AUGUST 2019
TOWARD INFILL HOUSING DEVELOPMENT
PREPARED FOR THE TASMANIAN DEPARTMENT OF STATE GROWTH Launceston
Hobart
TOWARD INFILL HOUSING DEVELOPMENT EXECUTIVE SUMMARY
Tasmania’s major urban centres are It covers a range of housing types, currently experiencing very high including duplexes, townhouses, demand for housing, both to own and ancillary dwellings, terrace housing, rent. This demand, largely driven by and low to medium rise apartments. growth in interstate and overseas These types of housing provide migration, tourism, and a growing a compromise between larger, university population, has seen detached dwellings and higher property prices in Hobart increase density apartments. 35% in the five years to May 2019 – Infill housing offers a number of the largest house price increase of advantages to households and any Australian capital city (Corelogic, cities. It contributes to a more 2019) – and a rental market vacancy compact urban form, supporting the rate around 1.4% (REIT, 2019). It is use of existing infrastructure and now increasingly difficult for people services. It increases total housing to enter Tasmania’s housing market, stock in areas with good access to to secure long-term rentals or to employment, schools and public have a reasonable level of choice in transport. In providing a range of type and location of housing. housing types, it supports market Tasmania’s housing market is very demand and demographic needs for traditional in its product makeup different types of housing, including and buyer demands. Detached smaller and more affordable options. houses located on greenfield sites The delivery of infill housing is continue to make up the majority of challenging, particularly when it the market, and comprise a higher does not form a significant part of proportion of residential development an existing housing market. Barriers compared to other major cities such include the higher cost of inner-city as Sydney, Melbourne and Canberra. land, fragmented site ownership, While this type of housing meets industry capacity to deliver a the needs of some households, it different type of product, planning limits choice and affordability for and heritage restrictions, and lack of many others, including low income community awareness of different households, first home buyers, housing products. individuals seeking to downsize and people wanting to live within or close This report identifies a series of to major employment centres. recommendations to improve the ease, opportunity for, and Until recently, in the absence of affordability of infill housing in high growth, there has been no Tasmania. It recognises that, while pressure to facilitate infill housing there are barriers to achieving a development or promote a wider higher proportion of infill housing range of housing typologies. in Tasmania, this type of housing However, as Tasmania’s population offers advantages that may improve grows and its demographics change, housing choice, accessibility and a more diverse range of housing affordability for home owners and typologies will be required. renters across Tasmania. Infill housing refers to the establishment of new dwellings within an existing urban area, focusing in particular on the inner to middle areas of a city.
TOWARD INFILL HOUSING DEVELOPMENT CONTENTS
INTRODUCTION 3
HOUSING CAREERS 5
TYPES OF INFILL HOUSING 7
TASMANIAN HOUSING MARKET 11
WHO IS DRIVING HOUSING DEMAND? 16
BARRIERS TO DELIVERY 21
IMPROVING INFILL OUTCOMES 26
1 TOWARD INFILL HOUSING DEVELOPMENT TOWARD INFILL HOUSING DEVELOPMENT 2 INTRODUCTION
PROJECT BACKGROUND WHAT IS INFILL HOUSING? The missing middle considers both the type of housing provided and The Toward Infill Housing Infill housing refers to the where this housing is located. Across Development project was development of new dwellings within Australia, dense missing middle commissioned by the Department an existing urban area. housing projects are being delivered, of State Growth (State Growth), as however these projects are often Infill typologies range from an initiative under the Tasmanian located in master-planned estates detached houses including multiple Government's Population Growth on the urban fringe rather than dwellings, with generous front Strategy, to inform the Tasmanian as part of urban renewal projects. and rear setbacks, to duplexes, Government’s response to increased The location of these projects on triplexes, townhouses, row and demand for well-located, affordable the urban fringe places people terrace housing, low to medium rise housing within the State’s urban further away from employment apartments and ancillary dwellings. centres. opportunities, services and public Infill housing can be delivered as a transport. Missing middle housing is The project also informs objectives single or small-scale development, most needed closer to the centre of a under the Launceston and Hobart or as part of a larger, integrated city where it can leverage off existing City Deals, including increased infill development. physical and social infrastructure and development, urban renewal and the While rates of infill housing have services. delivery of new dwellings. increased in some cities, including Both Hobart and Launceston are While this report considers infill Sydney, Canberra and Brisbane, experiencing some redevelopment housing for the whole of Tasmania, infill housing continues to make up of their city centres, and significant and as a concept can be applied a comparatively small proportion of development on their edges, however to all urban areas and towns within new housing stock. In Tasmania, the there is insufficient development the State, the focus is on the proportion is even smaller at around happening in the spatial ‘middle’ larger urban centres of Hobart and 15%. Given this lack of availability, suburbs. Launceston. infill housing has been referred to as ‘the missing middle’ or the ‘missing’ In this report, references to Hobart housing typologies from within a and Launceston relate directly to the city’s housing typology spectrum, significant urban areas of those two (Figure 1). cities. Where discussions are based on statistical data, specific reference is made to the relevant statistical area, i.e. Hobart SA4 and Launceston and North East SA4.
INFILL HOUSING TYPOLOGIES
Figure 1: The “Missing Middle” typology transect
3 TOWARD INFILL HOUSING DEVELOPMENT Gentle Density "Gentle density is about trying to find ways to make infill housing compatible with its surroundings to support both urban design goals and the delivery of more housing"
WHY IS INFILL HOUSING IMPORTANT? SO WHAT FOR TASMANIA?
In concentrating new housing in Infill housing is largely absent within This could be achieved through a mix existing urban areas, and providing the Tasmanian housing market, with the of 'gentle density' including ancillary a compromise between larger, majority of new housing development dwellings, small subdivisions and small detached homes and higher density located on the urban fringe, mostly as townhouse typologies, appropriately apartments, infill housing supports detached houses. positioned within existing suburbs, combined with more concentrated broader policy outcomes, including Low density housing on the urban nodes of higher density low-rise and fringe is often the most affordable improved accessibility; increased medium-rise residential developments, type of housing for many households. housing diversity; and the more in proximity to high frequency It is also the most affordable type efficient and sustainable use of passenger transport services. existing infrastructure and services. of housing for developers to deliver. However, this development pattern Most jurisdictions within Australia For households, infill housing can comes at a cost. Fringe urban areas have regional planning policies that provide the following benefits - are highly car dependant, with limited clearly define infill and greenfield public transport services. Supporting dwelling targets. For example, Sydney, »» More affordable options for educational, social, and recreational Melbourne and South East Queensland homebuyers and potentially, faster services are also limited. are all seeking around 60% infill versus access to home ownership. 40% greenfield. For infrastructure providers, low »» Proximity to public transport nodes density housing requires the extension These policies have been specifically and amenities, facilitating access and upgrade of economic and social developed to limit less sustainable to employment opportunities and infrastructure, often across many growth at the edge of cities. While services. different suburbs. In Hobart and Southern Tasmania has a 50% Launceston, the conversion of fringe greenfield, 50% infill target, this target »» Options to downsize and unlock land to housing has implications for has not been enforced across the equity in a family home. the loss of productive agricultural and metropolitan region. »» Greater housing choice, supporting resource land, and greenspace. ageing in place. A greater focus on infill provides »» More housing within suburbs of opportunities for households to trade higher demand. off a longer commute with a smaller To support equity and affordability, backyard and better access to major employment centres, key services and it is also important that cities have facilities. a supply of subsidised affordable housing (i.e. social housing) within the inner and middle suburbs of key urban centres.
TOWARD INFILL HOUSING DEVELOPMENT 4 HOUSING CAREERS
The idea of a ‘housing career’ was Housing careers are important Housing markets should supply a first conceptualised within academic because like our working careers, range of housing types, at a variety literature in the early 1970s and they can be disrupted by technology, of price points to enable households 1980s. A variety of academics noted changing working trends, and and individuals to access affordable a strong correlation between stage changing social circumstances. In housing, and then move through of life and the type of dwelling an Australia, the cost of housing, to buy their housing career within the individual or household resides or rent, is seeing children stay in the same suburb, or in proximity to that in. Those academics argued that family home for longer. Increasingly, suburb. individuals progress through the people are also challenging the housing market in response to traditional focus on ‘bigger and changing demographic, economic better housing’, and instead choosing and social circumstances. to invest in alternative housing, Generational influence on the which is more convenient and offers property market is shown in Table 1, access to more job opportunities and with a typical housing career shown amenities. in Figure 2.
A TYPICAL HOUSING CAREER THAT FOLLOWS TRADITIONAL STEREOTYPES OF THE COMMUNITY WOULD BE AS FOLLOWS:
Figure 2: A Typical Housing Career
5 TOWARD INFILL HOUSING DEVELOPMENT LEGENDLEGEND LEGEND LEGEND LEGEND
GENERATIONGENERATIONGENERATION Z 1995GENERATION Z 1995 - 2010Z 1995 GENERATION- 2010 Z- 19952010 - 2010 Z 1995 - 2010
GENERATIONGENERATIONGENERATION Y 1980GENERATION Y 1980 - 1994Y 1980 GENERATION- 1994 Y - 19801994 - 1994 Y 1980 - 1994
GENERATION GENERATION GENERATION X 1965GENERATION X 1965 - 1979X 1965 GENERATION- 1979 X- 19651979 - 1979 X 1965 - 1979
GENEGENEGRENEATRGIONAENERTIONAALTGRION ALAENEINTFAL IONINLRUE FIANALLTUENFIONL CESINUENFALCESLN OUECES INN O NFTHNCESL O UETHEN N THEOCES NE TH OEN THE BABYBABY BOOMERSBABY BOOMERS BOOMERSBABY 1946 1946 BOOMERS- 1964BABY 1946 - 1964 -BOOMERS 19461964 - 1964 1946 - 1964 PRPROPPROERTPOEPRPYRTE MORTYAP MPRREYAKRT MREOATYKPR E EMKTRTAE RTY K META RKET BUILDERSBUILDERSBUILDERS 1925 1925 BUILDERS- 1945 1925 - 1945 -BUILDERS 19251945 - 1945 1925 - 1945
DWEDLLWEINGDLLWE TYPE/YEAINGLL DTYPE/YEAINGWE LTYPE/YEALRING D WERTYPE/YEA LLRI NG TYPE/YEAR 2010201 R 0201 0 2010 2012015201 0 5201 5 2015 20201202 05 202 020 2020 202205202 52025 2025 2025 SO WHAT FOR STUDENTSTUDENTS TUDENTHOU HOUSSINTUDENTG HOUS INGS SIN HOUTUDENTG SING HOUSING TASMANIA?
Affordable housing is more than just RENTRENAL TRENAL TARENL TAL RENTAL about price. It is about what people
can afford relative to their income, and RENTRENT AS RENTA A S A A RENTS A AS RENTA AS A where housing is located in relation COUPLECOUPLE/C1OSTUPLE /HOUS1SCTO/ HOUS1UPLESE T HOUS/E C1SOTUPLEE HOUS /1ES T HOUSE to work, schools, family and services.
YOUNYOUNG FYAOUNGMI FLAYGMI YO OUNFWLAYNMI O G LWY FN AYO MIOUNWNLY G O FWANMI LY OWN In constructing new houses, there needs to be a better understanding MATUMRAETU MFARAMETU IFLRAYMEM OA FITUWLAYNM RO IELWY FMN AO AMWTUINLYR EO FWANM ILY OWN of ‘who’ will occupy and buy future housing. Table 1 shows housing trajectory by generation over time. For BUY BU2NDYBU 2HOUNDY 2HOUSNDBUE YHOUS E2 NDSE BUHOU Y 2SNDE HOUSE most Australian capital cities, Gen-Y and Gen-Z will soon be the primary
EMPTEMPTY NEEMPTYS TENERY SEMPT TENER STEY NER EMPTSTER Y NESTER buyers of many forms of housing.
These groups have different RETIRRETEMENTIRRETEMENTIR HOMEMENTRET HOME IREMENT HOME RETE IRHOMEMENTE HOME aspirations and values when it LEGEND comes to urban life, and these values GENERATION Z 1995 - 2010 need to be tested against the type Table 1: Generational Influences on the property market of housing that is being delivered. GENERATION Y 1980 - 1994 It is likely that these groups will demand smaller and more affordable LEGEND GENERATION X 1965 - 1979 housing, and may be interested in different housing typologies GENERATIONAL INFLUENCES ON THE GENERATION Z 1995 - 2010 BABY BOOMERS 1946 - 1964 PROPERTY MARKET compared to past buyer groups (e.g. GENERATION Y 1980 - 1994 BUILDERS 1925 - 1945 baby boomers and Generation X). This type of housing is also closely GENERATION X 1965 - 1979 aligned to two of Tasmania’s key GENERATIONAL INFLUEDWENLCESLING TYPE/YEA ON THR E 2010 201BABY5 BOOMERS 1946 -2 1964020 2025 housing market cohorts – persons PROPERTY MARKET STUDENT HOUSING aged 65+ and international BUILDERS 1925 - 1945 students, both of which are likely to be seeking smaller, lower- RENTAL maintenance, more affordable
DWELLING TYPE/YEAR 2010 2015 2020 2025 housing options, close to services.
STUDENT HOUSING RENT AS A
COUPLE /1ST HOUSE
RENTAL YOUNG FAMILY OWN
RENT AS A MATURE FAMILY OWN
COUPLE/1ST HOUSE
YOUNG FAMILY OWN BUY 2ND HOUSE
MATURE FAMILY OWN EMPTY NESTER
BUY 2ND HOUSE RETIREMENT HOME
EMPTY NESTER
RETIREMENT HOME
TOWARD INFILL HOUSING DEVELOPMENT 6 TYPES OF INFILL HOUSING
Minimum, Micro & Small Infill Lots Duplex Micro or small lots are parcels of land smaller than A duplex is a residential building containing two houses that the minimum lot size specified in the relevant zone share a common central wall. The pair of homes are either provisions. In Tasmania, the minimum lot size in the strata titled or exist on separate titles and can be owned General Residential Zone is currently 450m2, and 325m2 and sold separately by non-related households. The two for multiple dwellings, and 200m2 in the Inner Residential dwellings may be beside one another of above one another. Zone. Each house is a separate home with its own entrance, The development of smaller lots for housing often amenities and yard. requires a flexible approach to setbacks, site cover and carparking requirements. From a design perspective, best practice suggests that the smaller the lot, the more considered the house design needs to be, to ensure the highest and best use of allocated space.
Case Study - Micro lots A ‘micro lot’ housing project was launched in April 2018 in Ellenbrook in Perth’s north-east. The housing plans included a two-bedroom, two-bathroom layout, or a two-by-one on 80m2 blocks of land. The pilot project is a joint venture between the WA Government, developer LWP Property Group and home builder Now Living. Reference: https://www.nowliving.com.au/80- ellenbrook/
7 TOWARD INFILL HOUSING DEVELOPMENT Ancillary Dwellings Low-Medium Rise Apartments An ancillary dwelling refers to a second house less than 60m2 Low-rise typically accounts for residential apartment on a lot containing an existing house where both dwellings buildings of up to 4 storeys, while mid-rise can include form part of the same title. 5-7 storeys. These buildings contain dwelling units that share common property and are strata titled. The Ancillary dwellings can be delivered under existing planning boundary of each unit is defined by floors, walls and controls and without the need for regulatory change. They ceilings. can be separate, attached or within the main residence. Ancillary dwellings are an affordable housing option and Access to each unit is usually through common property, genuine form of incremental infill, providing an opportunity and units are typically located above ground level or for property owners to unlock the equity they may have in semi-basement car parking. Units have private open their property. space and access to communal facilities, dependent upon the number of dwellings within the building.
Case Study - Granny Flat »» Maintain a 3m setback from the rear, 0.9m setback Granny flats, or ancillary dwellings are seen as a positive from the side boundaries; way to add value and flexibility to a home and increase »» Maintain a distance of 3m from any existing trees the number of affordable dwellings available in the rental over 4m in height; and market. »» Maximum 60m2 external area for the granny flat.
IIn 2009, the New South Wales Government released the Affordable Housing State Environment Planning Policy (SEPP), which allows all residential home owners with a property larger than 450m2 (and with a minimum 12m street frontage) to build a granny flat on their property. The construction of granny flats on these types of lots is a complying development and does not require a full development application or approval.
Minimum Site Requirements: »» Property must be a minimum of 450m2 in area; »» Property must have residential zoning; »» Property must have a minimum 12 metre width at the building line of the existing dwelling. If the property does not meet this requirement it there is an ability to apply for an attached granny flat;
TOWARD INFILL HOUSING DEVELOPMENT 8 CAFE HAIR
Terrace /Row Houses Shop Top Housing Terrace and row houses are visually attached dwellings Shop-top housing refers to attached housing in varying on a strata or separate (freehold) lots, located beside forms above ground floor retail or commercial uses. Shop each other and appearing as a row of attached houses, top housing offers an alternative to more traditional sometimes gaining access from a rear lane. This type housing types and contributes to the economic and of housing is typically approved in combination with social vitality of village and city centres. Shop-top a subdivision (reconfiguration of a lot), and may have housing is somewhat location sensitive. It generally works shared common walls or separate built-to-boundary walls in areas with particular attributes, including linear retail strips along feeder or arterial roads, sites close to major Each dwelling has a ground level and its own entry from infrastructure, such as a CBD or university; and areas the street, and appear as separate houses to the street, with good public transport connectivity. with a height typically not exceeding three storeys.
Case Study - Terrace Houses Case Study - Shop Top Housing Envi Micro Urban Village is an architect-led development Lismore City Council's ‘Lismore Housing Strategy’ identified located in Southport, on the Gold Coast. The development CBD housing as a key component to improving housing has seen the conversion of a single suburban lot into ten options, and in 2015 Council brought together a focus group affordable terrace homes, comprising micro terraces (two to look at barriers related to shop-top housing. As a result of bedrooms), ‘urban pods’ (two bedrooms), a ‘village home’ the feedback, Council worked closely with property owners (three-storey, three-bedroom house), and ‘pico pod’ (one to help meet fire regulations, which can be complicated and bedroom). costly. Council also released a community brochure outlining how building owners can address the major issues that The development features what are believed to be some of have inhibited shop-top housing development in Lismore, the smallest freehold residential lots available in Australia, especially in the CBD. This guidance is aimed at encouraging with the smallest lot being just 38m2. This lot houses a 67m2 more housing, particular smaller types of accommodation residence. Seven of the ten lots were purchased by new home within the city centre. Council also adopted a policy that buyers, supporting an objective to provide affordable housing waived carparking and Section 94 and 64 contributions options. and fees for shop-top housing to incentivise this type of development.
9 TOWARD INFILL HOUSING DEVELOPMENT A PRECINCT APPROACH Housing within the project was The project has also seen significant delivered by partner builders, who capacity building within the housing In 2008, the Queensland Government essentially ‘bought’ land off the sector, which has had flow-on identified the opportunity to develop ULDA. Given the small size of houses effects for other developments in the new generation housing products for (e.g. houses that fit onto 6m wide region. the Brisbane market, using surplus lots), significant innovation was Government land. The final product, required to deliver a high quality the master-planned ‘Fitzgibbon product. Chase’ estate, located 13km from the Housing on the estate was sold Brisbane CBD was facilitated by a on the open market with no pre- state-owned development company, eligibility criteria, and was essentially the Urban Land Development affordable by design, with smaller Authority (ULDA – now renamed housing and lot sizes. The project Economic Development Queensland). served as a useful display village for The ULDA developed the policy and local government and developers. design guideline, ‘Res30’ Code, It has proven an effective tool in to facilitate new housing at 30 the South East Queensland context, dwellings per hectare. This was demonstrating the ‘missing middle’ achieved through a mix of smaller housing options, with a number of detached housing, terrace housing, Local Governments subsequently and a limited amount of low-rise adopting Res30 principles into their residential units. planning schemes.
Fitzgibbon Chase, QLD, ULDA
TOWARD INFILL HOUSING DEVELOPMENT 10 THE TASMANIAN HOUSING MARKET
Across Australia, households are spending more of their income on housing than in previous decades. Home ownership rates are falling for all age groups under 65, particularly for the young and those on lower incomes (Grattan Institute 2018). For many individuals and households, owning a 10.2% home or finding secure, long-term rental of Tasmanian renting accommodation comes at a significant households spend over 30% financial and personal cost. of their income on rent In Tasmania, demand for housing has increased significantly in recent years. It is now increasingly difficult to enter 43.0% Tasmania’s housing market, to own or of suburbs within Hobart rent, particularly in the inner and middle urban areas of Hobart and Launceston. are spending over 25% of their income on mortgage The factors contributing to the current repayments housing situation in Tasmania include: »» Over the past decade house price growth for renters and owner occupiers has surpassed income growth, creating a need for more affordable housing options. »» Interstate and overseas migration and the number of international students studying in Tasmania, have both increased. This has placed additional demand on the 9.7% housing market. Median rent increase in »» Tourist visitation has increased, Southern Tasmania with flow-on effects for how
existing houses are being used (i.e. conversion of rental properties 7.0% to short-stay accommodation). Median rent increase in »» An ageing population, with limited Northern Tasmania alternative and affordable private Source: Tenants’ Union of Tasmania (TUT) 2019, housing options to support Tasmanian Rents: March Quarter 2019. downsizing. »» The way people are living is changing, resulting in demand for housing that provides a range of housing types to match housing careers.
11 TOWARD INFILL HOUSING DEVELOPMENT THE COST OF HOUSING Median Annual Household Income and Growth (2006-2016)
Tasmania’s major urban centres SA4 Region 2006 2011 2016 CAGR 2006 2018* are currently experiencing very - 2016 (% p.a) high demand for housing, both to own and rent. Growth has been Greater $46,904 $55,224 $64,064 3.2% $68,186 particularly high in Hobart, with the Hobart city experiencing an increase in Launceston $39,468 $46,540 $52,780 2.9% $55,939 median sale price from $359,000 in Greater $60,996 $75,088 $90,792 4.1% $98,310 June 2012 to $483,750 in March 2018 Sydney (refer to Figure 3).
Growth in household incomes has Greater $56,680 $69,212 $80,028 3.5% $85,744 not kept pace with growth in the cost Melbourne of housing. Between 2006 and 201 6, Table 2: Median Income and Growth 2006-16 annual household income increased Source: ABS Census (2016) 3.2% in Greater Hobart to $64 000 and 2.9% in Launceston to $53,000 Median Annual Rental and Mortgage Repayments (refer to Table 2). Over the same period, median mortgage repayments SA4 Region Payment 2006 2011 2016 CAGR Type and rent for both cities increased at a higher rate. In Hobart, mortgage Hobart Median $11,700 $17,160 $16,824 3.7% mortgage repayments and rent increased repayment 3.7% and 5.7% respectively, while in Launceston the increase was 3.8% Median rent $7,800 $12,220 $13,520 5.7% and 5%, respectively (refer to Table Launceston Median $10,404 $15,600 $15,120 3.8% 3). mortgage repayment
Median rent $6,760 $9,880 $11,024 5.0%
Table 3: Median Annual Household Income and Growth (2006-2016).
500,000
Hobart 450,000
400,000
350,000 $ Sale price 300,000 Launceston
250.000 North West Coast 200,000 June 12 June 13 June 14 June 15 June 16 June 17 June 18
Figure 3: Median sale price in Tasmania regions Source: REIT Property Update, quarterly reports
TOWARD INFILL HOUSING DEVELOPMENT 12 Market indicators continue to identify 7.0 Tasmania as having one of the tightest rental markets in Australia. 6.0 Vacancy rates have dropped to 5.0 around 1.4% in Hobart since June 2012 (Figure 4). The average 4.0 proportion of household income spent on rent in Hobart is 28.1%, the 3.0 North West second highest of any capital city (percent) Coast (Table 4). Table 5 shows the high Rental vacancy rate rate vacancy Rental 2.0 Launceston number of suburbs across Tasmania Hobart spending more than 25% of their 1.0 income on rent. 0.0 Rising rents reflect a shortage of private rental accommodation, with June 12 June 13 June 14 June 15 June 16 June 17 June 18 increased competition for fewer houses. Rental demand and costs are Figure 4: Vacancy rates in Tasmania regions (%) Source: REIT Property Update, quarterly reports higher in inner city areas, which are more attractive in terms of access to work, schools, public transport and STATE MARCH QTR 2018 % AREAS other services. NSW 30.10% 30-35% Hobart, Elizabeth Town, Escalation in median sale price and Greens Beach, Exton, Cuprona, rental payments in Tasmania has TAS 28.10% Deep Bay, Kayena, Maydena, proven positive for owner occupiers Kellevie, Meander, Bellingham, VIC 23.80% and investors but has impacted on Coles Bay housing affordability. For households QLD 23.10% 25-30% Hellyer, Kindred, Falmouth, on lower-incomes, finding a house Frankford, Huonville, Burnie, with affordable rental is difficult. NT 22.50% Leith, Bicheno, De-loraine, Launceston, Calder, Judbury, Anglicare’s Rental Affordability SA 22.40% Chigwell, Lebrina, Huntingfield, Snapshot for 2019, found only Grove, Latrobe, Grindelwald, 22% of listed rental properties ACT 18.50% East Devonport, Clarence were appropriate and affordable Point, Beauty Point, Devonport, WA 16.30% Geeveston, Bridport, Golden for persons on income support Valley, Adventure Bay, Lutana, payments, while just under half Table 4: Proportion of Family Income Required to Deviot, Forcett, Bellerive, were affordable for families on the Meet Rent Payments Lindisfarne, Berriedale, Source: Real Estate Institute of Australia, Housing Cygnet, Kingston Beach, Eggs minimum wage. Affordability Report, March Quarter 2018 And Bacon Bay, George Town, Kempton, Cradoc, Campania, The report also found a 60% Low Head, Austins Ferry, Kings reduction in listed rental properties Meadows, Lanena, Howrah since 2013. Table 5: Proportion of Family Income Required to Meet Rent Payments - Tasmanian Local Govt Areas Infill housing can play a key role in Source: Real Estate Institute of Australia, Housing addressing problems of housing Affordability Report, March Quarter 2018 shortage and affordability, increasing both total available housing stock, and delivering smaller, more diverse and more affordable housing options.
TIGHTEST RENTAL 1.4% 1.9% MARKET Vacancy rate in Hobart Vacancy rate in Launceston in Australia (May 2019) (May 2019)
13 TOWARD INFILL HOUSING DEVELOPMENT BALANCING GREENFIELD In Tasmania, this land is often productive agricultural land and/or AND INFILL DEVELOPMENT has greenspace and environmental Australia’s cities are characterised by values. Based on a density of ten urban sprawl, which has dominated dwellings per hectare, every hundred residential development patterns for houses delivered as infill would avoid decades. Tasmania’s urban centres the conversion of ten hectares of have followed this trend. Separate land. houses account for 85% of total While housing development on housing stock in Hobart, and 87% the urban fringe is more costly for in Launceston, compared nationally governments and the community, with 66%. it does deliver affordable housing Figure 5 provides a comparison options and it does support a housing of medium density housing stock product – single dwellings on a larger between Hobart and other capital block – which many households still cities. Smaller capitals, including prefer. From an industry perspective, Canberra, Darwin and Adelaide all it is also an easier form of housing have 27-36% of their dwellings as to deliver, with less complexity and medium density or apartments, lower risks for developers compared compared to Hobart at only 15%. to more constrained, inner-city sites. Most interstate metropolitan cities The key for any housing market is now have infill growth targets of to achieve an appropriate balance between 60-70% of all new housing. between infill and greenfield housing. The Southern Tasmania Regional Tasmania’s very high proportion of Land Use Strategy adopts an infill/ greenfield development suggests a greenfield ratio of 50/50. It is greater focus on infill opportunities unclear how the Region is tracking and stronger enforcement of infill towards this 50/50 target, however, ratios, would be appropriate. anecdotally and based on the location of growth across Greater Hobart, it is reasonable to assume that development has not moved far from the original 85/15 ratio since 2010. Figure 6 overleaf shows building approvals in Greater Hobart for the year to April 2019. Nearly all higher growth areas are located on the urban fringe, including Kingston, Margate, Brighton and Sorell. Inner Hobart recorded a high number of new dwellings, however a significant number of these were non-detached buildings, including units, apartments and townhouses. Greenfield development requires the conversion of large areas of land, often for low-density housing, together with the provision of new and expanded infrastructure to service new residential areas.
Figure 5: Housing stock in Australian capitals Source: ABS Table Builder – Dwelling Structure by Greater Capital City Statistical Area (2016)
TOWARD INFILL HOUSING DEVELOPMENT 14
S
G
H
H
Figure 6: Building Approvals in Greater Hobart for the year to April 2019. Total New Houses & Other New Residential Buildings (2018-19)
0 -10
11 - 30
31 - 50
51 - 70
71 - 158
15 TOWARD INFILL HOUSING DEVELOPMENT WHO IS DRIVING HOUSING DEMAND
House prices and competition for TASMANIA'S POPULATION Historically, Tasmania’s population rental properties have increased growth has been driven by natural significantly in Tasmania’s urban The age and movement of people increase. But with an ageing centres, particularly Hobart. While the into and out of Tasmania has direct demographic and a median age factors driving higher demand and implications for housing demand. of 42 years (as at June 2016), the higher housing costs are complex, predominant source of growth is now Between 2006 and 2016, the two market segments are having an interstate and overseas migration. population of Tasmania increased impact on total demand and how Interstate migration patterns in by almost 30,000 residents (2,830 existing houses are being used. particular, tend to be closely aligned per annum based on estimated with economic conditions. Periods of Between 2002 and 2018, the number residential population), at an average strong economic growth in Tasmania of international students attending annual growth rate of 0.62%. Growth have coincided with higher rates of university or TAFE institutions in was much more prominent over migration, while weaker periods have Tasmania increased five-fold. These the first five years (2006 -2011) resulted in higher numbers of people students require accommodation. expanding by 4,044 residents per leaving the state. Inner-city apartments and houses, annum, which slowed to a more close to tertiary institutions, subdued rate of 1,614 additional However, migration is also influenced transport and services, are likely to residents per annum between by a range of other factors, be most attractive to this group. 2011 and 2016. Since the Census, including individual decision making estimated residential population and relative conditions in other In addition, the number of tourists (ERP) data from June 2016 to June jurisdictions. Accordingly, migration visiting Tasmania has continued to 2018 shows that trend reversing with patterns are somewhat volatile, increase. Consistent with broader significantly increased annual growth creating challenges for service and market trends, many tourists are now of over 5,000 persons in 2017 - and infrastructure planning. seeking short-stay accommodation 6,000 in 2018 or 1.15%, which is the in private houses. This has led to fastest growth rate in a decade. the conversion of some houses and rental properties to short-stay This increase has not yet been accommodation, further reducing reflected in significant changes to housing supply. the typology of housing provision as might be expected. However, growth The flow on impact is a complex is beginning to test the existing mix of people being forced in and dwelling mix and density across out of rental housing, due to an Tasmania. inability to purchase, to meet rental price increases or to find suitable accommodation as supply reduces. This ultimately changes the shape and function of local communities.
TOWARD INFILL HOUSING DEVELOPMENT 16 MARKET TRENDS AFFECTING INNER-CITY HOUSING SUPPLY AND AVAILABILITY
THE IMPACTS OF The Tasmanian Government recently introduced legislation to TOURISTS AND VISITOR require people listing short stay ACCOMMODATION accommodation to demonstrate that they are complying with existing In 2018, Tasmania recorded 1.32 planning requirements. million visits, up 4% from 2017. The number of international visitors The Short Stay Accommodation 1.32M increased 11% to 308,800, and Act 2019 delivers a data sharing Tourist visitations in interstate visitors by 5% to 1.11 partnership with booking platforms 2018 million. Visitor expenditure increased that offer short stay accommodation by 5 % to $2.46 billion. in Tasmania. The Act applies to both new and existing property listings in There has been significant discussion residential areas, and requires certain of the role Airbnb and other short information about the property, stay accommodation platforms have including permit numbers, to be had on Tasmania’s private rental supplied to the website operator. market. Currently, there is limited data on the extent to which private The Act serves two important roles. 4% houses in Tasmania’s urban centres It ensures that everyone is ‘playing have been converted from long-term by the rules’ in relation to the current INCREASE rental to short-stay accommodation. permit requirements for short stay from 2017 The University of Tasmania’s Institute accommodation, and gives a clear for the Study of Social Change picture of the extent that housing, estimated that, between 2017 and including former long-term rental 2018, 6% of private rentals in the accommodation, is being used Hobart LGA were converted to short for short stay accommodation in stay accommodation. In the eighteen Tasmania. months to January 2018, it also estimated that the number of entire homes in Hobart listed on Airbnb increased from 250 to 876. Despite a lack of data, it is clear 5,245 that the popularity of short-stay accommodation has increased LISTINGS significantly in Tasmania, reflecting on airbnb national and global trends, and that many more visitors to Tasmania are now using short-stay accommodation options.
17 TOWARD INFILL HOUSING DEVELOPMENT TASMANIAS STUDENT As of 2018, UTAS had 1,100 available University supported rooms in POPULATION Hobart. These rooms are available In 2018, Tasmania had a total to all international, interstate student population of just over and regional Tasmanian students 31,500 students in higher learning studying at the university institutions and vocational education Over recent years, UTAS has 31,500 training. Of this total, 10,300 were purchased a number of inner-city Students in Tasmania international students, comprising sites for conversion to student 33.7% of all students. This represents accommodation, including two a 504% increase in international hotels. It also recently purchased student enrolments from 2002. the 1.2 hectare K&D site, which 1709 International Students Hobart currently accommodates occupies a full city block in central 87% of Tasmania’s international Hobart. This site will be redeveloped in 2002 student population (Figure 7). This for accommodation and teaching figure is likely to increase as the facilities. University of Tasmania (UTAS) has Despite these purchases some 10,300 indicated it plans to almost double students will need to enter the International Students its international student enrolments private rental market, which is in 2018 across its Hobart and Launceston currently experiencing very high campuses to 10,000 students. demand. Infill housing provides an Planned investment in both the opportunity to develop smaller-scale Hobart and Launceston campuses, housing in the inner-city, which can which includes relocation of the be adaptable to students and other existing Launceston campus to an household types (for example, lone inner-city site, may see even higher person households and younger growth. workers). International students have the option of staying within University- 504% owned student accommodation, or entering the private rental market. INCREASE Unlike local students, they do not have the option of staying within the family home.
VET: Vocational Education and Training. ELICOS: English Language Intensive Courses for Overseas Students. Non-Award: Refers to enrolement in subjects that do not count toward a degree program.
Figure 7: International student enrolment in Tasmania by institution and SA4 Source: Tasmanian Department of Education and Training – International Student Enrolments International student enrolments by Australian Statistical Geography Standard (ASGS) SA4 region (2018)
TOWARD INFILL HOUSING DEVELOPMENT 18 THE IMPACT OF AN AGEING If suitable housing is available, Although some private sector downsizing can occur at the earlier providers have begun to develop POPULATION end of the ageing spectrum, age friendly products specifically Tasmania’s population is older than allowing the option for empty marketed at downsizers, these the national average. Between 2006 nesters and those seeking alternate developments tend to be in desirable and 2016, Tasmania recorded the accommodation to release capital locations and targeted at more largest increase in median age from and equity by moving into a smaller affluent occupants with prices at the 38.9 to 42 years. dwelling. Economic arguments in upper end of the market. In contrast, support of downsizing have been those in the lower to middle market Population growth remains highest in made on the basis that there are (i.e. without high value assets) and the 65+ age cohort, which increased quantifiable benefits to freeing up those living outside higher value by 27,600 residents between 2006 family sized housing assets currently areas (such as inner city Hobart) may and 2016 (Figure 8), followed closely owned or rented by seniors. face very limited choices when it by the 50 to 64 age cohort (+15,279 comes to downsizing. residents). In contrast, Tasmania is Downsizing means different things experiencing population decline in depending on a household’s income, the 0 to 19 and 35 to 49 age cohorts social background and existing (i.e. young families). housing situation. Although the term SO WHAT FOR downsize has an association with TASMANIA? Much of Tasmania’s new and existing smaller homes, research suggests housing stock has been designed for many prospective downsizers don’t In Tasmania, a lack of alternate, smaller, younger families or first home buyers, necessarily envisage a reduction accessible, and low maintenance that is, detached dwellings on larger in their overall living area, which is housing options may mean older people are unable to transition to lots. This has resulted in a shortage seen as important to support visiting of smaller, more accessible housing more suitable, independent housing in friends and family, and grandchildren, locations of their choice. options for older people. but they may require fewer bedrooms The Tasmanian housing market Ageing in place refers to housing and smaller gardens. This type of housing move is also sometimes needs to better support downsizing typologies that support or allow older opportunities, including at the empty referred to as ‘right sizing’. people to remain in their established nester and retiree stages of life. community, including by staying The Tasmanian housing market has Appropriate downsizer housing types within their family home, down-sizing been slow to respond to the changing include ancillary dwellings, townhouses to a smaller dwelling, or relocating to aspirations of downsizers and and houses on small infill or micro lots. a seniors’ living community. Ageing previous research has highlighted a The provision of more downsizer in place allows people to retain a particular shortage of general needs housing will free up existing housing relatively high level of control over housing for downsizing (i.e. homes stock and support the redevelopment their lives, as they can continue that are not purpose built or age of existing underutilised housing stock. to live in their existing home or exclusive). Many of these typologies suburb. Those who are accustomed tend to fall into the missing middle to satisfying basic needs, such as identified earlier in this report. shopping, personal care and doctors in their own neighbourhoods, often find comfort in being able to manage these necessities independently.
CHANGE IN AGE COHORT TASMANIA 2006 - 2011 AND 2011 - 2016
Figure 8: Population growth and decline by age cohort (2006-20112006-2011 vs 2011-2016) Change 2011-2016 Change Source: ABS Census (2006-2016).
19 TOWARD INFILL HOUSING DEVELOPMENT SOCIAL HOUSING ROLE AND OBSERVATIONS
A lack of affordable housing has the The challenge for Housing Tasmania greatest impact on vulnerable groups has been to work within the State’s within society, who are least able to land use planning framework access the private housing market. to deliver a range of affordable This includes people on low or fixed housing options, including through incomes and long-term renters. innovative redevelopment projects. These groups form a high proportion The introduction of the Housing of households across Tasmania. Land Supply Act in September 2018 has been important in providing a Social housing is a critical more flexible approach to developing component of any housing market, affordable housing projects within particularly during periods of rising Tasmania. Ongoing planning reform costs (to buy or rent) and declining will improve the effectiveness of supply of affordable housing options. land release and promote affordable Housing Tasmania provides housing through a greater array of affordable and secure housing for housing options. Tasmanians on low incomes or with Government-led mandated special needs who meet certain spatial planning strategies that criteria. The extent of Tasmania’s promote housing affordability, waiting list for social housing remains including inclusionary zoning which an issue. As of December 2018, identifies percentage targets for there were approximately 3,233 affordable housing within major Tasmanians on Housing Tasmania’s new developments, can be an Housing Register. efficient and equitable mechanism Whether it be for social housing, for encouraging affordable housing crisis accommodation, subsidised development. rental or purchasing of new properties for social housing, the Tasmanian housing market’s ability to deliver housing for vulnerable people is facing significant challenges. Many mainland states have sought to provide an increased social housing stock by delivering more diverse and compact forms of housing. These projects tend not to be limited by standard planning code requirements or regulatory approval processes. In Tasmania, affordable housing developments are required to follow the same planning processes applying to the private housing market, unless it is a site identified by a Housing Land Supply Order, which provides a fast-track process to rezone government owned land for residential development. In the absence of mandatory or opt- in policy targets, affordable housing will continue to be a low priority for developers.
TOWARD INFILL HOUSING DEVELOPMENT 20 BARRIERS TO DELIVERY
THE COMPLEX NATURE OF From a developer’s perspective, greenfield sites are the cheapest DEVELOPMENT, MARKETS and easiest sites to develop, despite AND PLANNING the requirement to construct or extend new infrastructure and The delivery of new housing carries services. Land parcels in greenfield significant risks for developers, who areas tend to be larger, supporting must anticipate consumer demand, economies of scale in development; secure land, negotiate financing, land is cheaper and generally vacant; navigate planning and building subdivisions and houses can be more approval requirements, manage the easily designed to meet planning construction process and eventually and building requirements; and there sell to the market at the price is reduced likelihood of community originally budgeted for. opposition. These risks are higher for infill In contrast, most infill housing is housing, which attracts additional more costly and complex, reflecting development constraints, including the need to develop within existing, higher land and construction costs, often constrained urban sites. and greater difficulty in meeting Inner-city land prices are higher and planning and building requirements. it can be difficult to find suitable If the risks are too high at any sites, including sites large enough stage, for either the developer or to support economies of scale. a third party, such as a bank, the Infill sites are often constrained in development will not proceed. terms of size or adjacent buildings, meaning some relaxation of planning The housing market, particularly and building regulations, such as for new products, is a supply and carparking spaces and boundary demand model. Developers must setbacks, is often required. Good determine, ahead of time, where housing design is more important to people want to live, what type of ensure houses ‘fit’ the character of housing they want, and how much an existing area. they want or can afford to pay. In 2012, the Australian Housing and In some instances, demand occurs Urban Research Institute (AHURI) ahead of supply and these are undertook a comprehensive study the easiest markets to deliver in, to research and quantify the typical because sales and location risks barriers to the delivery of infill are significantly reduced. This type housing within Australia (see Table of market has occurred in Sydney, 6). The research demonstrates the Melbourne and Brisbane in recent substantial barriers facing infill years. development, across all stages of the development cycle, and these barriers remain relevant today. Key barriers as these relate to the Tasmanian market, are discussed below.
21 TOWARD INFILL HOUSING DEVELOPMENT Major Barriers and Hurdles to Infill Housing COMMUNITY RESISTANCE TO
Site Identification »» Supply of suitable sites; DENSITY »» Land values; »» Existing, prescriptive zoning system; and Infill housing provides benefits for »» Public land availability. both cities – reduced urban sprawl, better use of existing infrastructure Site Assembly »» Fragmented ownership; »» Difficulties in redeveloping strata developments; and services, new community »» Owners refusing to sell; assets – and households – improved »» Contamination; and access to employment, schools »» Land speculation. and public transport, more diverse Feasibility Appraisal »» Lack of demand for infill housing products; and affordable range of housing »» High construction costs above three storeys; options. However for some local »» Extent of revenue required to make development feasible given land communities, the nature and scale values and construction costs; of proposed or delivered infill »» Unrealistic land value expectations; »» Height and density restrictions; housing can generate opposition and »» Developer contributions to infrastructure both cost and uncertainty; concern. These concerns include and overcrowding, overshadowing, local »» Cost and availability of finance. traffic congestion and changes to the Development »» Duration and uncertainty of approval process; ‘character’ of an area. Approval »» Complexity of approval process; »» Community opposition at strategic and development approval Often, these concerns reflect a lack stages; of understanding regarding infill »» Extent of environmental approvals; development, past poor experience »» Infrastructure cost and capacity; and with infill developments, and a »» Uncertainty when dealing with infrastructure providers. broader lack of awareness regarding Development »» Required loan to value ratios; different housing products. Finance »» Lack of funds available, particularly to smaller developers; »» Banks’ risk mitigation strategies; Infill development needs to be »» Securing necessary pre-‘sales’ to prove to banks there is a market consistent with the character of for the product; and »» Structure of joint venture agreements not providing an exit strategy a suburb, and add to the qualities for banks. of a site and area. Poorly designed infill development is a key issue Construction »» Construction costs especially when building over three storeys; »» Availability of labour—competition from other sectors; within the Tasmania market. In the »» Flexibility of labour—lack of skills to deliver projects above two past, developers have attempted to storeys; and fit oversized and poorly designed »» Infrastructure contributions—charging structures. dwellings into backyards, sometimes Sales »» State of the residential market—owner purchaser, investor and resulting in significant loss of private rental market; amenity for neighbouring properties. »» Strength of overseas demand—particularly for new apartments and pre-‘sales’; and Demonstration projects are important »» General economic conditions. in showing communities what good quality infill housing looks like and Table 6: Major barriers and hurdles to infill housing Source: AHURI, 2012 how it can be effectively integrated into a local area. Demonstration projects have proven to be an effective tool in the South East Queensland context, highlighting a range of missing middle housing options. This approach is also important in demonstrating that change through infill housing can be incremental, and achieved without undermining the core fabric or character of a suburb.
TOWARD INFILL HOUSING DEVELOPMENT 22 Infill housing increases the would see new and upgraded detached houses and smaller scale population of a local area and can services and facilities delivered in townhouse projects. Due to the generate impacts if not appropriately advance of the 'impacts' of density. size of the state, there are fewer, managed. Therefore, it is important This is critical to build community large-scale developers willing and that infill housing strategies include support for infill development. financially able to fund and deliver provision for new and upgraded Mechanisms to fund and facilitate the larger and arguably more risky infill infrastructure and facilities to early delivery of new infrastructure projects in Tasmania. support local communities, including such as parks and communal The opportunity exists to enable parks, local road improvements and facilities should be explored, as well smaller developers and builders streetscaping. as any opportunities to leverage to move into the delivery of charging to incentivise infill over A master plan or specific area plan smaller-scale infill housing. This greenfield development. provides the opportunity to integrate will complement larger developers new infill housing with supporting who are focused on larger unit style infrastructure and facilities. DEVELOPMENT CAPABILITY projects, and ensure those projects Tasmania’s housing market is very are not the only form of infill being MORE EFFICIENT traditional in its product makeup delivered. INFRASTRUCTURE and buyer demands. Detached Increasing the number of builders PLANNING AND DELIVERY houses located on greenfield sites in this space, as seen in larger, continue to make up the majority interstate markets, promotes Tasmania’s current approach to of the market. Until recently, in the competition and tends to result in settlement planning is largely absence of high growth, there has greater innovation and pioneering reactive. Regional Land Use been no pressure to facilitate infill products, as businesses compete for Strategies, which provide frameworks housing development or promote a market share and differentiation. to guide development in Tasmania’s wider range of housing typologies. three regions, have had only a limited However, as Tasmania’s population A pilot housing demonstration impact in effectively managing a grows and its demographics change, precinct or display village will help to sustainable settlement pattern. a more diverse range of housing build capacity in the housing sector Significant areas of land on Hobart typologies will be required. and de-risk some of the market and Launceston’s urban fringe, in aspects of delivering more infill The housing market is a supply and competing locations, continue to be housing. demand model and developers need re-zoned for residential development. to determine ahead of time, where An industry study tour of smaller, The release of land in comparatively and what type of housing people best practice and affordable infill better located areas within Hobart, want. Developers are rarely rewarded development interstate would Glenorchy and Launceston has not for taking risks. For example, building promote innovative housing occurred. a product in a location that the typologies and enhance interest Currently, Tasmania has an overly market has yet to demonstrate a in delivering smaller infill housing simplified model for the collection of desire for, often results in slow sales solutions in Tasmania. It is hoped contributions towards the delivery or lower sale prices. While greenfield that lower tier developers and of infrastructure. Response times for development is meeting a current constructors will then actively look the approval and delivery of works need, it is unlikely to provide for at incremental infill as a viable by utility providers, and a lack of future, more diverse market needs. development option, having seen coordination of funding and charging An ageing population will demand tangible evidence of its success. for infrastructure, are issues for more, likely smaller houses, in developers. established urban areas near services FUNDING AND FINANCE and transport. Younger generations Tasmania needs to better integrate The big four Australian banks and about to enter the home ownership its settlement and infrastructure their subsidiaries have dominated phase are demonstrating a desire for planning, ensuring infrastructure the development finance market a more urban experience. networks are planned and designed in Australia's post global financial to meet forecast growth, and that Consultation with the development crisis (GFC) climate. Similar to many the distribution of this growth sector as part of this project other regional Australian markets, is coordinated at a metropolitan confirmed that there is community the willingness of banks and lenders level. Regional Land Use Strategies demand for a broader diversity of to fund or take on any development provide the appropriate framework product, as evidenced in strong sales risk in the Tasmanian market, is very to achieve this. Future reviews when medium density infill products limited. of the Strategies should seek to do come to market. Banks have been forced to reassess strengthen the underlying data, and The Tasmanian housing and their view on loan risk, which has analysis informing planning, and development sector largely resulted in a preference to fund better integrate infrastructure and comprises small to medium scale completed products over new builds settlement planning, particularly enterprises owned and based in or ‘off the plan’ developments, due to within urban centres. Tasmania. This sector delivers the the reduced risks associated with an For infill housing, this approach balance of development, usually existing product.
23 TOWARD INFILL HOUSING DEVELOPMENT In the context of funding and delivery the quality of development being developers facing challenges in of new infill housing, and in a time delivered. This should be supported securing finance, often having to when funding for larger projects by more general guidance on types of solely rely on the use of working is potentially more challenging, infill housing, addressing site design, capital to secure development sites. there are significant opportunities building design and tenure. This In contrast, larger developers are for smaller developers to enter the guidance will assist developers and generally more concerned by the market. local communities to understand the significant costs associated with different types of infill housing, and Many smaller and more affordable holding land during protracted how it can be successfully integrated infill projects could be undertaken approval processes, including for into existing neighbourhoods, thus by existing property owners, thereby service connections, and the flow-on minimising conflict and broader unlocking significant equity in impacts of having funding tied up for barriers to increased density. their properties via small scale, extended periods of time, noting its developments. For example, through It is recommended that consideration impact on securing funding for other construction of multiple or ancillary is given to simplifying the approval development sites. dwellings. This approach also process, including the related presents an opportunity for existing planning scheme provisions for residents to age in place by moving missing middle dwellings to facilitate into a new dwelling, vacating the their timely delivery. A Tasmanian primary residence for a family to rent. Planning Policy for affordable and infill housing will provide a whole of It is likely that banks will have fewer state framework to guide regulatory funding issues at this retail level, changes that better support infill particularly when there is high housing. existing equity and opportunities for new income from rent. It is expected that the rental income from SITE ACQUISITION additional dwellings should more The cost of construction and the end than cover the repayment costs of sale price are hard to influence as constructing the new dwelling, where they are relatively fixed or subject that dwelling is a modest size and of to the market. The profit margin is a standard finish. largely set as well. This leaves little room for developers to innovate PLANNING AND APPROVALS and makes the only real variable the purchase price for the development Feedback from the development site. sector noted that Tasmania’s planning system can cause delays, Developers seeking to deliver infill uncertainty and add risk to infill housing, often need to do so by projects. The number of approvals displacing a current use. If there required for a single development to is a desire for more infill within proceed, triggers for discretionary established communities, then they assessment and the risk of potential will need to buy an existing parcel of appeals, were all identified as land (likely with an existing dwelling specific issues. or use on it). However, developers are often competing to buy the site Alternative housing products often with renovators. In this model, the fall outside the Acceptable Solution renovator wants both the house provisions of a planning scheme, and land, while the developer really triggering a discretionary application only wants the land. This usually requiring public notification. sees renovators willing to pay more Discretionary applications often for the site than a developer, and require a more detailed planning the use remain as a single dwelling, assessment, involving longer potentially on a larger lot capable timeframes, particularly when of supporting greater density. Once there are third party objections to a a property is renovated, it then proposal. This adds extra time and becomes locked up through market resources to the assessment process. conditions and the capital invested in Policy makers need to have a better the property. understanding of the regulatory Smaller and medium sized developers barriers to infill housing. A state- are typically more concerned wide infill/medium density design about higher initial purchase costs guideline and approval framework compared to larger developers. This would improve certainty for is likely a reflection of the smaller developers, as well as improve
TOWARD INFILL HOUSING DEVELOPMENT 24 STRONGER STATE LED It is important that the relationship between infrastructure planning SETTLEMENT PLANNING and settlement planning within the Generally, Tasmania’s evolving Regional Land Use Strategies is planning framework and reform strengthened. At present, it appears agenda is structurally adequate to local governments are able to make support a sustainable settlement planning decisions which conflict pattern and balanced housing with the Strategies, including for new market. However, some changes are residential development in locations required to ensure infill targets are where infrastructure and services effectively met; planning approval may be limited. The cost of providing processes are streamlined; and infrastructure to fringe and rural design guidance for a broader range areas, compared to the benefits of of housing typologies, is provided. delivering more infill housing, are not effectively addressed within existing The Government’s ability to influence Strategies or the broader state the future acquisition of infill housing planning framework. development sites compared to simply unlocking more greenfield land is limited under existing arrangements. However, through careful zoning and precinct planning, it is possible to de-risk infill sites. This, in turn, makes developers more willing and able to pay more for those sites, which may improve the sale appeal to existing land owners. The pending Tasmanian Planning Policies and revised Regional Land Use Strategies will need to better acknowledge the critical role that land use planning has in the development and delivery of a diverse range of housing, which is appropriate to current and future needs. The State Planning Provisions need to provide appropriate regulatory provisions to enable the delivery of infill housing in a range of areas. This includes incorporating suitable provisions to allow for infill housing types, including deemed to comply provisions, and the pragmatic design of houses on a site by site basis. Changes to residential provisions can have an immediate impact on the delivery of infill housing. While updates to the Tasmanian Planning Policies and Regional Land Use Strategies may take longer to implement, these changes will deliver longer term solutions including a head of power for the delivery of infill housing.
25 TOWARD INFILL HOUSING DEVELOPMENT IMPROVING INFILL OUTCOMES
Successful and sustainable »» Limited community awareness of housing markets have depth in the benefits of a broader range of their development sector, offering housing products. a diversity of housing products, in a The recommendations outlined variety of locations and at a range below seek to increase the proportion of price points. This type of housing of infill housing currently being market is better able to meet overall delivered within Tasmania’s housing demand, as well as the needs of a market. diverse and changing demographic. The recommendations reflect Tasmania’s housing market is very shorter-term actions, which can focused on single dwellings on the influence the delivery of infill urban fringe, with low levels of infill housing, together with more development and a limited range complex, longer-term regulatory and of housing products. This has led policy interventions. to core gaps in the housing market, particularly for first home owners, The recommendations are low-income households, older people categorised as - and downsizers, and students. Home »» Planning/Strategy – Actions owners and renters in each of these that may require new studies or groups would benefit from a much best practice guidance to support greater range of housing choices in a future policy or governance accessible locations. change. This report has identified the barriers »» Capacity/Demonstration – and opportunities to delivering more Actions that assist to build infill housing in Tasmania’s major the capacity and awareness of urban centres, including - housing diversity and delivery within Tasmania’s development »» Population growth and the sector. changing demographics influencing Tasmania’s housing »» Policy/Governance – Actions market; that relate to policy, legislation or procedural changes that »» The risks facing developers in will support increased housing delivering infill projects, including diversity. land, regulatory, funding and profitability risks; »» Opportunities for the State’s current land use planning reform process to better support the delivery of infill housing; »» The need to achieve a better balance between greenfield and infill development, recognising that greenfield development carries higher infrastructure costs and meets only some market demand; and
TOWARD INFILL HOUSING DEVELOPMENT 26 KEY RECOMMENDATIONS
PLANNING/STRATEGY
No. Action Recommendation Detail
Review Zone Code Provisions Review and amend residential provisions across all zones within the State Planning 1 Provisions to ensure that infill housing typologies are enabled, particularly through additional Acceptable Solution pathways.
Infill Capacity Study Review the capacity for infill development within Hobart and Launceston. Initially, this should involve a desktop analysis of the actual net capacity available to support infill 2 development. This analysis will identify lots that are constrained, such as smaller lots, and lots that are affected by slope or heritage. Areas that are not constrained can be prioritised for further investigation.
Infrastructure Charges Network Undertake a detailed review of current infrastructure charging frameworks, including examining the benefits and challenges of collecting developer contributions (infill and 3 greenfield). Better match new infill development with the delivery of new community infrastructure/ assets to ameliorate potential community concern about ‘density with no upside.’ Consider a mechanism to fund such improvements and new assets via development charging. Examine whether there is a need for a higher head of power above TasWater that ensures its operations and works program isn’t otherwise undermining housing delivery, accessibility, affordability outcomes and settlement planning more broadly.
Regional Land Use Strategy Review existing Regional Land Use Strategies, with a focus on – Review »» Establishing clear statutory planning horizons and review periods to ensure that 4 Strategies are reviewed regularly and maintain currency, particularly in relation to changing demographic and economic conditions, development activity and available land supply; »» Considering major infrastructure or policy interventions that will result in an adjusted growth projection and settlement pattern (i.e. Launceston and Hobart City Deals); »» Defining urban growth boundaries that will create an opportunity to establish a healthy tension between greenfield and infill housing; and »» Establishing dwelling targets for each Strategy. These should be focused on key urban areas and include targets by dwelling type (i.e. percentage of infill versus greenfield housing). Outcomes should be monitored to ensure targets are being achieved.
Feasibility of Infill Housing Study Undertake a feasibility analysis of infill housing across the State, with a specific focus on 5 Hobart and Launceston. This analysis should include a review of housing typologies and planning provisions to identify areas where greater flexibility in the planning assessment process might better support the delivery of infill housing. For example, in relation to car parking requirements and boundary setbacks.
Infill/Medium Density Guideline Develop a state-wide infill/medium density design guideline for Tasmania. This could be enshrined in a Tasmanian Planning Policy and delivered through a future review of the State 6 Planning Provisions. Key elements of the guideline include - »» Guidance on neighbourhood character analysis and planning for infill housing projects that may be seamlessly integrated within established communities; »» Design guidance on different types of infill housing, dealing with site design, building design, tenure, ongoing management; »» More flexible regulatory provisions in certain zones; and »» Overall reduction in approval risk, including reducing the need to go to a referral/notified development application, especially for smaller projects.
27 TOWARD INFILL HOUSING DEVELOPMENT POLICY/GOVERNANCE
No. Action Recommendation Detail
Promote Ancillary Dwellings Promote existing opportunities to deliver ancillary dwellings on suitable lots. 7 Develop a communication piece to assist the delivery of downsizer housing by existing residents and property owners. This could include easy-to-understand information detailing seniors’ housing pathways and options to downsize. It is recommended this is targeted at pre-retirees to allow them to create a staged retirement plan, based on different housing typologies.
Multiple Dwelling Unit Approval Develop less onerous and simpler planning provisions and approvals processes for appropriately- 8 Process scaled multiple dwellings. Investigate the development of design guidelines and plans for complying, low-impact infill developments.
Review of Approval Process Explore policy and process changes within the planning system to provide greater certainty and less 9 to Improve Certainty for Infill risk through planning application processes, including the range of approvals needed for a single Development development to proceed; the triggers for more detailed, higher levels of assessment; and third-party appeals. Examine the potential consolidation of TasWater and other permits into a single process, providing greater certainty in relation to timeframes for both approvals and infrastructure connections.
Infrastructure Networks Capacity Investigate redundancy in the utilities infrastructure networks within Hobart and Launceston to 10 highlight areas that might support infill.
Increased Delivery of Affordable Consider the following actions to better facilitate the delivery of affordable housing in accessible 11 Housing locations - »» Consider affordable housing mandates in medium to large scale projects. This could be facilitated by embedding minimum affordable housing components through both policy and development agreements. This could be specifically targeted or limited to key redevelopment sites or precincts involving Government land and/or via a process facilitated by state policy; »» Explore the implementation of an incentive program to encourage and support developers in the delivery of genuine affordable housing projects that waives or discounts both development application fees and developer contributions (headworks) charges; »» Explore an ‘underwriting’ process similar to the New Zealand Government's KiwiBuild entity; »» Provide priority access to surplus Government land for the purposes of delivering affordable housing, and in particular low or moderate-income seniors; and »» Investigate opportunities to facilitate more ancillary dwelling/ gentle density housing. Initiatives could include the incentivisation of development, policy changes to facilitate delivery of multiple and ancillary dwellings and development under houses (i.e. bedsits and one bedroom dwellings).
Tasmanian Planning Policy for Develop a new Tasmanian Planning Policy for affordable and infill housing, providing a whole of 12 Affordable Housing state framework to guide Regional Land Use Strategies and State Planning Provisions.
CAPACITY/DEMONSTRATION
No. Action Recommendation Detail
Government Owned Development Examine the establishment of a Tasmanian fit-for-purpose Government Owned Development 13 Corporation Corporation to test and pilot new forms of innovative development in a non-commercial context.
Banking Sector Engagement Engage with the banking and funding sector to explore what interventions the Tasmanian 14 Government can do to help remove real or perceived barriers to financiers funding housing development in Tasmania.
Industry and Community Infill Communicate how change can occur within existing suburbs and the potential benefits that can 15 Communication Program accrue within communities from infill housing. This should include the following activities - »» Facilitate early investment in infrastructure and facilities that support infill housing, including parks and local road upgrades, allowing residents to see the benefits of infill, before the impact; »» Undertake a significant infill demonstration/pilot project that demonstrates how missing middle housing can be delivered as part of a medium/large scale precinct development, as well as on a lot by lot basis within an existing suburb; »» Develop a new downsizer housing strategy, encouraging individuals and households to downsize, where appropriate, allowing existing housing stock to be recirculated for new families; »» Develop best practice design 'demonstration dwellings', including ancillary dwellings and duplexes, which are open for the public and development industry to view; »» Prepare a broad communication piece regarding the benefits of density, including for infrastructure and services, household accessibility and retail viability; and »» Facilitate an interstate study tour of successful infill developments for industry, allowing developers to see first-hand the type of new infill housing products being delivered, and to better understand the design, delivery risks, and sales opportunities associated with infill housing.
TOWARD INFILL HOUSING DEVELOPMENT 28 Report title Toward Infill Housing Development Project number 1118047 Prepared for Department of State Growth Authors Chris Isles, Hayley Watts & Amanda Taylor Revision number 05 Revision issue date 26/08/2019 Approved Chris Isles, Executive Director of Planning
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