New Residential Zones - what does this mean for Melbourne

The State Government released new Residential Zones for implementation in July 2013. These zones effectively sought to replace the Residential 1, 2 and 3 Zones with the General Residential (GRZ), Residential Growth (RGZ) and Neighbourhood Residential (NRZ) Zones. A major departure from the existing zone controls is the mandatory nature of many of the requirements, including:

• In the NRZ restricting development to two dwellings per lot, setting a maximum building height of 8.0 metres and enabling councils to set minimum lots sizes.
• In the GRZ (which is arguably the old Res 1 Zone), setting maximum heights that allow a maximum of 2-3 storey development.
• In the RGZ, setting mandatory heights that allow a maximum of 4 storey development, noting that ResCode now applies to 4 storey buildings.

Councils across the state were given until 30 June 2014 to implement the zones, replacing the old suite of zones with the new.

On the surface this didn't raise significant concerns within the development or planning industry, as the Advisory Note that accompanied the zones gave reasonable comfort that the zones would be applied in a sensible and logical manner. In particular, the NRZ, the most restrictive of all the zones, is to be applied in relatively limited circumstances, where there is recognised neighbourhood character, environmental or landscape significance.

However, it is evident that a number of councils are seeking to broadly apply the Neighbourhood Residential Zone as the default zone, covering anywhere from 70% to 90% of the residential land in their municipalities. Councils such as Bayside, Boroondara, Port Phillip, Stonnington and Yarra are proposing that between 70-90% of their residential land will be in the NRZ. It is incredible to believe that in the vast majority of these areas, a 3 unit development will be prohibited, regardless of the context of the site, such as the location of the 1960s block of flats next door.

In the City of Glen Eira, one of only two municipalities to have its zones approved, nearly 80% of residential land is located within the NRZ. Glen Eira, like many established municipalities, has considerable infill development from earlier periods, such as the 60s and 70s, that make medium density housing in these pockets a sensible and logical outcome. However, the days of building townhouses in between 1960s six packs are long gone and these sites are now only suitable for dual occupancies.

The City of Boroondara has adopted (without public consultation) the extensive use of the NRZ, where in most instances, the adoption of a 500 sqm minimum lot size for about 70% of the municipality, will render even two unit developments prohibited as 1000sqm is required to obtain separate titles. The icing on the cake for this council is that whilst locking away the majority of the municipality from any urban growth, Boroondara then seeks to only use the Residential Growth Zone along a small section of Power Street and Riversdale Road from the Yarra River to Camberwell Junction. No other nodes along tram lines or railway stations qualify in this council's mind to accommodate anything more than a two storey building in most instances. Where Boroondara has sought to apply the General Residential Zone, it of course seeks to use the mandatory height controls, but then largely applies this zone in areas of the municipality covered by single covenants.

This approach by councils was reinforced by the State Government late last year when the draft Plan Melbourne was released, proposing that more than 50% of residential Melbourne would be placed in the NRZ.

However, there are significant implications in effectively locking away the majority of suburban Melbourne from residential development. New housing choices will be limited to high rise development or the outer fringe, with little choice in between. This will impact housing choice, sustainability as well as affordability.

Melbourne was recently found by the "Demographia International Housing Affordability Survey" to be the 6^th least affordable city in the world, where restrictive land use policies were cited as one of the significant factors in unaffordability. The restriction on the reasonable development of land in suburban Melbourne can only increase housing prices, particularly in the established housing market. There will be no real alternative to established homes in the inner and middle suburbs, with townhouses and small scale apartment buildings effectively restricted to only small pockets. With a limited supply of new housing choices in established areas, existing homes can only rise in value, becoming even more unaffordable.

Coupled with the significant issue of affordable housing is the underestimation by the State Government in its population forecast for Plan Melbourne. Figures released by the ABS in Nov 2013 show an additional 2.1 million people are predicted for Melbourne by 2050. This is in additional to the 2.05 million to 2.85 million people assumed by Plan Melbourne.

The creation of development "go go" areas, such as Fisherman's Bend and other urban renewal sites will be an important part of the solution in providing an affordable supply of housing. Obviously the implementation of infrastructure, in particular public transport for Fisherman's Bend, will be key to the success of these precincts. But locking away 70-90% of Melbourne's residential land from anything more than 2 unit developments can only be seen as madness.

The urban consolidation of residential areas, particularly those with reasonable access to public transport and other infrastructure, has been the cornerstone of State Government Policy during my working lifetime. It is mind boggling the political energy the State Government is expending, trying to lock away Melbourne's suburbs from residential development.

The politics of kowtowing to a noisy minority who seek to preserve their streets will undermine the broader government strategy to substantially increase the size of our capital city. Quite simply, the Government can't have its cake and eat it too. It is ludicrous to nearly double the population of Melbourne over the next 35 years, whilst at the same time propose to prevent residential development in most of suburban Melbourne (in Glen Eira's case that's around 80%) and commit to holding the urban growth boundary. Something has to give!

It is important that concerns regarding the zones be voiced to the State Government and submissions lodged with respective councils as they place their zones on public exhibition. Given that entire zone review was a result of a noisy minority, such as Save our Suburbs, creating waves regarding "inappropriate development", the development and planning industry must makes its opinion heard and soon.

If you want to voice your opinion, I would suggest writing to:

The Premier

The Honorable Dr Denis Napthine - Department of Premier and Cabinet

e: denis.napthine@parliament.vic.gov.au

The Treasurer

The Honorable Michael O'Brien - Department of Treasury and Finance

e: michael.obrien@parliament.vic.gov.au

The Planning Minister

The Honorable Matthew Guy - Department of Transport, Planning and Local Infrastructure

e: matthew.guy@parliament.vic.gov.au

It is essential that correspondence be addressed to all three ministers as it is important that an understanding of what is happening is spread across all arms of government and not just the planning minister's office.

Here are some points which you might consider raising in any correspondence to the Victorian Government.

The widespread use of the Neighbourhood Residential Zone will:

• Make entry into the housing market more difficult due to cost of housing.
• Redirect affordable housing to the urban fringes and high density inner-city locations.
• Limit housing diversity and the ability for people to downsize and stay within the local community.
• Limit the opportunities for people using their property for super
• Push affordable housing growth to areas with limited access to jobs, public transport and community facilities.

Colleen Peterson is a Director at Ratio Consultants with over 20 years of experience leading statutory and strategic planning projects for both private and public clients.  Colleen tweets regularly on Victorian planning zone reform - you can follow Colleen at @colleenpeterson, and similarly you can use the hash tag #reszones to focus debate on this topic.