Media Release: New Territory Plan - one half-step forward, two steps back

The below statement is attributable to Howard Maclean, Convenor, Greater Canberra.

The New Territory Plan was a once in a generation opportunity to reform our planning system to deliver more homes where Canberrans want to live. It was an opportunity to meaningfully reduce Canberra’s carbon emissions and constrain urban sprawl. The plan released today does neither of these things.

Instead this document fails to adopt any elements of the Missing Middle Canberra platform that has been endorsed by both Labor and Greens party members. The Territory Plan also reduces opportunities for housing creation in well located areas like Phillip, and contains many errors - including errors that if left uncorrected would substantially reduce housing capacity in our higher density zones.

These issues are driven by a number of features of this Territory Plan:

An ineffective RZ1 dual occupancies policy that will have minimal take up due to poor policy design.
A decision to scrap the 2004 Woden Master Plan by banning residential housing in the Phillip trades area, preventing the creation of a vibrant mixed-use corridor similar to Lonsdale Street in Braddon.
Serious drafting errors in the notified Territory Plan documents that if left unamended would massively reduce housing capacity in high density residential zones, along with many other errors.

Both ACT Labor and the ACT Greens have adopted the core tenets of Missing Middle Canberra’s policy platform. The Territory Plan does not incorporate these tenets, and we call upon the government to clarify the path forward for meaningful planning reform.

An ineffective RZ1 policy

Greater Canberra, in conjunction with the Missing Middle Canberra coalition, called for the upzoning of RZ1 to RZ2. This would allow for the creation of new townhouses, terraces, and other medium density typologies on larger blocks using established rules that Canberrans and industry are both familiar with. Importantly, by building up not out, new RZ2 homes would preserve suburban green space while allowing better housing options.

Instead, this new dual occupancies policy proposed in the New Territory Plan may not deliver any meaningful increase in housing supply, because a series of small print technical details:

The second home for this dwelling is limited to 120 square metres, but must pay the full lease variation charge in schedule 2 of the LVC Determination. In Inner Canberra, this charge would be ~$150,000-$250,000 for a 120 square metre dwelling.
Blocks must be larger than 800 square metres, and no more than two homes are allowed, even on Canberra’s largest blocks.
The proponent must submit a Development Application, and the development is exposed to third party appeals in ACAT (in a way construction of a single residence is not). In the case where both homes are being developed simultaneously (such as a duplex knockdown rebuild), both homes would require a DA and be vulnerable to legal challenge by a neighbour.

In many cases, it may be better financially for the owner of the block to redevelop the block as a larger single residence (which would pay no lease variation charge and would involve no DA), as the substantial lease variation charge and development application costs may be higher than the gains from the creation of a relatively small second dwelling.

Based on unimproved land values and lease variation charges in inner Canberra, the cost to provide such a second dwelling under this policy may be well above $900,000 for a 120 sqm dwelling that is smaller than the average apartment by floor area.

We are concerned that the take up of this policy will be very low. The Shadow Planning Minister, Peter Cain MLA, was correct in describing this as a “watered down version of a 2020 Liberal election policy”. Canberrans expect much more substantial reform.

Drafting errors leading to massive downzoning of higher density residential zones

The Residential Zones Policy includes what Greater Canberra understands to be a drafting error, which if left unaltered would make massive changes to the maximum permissible density on blocks in RZ3, RZ4 and RZ5.

The draft residential policy previously set the maximum site coverage ratios for RZ3 to 65%, and 80% for RZ4 and RZ5. The current notified Residential Policy reduces this to 50% for all these zones, reducing the maximum built area of RZ4 and RZ5 by 37.5%.

This would be a massive downzoning of the housing capacity of all of Canberra’s higher density residential zones, and would lead to thousands less homes being built over the coming decades.

We have been informed that this is an error, however as it stands, this is the current legal effect of the Territory Plan as notified. This joins a large number of other errors in the planning documents - incorrect terminology, typos, draft watermarks for non-draft documents. There may be a large number of other legally consequential errors in the planning documents.

More broadly, the poor drafting, expression and unclear relationship between the Territory Plan’s various components, along with the potential for other errors of this kind may create substantial uncertainty and chaos in the new planning system, which will delay and stop housing creation that is sorely needed.

These errors are flatly unacceptable. They damage confidence in the planning system, and call into question the conduct of the Planning System Review and Reform process as a whole, and the Government should act to ensure that the Territory Planning Authority is appropriately resourced, structured and led to competently carry out this important work.

Banning housing in the Phillip trades area

Braddon is an excellent example of how industrial areas near our town centres can be adapted into vibrant mixed-use areas that provide a combination of employment, services and housing, close to high quality public transport.

There was an excellent opportunity to replicate the success of Braddon in Phillip, while also contributing a large number of well located, low emission homes. Instead, the new Territory Plan has been amended to ban housing in the Phillip trades area. This is a rejection of the 2004 Woden Town Centre Master Plan, which had envisioned the eventual introduction of mixed use residential, and will make it harder for the Territory to meet its housing targets.

A coming housing crisis

Given the barriers to creating RZ1 dual occupancy housing, the spate of recent rejections of large apartment developments, the banning of new housing in the Phillip trades area and the general uncertainty about the operation of the system, we are concerned that there may be a substantial undersupply of housing in the late 2020s, which will substantially increase rents and lower vacancy rates.

Canberra’s relatively high rate of homebuilding over the past few years has largely shielded the ACT from the massive increase in asking rents seen in other parts of Australia, and this progress is at serious risk of being lost as a result. This will lead to higher poverty and decreased economic growth, on top of the environmental impacts of worse urban sprawl and more carbon emissions.

We call upon the Government to promptly describe the pathway for the implementation of Missing Middle reforms as reflected in the official policies of both Government parties.

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