PLAN MELBOURNE. A Submission from the Community Housing Federation of Victoria

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1 PLAN MELBOURNE A Submission from the Community Housing Federation of Victoria The Community Housing Federation of Victoria believes that the development of a Metropolitan Planning Strategy for Melbourne to 2050 is of vital importance to the future liveability of the city. Thank you for the opportunity to again have input into this important piece of government policy. CHFV is supportive of the key aims of Plan Melbourne. We are encouraged by the emphasis on increasing the supply of affordable housing for purchase, and are looking forward to working with the Department of Human Services, Department of Transport, Planning and Local Infrastructure as well as the Metropolitan Planning Authority to increase supply of affordable rental homes and the expansion of supply of community housing. The plan seeks to require the provision of a diversity of dwelling types in appropriate locations to meet the needs of the city, especially in key National Employment Clusters. Our members support your aims to seek to address the need for affordable living taking into account the costs of travel and utility bills that are far more expensive on the city s fringe. We wholeheartedly support the streamlined planning process for social housing. We believe that community housing organisations registered with the State government s Housing Registrar (or potential National Regulatory System) should be exempted from requiring a planning permit for residential development proposals that satisfied the planning scheme appropriate to that zone, and that such developments be exempted from notices and review at VCAT. CHFV is concerned that there have been a succession of Melbourne Metropolitan planning strategies over the past 20 years, and these have had little impact if any on ensuring housing affordability in the city is improved. We are looking for more action in this area, rather than statement of intent. We would like to recommend that Plan Melbourne also incorporate changes to address the following three areas: Define Affordable Housing, Unlock affordability through Local Government, Key Worker Housing needs higher emphasis, and Make use of the government s land bank. Page 1 of 6

2 Define Affordable Housing. CHFV is very supportive of Direction 2.3 Facilitate the supply of more social housing 1 and Direction 2.4 Facilitate the supply of more affordable housing 2. We believe that it is important that Plan Melbourne give councils, developers and the community a clear definition of affordable housing. This will ensure consistency and credibility when higher density planning decisions are made through the Metropolitan Planning Authority (or regional bodies) and through councils. The nationally adopted definition of affordable housing is from the Local Government and Housing Ministers Working Group, 2006: housing that is appropriate for the needs of low and moderateincome households, and priced so that low and moderate incomes are able to meet other essential basic living costs. We also believe there is merit in taking a more structured approach, like the one that has been taken by the South Australian government, which has a legislated definition which requires: 1. Offering houses for sale at or below the price points, 2. Offering houses for sale to eligible buyers as determined by Housing SA, and 3. Being subject to a legally binding agreement to ensure these requirements are met. CHFV feels that this approach would mandate the process of providing truly affordable housing in the housing sector. CHFV would like to see Plan Melbourne mandate a clear definition of affordable housing so that affordable housing does not mean cheap quality housing sold at market prices. Unlock affordability through Local Government. CHFV would like to emphasise the key role that local government can play in facilitating and encouraging greater supply of social and affordable housing in their municipal area. However, Community Housing Organisations across Melbourne and Victoria have a varied experience with local governments across the strategic planning, statutory planning and community planning areas. Councils who lead the sector contribute positively to community housing developments (financially and in kind), making sure this form of affordable housing is delivered. There are unfortunately some examples of unreceptive councils, captured by NIMBY resident groups, closing the door to Community Housing organisations. Plan Melbourne emphasises the role of local government through the Direction: 2.1 Understand and plan for expected housing needs, 3 Initiative: Prepare municipal housing strategies to improve housing choice, 4 and in particular Strategy: Support local governments to prepare municipal housing strategies to inform the application of the Residential Growth Zone and Neighbourhood Residential Zone 5. 1 Plan Melbourne, Melbourne Metropolitan Planning Strategy, 2013, page 65 2 Ibid, page 67 3 Ibid, page 57 4 Ibid, page 57 5 Ibid, page 57 Page 2 of 6

3 We welcome the statement in Plan Melbourne that the government will Work with local governments on mechanisms to facilitate greater diversity of housing within new developments including family-friendly housing, affordable and social housing, and housing for key workers. 6 It is a vital function of local government to open the door to more community housing developments, cutting red-tape in statutory planning. CHFV applauds Plan Melbourne on the provisions within the MMPS which effectively will make the Minister for Planning the responsible authority for selected social housing planning permit application that are recommended by the Director of Housing for priority consideration. Our members feel that strategic planning needs to be done properly, ensuring the Reformed Zones for Victoria are used to increase housing supply not to prevent larger scale developments. We have identified that there may be some problems with the application of the new zones by some local councils. It appears that some municipalities are applying the new zones in a way that is inconsistent with Plan Melbourne. An example that has come to light is a Council in the south east of Melbourne, which has zoned 80% of its residential land Neighbourhood Residential Zone, the go slow zone which prevents medium density housing, therefore reducing the Residential Growth Zone and General Residential Zone to only approximately 20% of the municipality. This will prevent medium density housing developments in activity centres across Melbourne s established suburbans. CHFV believes this kind of application of the zones is not in the spirit of Plan Melbourne and that the key areas of suburban Melbourne should be opened up for higher density housing developments. We feel that using the new zones to block higher density development is contrary to the stated aims of Plan Melbourne Local governments will be supported to apply these new zones strategically, to identify future housing requirements and to define areas that are suitable for more residential growth. We will also identify and develop housing in and around newly-designated National Employment Clusters and Activity Centres 7. Local government housing strategies are a key tool to guide local decision making on re-zoning, opening up land for greater housing diversity and affordability, and town planning decisions on development proposals. However, it is evident that councils do not have the ability to greatly affect social housing supply and housing affordability through current available mechanisms. Community housing organisations are already demonstrating their capacity to construct and deliver infill developments in the middle-ring suburbs of Melbourne. The following is one example of the many developments delivered by the not for profit housing sector, adding to the supply of affordable rental properties across the city. Registered housing association Housing Choices Australia converted an ageing single-storey three bedroom home in Preston into two two bedroom, and five one bedroom apartments (one of which is modified for people with a disability). This conversion provided additional quality outcomes and was in keeping with the general mix of one and two storey housing in the area. 6 Ibid, page 53 7 Ibid, page 54 Page 3 of 6

4 We believe that Plan Melbourne should also include planning reforms and other strategies to support the development of more social housing. As stated in our earlier submission, we believe that a number of potential planning system levers should be made available to local governments that will deliver social housing through the development process. These include: Inclusionary zoning: where zoning requirements oblige new multi-unit developments to set aside a proportion of properties for social housing. Inclusionary approvals: where local government may place covenants or other conditions upon developments that require a provision for social housing. Density bonuses: where developments may be approved for higher density development if the applicant includes a provision for social housing within the development. CHFV believes that inclusionary zoning (of at least government owned land) offers a significant policy opportunity to leverage private investment in vital additional affordable housing in Melbourne. Inclusionary zoning schemes require new development projects to contribute a proportion of the project towards affordable housing, either as dwellings, a monetary contribution or a donation of land. In Ireland for example, planning legislation requires developers to make 20 per cent of their land available for social housing at a cost based on the original use of the land, in areas where local government has established a clear need for low-cost housing provision. A 15% provision was set in the South Australian government housing plan in 2005 for Metropolitan Adelaide, and indeed is mandatory on surplus government land, sites where rezoning has occurred, and on major projects. The South Australian industry has widely accepted that target and the mandatory provisions, and inclusionary zoning has assisted in the response to the critical undersupply of affordable housing. Key Worker Housing needs higher emphasis. The provision of key worker housing is of vital importance to Melbourne where there is the potential for disconnect between the location of work for employees of essential public services and where it is affordable for them to live. Plan Melbourne recognises this fact and seeks to address it. CHFV believes that the plan needs to more directly identify opportunities such as the National Rental Affordability Scheme (NRAS) to increase the supply of affordable key worker housing around Melbourne making use of current programs to maximise access. Melbourne s inner suburbs require more affordable housing options for key workers who do not earn enough to access the housing market in a location suitably close to their workplace. This also has a flow on effect on cost-of-living pressures of transport and poor services available on the fringes of Melbourne. CHFV recognises Direction 2.2 Reduce the cost of living by increasing housing supply near services and public transport 8 which emphasises the importance of affordable living through affordable housing supply. However, CHFV believed that Initiative Facilitate high-density residential development in Melbourne s expanded Capital City Zone 9 needs to go further. CHFV believes that item should be added to with recognition that NRAS is a key delivery mechanism of Key Worker Housing. Key government sites should be made available to not-for-profit organisations to deliver NRAS properties. 8 Ibid, page 63 9 Ibid, page 63 Page 4 of 6

5 The NRAS provides an incentive for rewarding investment in new affordable housing units in the private sector. It is modelled on the US tax-credit scheme but is provided for a limited 10 year period either as a tax credit for private investors or a subsidy for NFP providers. Requiring some kind of matching or in-kind contribution from states/territories, NRAS also allows community housing sector finance to be tied to grants to achieve greater economies of scale in delivery. As with other mechanisms aimed at increasing private sector investment, it is recommended that NRAS be established as a permanent program with predictable, annual funding to allow certainty for investors and long term planning for housing providers. Make use of the government s land bank. CHFV recognises that Plan Melbourne identifies strategic land re-zonings in key areas will assist to alleviate barriers to housing supply. The expansion of the Melbourne CBD to include Fishermans Bend is one such example of an important grey fill redevelopment. Transitioning former industrial land in well serviced locations to residential land has the potential to add significant land supply for higher density housing options in the private market. The community housing sector would like to see a demonstrable deflationary impact on the high levels of rent paid in the private market. We are concerned that over reliance on the private market across key activity centres of Melbourne will not deliver affordable rental options for low income Victorians. Growing the supply of properties for affordable rental in the key areas of the city is of vital importance for Plan Melbourne and the future of the city. As we stated in our previous submission, for many Victorians on fixed and low incomes social housing is the difference between a stable, secure future, and one that is characterised by housing stress, and the difficulties posed by being at constant risk of homelessness. As plan Melbourne identifies In the September quarter of 2012, less than 12 per cent of rental properties let in Melbourne were affordable to households on Centrelink incomes 10. Social housing offers people on the lowest incomes an alternative to the private market. Community housing offers long-term tenure, affordable rental, and well maintained properties. CHFV believes that Plan Melbourne needs to more actively address the need for more community housing to be constructed. Not for profit housing organisations lack access to inexpensive or free land for the purposes of increasing the supply of more social, affordable and key worker housing in key activity centres across Melbourne. We feel that extensive opportunities exist within the housing portfolio of the Department of Human Services, VicTrack land and assets held by places Victoria. CHFV believes there is a massive underutilisation of government owned land in areas of high amenity and access to services. Plan Melbourne and government planning mechanisms should recognise community housing organisations are key to unlocking the potential of this land to provide for additional affordable housing supply. Plan Melbourne should seek to leverage the government s land bank to expand supply of social housing. Community housing organisations should be seen as key to unlocking capacity in established suburbs so they can play a greater economic and housing role for the future of the city. We are encouraged by the statement in Plan Melbourne that [the] plan is to encourage greater levels of investment in affordable housing, including encouraging the integration of social and affordable housing options within major urban renewal and growth area housing developments Ibid, page Ibid, page 57 Page 5 of 6

6 Community housing place based community renewal approach is recognised within Plan Melbourne, in the case study featuring the Ashwood Chadstone Gateway Project undertaken by Port Phillip Housing Association. CHFV agrees with the need to move to more integrated place-based programs that focus on the needs of a particular area or community, instead of just one issue in an area that has multiple needs. Community housing organisations have proven that they have the ability to maximise public benefit whilst renewing stock and providing for some private sales of affordable housing units co-located with social housing. We feel that Plan Melbourne should identify specific locations for government to partner with community housing organisations to deliver this model of neighbourhood renewal. Page 6 of 6