Cities are sprawling, climate change requires urgent action, housing has never been more expensive, and councils do not have the funds to do much about any of it. However, they do control planning, and therefore housing development in Australia. Therefore, councils are ideally placed to help drive more compact, sustainable, and affordable housing that we desperately need. But there’s a catch, or rather, a few of them.
1. Councils are risk averse
Most people don’t like developments around them, particularly if they are large, or the medium density housing that Australian cities lack.
Local government, being the closest to its constituency, is particularly vulnerable to the voice of community and usually play it safe, limiting development to what the local community doesn’t complain about (mostly).
Councils also don’t want to be seen to promote development, especially if the outcomes aren’t great. And they definitely don’t want to be seen to be gambling with council budgets by becoming developers – despite being able to potentially deliver the outcomes cities really need.
2. Land is fragmented and on small lots
To build anything significant you need a good volume of land. Most land parcels are small, which, combined with planning laws and building envelopes means that the only type of housing you can build on the majority of land parcels is attached or semi-detached which also usually covers the site with house and driveway.
3. Developers need to make money
As we’ve seen lately, the development game is tight. Yes, you can make a lot of money, but timing is crucial and costs stack up, meaning that developers have to maximise what they can get out of a land parcel. This, more often than not, brings us back to the first point, the delays of which can eat the profits and kill any project.
So, in terms of delivering housing in the compact city, what we have is an environment where you either over develop on a really large lots or do small-scale incremental development on small lots, as doing anything significant on smaller lots in the existing suburbs is nigh on impossible.
Councils could change the rules, but not if it goes against the will of its constituency. Which means, unless we can miraculously figure out how to replicate a larger site in the existing suburbs, where we could build bigger, but protect existing residents, or even improve local amenity, and provide security for developers, were stuck with the current system.
A solution that could work wonders
Researchers at Swinburne and Curtin universities have been working on this issue for 12 years (yes, it takes that long to change a system) and have cracked most of the solution, which centres on land assembly through lot consolidation.
Simply put, landowners, rather than redeveloping their lot individually, or selling a lot to be redeveloped, could sell alongside their neighbours to create a larger parcel of land for development.
But why would they go to all the additional effort to do this and what’s the benefit?
The benefits flow from creating the right planning tools and market incentives, which, if implemented correctly, provide wins for the landowners, the developer, the surrounding community, the council and, with serious uptake, the city as a whole.
The applied research iterated through all available planning mechanisms and, with significant community and stakeholder engagement, came up with planning scheme amendments that provides greater development opportunity (height) and the removal of third party complains if certain criteria are satisfied. The three criteria are:
- three or more lots (or 2000 square metres) must be amalgamated
- the precinct plan, jointly created by community and council, must be followed
- the development must contribute to the specific local amenity indicated in the plan
These criteria have been coded into a planning amendment which has been applied across two precincts, each with roughly 400 houses, in Melbourne, but could easy be recoded for any Australian jurisdiction.
The planning regime for these two areas now provides incentives to developers, which will create a land premium for landowners, while also providing the area around the development with more of whatever it needs (such as more trees, walkways, parking and flood mitigation), making it a win for the community and council. Resulting in better design, both aesthetically and physically, that can deliver the buildings cities need, in the vision of the community and with the security developers require.
While these planning changes are the first of their kind, the capacity of this form of planning regime to change the face of Australian suburbia is huge, particularly once we create the business model which we aim to commence shortly. As you would expect, this level of engagement is not cheap and neither is the process of making planning amendments.
The next stage of the research is to work with councils, developers and landowners to iron out the details of who pays for what, who engages whom, what services each stakeholder can provide, as well as to see what is viable, legally and politically for councils, in terms of promoting development.
While we would not expect councils to become developers (yet), we would expect that councils, as the administrators of local land use planning, have a significant part to play in this work.
However, they need support from third parties (in this case researchers), to de-risk the process, show that is it possibly and start the dialogue with those who approve the building and those who can do the building, to bring about a better planned future for the suburbs.
If you would like to be part of the discussion on business models for council-led development, please contact me or go to the project website www.greyfields.com.au for more information.
