DRAFT UDIA NSW SUBMISSION ON EXPANDING COMPLYING DEVELOPMENT THE MISSING MIDDLE

DRAFT UDIA NSW SUBMISSION ON EXPANDING COMPLYING DEVELOPMENT THE MISSING MIDDLE 2016

TABLE OF CONTENTS Contents Executive Summary 1 Introduction 3 Background 4 Opportunity 6 General Issues 8 Lot Size and Location Testing 10 Consideration of Subdivision Issues 14 The Urban Development Institute of Australia (UDIA) NSW is the state s leading property industry body. It advocates for better planning, timely and affordable housing, and the building of vibrant communities to increase local job opportunities.

EXECUTIVE SUMMARY Executive Summary Australian cities have traditionally accommodated new housing on the fringe with the overwhelming preference being a new detached house on a block of land. This is still an aspiration of many Australians but they are now preferring different housing models at different times in their lives. Further, with an excess of demand in the housing market driving up prices, individuals and families need different housing products to meet their budgets at any point in time. Household trends are changing and now more than ever before there is a need for greater diversity in housing stock and housing typologies. Extending complying development to include options for low rise medium density housing in particular areas is a positive move by the Government which the UDIA NSW is strongly supportive of. Missing middle is the opportunity to provide housing stock that addresses changes in demand and demographics. It provides choice and the ability for residents to remain in their community. It provides the option to downsize and unlock equity in the family home. Increases affordability for the 20-30 year age group. Existing areas of low density housing have the potential to transition to missing middle housing typologies and meet the needs of the changing demographics. Having reviewed the discussion paper and associated documents, we would like to make the following recommendations: We believe the delivery of these compact housing types distinguish themselves into two categories that align with the existing character, lot size and proximity to transport and centres. It is important to understand the typical lot sizes and dimensions within the suburbs most likely to utilise the proposed complying development control (CDC) provisions. Lot size and location testing should be undertaken. 1

EXECUTIVE SUMMARY The message needs to be about providing the missing middle; housing typologies that will allow Sydney to meet the needs of its changing and growing population within local communities. Up front engagement with service authorities is required to ensure the provision of the necessary infrastructure. Appropriate subdivision (Torrens or Strata) should be strongly encouraged to ensure buildings are titled and BCA issues resolved upfront. S.94 contributions should reflect the yield and therefore the demand and rate sit state wide within the CDC provision. Standard terminology of housing types that are cross-referenced within the Standard Instrument. Design Guidelines and information packs should be created for the service authorities, Council and planning consent authorities (PCA). 2

INTRODUCTION Introduction Officially established in 1963, UDIA NSW has grown to become the leading industry body representing the interests of the NSW property development sector. UDIA NSW aims to secure the viability and sustainability of the urban development industry for the benefit of our members and the communities they create. We represent the leading participants in the industry and have more than 500 members across the entire spectrum of the industry including developers, financiers, builders, suppliers, architects, contractors, engineers, consultants, academics and state and local government bodies. This initiative was borne out of the growing demand for a greater variety and alternative to the traditional housing model in Sydney s housing market. The idea of medium density development filling this gap in the market has become known as the missing middle. As outlined in a Plan for Growing Sydney there is a need to deliver greater housing choice to meet our changing needs and lifestyles. This expansion of complying development to include medium density low rise housing has the potential to improve housing choice and provide the alternative to apartment and quarter acre lot living that the market is calling for. Complying development reduces costs and time and overall improves affordability. The plan continues to outline that action is required which will enable the subdivision of existing homes and lots in areas suited to medium density housing. Doing this would remove the barriers to subdivision of existing homes and help meet consumer demand and reduce the cost of housing in NSW. The idea behind complying development is that more common developments and building types that fit rules outlined clearly can get faster approvals. Complying development is a much more attractive option than going down the route of a development application (DA). 3

BACKGROUND Background Today, our urban housing densities are drastically different from what they were a generation ago. Australian cities have traditionally never built high density flats or apartments instead favouring a separate house with its own block of land. This is still the aspiration for many Australians but as the housing shortage and issues of affordability continue to grow, people are looking towards alternative housing models. Currently, we are seeing Australian planning controls favouring compact cities, with higher densities in retail cores, employment centres and around train stations. The advent of strata title in the 1960s has been one key drivers in the growing popularity of higher density in Australian cities. Now more than ever, singles, couples, families and elderly looking to downsize and age in place are looking towards apartments as a legitimate alternative to the typical house on its own land. However, it is considered by many that there has been an overreliance on these two forms of development to provide housing options for the masses. There is a gap in the market to fulfil the demand for a product between the single detached house and the apartment or the missing middle. This is where medium density housing or compact housing could play an important role. It is much higher density than the single detached house and would provide those in need of housing with an alternative affordable option to apartment living. The concept of medium density housing in the form of compact housing is not new. Throughout the world, particularly in European cities, medium density, compact housing remains a popular alternative to high rise apartments and detached dwellings. Terraces in particular are popular and allow for numerous dwellings to exist on a relatively small lot. In Australia, this form of medium density housing was popular in inner city areas and many of Sydney s original worker s cottages were terraced houses. 4

BACKGROUND Medium density housing in the form of terraces, townhouses, manor houses and duplexes continue to be popular and successful in global cities such as London. Part of Sydney s original fabric is made up of these types of developments especially in places like The Rocks. These buildings add character and context to the city and help tell the story of the city s growth and development. However, it has been contended that the NSW planning system was originally designed by the garden city movement in reaction to the development of terrace housing in the city. The Minster for Planning has pledged his support for a renewed focus on terraces, townhouses, manor houses and other manifestations of medium density housing as a means of increasing density and liveability. In all its forms, medium density housing can help fill the need and demand for more affordable housing on smaller, compact lots and address the current issue of the missing middle. 5

OPPORTUNITY Opportunity The population of Sydney is projected to rise by 1.5 million by 2031. Household trends are changing and now more than ever before there is a need for greater diversity in housing stock and housing typologies. Housing affordability is a major concern for Sydney, and this issue is only set to intensify as the population continues to grow. Medium density housing is seen by many as a means of tackling this housing affordability crisis and its provision has the potential to provide affordable homes for many of those unable to afford traditional homes. Compact houses are an attractive product for a diverse range of people, there is an increasing demand for people looking to purchase medium density homes on smaller lots. Existing areas of low density housing have the potential to transition to missing middle housing typologies and meet the needs of the changing demographics. The missing middle housing or compact housing, can be designed and delivered in an appropriate scale and character with the local area. This type of housing has the potential to accommodate for the way people want to live on a size appropriate to their needs at the same time suited to their financial circumstance. Compact housing located in older suburbs could address a number of issues in terms of housing provision. Young family units who want to live close to services and transport routes would be one of the main demographics to benefit from this type of housing. Compact housing may also prove popular with seniors looking to downsize from their larger family homes. Further, seniors looking for a home to age in place may see this type of housing as a favourable alternative to apartment living. 6

OPPORTUNITY The addition of compact housing in established suburbs will also provide a supply of housing for affordable housing and seniors housing. Concessions for dedicated affordable and/ or seniors housing for key workers and to promote ageing in place are worth considering. Extending complying development to include options for low rise medium density housing is a positive move by the Government. The concept of complying development is one that is favoured by the public as it makes it easier and more expedient to undertake development without the need to enter a lengthy DA process. The overall aim of this policy is to boost housing supply by permitting 2-10 dwellings per lot. Key Points: Missing middle is the opportunity to provide housing stock that addresses this change. Will provide choice and the ability for residents to remain in their community. Provides choice to downsize and unlock equity in the family home. Affordability for the 20-30 year age group. Existing areas of low density housing have the potential to transition to missing middle housing typologies and meet the needs of the changing demographics. 7

GENERAL ISSUES General Issues The Challenge The current challenge is where we locate missing middle housing and how we implement it. This type of housing is an evolving model and is currently difficult to implement. Introducing low rise medium density housing as complying development is the most suitable solution to implementing this type of development throughout NSW. Different councils have varying requirements for missing middle/compact housing and this has made it difficult to develop a universal model, until now. The missing middle discussion paper outlines the compliance guidelines for lots resulting in the creation of 2-10 dwellings. UDIA NSW believes that the design and delivery of these dwellings should be considered under two separate categories. The Potential for Two Categories The missing middle document outlines the compliance guidelines for lots resulting in the creation of 2-10 dwellings. The design and delivery of dwellings classified as compact housing or missing middle lends itself to be considered as two separate categories. Category 1 - Low Rise Medium Density (4-10 dwellings) and Category 2 - Cottage Multi Units (2-4 dwellings). This delineation recognises the scale required to finance, project manage and deliver the number of dwellings. Potentially mums and dads could deliver the small scale category 2 type with category 1 requiring greater expertise and could be more suited to semiprofessional and professional involvement or management. 8

GENERAL ISSUES Category 1 Category 1 are more suited to low-rise medium density housing types such as townhouse and low rise apartments. These include areas within 1 km of a corridor or centre, R3 zones and inner established suburbs that have smaller existing lot sizes. These areas tend to be more inner middle suburbs and were developed before the early 1960 s. The original housing types were often single storey, three bedroom homes. These suburbs can generally be characterised by a mix of knock-down-rebuild, duplexes, townhouse and villas. They often allow some form of medium density development. The ability to deliver greater density and yield in these suburbs could be achieved with basements. The land value of properties in these suburbs could potentially sustain costs associated with basement parking. Category 2 Category 2 are lower density and the garden suburbs of the late 60 s, 70 s, 80 s and 90 s (mostly 600 m2 lot sizes and greater). This was the era of the mass production of the automobile which resulted in increased mobility, which in turn led to the rise of the project home industry. These large project homes, tend to be located in the middle/outer suburbs of Sydney. They are generally suburban in character, on larger lots with larger front setbacks that present houses individually rather than as a group of dwellings. These areas are suited to duplex, triplex and manor homes on single lots. The original streetscape was either single level or two storey project homes. These new compact house types could be salt and peppered into the existing streetscape. This area would include R2 and include areas more than 1 km from corridors and centres. Key Point: The delivery of these compact housing types distinguish themselves into two categories that align with the existing character, lot size and proximity to transport and centres. 9

LOT SIZE AND LOCATION TESTING Lot Size and Location Testing UDIA NSW believes it is essential that further testing of lot sizes and hypothetical development in many local government agencies (LGAs) and different local conditions is undertaken. This is important to ascertain how the division between the two categories could best be applied. Further, there is another level of investigation required to review the typical existing lot sizes and dimensions in these middle/outer ring suburbs in order to ascribe the relevant setbacks and streetscape considerations. This information could be sourced from land title records and other government agencies who remain key landowners. Recommendation: Important to understand the typical lot sizes and dimensions within the suburbs most likely to utilise the proposed CDC provisions. Lot size and location testing should be undertaken. 10

GENERAL COMMENTS ON CONTROLS CORNER LOTS Special consideration for corner lots with two street frontage is needed. The second street setback and the rear setback need to be considered. The short frontage should be deemed as the primary frontage regardless of the entry points to the dwellings. There is the potential for Fonzie Flat style dwellings over rear garage. These dwellings provide excellent affordable housing options and are an efficient use of land, insofar that they leverage off the required car parking solutions. ARCHITECTURAL FIT INTO EXISTING CHARACTER One of the most important considerations for the adjoining neighbours and the community generally is the protection of the streetscape. Special attention should be given to the details around the roof pitch, verandahs, patios, materials and colours, and landscaping. Missing middle/compact housing developments should harmonise with their surroundings and not lead to a degradation of the architectural merit or existing character of and area. UDIA NSW would encourage that a design guideline to provide examples and considerations through this process be created. CAP ON DENSITY TO PRESERVE EXISTING CHARACTER Controls that reduce the concentration and disperse the redevelopment by salt and peppering it more should be considered. This would go some way towards preserving the existing character of a streetscape and allow new complying developments to marry with their area. These could be achieved by: Considering a cap on the percentage of lots or overall density uplift in any street block similar to the old Ryde Villa Code (use it or lose it). 11

GENERAL COMMENTS ON CONTROLS Considering a maximum FSR for each lot size. Locking in a maximum of a one and two-bedroom product in every development in every project or a one and two bedroom in every 3 or 4 dwellings. Ascribing a yield by lot size, e.g. maybe 2 dwellings max up to 400 m2, 3 dwellings max up to 600 m2 and 4 dwellings 600 m2 or bigger. PARKING The provision and location of parking on the site impacts density and streetscape and is one of the main challenges facing the success of this initiative. Consideration should be given for one car space for a two bedroom and three-bedroom dwelling. For category 1 scale developments, basement or at grade parking will likely be with a single access point. Parking in the rear setback should be considered For category 2 developments, many existing middle/outer suburbs have 7m or even 9 m front setbacks. Consideration of the setback of garages is important and parking spaces in the front setback, designed to fit into the landscaping, could be attractive and fit into the existing streetscape. To minimise hard stand and driveways internally within the site, forward entry and exit to the site should be allowed, especially in category 2 scale developments. 12

GENERAL COMMENTS ON CONTROLS SOLAR AND PRIVACY OF NEIGHBOURS (PARTICULARLY IN CATEGORY 2) These need to be considered for neighbours on the south side. Maybe increase minimum setbacks to upper storey could allow for optimum privacy and solar access to adjoining neighbours. Increased setbacks may also have the additional benefit of reducing. BUILDING HEIGHT Building height should consider sloping land and changing levels by clear definitions and explanations of height. This is often not clear and any guidelines developed should specify this with the aid of diagrams where possible. UDIA NSW believes that with reducing lot sizes and increasing building size, it is time that general regulations and rules regarding building height are reviewed, and architects are given the opportunity to achieve the objectives of sunlight and space through innovative building design. CEILING HEIGHT In terms of ceiling height, 2700mm in downstairs and living areas are required but in a two storey configuration, bedrooms and bathrooms upstairs could be 2400mm. This would allow for increased flexibility. SIDE SETBACKS AND EAVES Consider making the setback to the fascia of the eave or increasing it to 1200 mm to wall or ground floor and 1500 mm to second storey. 13

CONSIDERATION OF SUBDIVISION ISSUES Consideration of Subdivision Issues SERVICES AVAILABILITY AND AUTHORITIES The capacity of local services to accommodate the additional demand from the increase in dwellings particularly in category 1 when the density will need to be considered. There may be a clear distinction between category 1 and 2 demands. Developments such as compact/missing middle housing which would utilise existing infrastructure such as roads, public transport, telephone, gas, water, sewerage and electricity services should be cheaper than extending infrastructure to support urban sprawl at the fringes of our communities. Whilst it is not necessary under complying development to engage with service providers, to ensure that the adequate services are in place for increased density, consultation with Sydney Water, Electrical and Stormwater particularly in category 1 should be considered. Downstream drainage and on-site stormwater detention (OSD) will need Council engagement as easements and connections may be negotiated with neighbours. The policy on OSD imposed by the Local Council needs to be reasonable. TORRENS OR STRATA CERTIFICATION Unless the lot is very large or the developer/ owner wants a low density option (i.e. two or three dwellings on a 900 m2 lot) most of the subdivisions will be strata title. There could also be some community title subdivisions. Having subdivisions strata or community titled from the outset could lead to fewer complications should one of the dwellings/units on the lot be sold. 14

CONSIDERATION OF SUBDIVISION ISSUES REQUIREMENT TO SUBDIVIDE WITH CONSENT FOR DEVELOPMENT The application and consent to subdivide should be strongly encouraged with the development application to ensure the dwellings are separately serviced, metered, and built with fire separation. It is important that they are built strata ready regarding fire separation and BCA compliance for subdivision as it is very difficult to do later. SECTION 94 AND DEVELOPER LEVIES A clear Section 94 based contribution should exist within the CDC document and aligns with the dwelling yield and therefore potential demand on services. There should be a sliding scale contribution as the yield increases, from a bedsit to a three-bedroom rate. It is assumed the Section 94 will be paid to the Local Council and they will issue a certificate to the developer to provide to the PCA prior to signing off the subdivision plan and issuing the subdivision certificate. Other charges from services authorities also need to be considered as there maybe upgrades to substations and other infrastructure required. Recommendations: Up front engagement with service authorities is required to ensure the provision of the necessary infrastructure. Appropriate subdivision (Torrens or Strata) should be strongly encouraged to ensure buildings are titled and BCA issues resolved upfront. S.94 contributions should reflect the yield and therefore the demand and rate sit state wide within the CDC provision. 15

GENERAL MATTERS DEFINITIONS NEED TO BE CONSISTENT There is considerable confusion over the terminology of housing types in the community. Clarity of housing types and their respective planning definition with the Standard Instrument and the Housing Diversity Package should be considered. Recommendation: Standard terminology of housing types that are cross-referenced within the Standard Instrument. RELATIONSHIP WITH OTHER PLANNING INSTRUMENTS Consideration should be given to the suite of exclusions including: High Density Zones (R3 & R4), heritage conservation areas, heritage listed items, flood prone land, and bush fire prone land. The is an opportunity to align the CDC SEPP with other SEPP s including the Affordable Housing and Seniors Housing SEPP s and offer incentives for parking and bonus FSR or yield. EDUCATION AND APPROVALS PACK FOR INDUSTRY It can be anticipated here will be lots of small scale developers and existing owners undertaking these small scale projects so education will be very important. Design guidelines may provide an excellent opportunity to provide guidance of architectural treatment, streetscape outcomes, landscaping, setbacks and parking. An approval pack would be essential for services authorities, local council and consultants (engineers, surveyors and PCA s private certifiers). These should include example documents, flowcharts and checklists will be an important part of the communication for this education process. 16

GENERAL MATTERS Recommendation: Design Guidelines and information packs should be created for the service authorities, Council and PCA s CONSULTATION TIMEFRAME TWO ISSUES There are two messages in the discussion paper and there is a risk the need for compact housing within your community story will be confused with the State CDC message. These messages are currently mixed in the exhibited paper. There is a need to summarise this background into simple compelling messages that can be clearly communicated to the public as part of the consultation process. Recommendation: The message needs to be about providing the missing middle; housing typologies that will allow Sydney to meet the needs of its changing population within local communities. 17

Should you have any questions please contact UDIA NSW Policy and Research Manager James White via jwhite@udia-nsw.com.au or 02 9262 1214. 18

Published February 2016 Urban Development Institute of Australia NSW 66 King Street, Sydney, 2000 Tel 02 9262 1214 www.udiansw.com.au 19