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Planning Ministers are writing essays about them, developers are battling councils in the courts over them and building designers want the right to design them. The great debate about the importance of a set of mandatory design standards for multi-residential apartment in Australia is alive and well and is becoming ever more prevalent in the state of Victoria.

IN VICTORIA:

Back in May, 2015 the Victorian Government reopened the conversation on setting Victorian Apartment Design Standards (VADS) with a new discussion paper that addressed the need for VADs in the context of a growing Melbourne population with a declining standard of apartment amenity.

Better Apartments: A Discussion Paper was followed by a two month online public survey and submission process, and a one month stakeholder consultation process.

And while the discussion paper and the possibility of Victoria Apartment Design Standards (VADS) was publicly welcomed by the then Australian Institute of Architects (AIA) Victorian Chapter President Peter Malatt, nothing much has happened since and there is a growing number of architects in the state who believe it’s time to stop talking (and writing essays) and start acting.

There are also others in Victoria that suggest that VADS will only mean higher apartment prices and less affordable housing options for Victorians.

Setting VADS, much like those in NSW‘s State Environment Planning Policy 65 (SEPP65) and accompanying Apartment Design Guide, have been on the cards in Victoria for some time, namely since the release of the 2013 Victorian Government document Plan Melbourne.

Initiative 2.1.4 of the 2013 Victorian Government document -‘Improve the quality and amenity of residential apartments’- promised to address the concerns of decreasing apartment design standards in Melbourne and suggested that there would be an updating of design guidelines and the introduction of measurable standards for high-density residential and mixed-use buildings in the future.

VADS were again thrust into the spotlight in July 2014 when a working draft of new standards being constructed by the Office of the Victorian Government Architect (OVGA) was leaked to the press.

However, according to Tom Alves, senior advisor from the OVGA, those drafts were leaked prematurely and contrary to what was reported, the proposed VADS were more than just about apartment sizes.

“The standards, unlike what has been reported in the press, aren’t just about apartment sizes, they also respond to a worrying precedent that is being set in Melbourne in which buildings are being designed and built with a severe lack of amenity,” he said.

“I will say that there has been concern in Melbourne for some time, from local governments and a variety of stakeholders, that there is an issue with the standard of amenity within apartment buildings in the city.”

THE FREE MARKET & GLOBALISATION ARE FAILING US

A recurring argument from some Victorian architects in the media has been that foreign-investment and an under-regulated property market is driving apartment standards down, particularly in the centre of Melbourne where foreign investment is higher than the city fringes and where apartments are (apparently) built for investors, not owner occupiers.

Speaking to Fairfax on behalf of the AIA Victoria Chapter, Malatt expressed with no uncertainty that Melbourne had a problem with apartment design and suggested that the marketing of high-rise projects to investors rather than owner-investors had fuelled the problem.

"Developers are building apartments that are uninhabitable; they're not restrained by any regulation; they're maximising profit," Malatt said.

"They're simply building a spread sheet, not homes for people."

These statements echo those previous made by the Victorian Chapter President in 2014 when the OGVA draft standards were leaked to the Australian press.

“Development of apartments in Melbourne have been left in the hands of developers, and in some cases overseas developers, for far too long,” he said at the time.

“The government to a large extent has abdicated its responsibility to the public. Standards are extremely low and they’re dropping.”

A report from Sam Nathan, Director of Projects from Charter Keck Cramer, titled ‘The strategic role of the Melbourne apartment market in the city’s future housing structure’ would show Malatt is correct at least on one thing—that foreign investment in apartments is particularly high in the city centre and investors aren’t necessarily stepping foot in the apartments they’re purchasing.

“The apartment market [in the Central City Region] is increasingly driven by the greater participation of offshore developers, offshore capital and offshore apartment purchasers,” he wrote in this report.

Michael Smith, Director and architect of Victorian firm Atelier Red + Black, would agree with Nathan who suggests that foreign investment will play an essential for Melbourne its movement towards global city status, however he does suggest that regulation is essential in ensuring apartment quality is not sacrificed in an investor-led climate.

“Foreign investment is great for our cities overall however it can cause future problems if we get swept up in the enthusiasm and fail to properly plan and design,” he said.

“Many of these investors will never step foot in their apartment and will either choose to rent it out or in some cases leave it unoccupied in the medium term. Just because apartment quality is not a high priority for these investors, doesn’t mean that future occupants of these apartments should be forced into living with below basic amenity.”

PRICES WILL GO UP AS CONTROLS TIGHTEN, LESS AFFORDABLE APARTMENTS WILL BE BUILT

It is difficult to say whether or not NSW’s adoption of SEPP65 has directly resulted in an increase in apartment prices in Sydney, however as of July 2015, the median price of an apartment in Sydney was nearly $700,000 compared to around $450,000 in Melbourne.

This is particularly troubling for Craig Yelland of Plus Architecture and, for Yelland, indicative of SEPP65s crippling effect on housing affordability.

“My main message is that you can bring in design standards, which make for more fabulous apartments, everybody wants a bigger living room and north facing orientation after all, but it all comes at a cost.

“And the cost is real and it comes in additional size and land components.”

As it stands, NSW’s SEPP65 has minimum standards for apartment internal areas including studio apartments and one-, two- and three-bedroom apartments. Minimum apartment sizes is one of the major topics being considered for the potential VADs and Yelland believes that if they are implemented then apartment prices are going to shoot up.

Using the Plus Architecture-design Central South (pictured above) in South Yarra as an example, Yelland says he’s worked out that if he had to abide by SEPP65 then there would have been an increase in $123,000 per dwelling and the development would have been reduced from 537 to only 236 apartments.

“This would be needed in order to get the same financial return so you can still get funding from the bank because if you don’t get 20 per cent return on a project the developer will not get finance from the bank and the development won’t happen.”

“So some people say ‘oh the developer can just make less money’, which is just naïve, because they can’t. They could make less money but they can’t get funding, then the job won’t happen.”

He also believes that SEPP65 will affect housing supply, not just affordability.

“The thing that I can work out is that in order to get the same financial return is $123,000 but what I can’t determine, because I’m not an economist, is if every site that you develop yields 30-40 per cent less apartments, that’s a lot less buildings that are going to get developed,” he explains.

“And if a site yields a third less, the chances are, like what happens in Sydney, if you have a two-story office building, and the floor space ratio is limited to how many apartments you can put on it, chances are that they are worth more money as just a two-story office building rather than if it was developed.”

GOVERNMENT IS BEHIND THE TIMES

Yelland isn’t fond of regulation on apartment standards and suggests that the market that should decide what is appropriate or not, not the government.

“People vote with their feet, if they don’t like it they move out, or they don’t buy it, or they offer less for it,” he explains.

“If developers are developing numbers of atrocious apartments, no one is going to buy them. And if they do buy them, no one is going to rent them because they are going to be atrocious.”

“When the government starts to prescribe things like apartment mix and size then they’re just prohibiting the market opportunity that developers might see at that point in time. Developers will tell you that by the time the government sees what is necessary, the market is past it and are onto the next product. “

On that point Yelland addressed one of the arguments (as mentioned previously) that is commonly used by supporters of VADS - foreign investment is high in Melbourne and undiscerning to apartment standards and quality.

“Again, that’s old news,” he says.

“What’s happening in Melbourne at the moment is that we’re having a shift back to owner-occupier, larger styled apartments because that is what is in demand, so we are seeing more larger if you like, SEPP65-style apartments because the market is demanding that because there is a big under-supply of that kind of product, because of changing and re-zoning in Melbourne.

“So we have had for the past four years, for nearly every development being one- and two-bedrooms and not a single three-bedroom near it. And now for the past six months we’ve been doing nearly everything with large two- and three-bedrooms. The government doesn’t even realise yet.”

SMALL ISN’T NECESSARILY WORSE

Photography by Katherine Lu

Yelland may be publicly leading the campaign against bigger apartments in Victoria but he isn’t on his own. Most recently Brad Swartz architect feature on a Channel Seven documentary which challenges the ‘Australian dream’ of owning a big house on a big block of land.

Guest speaking as a part of UBank’s All I Need Project, Swartz uses his award-winning 27sqm Darlinghurst Apartment (pictured above) as an example of how to use space efficiently in a growing cityscape. Under SEPP65, Swartz’s apartment wouldn’t have been permitted to be built.

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Similarly, Yelland has his own 43sqm one-bedroom apartment in south-east Melbourne that he designed and rents out. That too would be too small under SEPP65.

"See it’s one thing to say that everyone should have a fabulous, large apartment, just Google affordability problems or affordability solutions," says Yelland.

"In any of them, in all of the major cities around the world, and what you’ll find is that people have come back with creative ways to live in small spaces."

Architect Craig Yelland (right) with his tenants Katherine O'Byrne and Theo Christian in their 43-square metre apartment.Photography by Jesse Marlow/Fairfax

HOW CAN WE MAKE SURE THAT “WELL-DESIGNED” HAPPENS WHEN WE DON’T HAVE A BODY TO REGULATE IT?

In a bid to get a grasp of what constitutes “good” apartment design the Planning Minister released a public survey that asked respondents to rank the key issues affecting apartment amenity by most to least important.

The government shortlisted 14 key issues and the top five issues as voted by participants were daylight, space, natural ventilation, noise, and energy and resources.

Troubling for Yelland was that among those 14 issues, not one of them was affordability.

“Every survey, discussion and workshop the government did prior to this one ranked affordability as the number two concerns after design layout. So why wasn’t affordability listed as one of those issues?” He asks.

“The Victorian’s were asked ‘do you like a big living room?’ or ‘would you like a big apartment?’, so of course the answer would be yes. But they also weren’t asked, “do you have an extra $123,000 to spend on your apartment?”

“And if I then said, ok you could save $20,000 by not have cross-ventilation, and if you could save $5,000 if you had 12 apartments on your floor, then you would start to think, oh hang on – I can still live in that same wonderful suburb and actually afford to buy it.”

“But the government wants to take away that right.

“I firmly believe that it is the market that should decide what is appropriate or not, not the government.”

Nathan Johnson

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