Call for discretion in CBD planning

Urban experts predict unaffordable apartments if mandatory planning controls continue in the CBD.

Speaking at a Property Council seminar on October 8, Urbis director Sarah Horsfield said new mandatory Northbank shadowing provisions could halve the potential yield of some Flinders St properties.

And Plus Architects director Craig Yelland says the effect of mandatory setbacks and height controls could double the cost of apartment construction.

The CBD and Southbank are subject to mandatory controls for the next year while the State Government reviews and implements new planning rules.

Both experts argue that it’s not the nature of the controls themselves that are the issue – it’s that they are mandatory and discretion has been removed.

“I don’t personally disagree with many aspects of the controls,” Ms Horsfield said. “I think the plot ratios are reasonably generous, the setback controls make good sense for a lot of sites.  The issue is that discretion has been removed.”

Whereas previously developers were prevented from overshadowing the south bank of the river, the new rules protect areas 15 metres away from the north bank.

Ms Horsfield said she had modeled Flinders St properties under the mandatory provisions and found that some had lost half of their commercial potential.

“There’s an overnight contraction in yield that is very significant and starts to show the magnitude of impact of the controls. It highlights to me why the Northbank shadow controls probably need to be considered in a more sophisticated way,” she said.

“While I accept that parts of the Northbank environment do warrant protection from additional shadowing, there are many parts that can only be described as very low amenity environments.”

Ms Horsfield noted that 101 Collins St, Federation Square, Rialto and the Melbourne Aquarium would all be prohibited under the new rules.

“By applying mandatory controls, it drives a ‘tick-a-box’ type of approach to design and the real risk is that it can serve to put a handbrake on investment,” she said.

Mr Yelland agreed, predicting that up to a third of potential development sites (smaller sites) would be unviable under the new mandatory setback and height regime.

He said this lack of supply would flow through in a number of years and result in prices equivalent to Sydney.

“Apartments here sell for $8000 to $10,000 per square metre.  In Sydney, they’re selling for $15,000 to $20,000 per square metre.

We are heading down the line of unaffordability.  That will be the end result in five year’s time,” he said.

“It’s going to reduce the number of development sites by about a third. That might be one of the aims of Cabinet and that’s fine, but the impact will be reduced supply.”

“There’s still going to be demand there for living and we’re going to end up with the model we have in Sydney.  Sydney has reduced supply and higher construction costs.”

Mr Yelland also said mandatory controls took away developers’ incentive to invest in innovative design.

“In Melbourne, with discretionary controls, there’s been an upside for having good design,” he said. “Mandatory controls create ugly boxes on the skyline.”

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