ACCOMMODATING GROWTH CREATING BETTER PLACES GREENING OUR CITIES
THE
URBAN RENEWAL LIFELINE
PROPERTY COUNCIL OF AUSTRALIA – THE URBAN RENEWAL LIFELINE
WHAT IS URBAN RENEWAL? Urban renewal ensures that existing urban environments can evolve to meet the needs of a growing and changing population. It is the lifeline that guarantees our cities are continually revitalised. Urban renewal is about accommodating growth, creating better places for new and existing communities, and improving the sustainability of our cities by making better use of underutilised land and infrastructure and promoting the use of public transport. Urban renewal can be undertaken on a large or small scale depending on the residential and employment growth that is needed, the capacity of existing infrastructure and community expectations.
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WHAT DOES URBAN RENEWAL LOOK LIKE? + Transformation: The redevelopment of redundant industrial or government owned land to incorporate residential, employment and retail generating uses. Rhodes (photography by Murray Fredricks courtesy of Mirvac Projects P/L)
+ Transit Oriented Development: The delivery of residential, employment and retail opportunities near new or existing infrastructure, particularly transport infrastructure, that are accompanied by vibrant and accessible public places. The Forum, St Leonards (image courtesy of Winten Property Group)
PROPERTY COUNCIL OF AUSTRALIA – THE URBAN RENEWAL LIFELINE
+ Large scale: The substantial growth and revitalisation of existing centres and corridors to deliver housing, employment and retail opportunities. Victoria Park (image courtesy of Landcom)
+ Small scale: The modest redevelopment of existing centres and corridors to deliver housing, employment and retail opportunities. Bundock St, Randwick (photography by Murray Fredricks courtesy of Mirvac Projects P/L)
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WHY IS URBAN RENEWAL IMPORTANT? Growth needs to be accommodated Sydney needs to accommodate a growing population. In 2005 the NSW Government forecast that Sydney would grow by 1.1 million people to 20311. In 2009 these figures were revised and Sydney’s population is now projected to increase by 1.7 million people by 20362 . This population growth will need to be serviced with at least 640,000 new dwellings3. This means that Sydney needs to deliver at least 25,000 new dwellings per year (close to 19,000 are needed in existing urban areas). Yet in 2008-09 only 13,703 dwellings were approved in Sydney4, a shortfall of over 10,000 in only one year.
Cities change
Limits to greenfield growth
As our society changes, the type and location of housing, jobs and infrastructure also changes. What society will need in the future is not what we needed in the past.
Sydney needs a balanced growth plan premised on both urban renewal and greenfield development. Sydney’s urban expansion is constrained by its geography: ocean, a mountain range and various national parks.
Household sizes are shrinking and the structure of the workforce is evolving. Sydney will need to build an extra 65,000 dwellings over the next 25 years just to accommodate this trend (based on a drop in average household size from 2.61 in 2006 to 2.51 in 20316).
Sydney’s greenfields will never deliver enough new housing or employment to meet Sydney’s growth needs. Currently only one quarter of the greenfield housing lots needed over the next 25 years are appropriately zoned and only 17% are zoned and serviced7.
This means our built form needs to change too.
Sydney’s existing greenfields are also struggling to cope with the decision to heavily tax land supply to pay for infrastructure.
Sydney will also need to find room for over 500,000 new jobs5.
Most of Sydney’s housing will continue to come from urban renewal for at least a decade to come.
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Source: NSW Government, Metropolitan Development Program 2007/08 Report, February, 2009
Source: Australian Bureau of Statistics, Building Approvals, Australia 2009 – NSW SLA datacube/s (2001-2009) NB: ‘Total new residential’ includes all ‘new other residential building’ approvals (assumed to be attached dwellings) and 20% of ‘new house’ approvals (assumed to be detached dwellings). This assumes that the majority of ‘new house’ approvals are either ‘knock-down/rebuilds’ or are delivered in greenfield locations.
PROPERTY COUNCIL OF AUSTRALIA – THE URBAN RENEWAL LIFELINE
Challenges ahead Over the last ten years 75% of dwelling production across Sydney was delivered in established urban areas8. In recent years 40% of all residential infill growth was delivered on major sites9 (those that can potentially deliver 50+ dwellings). These were the low hanging fruit and they are disappearing fast. Currently there are only enough major sites identified to deliver 25% of Sydneyâ&#x20AC;&#x2122;s infill housing growth needs to 203110.
If Sydney is to deliver 60% to 70% of new residential growth in existing urban areas11 other potential major sites need to be identified and other types of urban renewal, such as transit oriented development, need to be kick started. Sydney needs a planning process that facilitates urban renewal to ensure it can continue to grow, become more sustainable and deliver better urban environments for new and existing communities.
FOOTNOTES 1 NSW Government, The Metropolitan Strategy, December 2005, p3 2 Department of Planning, Media Release, 20 October 2008 3 NSW Government, Metropolitan Strategy, December 2005, p7 4 Australian Bureau of Statistics, Building Approvals, Australia 2009 â&#x20AC;&#x201C; NSW SLA datacube, 2008-09 5 NSW Government, Metropolitan Strategy, December 2005, p7 6 Department of Planning, Media Release, 20 October 2008 7 NSW Government, Metropolitan Development Program 2007/08 Report, February 2009, p10 8 NSW Government, Metropolitan Development Program 2007/08 Report, February 2009, p28 9 NSW Government, Metropolitan Development Program 2007/08 Report, February 2009, p2 10 NSW Government Metropolitan Development Program 2007/08 Report, February 2009, p21 11 NSW Government, Metropolitan Strategy, December 2005, p134
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WHAT ARE THE BARRIERS? Sydney faces key barriers to the delivery of urban renewal:
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LACK OF COMMITTMENT Existing policies, strategies and legislative mechanisms are not being used and are not supported by a commitment in government to deliver good urban renewal outcomes.
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CONFUSED GOVERNANCE There is no entity responsible for overseeing and facilitating urban renewal, the role of the various levels of government is unclear and not aligned, and some key centres and corridors across Sydney are split between several councils.
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ECONOMICS ARE CHALLENGING Policy makers often don’t understand the economics behind implementing urban renewal, existing planning frameworks often do not offer sufficient development capacity to facilitate urban renewal, and levies on development are simply too high to deliver the quality outcomes needed. LACK OF COMMUNITY AWARENESS There is little public debate about the benefits and opportunities associated with urban renewal, often resulting in a community backlash to growth and change.
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PLANNING HURDLES There are still long lead times on planning decisions, particularly re-zonings, the preparation of new Local Environmental Plans is behind schedule, and some councils are applying overly restrictive planning controls that undermine the growth objectives set by the state government.
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INFRASTRUCTURE PLANNING AND FUNDING There is no long term transport or infrastructure plan to guide the delivery of new or catalyst infrastructure or fix existing infrastructure shortfalls. Infrastructure development levies slow growth. Better funding mechanisms are not being considered.
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SITE AMALGAMATION IS PROBLEMATIC The amalgamation of sites in fragmented ownership is very difficult using existing market based levers.
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STRATA TITLE STRAIGHTJACKET Current legislation makes it virtually impossible to dissolve a strata scheme to allow the appropriate re-development of underutilised sites.
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SOME STANDARDS ARE NOT REALISTIC Some design and sustainability standards and associated costs are increasing and are not being offset with appropriate incentives.
OUT OF DATE PLANNING FRAMEWORKS Existing local plans are often out of date, do not plan for the residential or employment growth Sydney needs, and are not premised on positively facilitating urban renewal.
The price of failure What happens if Sydney can’t renew its existing urban areas? + Housing supply will not meet demand. + Housing will become even less affordable. + Economic growth and jobs creation will be lost interstate. + Existing urban areas will become degenerated, unsafe and unattractive. + Sydney’s status as Australia’s only Global City will be threatened. + Congestion will accelerate.
PROPERTY COUNCIL OF AUSTRALIA – THE URBAN RENEWAL LIFELINE
A VISION FOR SYDNEY’S GROWTH Urban renewal is a vital part of a balanced growth plan for Sydney. Urban renewal should be underpinned by:
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A CLEAR VISION Urban renewal should accommodate growth, create better places for new and existing communities, and improve the sustainability of our cities by making better use of underutilised land and infrastructure and promoting the use of public transport.
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ECONOMIC FEASIBILITY Urban renewal will be driven by investment from the private sector. Development needs to be feasible to ensure that the private sector can deliver the required growth, sustainability and amenity outcomes.
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POSITIVE CHANGE Urban renewal should deliver better urban environments that are underpinned by good design and improved amenity.
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INFRASTRUCTURE AND GOVERNMENT INVESTMENT Growth should be supported by new catalyst infrastructure and the improvement and augmentation of existing infrastructure, particularly public transport.
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A FOCUS ON CENTRES AND CORRIDORS Urban renewal should focus on the growth and revitalisation of existing centres and corridors, in addition to the redevelopment of new major sites.
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ENGAGED COMMUNITIES The how and why of urban renewal needs to be communicated to the public and local communities need to be engaged in the planning process through a positive and proactive public consultation program.
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A RESPONSIVENESS TO CHANGE Urban renewal should be responsive to demand shifts spurred by demographic change, enable a mix of housing forms that are affordable and sustainable and deliver a range of employment, retail and recreational opportunities that are easily accessible.
COAG The Council of Australian Governments (COAG) recognises that linking land use planning and infrastructure delivery is tied to Australia’s competitiveness and economic growth. In April 2009 COAG decided that “providing improved access to services for the growing populations of the nation’s cities, enhancing the quality of life and conserving the environment” should be a priority of every state and territory government in Australia and established a task force to create better models for delivering this outcome.
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THE URBAN RENEWAL ACTION PLAN 1
Leadership at the federal, state and local level
Leadership is needed to sell policies to the community, provide certainty to the private sector and lead the significant investment in infrastructure and services needed to make urban renewal work. A cultural and attitudinal shift toward urban renewal is also needed. State and local government should leverage the funding opportunities available from the federal government, particularly from the Building Australia Fund and the Housing Affordability Fund, to underpin urban renewal projects. COAG’s national city building agenda should be front of mind for state and local leaders.
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A dedicated implementation body
Urban renewal needs a dedicated implementation body to ensure the required master and statutory planning, site amalgamation, infrastructure planning and delivery and community amenity issues, are addressed. A state level Urban Renewal Commission should be established. It should be responsible for site amalgamation, infrastructure planning and provision, broad master planning and community education. This could be a dedicated unit within the Department of Planning or a separate government body and could be created under existing legislation – the Growth Centres (Development Corporations) Act 1974.
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Clear identification of urban renewal areas
Key centres, corridors and transit nodes where urban renewal can and should be undertaken need to be identified upfront and their renewal facilitated by a dedicated implementation body (see above). The private sector should also be encouraged to identify additional opportunities and petition for a major site, centre, corridor or transit node to be activated for urban renewal. The State Property Authority should undertake a comprehensive review of government owned land, particularly well located RailCorp land, and earmark under-utilised sites that are ripe for renewal. Councils should undertake a similar process with their land holdings, including street level car parks. Industrial land in inner and middle ring local government areas should be assessed to enable suitable sites to deliver a wider range of uses, including commercial and mixed use development.
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The right planning framework
A State Environmental Planning Policy should be used to underpin urban renewal across Sydney and, if created, support the function of an Urban Renewal Commission. This SEPP should: • outline parameters for the indentification of major sites, centres, corridors and transit nodes for urban renewal, including sites put forward by the private sector, • set objectives for urban renewal to facilitate the merit based assessment of development in designated areas when the proposal does not comply with local plans, • deliver a streamlined, rapid rezoning mechanism to allow quick, market based responses to the demand for urban renewal, • offer incentives, such as density bonuses and levy reductions, to encourage the incorporation of market leading sustainability and affordability initiatives in urban renewal projects.
PROPERTY COUNCIL OF AUSTRALIA – THE URBAN RENEWAL LIFELINE
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A plan for infrastructure delivery
Prepare a long term infrastructure plan for Sydney which identifies the infrastructure needed to support urban renewal, its cost, who is responsible for its delivery and associated delivery times. We welcome the current commitment to prepare a NSW Transport Blueprint.
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New infrastructure funding mechanisms that work
New and innovative infrastructure funding mechanisms, including Growth Area Bonds and Business Improvement Districts, should be investigated for use in areas identified for urban renewal. No new levies should be imposed on development in existing urban areas.
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Facilitate site amalgamation
A site amalgamation or compulsory acquisition tool tied to urban renewal is needed to allow the ability to unlock land. This can be achieved by one of two options: â&#x20AC;˘ allow an Urban Renewal Commission to identify and acquire land needed to facilitate urban renewal and deliver value back to local communities (this model would ensure the benefit of the value uplift generated by urban renewal is captured by government and invested back into existing communities), or â&#x20AC;˘ ensure there is sufficient development capacity in local planning instruments to allow the private sector to use market based mechanisms to acquire sites from sitting land owners at a fair value (this model would deliver the benefit of the value uplift generated by urban renewal to the sitting land owner). The tax system should not discourage sitting land owners from relocating to facilitate urban renewal. Consideration should be given to providing tax relief to affected land owners, including capital gains tax relief on the sale of properties and the waiving of stamp duty on the purchase of property in a new location.
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Reform of strata title laws
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Economic analysis of all draft Local Environmental Plans
Strata title laws should be changed to allow a strata scheme to be dissolved if 75% of owners agree (rather than 100%). This change should also require the preparation of a Renewal Plan to provide an effective and transparent process to guide owners through the process of dissolving a strata scheme. The preparation of comprehensive Local Environmental Plans should first consider what density of development would be needed to make development under the LEP economically feasible and achieve transit oriented development objectives. This should involve the independent economic analysis of all draft comprehensive LEPs. Councils should also be prevented from imposing unreasonable and unworkable local controls through Development Control Plans.
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Transparent and up to date monitoring
A transparent and independent monitoring framework would assist state and local government make informed infrastructure investment decisions and give the property sector early indications as to where residential and employment growth can and should be accommodated.
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Property Council of Australia Limited ABN 13008 474 422 Level 1, Property Council of Australia House
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