased by 28,000 dwellings over the year to end-june 2011, taking the cumulative shortage since 2001 to 228,000 dwellings. The most acute shortage remains in NSW, with an estimated gap of 89,000 dwellings, followed by 83,000 in Queensland. Relative to the number of households, the largest estimated shortfall is in the Northern Territory at almost 15 per cent. The housing shortfall in Victoria narrowed over the year to June New South Wales and Queensland experienced further widening of the gap over the same period. The Council projects that the national shortfall will increase to 370,000 dwellings by 2016, 492,000 by 2021 and 663,000 by 2031, assuming historic demographic and supply trends continue (the Council's "medium" growth scenarios for underlying demand and supply). National Housing Supply Council (2012) Housing Supply and Affordability Key Indicators, 2012

4 Housing supply and demand

5 1981/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /15 90,000 SYDNEY REGION HOUSING COMPLETIONS, PROJECTIONS AND POPULATION GROWTH, 1981/2 TO 2014/5 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Greenfield - Forecast Greenfield Population Change (No. of People) Existing Urban Areas - Forecast Existing Urban Areas Source: Metropolitan Development Program (NSW Government, 2011), ABS Estimated Resident Population calculations, SGS Economics and Planning

6 SYDNEY HOUSING TARGETS MINUS SUPPLY BY SUBREGIONS AND LGAS (5 year growth rate) 7

7 Strategies aim for a mix in a range of centres but outcomes don t reflect this...

8 ACT targets 350,000 in 2011 to 389,000 in 2031 (high end 460,000) 50% infill : 50% greenfield 50% within 7.5 km of city - new model needed

9 Metro strategy objective: Build at least 80% of all new homes within the walking catchments of existing and planned centres of all sizes with good public transport;

10 Population growth in metropolitan Sydney

11 Sydney infill focus on the largest centres When public opinion counts for little March 23, 2013 Despite objections, unsightly buildings manage to spring up, writes Margaret Rice. They eventually accepted the development and the other highrise in the town centre as a way of absorbing high-density housing in Burwood, which state planners have identified since 2006 as an urban growth centre. ''When we did our local environment plan, we said we could have heights in the town centre of 16, 18, 20 storeys,'' Faker said. ''Residents accepted that because they knew we needed new housing growth. It was on the basis that we have no development in our residential areas. Read more:

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13 Community would prefer greater mix including small lot and terraces...

14 Renewal contested

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16 Grattan Institute (2011) The Housing We d Choose

17 In Grattan Institute Report The Housing We d Choose Re Finance Unlike developments of detached homes, apartment buildings cannot be built and sold in increments. Banks therefore require a level of pre-sale commitments Re Land Supply A number of larger developers reported difficulties with aggregating land into commercially-viable plots [in established areas] The timeframes associated with land assembly create uncertainty and increase holding costs. Where required, decontamination can also add significantly to time and cost. Re Planning.In both Melbourne and Sydney, multi-residential and sub-divisions are significantly more likely to be decided outside the statutory time, incurring increased holding costs.

18 Terraces, small lot housing provide an opportunity to get density in areas of marginal feasibility Area Gross Dwelling Density (ha) Bondi Beach 43 Bondi 42 Paddington 42 Bondi Junction 37 Kensington 29 Maroubra 26 Matraville 12 And they reduce costs (holding, labour, materials) compared to apartment projects

19 New housing typologies

20 Controls often restrict opportunities for incremental infill of small single dwellings...

21 A mansion or no house: a report for UDIA on consequences of planning standards and their impact on land and housing

22 In Canberra e.g. DV306 Some of the major elements in DV 306 include: requirements for solar orientation for blocks in new estates and adequate private and communal open space in new developments. the current minimum block size for dual occupancy in RZ1 zones has been maintained at 800m2. a draft Multi Unit Housing Development Code that includes new provisions for multi unit residential redevelopment in RZ2 including: no building will contain more than four dwellings buildings containing two or more dwellings on the same block must be separated by at least four metres the minimum block size for residential redevelopment comprising two dwellings is reduced to 700m2 and to 1050m2 for three or more dwellings for residential redevelopment comprising three or more dwellings, the minimum site area for each dwelling is 350m2 for up to five dwellings and 250m2 for the sixth and each subsequent dwelling consolidation of blocks is only permitted where they have adjoining street frontages. the maximum floor area for secondary residences (or granny flats) has been increased to 75m2. My detached house on 125 sqm block

23 Plot Ratio Provisions ACT v. Marrickville and Canada Bay Plot ratio (%) Single Dwelling Marrickville 50 Canada Bay 50 ACT 50 Dual Occupancy Marrickville Canada Bay ACT Multi Unit Marrickville Canada Bay ACT 65-80

24 Solar access provisions e.g.

25 In Sydney mostly a similar story.. e.g. Canterbury LGA Restrictions on town house and villa devt Restrictions on dual occupancy Density only if sites are amalgamated Generous and minimum parking rates

26 Rethinking renewal...

27 Sales Price ($) Granville: Median House Price House prices Granville Town Centre $600,000 $500,000 $400,000 $300,000 2 Bedrooms 3 Bedrooms 4+ Bedrooms $200,000 $100,000 $

28 Why buy an apartment in Granville when I can buy a house? 750 sqm site $ 420,000 land 12 units 1080 sqm total building area of 90 sqm each 1.44 FSR $ 2,800 per sqm construction and other costs $ 3,024,000 total building cost $ 252,000 land component per apartment $ 287,000 total costs per apartment 15% expected profit $ 330,050 final sale price per apartment

29 CENTRES RENEWAL FRAMEWORK CENTRE CORE The core town centre area; mix of residential and non-residential land uses. New development likely to be more intensive form of change: apartments and mixed use. Requires more detailed design studies and planning controls and possibly infrastructure upgrades and funding. Land assembly or development of key sites may be catalysts for broader change. Car parking rates and format critical considerations. New development: dph on 20% of land. Average density increases of 25 to 75 net dph.

30 CENTRES RENEWAL FRAMEWORK STRATEGIC PRECINCTS Areas where street and block layout are better suited to intensification. Intermediate housing forms (e.g. townhouses, terrace, small scale apartments); housing choice and transitional scale. Also require some detailed design, possibly infrastructure upgrades, land assembly may be advantageous but not necessary. Car parking rates and locations could also be key to facilitating uptake. E.g. angle parking on wider streets, no off-street parking. New housing: dph on 50% of land. Average density increase of 25 to 35 net dph.

31 CENTRES RENEWAL FRAMEWORK 3 2 New development: dph on 20% of land. Average density increase of 5 to 10 net dph CENTRE FRAME Remaining areas within 1.0 to 1.5 kms (an extended walking catchment) of centres. Suitable for small scale infill housing projects such as ancillary dwellings, duplexes, triplexes, or big house forms. Simple code-based planning, less restrictive than existing controls; permit infill without the need for land assembly. Incremental and salt and pepper change: infrastructure upgrades generally not required. Modest infill development easy to facilitate, likely to be feasible compared to higher density forms. Lower (or market?) parking rates.

32 EAST LAKE WORKING SCENARIO Overall land use plan showing the diversity and distribution of housing types preliminary work for ACTPLA by SGS / s+w / Kinesis from 2009/2010 not policy

33 MEWS HOUSING