New Housing Zones Could Make Rich Richer Poor Poorer

New residential zones being considered by Planning Minister Matthew Guy risk pushing up house prices dramatically in Melbourne’s most expensive suburbs, and depressing land values in less wealthy areas,

according to a letter penned by 35 of Victoria’s most senior planners and consultants.

The letter, submitted as part of a review of residential zones set up by the minister, argues that vast tracts of inner and middle Melbourne could soon be protected from medium-density development.

Victoria’s councils are midway through amending their planning schemes based on three reformed zones: growth, general and neighbourhood.

The neighbourhood zone limits all development to single dwellings or dual occupancies and introduces a mandatory height limit of eight metres. Previously, councils could allow taller developments.

All of Melbourne’s inner councils have applied as part of a process launched by the minister to dramatically restrict high-rise development in their areas in all but a handful of locations.

Some councils, such as Port Phillip, have asked the minister to allow medium and high-density development in a tiny 1.2 per cent of their areas.

Many others, including Yarra, Boroondara, Maribyrnong, Stonnington and Bayside, have asked for similar restrictions on where apartment towers can go.

The group of planners says the proposed reforms to what types of houses can be built where are “the single greatest change to the strategic and statutory planning system in Victoria for a generation”.

The planners, many of whom do work for large and medium-scale developers who might be badly affected by the changes, say that if they are made as councils have requested, up to 4000 fewer medium-density dwellings will be built each year in Melbourne.

The proposed changes to restrict subdivisions and limit the height of housing to under eight metres will, they argue, ‘’support higher values of the existing housing stock and make incumbent residents wealthier’’.

Meanwhile, in poorer areas, the changes “will depress land values, making incumbent residents less wealthy”.

“The current rollout of the new residential zones will throw the medium-density baby out with the bathwater,” they say.

They also argue the changes will encourage apartment and large-scale townhouse development only on Melbourne’s fringes, instead of the city’s inner and middle-ring suburbs.

And allowing councils to block the areas where apartment towers can be built will see “downsizers staying put and inefficiently consuming large houses and young people staying at home longer”, the planners said. They would also add to the “cost, complexity and public confusion surrounding the planning system”.

Opposition planning spokesman Brian Tee said the zones were “a complete disaster” that had been dreamt up in the planning minister’s office. The changes to planning laws were “opposed by the community and mean that older Victorians will not be able to live in the suburbs where they worked and raised their children”, he said.

But Mr Guy said the concerns raised by the group of planners and consultants were unfounded.

Planning consultants “derive income from the provision of advice in an uncertain regulatory environment”, he said. “In this context, it is not surprising that some members of this group have criticised a more certain planning system that provides mandatory controls and directs investment to defined locations.”

The planners were joined in their criticism of the zoning reforms by the Property Council of Australia, whose Victorian executive director Jennifer Cunich said there were real concerns widespread bans on apartment blocks across inner and middle Melbourne would “see whole areas locked up and people locked out”.

And people who owned large blocks of land that they would in future consider subdividing would soon be prevented from doing so, she said.

“Where you might have been able to get three or four townhouses on a site, you will only be able to get two. If you have been sitting on your home block and viewing it as your retirement nest egg, your land will be devalued.”

Planning Institute Australia gave some support to the new residential zones, although its Victorian president Brett Davis said he was aware of the concerns among planners. He hoped the review process set up by the Napthine government to review the new residential zones would address many of these concerns.

He said the advisory committees set up by the planning minister were the “most independent expert forum available in our system to test” the new residential zones and make sure they were not wrongly applied. ‘’Let’s let them do their job,’’ he said.

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