Housing density: why govts need to ‘sell’ developments

As our cities get bigger, more and more people want to live closer to the centre where they can get better access to jobs, people and services. They’re prepared to trade-off space for greater accessibility, but too often the price of apartments is just too high.

A key reason is existing residents and councils suppress the supply of new dwellings by opposing proposed developments. They impose restrictions and delays that limit the number of units that can be built and drive up costs.

So I’m pleased to see Victoria’s Civil and Administrative Tribunal (VCAT) has overridden Stonnington Council and given Lend Lease permission to build a 466 unit complex at Armadale in inner suburban Melbourne. It consists of 3, 2 and 1 bedroom apartments and town houses, a cafe and convenience store. Buildings are up to 12 storeys high.

As I’ve noted before, this is an ideal location for higher density housing – it’s only six kilometres from the CBD and on the door-step of Toorak railway station. The site is very large (2.5 Ha), adjacent to a small activity centre, and mostly abuts rail line and playing fields rather than houses.

I think there are some important issues/lessons raised by this and similar cases. Here are a couple.

First, sites like this are gold – and just as rare. When they become available, they need to be developed at the highest possible density consistent with basic planning constraints like infrastructure capacity and overshadowing.

Development shouldn’t be unduly constrained by concern that it’s out of character with existing low density housing. Nor should it be deterred by fears it would “introduce CBD-type high-rise development to these suburbs.”

Of course developments on the scale of this one will necessarily and inevitably change the character of their immediate environs. However the social value of these sites is immense – the issue should be to manage the change well, not to severely limit the potential of prime sites.

Second, I think a key reason residents oppose development is they have a heightened sense of what they fear they’ll lose from it, but little idea of how they might gain. In this case Lend Lease reckons the project will deliver benefits to the community i.e. a new public boulevard, more parking and improved connectivity to nearby Toorak station.

Either Lend Lease hasn’t worked hard enough to communicate those benefits, or residents don’t value them very highly relative to what they fear they’ll lose. I suspect it’s more the latter and moreover I think it’s true for the great bulk of projects.

Whether a project is big or small, residents will almost always feel they’re worse off. That’s not really surprising – after all, the costs are local and borne by a few, while the benefits mostly accrue at a wider scale and/or over a long time period.  It’s hard for residents to connect diffuse benefits with redevelopment in general, let alone with a specific project within spitting distance of their dwelling.

Governments and developers need to turn their minds to what incentives might make residents more receptive. Given the wider social benefits, compensating residents for their loss, whether real or perceived, should be considered. If residents don’t feel they benefit, councils are inevitably going to oppose redevelopment.

Third, this case also highlights the problem of small municipalities. Having many councils (there are 31 in Melbourne) favours local interests. That however can conflict with metropolitan efficiency – for example, what the residents of Armadale and Toorak think is good for them might not be good for the vast majority of Melburnians.

That’s one key reason why Planning Ministers call in major proposals and why the courts end up deciding a relatively large number of applications. But Ministers and courts have their own limitations so it’s not an ideal solution.

There’s accordingly a clear need to think about ways of getting a better balance between legitimate local concerns and legitimate metropolitan concerns. There’s no such thing as the perfect solution, but I think the Brisbane model – larger municipalities – is an approach worth thinking about. Another is the metropolitan authority model – for example, along the lines of the disbanded Melbourne Metropolitan Board of Works.