The density dilemma

A recent decision by Brisbane City Council to restrict townhouse and similar ‘missing middle’ housing product to areas actually zoned for it has been met with hostility from some parts of the urban planning community. It has been exaggerated as a “total ban” and labelled variously as “terrible news,” a “huge mistake” and “a disgraceful decision.” Setting aside the emotions that this decision has triggered, the decision highlights a potentially widening gap between the views and aspirations of residents and the preferred planning solutions of urban designers and planners. Is there a solution, other than duelling pistols at 50 paces?

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Brisbane, along with Sydney and Melbourne, is a city dealing with the pressures of a rapidly growing urban population. Federal Minister for Cities & Population last week (19 Nov 2019) declared at a Committee for Brisbane event that he believed Melbourne – his home city – was probably 20 years behind in the infrastructure needed to keep pace with its growth. Similar observations could apply elsewhere.

It’s not just our inability to fund and deliver infrastructure at the speed required that’s seen us fall behind, it’s also the speed of growth itself. Australia’s major cities have set themselves a blistering pace in terms of urban growth, as illustrated in the chart below. Our rates of growth are similar to Chinese mega cities like Shanghai or Beijing, and well ahead of comparably productive, profitable cities of the west with qualities we often seek to emulate.

Accommodating these almost frenetic rates of growth has for more than 20 years seen Australian state and local governments adopt a pro-density housing model which seeks to prevent outward growth and to encourage higher density living in established urban areas. While there is much logic behind this, it also means – for existing residents of those areas – potentially significant changes to the residential environments they’ve been used to.

To reassure residents, planning strategies sometimes got carried away with over-promising the benefits of higher urban densities. This blurb from the 2013 version of the Draft Metropolitan Strategy for Sydney is one example: “A home I can afford. Great transport connections. More jobs closer to where I live. Shorter commutes. The right type of home for my family. A park for the kids. Local schools, shops and hospitals. Livable neighbourhoods.” Few Sydneysiders would think those promises have since been delivered. Many might suggest the opposite.

Other planners were highly critical of the infill ambitions that were central to various state and regional plans. Nationally respected planner Tony Powell AO described Melbourne’s version at the time (“Melbourne 2030”) as “superficial to the point of ridiculousness.”

He went on to say (in 2007): “The proposition in the latest crop of metropolitan strategy plans that 50% or more of future housing development can be accommodated in existing suburban areas of the major cities is patently ridiculous. These are simply unexamined  and unreliable hypotheses, not strategies.”

Fast forward to today and the arrival of higher density housing forms into traditionally low-density suburban housing is not going down well with residents. In some neighbourhoods, residents are positively hostile. To whom do they express that hostility? Not to the urban planners and architects who have actively promoted the benefits of density (while downplaying its flipside) but to their local, elected representatives.

This is democracy at work, and local representatives have a duty to reflect those concerns. In Brisbane’s case, those concerns saw the Liberal majority Council introduce restrictions on townhouse and “missing middle” housing form in low density neighbourhoods. The fact that this amendment was supported by the opposition Labor Councillors suggests it’s feedback they are getting also. The community have voiced their opinions and the legislators and elected representatives have listened. Isn’t that how it’s supposed to work?

The reality of the restrictions is far from a blanket city-wide ban, as some critics have tried to make out. Townhouses can continue to be developed in areas zoned for them: in low-medium density zones, character residential infill zones, and in medium density zones. There have reportedly also been some 40ha of ‘emerging community’ zoned land which is no longer eligible for townhouse development (which is old news). 

Neighbourhood plans are also in a process of ongoing renewal, meaning additional zones suited for townhouse development can be created in the future, especially in and around transit or infrastructure nodes. The community simply doesn’t want to see townhouses arrive in suburban streets of detached homes where the zoning is low density. They understand low density to mean just that. They want town plans to deliver on what they say.

(Previously, if a 3000m2 block was available in a low density residential zone, or if one was amalgamated, developers could apply to develop a townhouse product irrespective of the low density zone. You can understand why this went down with locals like a ton of bricks).

But it’s been the hostile reaction of some parts of the planning community which has been enlightening. There is, it seems, a low regard by some for the right of the community to have an opinion on what gets built in their neighbourhood, near the property they own and on which they pay their taxes and (for many) want to raise their family.

In this case, the Council was criticised “particularly for ignoring the advice and submissions of industry experts” because “the community doesn’t understand the full story because they are not experts in the field of City design and planning.”

The Housing Industry Association chipped in: “This is plainly and simply a political move because they want to win the election next year.” Meaning doing what the community wants and hoping to be returned on that basis is now a bad thing?

Another commented: “It’s concerning that we listen to the general public for planning in our city rather than the experts who understand growth of a city.” Wow. Let the import of that statement sink in for a moment.

The tone in all this is “leave this to the experts.” Respect your betters. If the community fail to appreciate the wider planning objective being served by the arrival of unwelcome housing forms into their immediate neighbourhoods, they need re-education. How Orwellian.

Those sentiments obviously don’t represent the majority of the urban design profession. But the industry as whole might need to be mindful that the challenges of bringing the community with them, and in describing the benefits of housing forms such as townhouses, is something that can’t be taken for granted, nor can community opinions (nor their right to hold them) be dismissed so readily as the views of “non-experts.”

So the solution? I don’t know – but slagging off at the community isn’t one of them. There are design prototypes that are perhaps less likely to provoke community resistance, and there are many people who could welcome the cost and opportunity this type of housing can provide – from low income households to seniors to first home buyers. Maybe the community hasn’t seen as much of the ‘well designed’ product they can actually afford, but rather have seen perhaps too much of the product that is cheaply designed with little regard to its lasting community impact?

Either way, a lot more listening and a lot more respect of community opinion – and the people who are elected to listen to it – would go a long way.

Beyond the reach of regulation are accidents. Long may they live.

Cities have become a cause celebre among urbanists the world over, scaling ever new heights of hyperbole in industry and political adulation. The management and planning of cities – once left largely to market forces – is now recognised as a field of specialist expertise, requiring extensive regulatory intervention. This has spawned the global careers of any number of speakers whose main job, it seems, is to lecture rapturous audiences of city planners, developers, political and policy leaders on the best ways to manage and grow their cities for sustainability, liveability and resilience, among other things.

The language of cities and their management has similarly evolved in recent history. No longer does city management mean a local government focus primarily on “rates, roads, and rubbish” – cities are now described as “complex ecosystems” or “living organisms” with a “metabolism” all of their own. Some of them are “smart” and “intelligent” and all of them we are told – like a collection of fine arts – need to be carefully “curated.”

Urban design and city management is accordingly becoming more meticulously studied, planned and stage-managed than ever before. Spurred on by forecasts that half the world’s population will soon be living in cities (mostly - as it turns out - in the suburbs of those cities) the pressure is on for city planners to deliver growth without sacrificing amenity or delivering lower standards of living or quality of life than previous generations. This is a challenge of Sisyphean proportions.

Ironically however, many of the qualities of cities and the celebrated places within them now enjoyed by many were not the result of carefully managed or planned urban development, but accidents of history. 18^th and 19^th Century urban growth in the US, Europe and Australia revolved around industry – well described in Eric Hobsbawn’s classic “Industry and Empire.” Rivers were for the transport of goods to cities where wharves were constructed and where factories sprung up. Rail was mainly (in many centres) for freight. Power stations, goods yards and industrial lands were developed around these transport connections. Workers lived in cramped and unhealthy conditions close to these places of industrial employment because their form of commuting was mostly walking or - if lucky - by austere and perfunctory public transport.

While no city experienced the same patterns of growth or the same economic drivers, many did enter the 20th century with legacies of their past in the form of housing, industrial, administrative and transport systems which were largely developed without the careful supervision of today’s modern urban planner. Post-war prosperity in the mid-20th Century heralded for many the move away from cramped inner-city housing to new, expansive and healthier suburban domains. Older style industries and work practices changed, many moving to newer transport facilities such as modern seaports, airports and intermodals, or to other more convenient locations. Some shut down altogether: the collateral damage of industrial and technological change.

Both residents and businesses left behind a legacy of mostly accidental urban development. And ironically, it’s that very accidental quality of urban development and built form heritage which many cities now seek to protect - through various preservation laws, via support of adaptive re-use (finding new ways to use old buildings designed for a different purpose altogether), or via attempts to emulate that accidental quality in prescribed regulation.

There is a paradox in this. It was the very lack of regulation that helped make many places or buildings or urban features worthy of preservation.  Think of the inner-city terrace houses of Sydney, Australia, once home to the working poor. Or the timber and tin workers’ cottages of Brisbane, Australia – built from the only readily available (and low cost) materials at the time. These are now highly prized – not just for their location but also their typology and heritage qualities.

A similar story can be told in many cities which now celebrate converted warehouses, factories, hospitals, ports, and even power stations. These structures weren’t the result of careful planning but originally designed and located out of necessity and opportunity. Many are now prized community assets, accommodating entirely different activities to their original design.

Similarly, in modern cities there are places that are praised as clusters of cultural, ethnic, social, artistic or community value. Places where people gather willingly, but in way that wasn’t planned - it just ‘happened.’ Think of the haphazard laneways of Melbourne’s inner city or the many cultural, food or entertainment centres which have sprung up not because they were planned, nor were they encouraged, but because they escaped the watchful eye of regulators or over-zealous inspectors. Having secured their place in the life of the city (by virtue of their popularity), their “accidental” existence isn’t just condoned but celebrated. The same can’t be said for the carefully managed environments of the modern shopping mall which - although commercially successful - are unlikely to ever reach the same levels of community adulation or sentiment.

Could a rule book of building codes, access, regulatory and other permissions foster planned urban creativity in the same way as the accidental outcomes? Perhaps not. The work of the artist Banksy isn’t legal or officially sanctioned. But his works are highly prized. They are accidents of urban life incapable of official emulation of recreation. There’s only one Banksy.

None of this is to suggest that a well-managed urban environment can’t be “curated” to support a range of positive urban outcomes. Modern urban planning is fast evolving and many technologies in particular are giving urban planners and city managers new, highly advanced tools to understand how the community uses their urban spaces, and how to design places for even more positive outcomes. Nor does it suggest that the absence of regulation is the answer to anything. Unregulated urban development in the manner that early cities developed would invariably lead to regrettable outcomes – environmentally, socially and economically.

But we need to remind ourselves of the limits of regulation and prescription. There are forces at work which in the evolution of cities that can still be left to accident, by ensuring we don’t become overly prescriptive.

“Accidental cities” is used in some quarters as a derogatory term or as a tale of caution. Failing to meticulously plan every detail, we are warned, leads to inefficiencies and to cities not performing at their peak. But leaving room for accidents is also important. The surprise start-up hub. The surprise retail success story working from a location no one thought credible. The artists, foodies, businesses and industries adapting faster to new technologies than any set of planning regulations could possibly keep pace with.

There is a difference between the real and the reconstituted. We can tell the difference, without really thinking about it. For cities to remain real, it could be wise to recognise the limits of their “curation” at the hands of experts. There are places beyond the reach of regulatory control where accidents could – and should – be encouraged to continue to happen.

Making the suburbs cool again

This month, Brisbane Lord Mayor Adrian Schrinner announced that he has asked me to Chair a new “Better Suburbs Initiative” on behalf of the City. This is a significant honour and I am very humbled to be asked, but many of you will be asking ‘what does it mean?’ and ‘why do we need it?’ So here goes with something of an explanation. 

The “Building Better Cities” Program in Australia ran from around 1991 to 1996. It was aimed at preventing the hollowing out of inner-city areas – loss of jobs, empty schools, run down housing, underutilized infrastructure. The program was an initiative of the Federal Hawke-Keating Government and entrusted to Minister Brian Howe to deliver. In Brisbane, it led to a Federal Grant of some $24m which then Lord Mayor Jim Soorley applied to an upgrade of the main sewer (a very non-glamourous but essential piece of infrastructure) through New Farm – an inner-city area then at risk of decay. At around the same time he set up an “Urban Renewal Taskforce” led by the respected industry leader Trevor Reddacliff (after whom Reddacliff Place in the CBD is named) to continue the renewal efforts aimed at the inner city. 

It’s important to understand that Building Better Cities was aimed at the renewal of run- down inner-city areas. It could have been called “Building Better Inner Cities” given its specific geographic focus. It was announced after several decades of new suburban expansion across Australian cities: families settled into new homes in more amenable – and highly affordable - suburban environments, spawning new shopping centres, new libraries, new schools, new council swimming pools and host of other infrastructure related to that growth. 

From the 1950s through to the 1990s, the burbs were new and aspirational – and they grew rapidly. They were seen as preferable to the ‘old’ housing districts of inner-city areas, with smaller land sizes, older less family friendly housing forms and many of which were still jostling with heavy industry for space. 

Better Cities sought to enhance the amenity of inner-city areas and restore their appeal to a cross section of the community. Using the existing infrastructure of the inner city would also be cheaper than creating new infrastructure for continued suburban growth, and would be environmentally more sustainable into the bargain – or so the arguments went (usually without much evidence to support them). 

The focus on the inner city was more than a national initiative – it was global, spurred on by ‘Smart Growth’ movements and their like from (predominantly) the USA where inner urban cores had hollowed out, with regrettable economic and social results for many cities. In Brisbane, the work of Trevor Reddacliff’s Urban Renewal Taskforce began to visibly transform parts of New Farm, Teneriffe and the Valley. By leveraging developer capital and with an eye fixed firmly fixed on creating quality urban environments, the inner city began to witness old warehouses converted into slick inner urban pads, revitalized open spaces, new business enterprises, and new recreational infrastructure. 

This proved enormously popular with a range of people from what were back then called “yuppies” (young upwardly mobile professional person in employment). Money flowed into these areas which has seen places like New Farm go from derelict to now having some of the most expensive housing in Brisbane. 

Without a doubt, this process of urban (inner city) renewal has been a stunning success over a 30 year period. It is no longer confined to one particular area of the inner city either – anywhere within spitting distance of the CBD has benefitted from ongoing infrastructure investment, policy attention, and private and public capital investment on an almost incalculable scale. The standards of inner urban amenity on offer in Brisbane, as well as in Sydney, Melbourne and other capitals, are now high by global standards. If you are lucky enough to live and work in the inner city of a major Australian capital city, you are indeed part of a privileged minority.

But at the same time, many of the suburban centres that formed part of the growth story of Australia in the lead up to the Better Cities program, were largely (with few exceptions) left to their own devices. The burbs had become unfashionable in the eyes of many who had followed the money trail to the inner city. Many in the process became inner urban snobs, adopting fashionable political and social views which in many cases were the antithesis of the values that shaped suburban Australia. Many derided the burbs as places of low culture, poor education, poor health, as car loving, consumptive, reactionary, and as generally inferior in all respects to their chosen inner urban enclaves. Why bother investing in them?

Chief snob, Elizabeth Farrelly (urban affairs writer for the Sydney Morning Herald) famously wrote:

“I like excitement and energy and that to me is what (inner) cities are about… I actually like that there's drug dealers and poor people and a whole mix. I like differences.” (Yeah right, until the drug dealer sells to your own kids). 

She went on, celebrating her own privilege: “I can visit four different swimming pools, more than 200 cafes, three universities, the heart of Chinatown, the opera and the cinema, all without getting in a car.” Or having to step over the poor people outside the Opera one presumes?

And when it came to her view of the suburbs? “The suburbs are about boredom, and obviously some people like being bored and plain and predictable, I'm happy for them … even if their suburbs are destroying the world.”

Farrelly’s sense or moral and material superiority is palpable. And she isn’t alone. It’s becoming more noticeable as a potential divide opens up between inner city workers and residents, and the rest. Demographer Bernard Salt called it “the Goat cheese curtain”:

“There’s a tribe emerging in the inner city. It’s doesn’t have to be young, it’s often highly educated and well remunerated, often green-voting, an articulate knowledge worker, less likely to have children and much less likely to believe in God, dominated by people in their 20s and 30s,” said Salt. A reasonably accurate summation. 

If this one-sided approach to urban renewal were to continue unchecked, it could create its own class divide between inner city and suburban residents. This would be doubly inequitable, given that the proportion of metropolitan wide jobs found in the inner city is only around 10% to 15% at most. The proportion of residents who live inside Bernard Salt’s “Goat Cheese curtain”? Roughly ten percent. 

This is, I think, what Lord Mayor Schrinner recognized as fundamentally unfair. He could also see the economic wisdom of rejuvenating suburban business hubs and restoring their jobs: creating more suburban employment hubs creates more opportunities for people to live closer to work. The alternative of centralising jobs in to the city centre would render suburbs as little more than dormitories from which people would have to ensure lengthy and costly commutes. The community could not afford the transport infrastructure needed for this to happen. This is neither good planning nor good economics. 

Hence, the Lord Mayor’s Better Suburbs Initiative, with its nod to the history of the Better Cities initiative. The same lessons that we learned about inner urban renewal, similar public-private partnerships, similar investments into placemaking and supporting a range of mixed uses – all the ingredients of successful inner urban renewal can also be applied to suburban renewal. 

“Brisbane was a leader in urban renewal, now I want us to be a leader in suburban renewal,” the Lord Mayor said in announcing the Better Suburbs initiative. 

Like the process of urban renewal that began over 30 years ago, suburban renewal will be no instant fix. Every suburban business centre will present different opportunities and require different types of support. Some will be very unglamorous (like the New Farm sewer), some will require tripartite Government support for significant infrastructure investment, some could simply require regulatory measures to leverage private capital in the renewal process. Suburban renewal won’t mean 20 storey apartment towers popping up in suburban centres, and has in my view nothing to do with housing in suburban streets but will focus instead on the opportunities to enhance the employment and community value of a range of suburban villages and business hubs. The opportunities are widespread and by developing better suburbs, we create better cities – for all. 

This is going to be interesting, and exciting. And not before its time. 

Who needs democracy anyway?

On the 18th June this year, climate change demonstrators glued themselves to a main street in the centre of Brisbane, protesting what they regard as a climate emergency and to voice their objection to the recent approval of the Adani coal mine in Australia’s Galilee basin. Their protest caused major disruptions to CBD traffic and has since continued with a series of deliberate actions to block inner city streets and cause as much congestion and disruption as possible. 

Their moves started almost a month to the day that the national “climate change election” resolved clearly that the mood of the Australian electorate was not on the side of the climate protestors - at least not to the extent proposed by the more radical elements. (In fairness, there were other significant election issues but having claimed this as “the climate change election” those same political groups need to stand by the results). 

The Australian Labor Party – which promised a sweeping range of climate initiatives – recorded its worst vote in decades with just one in three votes.  In the resource rich state of Queensland – with Brisbane as its capital – the Labor vote fell to just one in four. In regional Queensland, traditionally blue-collar seats turned. Labor no longer holds any Federal seats north of Brisbane. Famously, Greens Party founder Bob Brown led a convoy of climate protestors north during the election campaign deep into resource seats of central Queensland - and was roundly rejected. If anything, their actions only aided their opposition. The Greens Party nationally failed to record much movement in their vote, eking home a 0.2% swing to record 10.4% of the primary vote. This was despite a very active and very high-profile campaign on climate issues that was also anti-coal, anti-Adani, and pro-renewables. The extent and profile of these issues in a Federal election campaign was something we haven’t seen in the lead up to a Federal election since the days of the Franklin Dam protests in Tasmania in the early 1980s. To say that coal, Adani and the climate were high profile issues in the last election is an understatement.

But being resoundingly rejected by the Australian electorate appears to make little difference to the strategies or determination of these groups. Far from being deterred, Bob Brown is now seeking to raise half a million dollars to establish a training camp for agitators, in defiance of electoral outcomes or due policy process (the Adani mine was approved after five years of delays but after passing rigorous environmental and economic assessments at State and Federal level). 

“So far activists have helped to delay, disrupt and reduce the size of the Adani mega mine for over 5 years. Now is the time to come together and stop it for good. Mass civil disobedience is our last position to stop Adani in one of the biggest environmental battles in Australian history,” says the website raising funds for Brown’s activist training camp. No mention of the election result. (The fund after two weeks raised just over $26,000 of the $500,000 target). 

The issue is not so much about the heated issues of climate politics but rather it raises questions about the purpose and function of democracy itself. The rise of social media means that almost any agenda – however obtuse – can find support. Agendas promoted by some academics, industry bodies or professional groups find wider support and can give the appearance of having significant authoritative status. Confirmation bias – the selection of opinions or information that support preconceived notions – is flourishing on the internet. 

But the ballot box test seems increasingly rejected by some groups as little more than a test of populism, or as evidence of an ignorant electorate (that being one which doesn’t agree with a particular agenda or point of view). Post-election, the entire state of Queensland was ridiculed by some as a backwater of red necks. Many mockingly proposed a ‘Quexit’ – separating the state from the rest of Australia (ignoring the fact that the swings in Queensland were not much greater than elsewhere in the country). The voters were blamed for making a mistake. The democratic outcome, in the eyes of some, was an error. 

It’s for similar reasons that other issues of public policy are increasingly regarded as the domain of ‘experts’ and not fit for democratic judgement by the people. A rapidly growing population – which is putting an obvious strain on the urban infrastructure of cities such as Sydney, Melbourne and Brisbane – is for example widely supported by a professional class but (if polls are to be believed) has limited support across the electorates most affected by that growth. The solution – again one proposed by the professional class – is for ever increasing urban density in the form of high-rise apartments in the urban cores and medium density housing elsewhere. While this might be a preferred choice for some, it doesn’t resonate widely in the electorate. 

This vision of urban settlement in our major cities into the future was described by the Planning Institute in 2018 thus: “We’ve got a great challenge to ensure that we don’t end with megacities like Lagos or Manila. We want Tokyos, Parises, and New Yorks – and we can do that by planning well.”  Any local, state or federal government candidate proposing a Tokyo or New York style urban form for Australian cities would not expect much support at the ballot box. (They might have better luck with Paris, but that city’s appeal as an urban model might find more support in Melbourne’s Brunswick, Sydney’s Redfern or Brisbane’s New Farm while still being rejected in middle in outer suburbs). Proposed policy directions take little heed of community support, or the lack of it. 

In Brisbane, community rejection of townhouse style developments encroaching into detached housing neighbourhoods saw the City Council respond by banning further encroachment. The community resistance, no doubt loudly and directly expressed to any number of sitting Councillors, has been rejected by a number of professional planners as short sighted or misguided. But rather than seek to win the public hearts and minds using arguments and examples in favour of this style of housing, they are blaming the Council for limiting housing choice. This is in effect blaming democratically elected officials for responding to democratically expressed views. 

The issue of private motor vehicles and their use is another area of pubic policy where professionals and experts promote minority ‘solutions’ which have little public support. High vehicle taxes, road user charges, limited carparking, ‘road diets’ and other policy levers designed to pry us away from the most convenient form of transport available for many might be measures toasted in academic and professional circles but are highly unlikely to win public support at the ballot box. Democracy, once again, is an inconvenience to be overcome if the solution proposed by the experts is ever to be applied. 

Even what adults choose to eat and drink is likewise subject to a paternalistic “father knows best” attitude. Sugary drinks and fast foods should be punitively taxed and advertising restricted to save people from themselves, we are sagely warned by yet more experts. Meat is bad for any number of environmental, animal welfare or health reasons others will claim. These claims could not survive a ballot box test, but that poses no deterrence to the proponents. They know best. 

Winston Churchill famously recognized democracy’s limitations when he declared that “It has to be said that democracy is the worst form of government except for all the others that have been tried.” While the ballot box outcome may frustrate ardent minority groups or cliques of professionals, it remains a great leveler. 

For the majority of people, the ballot box is their chance to express an opinion away from the daily noise of social or mainstream media and political debate. One vote one value may irritate those who feel their own vote and opinion has a great deal more value than others, but it’s the best system we’ve got. 

Rather than dismissing democratic outcomes or widely held views as ignorant, or planning activist campaigns that disregard the freshest ballot box evidence available, those who seek to change society need to work harder on bringing society with them. They need to respect majority views not deride them. They need to understand the freedoms they have to express and support their own views do not also mean the right to adopt stand-over tactics with those who do not agree, or resort to intellectual bullying of opponents by belittling or dismissing them. 

They need to respect that the final decision in any democracy rests with the people. The alternative is a form of modern-day feudalism – something utterly at odds with the values of a free and open society. 

Housing: where to now?

What would you rather have right now? An approved 150 unit inner city development site? Or an approved 150 lot greenfield land subdivision anywhere within the urban footprint? The answer says much about future challenges for housing development in Australia.

The rapid deceleration of the apartment market in Australia should come as no surprise. The speculative frenzy which saw investors commit to off the plan purchases in such volumes drove an unprecedented wave of apartment development in Australia’s capital cities. More than 80% of most of these projects were sold to investors, not owner occupiers. Many of those domestic investors – driven by FOMO – were leveraged often at 90% or more of the purchase price. Plus there were foreign buyers lining up and in no short supply. Competition was intense and prices rose rapidly. Despite warnings, buyers continued to rush the gates, egged on by boosters, marketers and some who just plain lied.

One of those lies – in my opinion at least – was that Australia’s “love affair” with the detached suburban home was over. The future, we were confidently assured, was one where the inner city apartment ‘lifestyle’ would be the preferred housing option, for a range of demographic, work and lifestyle reasons.

One such headline was from the ABC: “Apartment living is now a fact of Australian life. Meet the families going up, not out” (ABC News, August 2018). It led with a ‘typical’ young Sydney family renting an apartment in Sydney’s Neutral Bay. (The irony of a family living in Neutral Bay being labelled ‘typical’ was obviously lost on the author). Or this piece from The Melbourne Age: “The high rise of apartment living in Australia” (August 2018) which claimed: “Just as Melbourne’s laneway bars have spread to the rooftops, the city’s residents are heading skyward into apartments, leaving behind the traditional Australian dream of the quarter-acre block with a house and backyard.”

The worst examples came from real estate media channels, like this piece from Open Agent: “Why apartment living is the Australian dream” which made the outrageous claim that “Living the Australian dream is no longer a two storey house with a grand backyard. City areas generate more money for the economy than any other region in Australia. High density areas provide greater opportunities for work and lifestyle, meaning these areas also attract high-rise apartment living.” That’s right, a small apartment with views to another adjoining apartment block is the stuff of our dreams.

Manipulating the evidence was easy enough. Yes, there was growth in inner city living as urban renewal enhanced the appeal of inner urban areas and more people – especially those in the 10% to 15% of metro wide workers with jobs in the CBDs – sought to live closer to their work. A graph like this might suggest rapid growth across a long period of time.

But rarely was this growth put into context with broader metro wide growth. Here is the same inner city population data, in the context of wider metro area population growth.

 

When tightening credit met with rising oversupply, the crunch came. Values are falling across the board but the worst is found in the apartment market. Domestic investors have retreated and foreign investors departed. Approvals for new apartment projects are in free fall (albeit from very high highs). Some projects are being mothballed mid construction, while (according to a Financial Review report earlier this year) around a third of current approvals haven’t and won’t commence.

Prices for many new apartments – especially those designed for speculator appetites - have fallen below their contract value. The scale of the rapid rise and fall of apartment approvals is highlighted in this Macrobusiness chart:

  

Some developers are reportedly now offering sales commissions three times the level of a couple of years ago, along with a range of other incentives to entice buyers back into the market. Even the rental market is struggling, with apartment vacancies rising and rents falling. If it had been true that “residents are heading skyward into apartments, leaving behind the traditional Australian dream (of a detached home)” then why would this be happening? And why would most of you have answered ‘yes’ to the 150 lot subdivision over the 150 apartment project in the opening paragraph?

The problem going forward is that enough investors will have long memories of being caught with negative equity in off the plan apartment projects, and even when the finance taps are reopened, lenders may be equally cautious. Getting apartment projects out of the ground in anything like the record numbers we have seen in recent years is unlikely – meaning fewer additions to the dwelling stock from this type of product until market confidence (from investors, owner occupiers, financiers and developers) returns. This could be some years.

The “missing middle” – townhouses and duplex style projects – have been promoted as a solution and while these may have much going for them in urban planning circles, they are not popular in the detached residential neighbourhoods in which they’ve been appearing. Communities are making their hostility known to elected councillors and those same councillors who need to face the electorate at the ballot box are aligning with community opposition to “the missing middle.” This is democracy at work. Suggesting that opponents are ‘wrong’ or ‘misguided’ or that they hold ‘inappropriate views’ is nothing less than a form of ruling class elitism. (Perhaps it would be better to dispense with democracy and simply start doing what some urban planners insist is needed, despite ‘poorly informed’ community opinion?).  So for a variety of reasons, the ‘missing middle’ is unlikely to fill the supply void for housing in sufficient numbers to keep pace with projected population growth.

This leaves traditional suburban development. While much derided by some urbanists and designers, it remains the preferred form of housing for families. It’s just that many families now struggle to afford them. And now, finding land to create them has been made increasingly difficult. With the exception of Melbourne (which by accounts has responsibly adjusted its forward land supply in line with market demand), other cities have rigid growth boundaries and a range of planning and environmental overlays which will inevitably choke the supply of new suburban housing going forward. While it may remain desirable in the market, the notion of further suburban expansion in anathema to many planning schemes. It will become both scarce and (as happens with scarcity) expensive.

So what’s going to meet the housing demand for the future waves of population we are told will inhabit our cities? High rise apartments? Little appetite for some time. The missing middle? Problematic politics. Greenfield suburban housing? Good luck finding the sites.

It will be interesting to watch how this all plays out in the years ahead. Shortages of supply – if this is what we will soon face – usually lead to the same outcome. Which could see the whole cycle of policy induced market dysfunction begin all over again, until the next correction.