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Involvement in the Missing Middle Canberra Coalition
Greater Canberra is a signatory and strong supporter of the Missing Middle Canberra open letter, which draws together a range of Canberra organisations to support sensible planning reform. The letter notes that Canberra currently faces a dual housing crisis: an affordability crisis, which is exacerbated by a severe shortage of both private and social housing, especially in our most in-demand suburbs; and a climate crisis, which is exacerbated by our current sprawling suburban form, which leads to increased greenfield development and increased transport emissions.
We, along with our co-signatories, have drafted this letter due to our deep concern that Canberra’s current planning and zoning policies severely stifle the development of medium density housing, and so are deeply inadequate to meet the demands of these crises. As such, the letter calls for the following policies to be implemented in the new Territory Plan:
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Legalise more private, public, and community-owned duplexes, terrace-houses, and townhouses by upzoning current RZ1 areas to the RZ2 standard, and allow this low-impact housing to be subject to similar streamlined development approval requirements as existing detached homes.
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Rejuvenate local centres and allow for more terrace-housing and low-rise apartment buildings, by upzoning current RZ2 areas to the RZ3 standard.
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Reform the CZ4 local centre zone to more easily allow for apartments above local shops, increasing the height limit to at least three storeys, while reserving ground floor space for commercial use.
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Enable more sustainable housing designs and reduced housing costs for the increasing number of Canberra families who don’t own a car, or only own one car, by reducing mandatory parking requirements to 1 car space per home, across all residential zones.
These reforms would make a significant impact to our city’s ability to tackle our housing and climate crises, and should be implemented as a priority in the new Territory Plan.
List of recommendations
Recommendation 1: The ACT should adopt the Missing Middle Canberra platform by upzoning RZ1 areas to the RZ2 standard, creating a streamlined pathway for medium density exempt development, and allowing for more homes in high-demand areas.
Recommendation 2: The ACT Government should adopt standards that enable the provision of good-quality medium density housing, similar to the Medium Density Residential Standards adopted by the New Zealand Government.
Recommendation 3: Remove mandatory side setback requirements in the Territory Plan for general residential zones.
Recommendation 4: The move from plot ratios as a mandatory condition to site coverage provisions should be kept in the Territory Plan.
Recommendation 5: Extend the ability to subdivide blocks without being required to construct new dwellings to blocks zoned RZ1 and reduce minimum plot requirements to 200-300m2 minimum depending on proposed new dwelling size.
Recommendation 6: Remove parking minimums as a mandatory requirement for the approval of new dwellings.
Recommendation 7: The Territory Plan and District Strategies should be redrafted to include requirements for housing growth to be focused in central areas, specifically the Inner North and Inner South of Canberra.
Recommendation 8: The District Strategies should be redrafted to include greater detail including on the planning framework, the proposed changes for the relevant districts and how the desired outcomes will be achieved. They should also feature clear integration of the relevant ACT Government directorates forward plans and infrastructure proposals, and be based upon ‘conservative’ upside population growth projections.
Canberra’s Housing Crisis
Canberra is among the most expensive cities in Australia in which to rent or buy housing. Figure 1 shows how over the past five years, Canberra rents have risen at a markedly faster rate than rents in Sydney or Melbourne. This is further supported by the recently released 2021 Census data, which indicates that Canberra’s median weekly asking rent is $450 per week, slightly lower than Sydney ($470), but significantly higher than Melbourne ($390) and Brisbane ($380).
Figure 1: Canberra rents compared to Melbourne and Sydney
Data: ABS, Consumer Price Index, September 2022.
Case study: The impact of the 2016 Auckland Unitary Plan
Planning reforms can make housing more affordable, as seen in the improvements of housing affordability in Auckland after significant planning reforms in 2016.
Figure 2: Average weekly rent to average household income in Auckland vs New Zealand, 2016-2022
Graph: Matthew Maltman, One Final Effort, https://onefinaleffort.com/auckland, retrieved 14 Nov 2022, reproduced with permission.
In their paper, Greenaway-McGrevy and Phillips (2021) analyse reforms to the Auckland planning system that allowed more medium-density developments in inner urban areas, and find that they doubled the rate of new housing construction in the city in the four years after implementation. This impact is clear in Figure 2, which shows that the rent-to-income ratio in Auckland fell while the ratio in the rest of New Zealand rose following zoning reform. Auckland began their rezoning in 2016 and its success led to New Zealand to adopt these reforms in 2021.
Given the substantial impact that planning rules can have on housing affordability, it is clear that affordability must be a core consideration of the Territory Plan and the District Strategies.
Territory Plan Changes
Universal Upzoning
Lessons from the New Zealand Case Study
As identified earlier in this submission, In response to the ongoing housing crisis that plagued New Zealand, the Aotearoa Government enacted the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021. The Government correctly identified a key driver of this shortage was the restrictive planning rules which limited the heights and density of housing in residential areas. This was particularly the case for low-density suburban zoned areas, similar to RZ1-zoned parts of the ACT.
This followed the example set by Auckland, whose council upzoned approximately three-quarters of its residential land area by abolishing single-family zoning under the Auckland Unitary Plan (AUP). Since this universal upzoning occurred, Auckland saw a dramatic increase in dwelling completions and a significant increase in housing supply.
According to Dr Ryan Greenaway-McGrevy, University of Auckland associate professor of economics:
“The punchline is the policy did encourage, certainly, higher rates of construction and dwelling stock, … and it will increase over time.”[1]
Since the enactment of this upzoning, Auckland has seen real rents decline, as well as a decline in rents as a proportion of median income from 22.7 per cent in 2016 to 20.6 per cent in 2022.[2] There is also strong evidence to suggest that house prices have remained more affordable in Auckland than in other urban areas in New Zealand as a result of this policy.[3] More recent data suggests that Auckland may have seen a decline of real rents of up to 7% in the last year.[4]
Barriers to Medium Density in Canberra
Some of the core issues with our current planning system can be illustrated with the planning pathways required for two different developments in the ACT:
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A property owner who wants to knock down their existing home and build a new two-story five bedroom house in an RZ1-zoned neighbourhood faces the following pathway:
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They will often not be required to submit a development application.
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They will only have to provide two off-street car spaces.
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A housing developer next door who wants to build a four-unit townhouse development of exactly the same size and footprint as their neighbour’s two-story house, in an RZ1 zone faces the following challenges:
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This type of housing is generally banned in the RZ1 zone in ACT.[5]
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Even if this development was to be built in an RZ3 zone where it would be permitted, it would be required to go through a development application.
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While both development processes could be impacted by a number of referral entities, such as the Conservator of Fauna and Flora or the Heritage Council, who can unilaterally act to slow down or prevent a development application, these processes appear to be more difficult for multi-unit developments than single family dwellings.
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Once the development application is approved, it can be subject to ACAT appeals from other residents.
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The development would in most cases have to provide at least 6 off-street car parking spaces, even if the block was right next to a rapid bus route or other public transport.
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This disconnect between two different developments of the same silhouette and floor plan, despite the second providing four times the number of homes, shows the challenges the ACT faces in providing sufficient supply of housing both in the private market and in the context of social housing. If the ACT is serious in confronting the affordability crisis, then reforming the planning and zoning systems must be a central aim.
Upzoning RZ1 to RZ2
Greater Canberra strongly supports moving from RZ1 to RZ2 as the lowest density zone in the ACT, as a way to unlock a significant amount of new housing across Canberra, and especially in those suburbs with highest rents and house prices. For instance, there are around 60,000 properties in the ACT larger than 700m2 which would be eligible for development into duplex or multi-family housing under this proposal, in a manner that promotes gentle urbanism while preserving and improving the character of established suburbs.
We note that the ACT Government has previously committed to allowing unit-titled duplexes in the RZ1 zone as part of the 2018 Housing Collaboration Hub report, and this commitment was endorsed at election via the reelection of the current ACT Government. Moving existing RZ1 areas to RZ2 would deliver on this commitment, while also allowing flexibility for stronger development and design on larger RZ1 zoned blocks.
We strongly welcome the move in the draft Territory Plan to add two storey apartment buildings that are compliant with the RZ2 requirements to the list of approved development in RZ2 zones, and note that a policy that only allows for unit-titled duplexes in RZ1 would limit the availability of such single-floor medium density homes.
Adding RZ2 Properties to Exempt Development
Under the current Planning and Development Regulation 2008, development of a single dwelling on a single block is generally exempt from the DA process (Schedule 1 section 1.100 through to 1.100B).
The draft Planning (Exempt Development) Regulation 2022 proposes to retain this exemption to the DA process (section 1.102).
This practically means that any single, detached dwelling, no matter how large or how high impact, is exempt from the DA process so long as it complies with the rules in the relevant codes, and therefore cannot be the subject of third party appeal in ACAT.
By comparison, moderate medium-low density multi-unit developments, such as duplexes and triplexes, are not currently exempt development, and can be appealed by third parties. This is even if the overall footprint and the scale of the multi-unit development is the same or smaller than that of a single dwelling built on the same block.
The cost of defending an ACAT appeal only scales modestly with increased development size, and so the risk of defending an expensive ACAT matter for a two or three dwelling development may seriously impact the financial viability of such developments and have a chilling effect on housing creation.
The number of surrendered block dual occupancies that have been the subject of ACAT matters is indicative that this is a major barrier to the creation of medium density housing throughout the city. This creates a substantial distortion in our planning system in favour of large, high footprint detached development over medium density homes, stalling housing creation in inner Canberra.
The Missing Middle Canberra open letter (discussed above) calls upon the government to “allow this low-impact housing to be subject to similar streamlined development approval requirements as existing detached homes.”
Greater Canberra recommends for this to be reflected in the Planning (Exempt Development) Regulation. We encourage the Planning Directorate to assess whether this would be best achieved by exempting all multi-unit developments up to a certain density, or providing a pathway through the Design Guides to allow for certain typologies and compliant designs to be certified as exempt development. We note that Victoria is currently trialling the latter approach through its Future Homes exemplar design program.
The objective of either approach, however, should be to provide a clear, reliable, and low cost pathway for the construction of medium density housing in our suburb without the proponent taking on the substantial risk of a third party appeal. If such a pathway also minimises design issues and privacy concerns from a development by use of exemplar designs in the Design Guides, so much the better.
Greater Canberra recommends that this apply to RZ2 level density as a necessary complementary policy of universal RZ1 to RZ2 upzoning. This will ensure that the housing potential of this rezoning is not blunted by the risk of bad faith ACAT appeals.
Upzoning High Demand Areas
High-demand areas near local commercial centres, the city centre, major employment hubs, and public transport should be upzoned to permit more mixed-use apartment buildings and townhouses. We note that the Missing Middle Canberra open letter supported the rezoning of all existing RZ2 areas to the RZ3 standard, and the reform of the CZ4 zone to allow more shop-top apartments. We encourage the ACT Government to consider this and further changes to establish more homes in these high-demand locations.
The potential for such reforms to create a more affordable and sustainable ACT - and to rejuvenate local economic activity - is vast. Indicative analysis conducted by Markus Mannheim for the ABC suggests that enacting reforms similar to those recently adopted in New Zealand just in Canberra’s inner north and south would allow for up to 50,000 homes.[6]
There is further potential to increase height limits on many of the mixed-use zones that apply in many of Canberra’s suburban town centres, to allow for more mid-sized apartment buildings above local businesses.
Recommendation 1:
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Legalise more private, public, and community-owned duplexes, terrace-houses, and townhouses by upzoning current RZ1 areas to the RZ2 standard, and allow this low-impact housing to be subject to similar streamlined development approval requirements via the exempt development track as existing detached homes.
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Rejuvenate local centres and allow for more terrace-housing and low-rise apartment buildings, by upzoning current RZ2 areas to the RZ3 standard.
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Reform the CZ4 local centre zone to more easily allow for apartments above local shops, increasing the height limit to at least three storeys, while reserving ground floor space for commercial use. Consider further upzoning near employment and economic centres.
Medium Density Housing Standards
As identified by the ACT Government and the Chief Minister, the development of medium-density housing as a form of ‘gentle urbanism’ is an important part of solving the ACT’s housing crisis. Medium-density housing has the potential to provide a range of benefits for residents, including more affordable housing options, increased walkability, and more vibrant communities. In order to sufficiently facilitate the development of medium-density housing options the ACT Government should take inspiration from the Medium Density Residential Standards developed by the Government of New Zealand.[7]
The Medium Density Residential Standards, and the accompanying National Medium Density Design Guide, provide a comprehensive framework for designing and developing medium-density housing in a way that is both functional and sustainable. Under the standards, property owners are able to construct three homes up to three storeys on sites that have the lowest residential zoning, without the need for resource consent (the New Zealand equivalent of a DA). The standards are designed to balance the need for increased density with the need for good design, functionality, and livability. They provide clear guidelines on a range of issues, including site layout, building design, materials, and landscaping. By adopting similar standards, the ACT can ensure that medium-density developments are well-designed, sustainable, and attractive places to live.
In addition, adopting similar standards can help to reduce the impact of medium-density developments on the environment. The New Zealand standards promote the use of sustainable building materials, the incorporation of green spaces, and the use of water-efficient design features. By adopting similar standards, the ACT can reduce the environmental impact of medium-density developments, contributing to a more sustainable future.
Recommendation 2:
- The ACT Government should adopt standards that enable the provision of good medium density, similar to the Medium Density Residential Standards adopted by the New Zealand Government.
Technical Changes
Removal of Side Setback Requirements
Greater Canberra supports the removal of side setbacks from properties to allow for connected separately titled terraced homes, and better design and land use outcomes. Side setbacks create an inefficient amount of space between properties that is usually not enough to enable productive use of that land or assure any privacy. They also prevent properties from achieving efficiency gains in both land use and energy use, as detached properties generally have lower efficiency and require more resources to build.[8]
As the value of land and cost of development increases, lot sizes have reduced in area, generally at the expense of usable outdoor space. However, if house footprints can be reduced by the use of multi-storey construction, open space amenity can still be retained. Further land area can be saved by joining houses in rows, thereby eliminating inefficient long narrow slivers of space that have traditionally separated detached houses. Service access to the rear of properties can usually be achieved through garage areas. Alternatively, rear access can be provided using laneways where applicable. Upper storey development also has the advantage of enhancing both street presence and activation by the provision of windows and balconies.
Unlike single storey housing, where garaging can dominate facades, upper storey construction can aesthetically enhance appearances and overshadow the monotony of blank garage doorways. Affordability criteria can also be met by grouping development into rows to increase the efficiency of scale, and also to implement design and construction efficiencies that are cost saving.
Shared walls are integral within a multiple development comprising the construction of a number of separate dwellings in a row form. The walls allow for shared structural support and jointly provide fire and acoustic separations. They are also usually easier to construct and more economical to build, and enhance energy efficiency outcomes.
The removal of side setbacks would also reduce privacy concerns from new residential development, as windows, balconies and living spaces would be oriented towards the street and to the rears of plots, rather than to the sides.
Recommendation 3:
- Remove mandatory side setback requirements in the Territory Plan from general residential zones.
Change from Plot Ratios to Site Coverage
Greater Canberra supports the move from plot ratios as a mandatory condition to site coverage provisions. Plot ratios acted as an incentive to reduce green space on properties and discouraged the full use of height allowance for the relevant property.
The territory plan should be incentivising the maintenance of green space in line with the ACT Government’s tree canopy targets. The movement to site coverage, as well as the removal of attics and basements from plot ratio consideration, will encourage better land use and more efficient use of space while also enabling the preservation of tree canopy. This, combined with the removal of side setbacks will assist in enabling more housing in smaller areas while mitigating the urban heat island effect.
Recommendation 4:
- The move from plot ratios as a mandatory condition to site coverage provisions should be kept in the Territory Plan.
Subdivision without New Dwellings
Greater Canberra supports the change allowing a block in RZ2 to RZ5 zones to be subdivided without being required to construct new dwellings first. However, Greater Canberra believes this should be extended to RZ1 properties and the minimum plot ratios should be reduced to allow for 200-300m2 minimum land areas for properties.
While different dwelling sizes will require different minimums we note that based on good design principles the following amount of space will sustain the following housing[9]:
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200m² will sustain a 2-bedroom single storey house OR 3-bedroom two storey house (both single garage).
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200m² to 263m² will support a range of two storey 3 bedroom houses with single and double carports.
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278m² to 293m² will sustain a 4-bedroom two storey house (double garage).
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300m² will sustain a 4-bedroom two storey house (double garage) or 3-bedroom single storey with single garage.
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320m² will sustain a 3-bedroom single storey house (double garage).
Recommendation 5:
- Extend the ability to subdivide blocks without being required to construct new dwellings to blocks zoned RZ1 and reduce minimum plot requirements to 200-300m2 minimum depending on proposed new dwelling size.
Removal of Parking Minimums
The mandating of a minimum number of parking spots is a flawed policy that harms Canberra’s urban areas by driving up the cost of development, and reducing the supply of affordable housing. Instead of mandating developers to provide a certain number of off-street parking spaces, planning laws should allow developers and homeowners to make their own decisions on parking provision based on market demand and individual circumstances. In such situations, individuals will be able to make there own choices about the parking spaces they require rather than be forced into paying for spaces they may not need or want.
Research has shown that parking minimums have negative effects on urban areas. A study by the Victoria Transport Policy Institute[10] found that parking minimums increase the cost of development and reduce the supply of affordable housing in cities.
Parking minimums can also detract from the amenity of an area and undermine the character of the city planners are trying to build. Their existence can lead to the construction of large, unsightly parking lots, or building facades that are entirely oriented around traffic flow, rather than amenity. These detract from the aesthetic appeal of a neighbourhood.[11]
By removing or reducing parking minimums, cities can encourage the use of alternative transportation modes such as walking, cycling, and public transit by providing cheaper homes for individuals who don’t need a car. This can lead to reduced traffic congestion, air pollution, and greenhouse gas emissions, and can create more livable and vibrant neighbourhoods.
Furthermore, allowing developers to make their own decisions on parking provision based on market demand can lead to more efficient use of land and resources. Developers can build fewer parking spaces or none at all if there is not a high demand for parking in a particular area, reducing the cost of development and allowing for more housing or commercial space to be built. This enables more Canberrans to live closer to the services they use and the areas where they work.
Parking minimums also act as a disincentive to build the medium density needed in Canberra’s suburbs. Currently, even where the existing planning laws allow for the construction of medium-density housing typologies such as duplexes or townhouses, these options are infeasible because of the amount of parking that a landowner is required to provide. To build a duplex a landowner must demonstrate there is the ability to park four vehicles off street. This can lead to absurd outcomes where the owner is required to provide so much off-street parking that a third dwelling could have been built in the space allotted to cars. This acts as a very real barrier to the construction of this much needed housing supply.
Parking minimums are a flawed policy that harms urban areas by promoting car use, driving up the cost of development, and reducing the supply of affordable housing. Greater Canberra strongly supports moving towards a system where parking minimums are not a mandatory assessment criteria. We endorse the approach in Auckland Unitary Plan (AUP), which removes parking requirements from the development application process. While Greater Canberra notes that the outcomes-focussed system allows discretionary reduction in parking requirements, a stronger signal should be sent to developers by removing the requirements altogether.
Recommendation 6:
- Remove parking minimums as a mandatory requirement for the approval of new dwellings.[12]
Equitable and Efficient Distribution of Housing
Greater Canberra was disappointed to see that under the draft Territory Plan, areas of Canberra close to amenities, public services and employment hubs are predicted to see lower housing and population growth than areas further away from the city centre. We firmly believe that housing should be distributed in a way that prevents any area from avoiding taking its fair share and allowing future, younger and lower income residents to have the ability to live in these areas.
To enable this, greater housing requirements should be provided for in central areas of Canberra, specifically in the inner south and the inner north, including along the existing and future light rail lines, near major employment hubs and within areas that are 15 minute walking distance from the city centre.
It is disappointing to see that on current plans areas such as the inner south will remain the exclusive domain of the city’s wealthy, and that poorer and younger Canberrans are pushed further from the city centre to suburbs further away from jobs and key amenities. In the current Territory Plan and accompanying District Strategies only an additional 12,000 homes are being planned for in the Inner South in the same period that Canberra’s population will increase to nearly double that recorded on the 2021 Census.
Recommendation 7:
- The Territory Plan and District Strategies should be redrafted to include requirements for housing growth to be focused in central and well-located areas, specifically the Inner North and Inner South of Canberra.
Better Made District Strategies
The District Strategies as drafted lack sufficient detail or explanation of their goals to provide guidance on the future of the areas they are intended to design.
The maps detail multiple areas of potential housing growth but provide no clear timeframes on when the proposed future investigation areas will be developed or how the additional dwelling will be included. Nor do they provide any guidance on what process will be involved in investigating these areas and what the criteria to determine their suitability will be. Without this required detail the District Strategies add little value to the Territory Plan and are merely commitments to plan for further plans in future. Reformed District Strategies should provide clearer outlines of how Canberra’s planning system will meet its housing and climate action goals, and should better utilise the urban-to-rural transect model to better facilitate the transition between city and suburban environments.
We are further strongly concerned around the disparity between the relatively low number of dwellings projected as being necessary in the district strategies, and the strong population growth the ACT has seen over the previous several years. Notably, the annual rate of dwellings being planned for across the ACT by 2063, if achieved, would represent a halving of the current rate of annual dwelling growth in the ACT. We note that there are strong reasons to plan for more, rather than less population growth, given the high costs in terms of rising rents, displacement, and environmental degradation if our planning rules don’t properly accommodate the number of homes necessary within our existing urban area.
Recommendation 8:
- The District Strategies should be redrafted to include greater detail including on the planning framework, the proposed changes for the relevant districts and how the desired outcomes will be achieved. They should also feature clearer integration of the relevant ACT Government directorates forward plans and infrastructure proposals, and be based upon ‘conservative’ upside population growth projections.
[2] https://onefinaleffort.com/auckland
[3] ibid
[5] While social housing developers may be permitted to build such a building due to exceptions specific to supportive housing, they are still limited by a number of RZ1 requirements with regard to built form, such as building setbacks, basement works, and height.
[6] ABC, Could a simple change to zoning laws solve Canberra’s housing affordability crisis?, April 2022.
[12] This recommendation does not include any parking requirements that exist for equity/public safety reasons.