The Business Getting the ‘G’ into the RGZ (Residential Growth Zone)

Overview

This publication often has a strong focus on the ‘meatier’ greenfield developments around the fringe of Melbourne and the sexier large scale urban renewal projects in inner urban areas. I felt it was time for a piece on the heartland of Melbourne, suburbia. Whilst each project has much less yield than of the duo above, the sheer volume of them makes them just as important in relation to the overall puzzle of housing supply along with affordability, diversity, amenity, and character. Part of this jigsaw is the contribution made by lots in the RGZ. We are now 6-7 years down the track since the inception of this truly new Zone into Planning Schemes and it is appropriate to reflect on the outcomes occurring. I have some fear that the opportunity intended to be created is being either undersold or restrained that may have generational consequences.

Policy context

Let us start with some policy context. The purposes of the RGZ relating to housing and built form are:

• To provide housing at increased densities in buildings up to and including four storey buildings.

• To encourage a diversity of housing types in locations offering good access to services and transport including activity centres and town centres.

• To encourage a scale of development that provides a transition between areas of more intensive use and development and other residential areas.

Last December the Government published Practice Note 91 which gives ‘information and guidance’ on how to apply the residential zones. About the RGZ it identifies the following as a principle underpinning the selection of this Zone:

While the Residential Growth Zone promotes greater housing intensification up to four storeys, it can also be used to facilitate taller residential development by specifying a maximum building height greater than 13.5 metres in the schedule to the zone.

By way of contrast the same document says the following about the principles underpinning the General Residential Zone (GRZ):

The General Residential Zone should be applied to areas where housing development of three storeys exists or is planned for. It is inappropriate to apply the General Residential Zone to areas where a planning authority seeks to respect the existing single and double storey character of an area.

Economic, design and market realities v policy aspirations

In the middle to outer rings of Melbourne the RGZ is applied around existing activity centres. Specifically, I am referring

Andrew Clarke Director, Clarke Planning

to places like Clayton, Glen Waverley, Ringwood, Boronia, Heidelberg, Reservoir, Pascoe Vale and Broadmeadows. Think, generally beyond the ‘tram line’ radius of Melbourne. Yet, getting the growth into these areas is at times proving challenging. In general terms there is a policy push for lot consolidation and apartment buildings sitting atop basement carparks in a lushly landscaped setting. Numerous Reference Documents contain exciting ‘artists impressions’ of what the future streetscape is to look like under this vision.

Unfortunately, these visions are somewhat divorced from the economic realities, which are critical when the housing system we have essentially relies on the private sector to provide it. Clearly, the private sector will only do so if the exercise is profitable and it should not be villainised for such a mindset, itself a reality of any ‘capitalist’ economy.

Single blocks in these suburbs are mostly in the 600m2 range and regular rectangles in shape around 15m in width. Clearly apartment buildings with basements won’t work on such lots due firstly, to their narrow widths. Whilst consolidation can be encouraged, (and rewards given), it must be expected that housing growth will occur on single lots in the RGZ.

That said, consolidated lots will produce wider buildings that are more imposing on a streetscape and more challenging for internal daylight via having a broader perimeter. The single lot approach naturally creates building spacing for streetscape relief, daylight penetration and potentially landscaping.

Then there is the matter of basements which are not cheap. A 400m2 basement would cost around $600,000. You do not need a policy directive to achieve a basement in RGZ areas like South Yarra, Brunswick, or St. Kilda. 1kg of cement costs the same where ever it is poured. But the return on the construction cost is very different. The decision on whether to ‘basement or not’ is one of the very first planks in the formation of any design with profound impacts flowing from this.

Of lesser importance, whilst there might be a policy desire for apartments, there is a still a very strong consumer desire for ‘townhouse’ style housing in these middle/outer suburbs. Apartments are still seen as the domain of the ‘city’ or at the very least ‘within’ the activity centres, not around its fringes. Planners might prefer one typology, but citizens prefer something else, an interesting disconnect given the primary role of planning at its most basic of levels.

So, if single lot owners in this area don’t want to consolidate, say basements are not viable and say townhouses will sell better, do we wait an unspecified time in the hope the market will mature or do we take the best growth we can get in the RGZ now? And if the latter, and we do not just let RGZ land lay indefinitely idle, what should the basic bones and typology of such a module be?

Crumbling of unpinning strategic visions

Aside from the obvious that we may never get there, one of the more immediate problems with the (wait and hope) approach is that nearly all of the Municipalities in this middle to outer ring have recently completed Housing Strategies that have informed Zone selection. These are largely predicated on assumptions about getting growth in the RGZ. But if the type of growth that is desired is not desirable to the private sector providing it, then we have a problem. The problem manifests itself with new sets of more restrictive provisions to limit growth that are rightly granted in creek corridors, ridge lines, foothills, areas with a bushy character or places more remote from activity centres and transport. But if the growth is not occurring in the RGZ then things start to fall apart in a macro sense.

Another challenge in many of these RGZ areas is that they are logically well located and thus already have some lesser quantum of units on them making them harder to redevelop again. Think single storey villa style homes or 2 unit double storey townhouses from previous policy regimes over the last 50 years. The uplift arising from collective acquisition is rather demure.

Getting uplift beyond just GRZ outcomes

A basic 2 unit townhouse module on a 600m2 and 15m wide lot is more akin to the GRZ (or even NRZ) so we must be asking and expecting something more of single lots in the RGZ than just this. The lined up and semi-attached reverse living module of ground level parking, first floor living areas and 2nd floor bedrooms is an emerging typology in these middle/outer RGZ’s. It ticks the diversity and growth boxes and is a module the private sector is willing to provide in these suburban settings. It is more intense than you would expect in a GRZ and would typically deliver 5-6 dwellings per standard lot. In fact, one wonders if densities would be much greater anyway for an apartment form on a consolidated lot. Yet, it comes with its own challenges and at times disdain.

Indeed, in some areas the same development has been argued as being both an overdevelopment and an underdevelopment. In other areas the detached 2 storey townhouse remains the outcome expected in the RGZ. Context of course plays a role, so outcomes ought not be identical. But the premise of growth implies change and the disparity within the same zone is alarming.

In some areas the 3 storey reverse living outcomes occur in the GRZ due to a differently phrased and structured hierarchy of those Planning Schemes. With this re-shuffle though the substantial buffer/constraint (depends on your perspective) of the garden area requirements then come into play.

Reverse living townhouse modules in the RGZ; whose amenity should prevail?

The main challenge for the reverse living module is primarily about amenity impacts on abutting lots and internal amenity, specifically screening of the balconies. The two are intrinsically linked.

In order to avoid overlooking impacts, it is generally accepted that balconies at first floor level that are situated a few metres from a side boundary and screened to 1.7m high whilst ticking the ‘overlooking box’ are a poor outcome for internal amenity. Remove the screens, and internal amenity is fine, but overlooking is severe. It is not possible to have balconies 9m in from either side boundary on a 15m wide lot. Roof decks are perhaps an underutilised space and a possible solution. For over 20 years, roof decks have been accepted under Rescode as a permissible form of open space. It is accepted that they would not be perfect in terms of connectivity to the first floor living areas.

Then there is the interim amenity to the abutting as yet undeveloped lot to consider. The incoming more intensive building can be expected to stand for 80 or so years. Do we compromise its internal amenity and its yield/housing contribution in the name of ‘preserving’ amenity for an existing resident next door from visual bulk, shadowing and overlooking? Alternatively, if it is accepted that amenity impacts on the abutting lot should be tolerated this might lead the owner to sell up (cash in). This outcome can surely only aid in the advancement of the espoused strategic planning policy. Adopting this approach would provide e.g. balconies which could be unscreened at first floor. While these would allow significant overlooking in the interim, they would deliver good amenity for the occupiers that will outlast the incumbents. This can easily be done without impinging on equitable development rights too, with preference given to balcony orientations to the north and then east for ESD reasons.

Will we pass by these areas in 10 years’ time and see that abutting site developed anyway and wonder why we bothered? The rules we applied have locked in compromised design outcomes and produced lower quality housing outcomes on the earlier developed lots. These impacts will last for decades. They were the result of pandering to no longer existent abutting single dwelling residents. It seems we are having an each-way bet on this front. Some courage is perhaps required by policy writers and the decision makers here. The concept of net benefit must inform the pathway selected.

Conclusion

We are now 6 years down the track of having the RGZ in our Planning Schemes. Its uptake has been cautious and rather limited. But in places where the RGZ has been applied, it is time to adopt a more practical and wholehearted approach, if it is to deliver its actual purpose. While I do not profess to have answers to every conundrum about the RGZ, the issues seem serious enough to pen this piece in the hope it might act as a conversation starter.

Andrew runs his own sole practitioner planning company. He is a town planner with over 10 years’ experience in the local government sector and over 10 years’ experience in the private sector. Andrew Clarke can be contacted at andrew@clarkeplanning.com.au