Victoria is currently undergoing a substantial consultation process targeted at improving the design quality of apartments being built across the state. Part 1 of this post discussed the main aspects of the Better Apartments discussion paper released by the state government. Part 2 of this discussion will focus on why the state government should step in to guide the future development of apartments.
Many commentators on this subject are fiercely against anything other than the status quo which is largely determined by the free market. Their view is that if someone is willing to depart with the cash, it should be up to them as to what they buy. If that means the apartment has poor amenity then that is the individual’s choice and government has no place intervening. However the government does intervene in many other goods and service for the benefit of the community.
So why should the government step in to provide minimum apartment standards?
The free market does not easily take into account the mass consequences of individual choices. For example, if apartments within a building can be sold cheaper by the development excluding suitable landscaping, then the market will reward that approach. If this approach is allowed to continue over time, our built environment as a whole suffers the combined effects of poor design, such as making cities more susceptible to the Urban Heat Island Effect.
Another failure of the free market approach is to ignore the long term consequences in favour of achieving short term priorities. In a fast paced consumer driven society, permanence is something of a novelty. Our cars and white goods seem to last up to 10 years whilst our smart phones typically last about 2-3 years before they ‘need’ upgrading. Apartments however on the whole still have very substantial lifespan even when they are no longer useful. This is a significant danger for our newly constructed apartment buildings which could easily become semi-abandoned slums if they cannot adapt to future requirements or be easily maintained. The developer and the initial buyer have nothing to lose if the building is great for the first ten years, mediocre for the next ten and uninhabitable from then on. As long as they don’t own the building when it becomes uninhabitable it will not be their problem. It will be someone’s problem though and our society will collectively pay the price if buildings become dilapidated and unusable.
The free market approach is also excluding certain people form residing in our city. Families are a one such group with only 5% of apartments currently being constructed or marketed including three or more bedrooms. At what point did our elected politicians, or urban planners, or in fact anyone agree that we should exclude families that require three or more bedrooms from the city? It wasn’t a decision. There was no plan. Instead it was just the outcome of an economic system. For our city to thrive at its fullest potential, we must challenge this system and intervene with good policy to deliver the city we want to live in, not just the one that is most economical for developers to build.
Should the government mandate minimum apartment sizes?
A substantial aspect to this debate is the question of mandated minimum sizes. A common complaint against apartments are that they are ‘dog boxes’ which are too small. This complaint however is much more of a symptom than a disease. A poorly designed 50 square metre apartment can be very impractical for living, just as a well designed 24 square metre apartment can be a great place to live. It is far more about design quality, than size.
Some commentators believe that mandatory apartment sizes are a foregone conclusion for Victoria. This would seem quite premature given the following commentary by the Planning Minister in Urban Melbourne
“While apartment sizes are a hot talking point, we must keep in mind that good design is the key. There are some fantastic small apartments offering good amenity, natural light and are affordable, just as there are plenty of poorly-designed large apartments.”
Planning Minister Richard Wynne
If we agree that the problem is poor design at the bottom end of the spectrum, the solution then is to weed out the bad designs prior to approval. To do this the most obvious solution would be to require proposed apartment developments to be subject to a design review by the Office of the Victorian Government Architect. This would enable the quality of design to be assessed independently and the success of an apartment proposal would be tied to design quality rather than apartment size. For unwilling developers concerned by the perception of a less certain outcome, a secondary option would be compulsory adherence to a full set of proscribed design standards including minimum apartment sizes.
Bedroom sizes are being squeezed
A major bugbear for many apartment dwellers in newer homes is the limited size of the bedrooms. Whilst some might argue that a queen or king sized bed is a luxury item, for those taller than 188cm, a queen or king sized bed is a requirement for a good night’s sleep. By restricting bedroom sizes to only fit a double bed, the effect is to restrict who can live in the apartment. Apartments which cannot facilitate a queen sized bed amounts to housing discrimination. Imagine the outcry if a public transport or government service was not available to people over 188cm in height. Housing is a basic and fundamental human need, regardless of height. Any guidelines or standards on apartment design that come out of this process need to engage with this aspect of apartment design.
Will Minimum Design Standards significantly increase apartment costs?
Some of the most outspoken critics of the Better Apartments discussion paper and of apartment regulation cite the issue of housing affordability as the major reason why the government should not interfere with the apartment market. Perhaps the most alarming prediction was from Craig Yelland who proclaimed that “The cost per apartment will immediately increase by upwards of $150,000”. The prediction is drawn from a comparison between Melbourne and Sydney apartment prices. Whilst it is absolutely clear that inner Sydney apartment prices are significantly more expensive than inner Melbourne apartments it is far less clear that this can be blamed upon their apartment design regulations, SEPP 65.
There are many factors that impact on the cost of an apartment in Sydney. Sydney has higher average wages and higher prices on goods and services. It also has different city geography, zoning controls, levels of international investment and different transport infrastructure all of which affect apartment prices. Median house prices in greater Sydney have also increased more quickly than in greater Melbourne, a fact which is also due to a complex system of factors.
|Median House Prices|
It is important to note however that SEPP 65 is not limited to Sydney, it is has jurisdiction across all of New South Wales. It is in fact in the regional centres where the State of Origin comparison between NSW and Victoria reveals an interesting story. If it were the case that SEPP 65 was responsible for apartment prices immediately increasing by upwards of $150,000, due to the mandated larger sized apartment sizes, bedroom windows or higher ceiling heights then we should expect it everywhere that those requirements are enforced. A quick comparison between Newcastle (NSW), Wollongong (NSW) and Geelong (Vic) shows that it is possible to buy in all three locations a typical 2 bedroom, 2 bathroom 1 car-space apartments for somewhere between $530K and $580K
The view that the New South Wales apartment regulation SEPP 65 Laws have not substantially impacted apartment affordability is also shared by The Property Council of Australia. A 2009 survey of the Property Council of Australia’s members found that 82 percent of respondents agreed that it had led to improved design, and with relatively minor impact on affordability. At the time of the survey, the regulations had been in place for seven years.
Despite being skeptical of the idea that minimum apartment sizes will cause substantial price increases, If apartment affordability should still be monitored closely to determine the likely impacts of the regulation. If prices do begin to rise substantially there is no reason why other planning mechanisms could be looked at to increase the supply side of the equation.
Where to from here?
In a democracy it is up to the citizens to determine how much we want our government to regulate. Do we allow a basic human right such as housing to be dominated by the developer spreadsheet or is there a further role for government to step in to make sure we build the city we need now and in the future. Now is the time to have your say. public submissions on the Better Apartments Discussion Paper open until the end of July there is still much debate to be had about the way forward.
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