Melbourne hyper-density report: why limit it to the City of Melbourne?

If you haven't read Leanne Hodyl's Churchill Trust report into comparing density-based planning policies in New York, Hong Kong, Vancouver, Seoul and Tokyo with that of the planning regime in Melbourne, then I would recommend setting aside an hour over the weekend to do so. Some will be scathing, some will love it.

It's a report which adds to a growing repertoire of commentary which is calling for restraint in the type of development occurring in central Melbourne. As more reports like Hodyl's are published and more urban design professionals, local politicians and engaged citizens debate the future direction of central Melbourne, the better the outcome we eventually get.

The new state government has flagged changes for the Capital City Zone, singling out the City of Melbourne to play a greater role. We haven't seen the detail yet and it wouldn't surprise me if City of Melbourne seek to apply a two-tier regime focusing on density like the one outlined in the Churchill Trust report.

Aside from the city to city comparisons which have been covered ad nauseam in the mainstream media (special mention goes out to Nine Network's awful coverage which appeared to confuse height and density [insert clown horn sound here]; not to mention it featured the mainstream media's anti-skyscraper academic on speed-dial), this section from page 35 cuts to the chase:

Developing in the central city is important and critical for the prosperity and sustainability of the city, however, this should not be done at the expense of liveability and longer-term prosperity of the city. The social and economic consequences of this pattern of hyper-dense, high-rise development are unknown. This scale of densities is not required to support population growth in the central city as there is sufficient land supply to meet the growth projections. Nor is there a valid argument that these densities are required to ‘put Melbourne on the map’ as a global city. Not having density or enforceable height limit controls has led to significant increases in land value.

As land values rise, developers seek greater financial return to compensate for the cost of the land. This then locks in a cycle of increasing densities as developers speculate on the potential higher yield that they now could realise. These high yield targets add further pressure to increase the number of apartments within a development, and to decrease the size of apartments. This diminishes the provision of basic levels of amenity such as light and air to bedrooms.

High land values also restrict or prohibit the opportunity for government to purchase land for open space or community facilities to support these new residents. This pattern of development is also affecting the diversity of the housing supply. High land values mean that in order for developers to achieve viable returns on a development, different types of housing, eg. mid-rise developments that have lower yields are not an option.

The conclusion on page 37 furthermore asserts:

We have highly competent developers and design and planning professionals in Melbourne. It is the lack of effective policies that is letting Melbourne down.

The evidence from these cities is clear. Melbourne would benefit from the introduction of policies that:

• Establish appropriate density controls in central Melbourne.
• Establish density bonuses to link development to public benefit and incentivise the delivery of new open spaces, affordable housing and other community facilities.
• Establish an enforcable tower separation rule.
• Establish apartment standards.

This report also recommends investigating the introduction of two planning streams for large-scale development approvals that developers can choose between – an ‘as-of-right’ approval for meeting these controls (that can provide certainty to developers and the community) or a negotiated outcome (with community review) if the controls are exceeded.

Each of the four points from the conclusion above warrants individual analysis and debate. The only comment I'd make at this stage with regards to apartment standards: the argument for mandating minimum apartment sizes needs to be more convincing as the comment surrounding this topic has been very much one size fits all.

Anyhow, I like to (try and) think 20 steps ahead at the best of times, and my thoughts soon honed in on the possible ramifications should the City of Melbourne implement a density control and bonus system, in conjunction with being granted more control in the Capital City Zone.

It's been clear to us here at Urban.com.au that there are growing voices for change and more regulation.

My primary fear should a new controlled regime be implemented in the City of Melbourne is that neighbouring municipalities in the middle-ring - Hobsons Bay, Maribyrnong, Moonee Valley, Moreland, Darebin, Boroondarra, Stonnington, Glen Eira and Bayside - won't have the same controls and incentive schemes.

If the goal is to increase the quality of development and temper the land price rush in central Melbourne, then the spread of development with the same levels of density and calibre throughout the metropolitan area should also be prioritised. Forcing density controls on central Melbourne without making changes outside the municipality will just result in downsizing the entire development industry sector.

Of the 589 projects on the Urban.com.au project database, 153 of them (one quarter) are located in the City of Melbourne and City of Port Phillip Fishermans Bend area. For the City of Melbourne/Fishermans Bend region, we have total apartment data for 91% of all projects and that equates to 41,280 apartments. The grand total of apartments in the database is always in a state of flux (as projects move in and out statuses and we're constantly finding new data), however the latest numbers we have are in the 60,000 to 65,000 range.

I'm not usually someone to bleat on about "jobs for jobs sake" but it's hard to ignore the those numbers. Significant volume reduction in the City of Melbourne will inevitably result in lower economic activity for the State as a whole should no effort be made to increase the attractiveness of heightened densities elsewhere in metropolitan Melbourne.

As Hodyl points out in the report, City of Melbourne is very supportive of development, and it's not about turning the tap off completely or cutting new proposals down at their knees.

But what is the best pathway to ensure the development sector remains buoyant in the advent of a new planning regime? And will surrounding councils help shoulder the growth burden?