No More Townhouses…More Carparks in Apartments

So, there are various parties that are lamenting the fact that Brisbane City Council has stopped the development of townhouses in areas zoned low density residential. Arguments around world’s best practice, affordability and product diversity are all valid to some extent, though there is a whole lot of grey that goes with it. Very little in planning and economics is black and white. Unfortunately, this has been the attitude adopted across almost every aspect of society. We have forgotten to discuss, see it from the other person’s perspective and be considerate of other countering points. When we don’t get what we think is right, the dialogue becomes “world’s worst planning outcome”. Really? World’s worst?

So how did we get to this point and why is it that some professional planners are so up in arms about the outcome. I acknowledge that a planner’s role is to often lead the community, however it is also the planner’s job to listen to the community. When the community pushes back, alternative solutions need to be sought.

Some quick observations;

• Detached houses are the most cost effective to build, townhouses middle of the range and apartments the most expensive as a generalization. Therefor the cost of land is where the townhouse has to make up ground to become more affordable, given it can’t achieve this on a per square metre build rate, simple maths. As a result you typically get more house than a townhouse on a larger lot for the same price. Basic economics with an end product that is suitable for most, not for all.

• If houses in low density residential areas are able to be subdivided into townhouse accommodation, their value will increase further thereby reducing the affordability of family homes. The cost of the land will escalate, the build cost is more expensive for townhouses and affordability for townhouses then becomes problematic, much like it has in many Melbourne and Sydney suburbs. Whilst this is theoretical, the practicality is that very few detached dwellings can be bought at the right price to make a townhouse project stack up at acceptable developer margins. The only way a developer margin is achieved in this scenario is through building more expensive townhouses, not less expensive product. It is simply not viable. There is a reason the “missing middle” term was coined, and it has absolutely nothing to do with developers overlooking these suburbs. It has everything to do with financial feasibilities.

• The community would argue many townhouse projects have done little to enhance the aesthetic fabric of their community. Repetitive designs, even by some of Brisbane’s and the countries best developers leave the broader community cold on their design and built form outcomes. With very little in the way of vegetation, community facilities – often token at best and increased traffic on roads that were not designed to cope with the added usage have also contributed to the general community’s resistance to this accommodation option.

• I suspect much of the community actually bought their home in a low density residential area on the expectation that they would never have a townhouse project on their street or even next door. Whether this expectation is valid today would probably yield polarizing opinions between some planners and residents of those suburbs.

• Diversity of product is not just about options in our suburbs, it is also the diversity of built form. Rows and rows of the same thing are hardly inspiring and do not promote the development industry in a great light. Good built form creates good communities, the two go hand in hand. Somewhere in the past decade this lesson got unlearned at a scale that has led the community and the council to this point where the equivalent of “talk to the hand” has been adopted.

• Apartments have also been dragged into the debate regarding the need for increased car parking arrangements. The quantum of apartment accommodation I suspect largely grew at such a rate through the last credit cycle it caught everyone off guard. The minimization of parking was actually a response to the development community through negotiation with council at a time when the market was extraordinarily depressed, and this was one way of assisting the industry to get back on its feet. A new norm was created and reverting back to older planning principles will cause some development pain. The broader community and many retailers may have a different perspective.

• That quantum of apartment accommodation brought with it many challenges, not the least of which was on street parking as the actual projects could not cope with the number of cars. If two people want to live in an apartment that only has one carpark, and neither work near public transport, it is unlikely they can do without two vehicles. Add children to the mix and it becomes both more dynamic and complex at the same time. Those residents, workers and retailers in the highly affected suburbs are going to be vocal about their share of on street parking. Residents in those towers are also going to get frustrated with the distance they have to walk to their tower, particular in summer when it is hot, and sometimes hot and wet.

So how did we get to this point? Well pretty much everyone is frustrated, offended, outraged because council has taken the toys out of the sandpit. The simple reality is that we are constantly trying to retrofit existing communities in ways that they were not planned for. With that retrofit comes a resistance to change because what the community has seen and experienced, they haven’t liked. Infrastructure has not kept up with the pace of development. It has not presented new ideas, it has not been supported with an education program and it has not offered an economic incentive for people to change their behavior. But if infrastructure doesn’t keep up, how can you expect the community to change?

Alternative solutions require different ways of thinking. Cycling is an obvious one to help with congestion, but until you separate cars and bikes, the subscription rate for cycling will fail based on fear and the perception of bad mannered car drivers. Solve this problem and more people will be inclined to ride, assuming the next piece of infrastructure exists; quality end of trip facilities. The concept of park and ride really does have quite a literal meaning where designated bike paths meet the road. If the government was to offer a tax incentive for cyclists, much like the $20,000 offered to small business each year, it is suspected that a significant number of E-bikes would be delivering people to work. Thus reducing congestion and helping to improve society’s general health. Every bike sold is potentially one less car on the road, at least around peak hour traffic times. Personal safety however is paramount, the elephant in the room that is slowly being squeezed through the back door.

Public transport is another option though many considered it expensive in Brisbane. It is often perceived as irregular and if you catch a train, the media would have you believe that it is somewhat unreliable. I don’t catch a train so I wouldn’t know, there are none near where I live. Yes, it is less expensive than driving but the gap is not wide enough to change the behavior of commuters. When fuel prices escalated to circa $2.00 per litre as the world was scared that oil was running out forcing prices to record highs; buses and trains had improved patronage. Whilst the Greens were laughed at for suggesting making public transport cheaper and road maintenance and usage would fall to a point where the costs and benefits reach an equilibrium is arguably worth greater investigation. This exercise alone would probably yield some very important economic insights and models that could shape our infrastructure creation in more sustainable ways. There is a lot to learn from the modelling done on our tunnels…

If you increase density anywhere, people’s share of external amenity decreases. This is particularly problematic where green space is concerned, parks and playgrounds will have competing interests that inevitably lead to conflict. Public space needs to be reinvented to ensure that there is a greater degree of equity as well as being attractive to promote use. However, the closer you are to this amenity, the higher the price you pay. Just think about river frontage verse non-river frontage as an example. The affordability argument again starts to be eroded.

If one was to look at the economic rationale of halting density in areas zoned low density to focus on growing retail and business precincts, the argument is much easier to make. Those densities continue to deliver street level amenity through better cafes, shops, entertainment and lifestyle that can only occur when certain population thresholds are achieved. Perhaps there is merit in driving development to these destinations, however through previous studies, the economic viability of townhouses is again difficult to make stack up unless delivered at higher price points. It also relegates sites that could be used for higher density to something less that inevitably may reduce the capacity of the LGA to meet its population obligations under the SEQRP. No one said planning policy was easy, nor without compromise or tough decisions.

Finally, let’s look at the issue of affordability as it stands right now. Brisbane is far better positioned than any capital city on the east coast of Australia. The housing options are enormous when you consider what Logan, Redland, Ipswich and Moreton have to offer. At some point consumers will need to face the fact that they may not be able to buy in Brisbane initially, though over time this is probably a goal that is more achievable than most. Buying property is a journey just like buying a first car. I would be highly surprised if the majority of people stayed with their first car, the same applies to their house. All of those other LGA’s have strong economic development strategies, are creating employment opportunities outside of the CBD (which is given way too much attention in my opinion to the exclusion of many other economic development zones) and offer many suburbs with highly affordable housing.

When we solve the infrastructure issue, retrofit our suburbs with segregated bikeways, improve public transport through price, reliability and frequency, and listen to what the community wants, planning instruments will change. Whilst I can’t say that I agree in full with the blanket approach adopted, I can also understand how we got to this point. The changes made to the plan are responsive to the community. It is very easy to jump up and down stating that the changes are political, but this is the environment that the whole development industry has to navigate. Most developers will take certainty in their planning risk than uncertainty. Though I suspect that there are developers who have bought sites with the intention of doing a particular project that will be incredibly frustrated and possibly facing a financial loss as a result of those changes. I suspect a moratorium on those sites with the developers in question needs to be negotiated through the system.

Clearly the challenges facing the Brisbane City Council are not going to go away over night. However as the infrastructure improves, consumer behavior changes and the market continues to cycle through its various phases, no doubt planning policy will continue to be reviewed and adapt. But rest assured, if the residents don’t like what they are seeing in their neighbourhoods, they will remain vocal bringing planners and the development industry to account forcing the council into the actions just undertaken.

My final point just to put things into context, Townhouses as a market option have continued to decline in Brisbane’s LGA currently representing less than 5.0% of all residential sales.  Depending on what camp you sit in, the less than 5.0% argument could be, “why are you bothering to take this out of low density residential, it is just a fraction of sales” to “what’s the big deal, it is a declining market choice that reinforces the council position to remove it.”  With the quantum of townhouse sales being completely disproportionate to the community and council’s reaction, this suggests that there has been a disconnect in the expectations of the public and development community of what is acceptable in a low density residential suburb.