NSW PARLIAMENTARY LIBRARY RESEARCH SERVICE Urban Consolidation: Current Developments by Stewart Smith Briefing Paper No 23/97 Urban Consolidation: Current Developments by Stewart Smith NSW PARLIAMENTARY LIBRARY RESEARCH SERVICE Dr David Clune (9230 2484), Manager Dr Gareth Griffith (9230 2356) Senior Research Officer, Politics and Government / Law Ms Honor Figgis (9230 2768) Research Officer, Law Ms Rachel Simpson (9230 3085) Research Officer, Law Mr Stewart Smith (9230 2798) Research Officer, Environment Ms Marie Swain (9230 2003) Research Officer, Law/Social Issues Mr John Wilkinson (9230 2006) Research Officer, Economics ISSN 1325-5142 ISBN 0 7313 1601 0 © 1997 Except to the extent of the uses permitted under the Copyright Act 1968, no part of this document may be reproduced or transmitted in any form or by any means including information storage and retrieval systems, without the prior written consent from the Librarian, New South Wales Parliamentary Library, other than by Members of the New South Wales Parliament in the course of their official duties. Should Members or their staff require further information about this publication please contact the author. Information about Research Publications can be found on the Internet at: http://www.parliament.nsw.gov.au/gi/library/publicn.html November 1997 Briefing Paper is published by the NSW Parliamentary Library CONTENTS 1.0 Introduction ...................................................1 2.0 What is urban consolidation ? ......................................2 3.0 Arguments for and against urban consolidation .........................3 3.1 Economic Aspects ........................................3 3.2 Environmental Aspects .....................................4 3.3 Social Aspects ...........................................4 4.0 How to achieve urban consolidation .................................5 4.1 The Planning System ......................................6 5.0 A History of Urban Consolidation in Sydney ..........................6 5.1 Sydney Regional Environmental Plan 12 - Dual Occupancy .........7 5.2 State Environmental Planning Policy No 25 - Residential Allotment Sizes ..........................................8 5.3 The Simpson Report .......................................8 5.4 The Response to the Simpson Report .........................10 5.5 A change in Government - New Directions .....................13 6.0 SEPP No 53 - Metropolitan Residential Development ..................14 7.0 Conclusion ...................................................15 Urban Consolidation: Current Developments EXECUTIVE SUMMARY Demographics in Australia have changed dramatically over the last 25 years. In the 1990's, the traditional family of two parents and dependent children is now in the minority and accounts for only 25% of all households. More than half of all households comprise only one or two people, and the number of elderly people will increase by over 50% in the next twenty years. In the light of these statistics, it is noteworthy that more than 66% of dwellings in Sydney comprise the traditional detached family house (page 1). These changing demographic patterns, as well as a growing population, help account for the fact that Sydney will, on present trends, require an additional 520,000 new dwellings between 1991 and 2021. In response to these projections, State governments have pursued policies of urban consolidation. Urban consolidation is the process of increasing or maintaining the density of housing in established residential areas (page 3). The ultimate aim of consolidation is to reduce development on the fringe areas of the city. Arguments for and against urban consolidation centre on three main issues: economic, environmental and social. It is apparent that one of the driving forces of urban consolidation in the later half of the 1990's is to help reduce air pollution in Sydney, especially that affecting Sydney’s western suburbs. Commentators have noted that to achieve urban consolidation goals, land prices, distribution of employment and access to transport are key factors that influence where people choose to live (page 5). Local government is responsible for day to day land use planning and housing management. It is argued by some that historically, councils have entrenched the idea of a single dwelling on a quarter acre block through regulatory fiat (page 6). The policies of State governments towards urban consolidation targets has been of great significance to councils and their land use planning procedures since the mid 1980's (page 7). With the election of the Carr ALP government in early 1995, previous State government policies on urban consolidation were repealed, and councils were invited to prepare their own residential development strategies (page 12). The strategies were to identify urban consolidation opportunities, and if the strategy was accepted by the State government the council would be exempt from the newly drafted State Environmental Planning Policy No 53: Metropolitan Residential Development (page 13). SEPP 53 was released in September 1997. Of the 53 councils in the greater metropolitan area of Sydney, 36 have prepared strategies that meet the government’s urban consolidation goals, whilst the remainder have been given an additional six months to prepare an acceptable strategy or their council area will be subject to SEPP 53. Urban Consolidation: Current Developments 1 1.0 Introduction Housing is an issue that effects everybody on a day to day basis. This paper concentrates not on housing itself, but provides an historical context to contemporary policies that attempt to deal with the question: “how and where to house all the people that wish to live in the Greater Sydney Metropolitan Area?” The demographics of Australia have changed dramatically in the last 25 years. The National Housing Strategy (1992) has highlighted the following: • the traditional household of 2 parents and dependent children is now in the minority and accounts for only 25% of all households; • by early next century almost 50% of income units will consist of single persons or childless couples over 35; • more than 50% of all households comprise only 1 or 2 people. The average household size has fallen by 20% over the last 30 years and this trend is continuing; • 40% of women over 16 were in the workforce in 1986 and in the next 15 years that percentage will increase to 60%, • our population is ageing - the number of elderly people will increase by over 50% in the next 20 years. Notwithstanding these dramatic changes in demographics, more than 66% of dwellings in Sydney comprise the traditional detached family house.1 It therefore seems necessary that more varied housing options are made available to cater for our changing social needs. Table 1 shows the Sydney population trends since 1881, and a projected population of 4.48 million people by the year 2021. Based on this projected Sydney population of 4.48 million people by the year 2021, it is expected that 520,000 new dwellings will be needed by the year 2021 (with a base year of 1991) in the Sydney region alone. Of these, 375,000 will be needed for additional population, 90,000 for the increased demands arising from a changing demographic and social structure2, and 55,000 for replacing old housing stock.3 1 Department of Planning publication, Housing Choice - a new direction for UC policy, November 1993. 2 This is brought about by the fact that more people are living alone, fewer people are having children, the population is ageing and older people are living at home longer. All these trends lead to a demand for housing. 3 NSW Government, Cities for the 21st Century,1995 at 28. 2 Urban Consolidation: Current Developments Table 1: Population of Sydney4 Year Population of Sydney 1881 224,900 1947 1,484,000 1966 2,447,200 1994 3,713,500 2021 4,480,000 From 1980-81 to 1995, total dwelling approvals have averaged 23,156 per annum in Sydney, ranging from a low of 14,297 to a high of 31,363. In 1995-96, approvals were expected to reach 21,450 dwellings.5 Over the 30 year time period (1991-2021), an average of 17,300 new dwellings will need to be built each year to satisfy the market demand of 520,000 new dwellings by the year 2021. This demand for new housing leads to the question: where are the new dwellings going to go? In response to this question, various State governments have formulated strategies and policy initiatives to contain Sydney’s growth. The overriding theme of these strategies has been the pursuit of urban consolidation. In September 1997, the Carr ALP government released its Residential Development Strategy. 2.0 What is urban consolidation ? Urban consolidation is a means by which more people can be brought into existing residential areas where the necessary infrastructure such as public transport, schools and utilities are already in place. For social as well as economic reasons, it is seen by many as preferable to creating new residential developments on our metropolitan outskirts. Two definitions are: Urban consolidation is ... a planning policy directed to bringing about the more efficient use of a finite resource namely existing or likely future urban land and involves increased density.6 4 NSW Government, Cities for the 21st Century, 1995, at 55. 5 BIS Shrapnel, “Major trends in Australian residential demand” in The Valuer and Land Economist, Vol 34, No 3, August 1996. 6 Simpson,W. Report to the Minister for Local Government and Minister for Planning on an inquiry pursuant to Section 119 of the