Calibre : Has Housing Diversity Worked? A reflection – three years on.

August 2014. As a Planner, I remember it well. The long anticipated changes to the State Environmental Planning Policy (Sydney Region Growth Centres) 2006 transpired with the goal to expand the supply of housing choice in Sydney's Growth Centres to supply a small lot housing choice.(AKA the Housing Diversity package). The promise was threefold: increase housing supply, provide a greater range of housing options, and to offer more affordable housing packages.. three years on, has the package delivered?

The answer, unfortunately, is both yes and no.

While some Councils have embraced the new planning controls in the Diversity package, others have not accepted all design controls, especially around the treatment of laneways.

So, what has worked?

To ensure that subdivision and development on smaller lots is undertaken in a coordinated manner, a Subdivision Approval process was established with different approval pathways depending on the lot size and whether built form approval is sought.

The approvals pathway allows for lots less than 225m (or less than 9m wide) to include either a dwelling design or a building footprint that is integrated with the subdivision approval. The dwelling design/building footprint is included via a Section 88B restriction as to dwelling design on the lot. In contrast, for lots between 225mand 300m the subdivision application must be accompanied by a separate building envelope plan that creates suitable building areas.

The increased flexibility of this approach to subdivision and building approval has allowed for the registration of smaller lots both pre and post construction; and has allowed the development industry to provide various land and building contracts in order to facilitate housing supply and a broader diversity of products.

And, what hasn't worked?

To reduce the dominance of garages in residential streets, laneways have been introduced to assist in providing rear loaded garage products, particularly for narrow lots. The creation of public laneways in the new release areas has been promoted in order to facilitate different sized lots within the market.

While some Councils have openly accepted the establishment of public laneways, others are resisting the laneway as a public road and insisting on private shareways. Although the public laneway as part of the street network has been accepted practice in many urban areas, some Councils are reluctant to accept this form of road and the benefits it confers. For instance, not only do the laneways provide a shared space for vehicles and pedestrians, they help to reduce road widths and through traffic. Yet, despite such positive outcomes some Councils have instead forced developers to create private shareways with the land owner being responsible for maintenance and legal rights. Laneways are a better alternative to private shareways and be considered part of the road typologies.

The Department of Planning & Environment in NSW needs to resolve any differences in interpretations and provide direction for an accepted approach to road formations and treatments across all release areas, especially in regards to laneways.

Lessons learnt

The big lesson learnt by most developers for small lot housing and integrated development is to coordinate with the architect and dwelling designers on small lots as to the allocation and construction of infrastructure servicing. In particular, there is a need to design the location of drainage lines, electrical supply connections, retaining walls and driveways in close conjunction with the development plans.

During my many years of experience one of the lessons that I observed was the need for early coordination of all aspects of engineering and servicing in order to avoid any conflicts with infrastructure and ensure the buildability of the housing on the small lots.

Has the introduction of new planning controls for small lots and different built product worked?

The answer is evident in the development outcomes that are being achieved across all the new residential subdivisions. At subdivision stage more attention is being paid to lot frontages, size of lots, and the building footprint for the new products, than had previously taken place. The result is a superior subdivision layout that encourages diversity in lot sizes and varying built form product. In other words, the housing diversity initiatives have had the desired effect of increasing housing choice for smaller lot products.

As illustrated in the graph below, across the country average lot sizes in residential subdivisions has reduced, while average lot prices have increased. In NSW, the lot price has significantly risen since 2014 with the pent-up demand for new subdivided lots driving up the price.

Only time will tell if the small lot housing and the housing diversity initiatives have had a positive impact on affordability of new lots and housing, particularly as affordability is an increasingly pressing issue for Sydney and for first home buyers.

Moving forward

While the Housing Diversity package has assisted in freeing-up the residential subdivision standards in Sydney's Growth Centres a number of amendments must be made to ensure consistency across Councils.

The new approach to housing diversity appears to have worked for Sydney's Growth Centres and there is no reason why similar controls should not be introduced within existing suburbs, especially those close to services and transport.

In going forward, the NSW Government has sought comments on an initiative to permit as Complying development to cover medium density housing options in existing urban areas. The 'missing middle bit' (as it is referred to by former Planning Minister, Rob Stokes) is as an initiative to assist in the delivery of more housing, greater choice and better designed outcomes for medium density lots. In my opinion, it would be desirable to expand the initiatives on housing diversity from the Growth Centres to apply to all residential zones in order to help address affordability and housing choice. This is particularly relevant where services are already available in existing suburbs, thus making better use of the large tracts of low-density residential land.

I believe supply and affordability are crucial issues in meeting Sydney's housing demands and the Growth Centres' approach to diversity and flexibility in the planning controls is essential for our expanding population.

For further enquiries on this topic or planning matters please, contact Calibre's Planning team.

Peter Lee

Manager - Planning