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Seeking systems for sustainable higher-density housing in
Australian cities
Author:
Palmer, Jasmine S.
1
1
Centre for Housing, Urban and Regional Planning, University of Adelaide, Adelaide,
Australia
Abstract Summary: Decades of expanding, low-density urban sprawl has shaped the form of
Australian cities as well as housing construction and finance systems. Current metropolitan plans
promote urban consolidation and increased housing densities in suburbs. Such densification
challenges the perceived ideal of the free standing suburban family home and existing methods of
housing provision and construction. Higher-density housing is viewed as a compromise to the
Australian housing dream and remains primarily an investment market rather than a desirable owner-
occupied housing option. This scenario has generated a miss-match between household desires and
the higher-density housing products available. This paper examines the existing higher-density
housing provision systems to determine social, systemic and institutional barriers to change. Removal
or reduction of the identified barriers may assist in reducing the identified miss-match, supporting the
implementation of urban consolidation promoted by metropolitan plans as a significant tool for
improving urban sustainability and resilience.
Keywords, medium-density, housing provision, consolidation, owner-occupied, Australia
The context of the Australian consolidation challenge
Recent decades have seen the introduction of an assortment of metropolitan planning policies
across Australian cities promoting development within existing urban boundaries through
urban consolidation(1). Among other attributes, these policies have a collective ambition to
generate more ‘sustainable’, ‘equitable’ and ‘liveable’ future urban environments.
Commentators have criticised these plans as containing little more substance than marketing
documents, “confusing physical phenomena with social relations”(2). Forster(3) observes a
continuing disparity between planning ambitions and urban reality resulting in two parallel
urban universes: that of the planning authorities and that of the
“realities of the increasingly
complex, dispersed, residentially differentiated suburban metropolitan areas most Australians live in”
(4).
The
majority of growth in Australian cities continues to occur outside of policy designated growth
areas consists of large single family housing with little variation(5). Scholars suggest this
mismatch between policy intent and urban reality results from the persistence of existing
urban infrastructure and form, doubts regarding the ‘worth’ of proposed change and the lack
of comprehensive policies or programs for effective implementation.(6).
This paper reviews existing literature regarding housing preferences and whether these are
addressed by current housing provision systems. It aims to outline the significant social,
systemic and institutional barriers which perpetuate existent mismatches and discourage the
implementation of urban consolidation plans. Examples of alternative medium-density
housing solutions are then described to illustrate emerging trends and opportunities.
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Social barriers: medium-density housing perceptions
Historically medium density housing in Australia has been associated with inner urban
workers accommodation and low socio-economic rental housing (both private and publically
owned). In parallel with the post WWII increases in personal mobility and rapid urban
expansion, the low-density single family suburban house became the dominant housing form,
acquiring the descriptor of ‘The Great Australian Dream.’ Both medium and high density
housing became viewed as a temporary arrangement for young households as they worked
toward achieving the common dream. To this day media and researchers continue to reinforce
the perception that medium and high density housing is an inappropriate environment to raise
children(7). The 2011 Australian census shows three quarters of Australian privately-owned
houses are free-standing suburban dwellings(8). Of these, 77% are owner-occupied with the
remainder privately rented. In contrast, privately-owned multi-unit housing has an owner-
occupier rate of just one third(9). Only 13% of people in rental housing are likely to reside at
the same address as they did five years prior compared to 71% of owner-occupiers(10). These
tenure and mobility differences between low density and medium/high-density housing have
steered the evolution of two distinct provision systems over time. The resultant built form
perpetuates the entrenched perception of medium-density as an inferior housing alternative
and as undesirable in one’s neighbourhood due to high rental rates. Until this perception is
transformed the planning policies promoting consolidation have limited chance of success and
public objection to consolidation of existing urban areas is likely to continue.
Given the apparent negative perception of medium-density housing it is valid to enquire as to
whether there is a demand for the housing types promoted by urban consolidation plans. Two
recent studies have investigated this matter. Focusing on Sydney and Melbourne a 2011
study(11) sought to understand the ‘trade-offs’ households were willing to make given
decreasing housing affordability. In comparing ‘trade-off’ preferences with actual and new
housing stock a significant unmet desire for medium-density(up to 3 storey) housing was
identified in both cities, with only 41% of Sydney residents and 48% of Melbourne residents
preferring to live in detached housing given current market prices. Another 2011 study in
Adelaide(12) demonstrated similar outcomes, finding that one third of respondents were not
averse to living in medium-density housing with children. However, it also identified that
those attracted to living in higher-density housing did not view the housing product available
as meeting their lifestyle needs. These two studies reveal a notable shift in public acceptance
of medium density housing partially driven by financial constraint and household purchasing
power. They also show this shift is not accommodated by existing housing provision systems.
Systemic Barriers: provision and purchasing systems
Low-density speculative housing construction is uncommon in Australia; most construction is
undertaken on a contractual basis with individual homes built to the chosen specifications of a
household on their selected allotment. Nonetheless, each new region of suburban growth
tends to be constituted of remarkably similar houses. Burke and Hulse(13) describe low-
density housing as providing as ‘wrap-around’ housing tenure. That is, the ability for
households to wrap their chosen lifestyle and leisure activity around the built form of the
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house, adapting the generic form of suburban homes to outwardly express their individuality.
As Australia moves toward higher-density housing advocated by city plans, the relatively
simple contractual construction tradition familiar to new home purchasers shifts to a more
complex ‘modern’ or ‘industrial’ one(14). Unlike low-density housing, medium-density
townhouses and multi-dwelling units are typically offered for purchase ‘off the plan.’
Predesigned for an assumed occupant, constructed with generic fittings and finishes, and often
identical to other dwellings in the development, they offer little room for occupant
intervention. In particular, they significantly constrain the potential for the ‘wrap-around’
housing tenure. Designed by developers, architects and builders with a view to maximum
financial return, this shift in procurement precludes a significant portion of the population
from engaging in medium density housing either through inappropriate design, inflated cost,
or perceived impersonalisation of space.
A number of recent reports have highlighted the significant influence of speculative
developers and property investors in the provision of medium-density housing(15). The
increased risk (both real and perceived) taken by developers to deliver speculative medium-
density developments in comparison to contract based greenfield building is compensated in
most cities by higher profit margins(16). In addition, different staging of payments by
purchasers places greater financial holding costs on the developer which are subsequently
passed on to the purchaser. Both of these factors combine (with other increased construction
impositions not discussed here) to increase the cost to purchasers(17). To minimise risk
developers wisely target their product to meet demand, which is predominately from property
investors, not owner occupiers. Investor demand in the ‘off-the-plan’ apartment market has
remained at around 70 per cent over time(18). The Australian property investor is typically a
middle to high income earner (or household) who either owns outright or is purchasing their
own home. They seek to use this second or subsequent property as an investment, building
value in capital and accessing government tax incentives to increase personal wealth.
Investors seek a balance between financial outlay and return, both in the long term in relation
to capital growth, and in the short term through property rental. Hence a typical medium-
density design and dwelling size has become entrenched based on the ideal financial
outcomes for investors, rather than on the needs and lifestyles of the occupants. Regardless of
the fact that one third of medium-density housing is owner-occupied it is typically constructed
to meet the needs of this dominant purchaser group, entrenching the perception of medium
density housing as a rental tenure solution and requiring those who select to owner-occupy to
compromise their person lifestyle to fit within that determined by the investment market.
Both academics and industry practitioners express concerns about investment dominance in
the Melbourne higher-density housing market regarding the quality of housing being
produced, particularly in relation to the social legacy which may result(19). Keck predicts the
creation, in the near future, of two distinct higher-density housing typologies: one meeting the
needs of investors and another for owner-occupiers. In making this prediction he also notes
that further construction of dwellings for rental purposes will increase the miss-match
between available dwellings and household preferences. The small proportion of
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developments currently aimed at the owner-occupier tends to be targeted to high income
households to achieve maximum return. Hence, medium to low income households are
effectively excluded from engaging in the owner-occupied urban re-generation market,
limiting housing choice and losing the opportunity to deliver lower cost housing through
consolidation. The existing developer-led method of medium-density housing provision has,
like its detached predecessor, become ‘locked-in’: it has gained an ‘early lead’ to ‘corner the
market’ and as a result other options become ‘locked out’(20).
Institutional Barriers: the risk of innovation
The major instruments through which government is able to influence housing size and type
are the Local Government Development Plans, made by local councils to comply with State
Government Planning Legislation. Focusing on systems in place in the state of Victoria
March(21) highlights the role of existing planning policies as restricting undesirable
development on a case by case basis by ensuring all development complies with the
applicable Development Plan and poses minimal risk to the community. This risk adverse
structure limits urban outcomes to a set of (re)combinations of existing, know urban solutions
and fails to promote or encourage innovative opportunities which may present themselves.
The rate of change in existing urban environments is further limited by the relatively high
rates of private home and land ownership. The vast majority of residents view their housing
and its surrounds not only as a home, but also as a significant financial investment. Having
selected a location and dwelling to invest in existing residential owners are reluctant to see
their locale change over time. In a study of inner suburban areas of Melbourne with high rates
of public protest to change Alves concludes that the main issues limiting the provision
medium-density housing in existing urban areas are
“the highly dispersed nature of residential
property ownership, and the conflict this engenders around the competing development and use rights that
accompany an interest in property.”
(22)
The complexity of financial, legislative and construction contract systems associated with
medium and high density housing provision requires a degree of expertise to ensure housing
development is effectively implemented. The proven success of the developer and investor
driven development model described above provides a financially successful model for
stakeholders, promoting the continuation of the status quo due to the perception that
alternatives may pose a greater risk. A number of scholars have made efforts to describe the
complex interactions between these financial, legislative and construction systems and how
they inform built outcomes. Burke(23) describes the Australian housing system as comprised
of four subsystems: Production, Exchange, Consumption and Management, all of which are
influenced by economic, legal, political, environmental, administrative, and social and
demographic factors. As seen from the above discussions a disjunction currently exists
between those stakeholders engaged in the production and consumption subsystems, with
occupants not provided an opportunity to engage in the production of medium-density
dwellings. Franklin(24) provides a conceptual framework of built form production relating
cultural processes to built form through structural processes(social, spatial and conceptual)
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and the agency of stakeholders. Franklin’s model(Figure 1) demonstrates that the removal of
agency of occupants(individuals and groups) from the production subsystem removes the
opportunity for built form to represent the occupants’ concepts of meaning, identity,
perception and use; to reflect the needs and preferences of the individuals lifestyle.
Conceptual processes become distanced from built form as the inputs of myth, ritual,
metaphor and symbol become interpreted through the (financially focussed) lens of spatial
processes by designers and developers. It therefore illustrates the dominant influence of
institutions and construction/ development systems which occurs when the occupant is
removed from the process of housing production, feeding the mismatch between household
preferences and available housing.
FIGURE 1: A model to illustrate the contextual framework of built form from Franklin 2006, p.27.Adapted to
demonstrate the effects of removing occupant agency from the process of housing production. Occupant
influence (blue dashed arrows) is severed, and conceptual processes become distanced from built form(orange).
Alternative Cases
A small number of innovative examples of medium-density housing provision have been
pursued in recent time by individuals and groups seeking to navigate an alternative to the
existing system and enable owner-occupier input in design. Each of these examples varies the
extent and location of risk in the development process and hence the magnitude of developers
profit. Four examples from Melbourne, both built and in progress, are described in Table 1
with an emphasis on how they differ from the existing provision model, the degree of owner
input in design enabled, the relocation of risk, and the motivations of the project instigators.
These four examples illustrate that viable options do exist for user input in design and
development in medium-density housing in Australia. Each takes a different approach and
requires individual engagement ranging from relatively minor time commitment in examples
1 and 2 to a high level of personal investment in examples 3 and 4. The level of personal time
commitment directly reflects the amount of design input enabled and cost savings realized. It
is also notable that where high levels of design input are achieved the group has benefitted
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Table 1: A comparison of alternative provision projects
Example 1. ‘On-Line dating service’ Commenced 2013. Groups currently being formed, no completed projects.
Differences Combines crowd sourcing and smart marketing in on-line platform to form groups of like-minded
households. Groups formed are paired with an architect and developer to realise the project.
Extent of
design input by
owners
Moderate. Interested parties indicate personal preferences via on-line platform. The group formed
meets with designers 3 times during design development. Some personal choices in finishes.
The intention is to avoid excessive input or ‘design by committee’ due to possible time delays resulting
Risk & Cost Risk to financial institutions and developers reduced as purchasers are pre-committed, effectively
representing adequate pre-sales for financial approval for development. This should represent a
saving through reduced marketing and financing costs. Additional costs incurred to utilise the service.
Instigators
Motivation
Architects seeking a means of enabling innovation in the medium-high density housing market by side
stepping the restrictive developer driven brief.
Example 2. ‘Mediation and Design’ Commenced 2013. Early project stages, no completed projects.
Differences A client group is formed through registration of interest prior to site selection. Client group formulates
project brief. Design team acts as ‘mediator’ between the client group and the financing developers.
Extent of
design input
Moderate. Client group formulates project brief. Designers provide a range of options or possibilities
within the budget. Group selects common options. Individual selection of interior finishes.
Risk & Cost The usual developer model of finance is not significantly altered. The risk which would normally be
associated with an atypical design is avoided through pre-sales.
Use of independent project manager proposed to limit construction risks. Marketing costs removed.
Instigators
Motivation
Young architects and property specialists seeking more collaborative living environments. Focus on
‘good design’, small living spaces and the inclusion of shared facilities.
Example 3. ‘Collective Development’ Initial Project completed 2013.
Differences A group of individuals form a company which purchases land and acts as a private developer. At
completion of project the company is dissolved and individual dwellings sold to members.
Design input Highest possible level of design input into brief, site design, building and individual interiors.
Risk & Cost Company, composed of the individual members, takes 100% risk. Owners personally realise the profit
usually paid to developer. No marketing costs. No stamp duty tax payable. Resultant property values
in the initial project greatly exceeded costs, realising a significant profit(or saving) for members.
Instigators
Motivation
The intent was to build properties for rent as part of personal property portfolios. Unexpectedly, all
units are occupied by owners.
Example 4. ‘Cohousing collective in partnership with community housing provider(CHP).’ In design.
Differences Group formed well in advance of site selection. CHP acts as developer, accessing finance through large
portfolio. Rental community housing combined on site with owner-occupied residences. Co-housing
members contribute an equal share of land purchase expenses at time of purchase. At completion
individual units sold to group members except those retained by CHP.
Design input High, including group design of shared external facilities and gardening spaces.
Risk & Cost CHP partnership provides access to cheaper finance. Developer profits and marketing costs avoided.
Instigators
Motivation
A group of mid aged professionals seeking an alternative to the developer designed model of city
living, including collaborative use of space and gardens.
from professional members, such as architects, planners and property consultants,
working in the interests of the project. If such processes for owner input in design are to
be main-streamed it is not realistic for all owner groups to have access to such expertise
and implementation programs would be needed to support participation and minimize
risk. The main attribute these examples all have in common is that they exist within the
established financial, institutional and contractual systems of development. They seek
alternative financial and contractual solutions within boundaries which have evolved to
meet the needs of the existing developer led system of provision. If they had the freedom
to move beyond these constrictions more innovative solutions may be possible.
Conclusion:
Discussing housing in the UK Franklin argues for smaller scale community/ collective action.
She highlights the potential for active (individual and collective) investment (physical,
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emotional and financial) in housing design and provision to increase household acceptance of
medium-density housing and commitment to local community and neighbourhood. Such
owner-occupier investment in medium-density housing provision may provide a key to more
effective implementation of consolidation policies, avoiding the confusion of “physical
phenomena with social relations”. The literature discussed has demonstrated that a new
direction in medium-density housing provision is required in Australia if the needs and
desires of those households seeking an alternative to low-density suburbia are to be
adequately met and perceptions of medium-density housing as undesirable are to change over
time. The examples described show new provision directions are possible within the
Australian context and can provide a level of owner-occupier design input suitable to the
individual. However, it remains clear that to effectively implement the urban consolidation
proposed by existing planning policies a more cohesive approach to alternative provision is
required to simplify processes and avoid design input becoming a privilege available only to
those with financial capital or professional expertise. Further study of these examples as they
mature is needed to identify how they can assist in facilitating an industry and community
shift from a predictable risk-adverse (market led) future to a culture of active participation in
the generation of prescriptive and desirable urban environments to meet future needs.
References
(1) Such documents include the Metropolitan Strategy for Sydney to 2031(in draft), SEQ Regional Plan 2009–2031(2009),
Directions 2031 for Western Australia(2010), 30-Year Plan for Greater Adelaide(2010) etc.
(2) Dodson, J.(2012). Transforming Australia's 'housing solution': how we can better plan suburbia to meet our future
challenges. Australia's unintended cities. In R. Tomlinson(Ed). Collingwood, CSIRO: 19-32, p.28.
(3) Forster, C.(2006). The Challenge of Change: Australian Cities and Urban Planning in the New Millennium.
Geographical Research, 44(2), 173-182. doi: 10.1111/j.1745-5871.2006.00374.x
(4) Ibid. p.180
(5) Goodman, R., Buxton, M., Chetri, P., Taylor, E., & Wood, G.(2010). Planning and the characteristics of housing supply
in Melbourne AHURI Final Report no. 157. Melbourne Australia: AHURI.
(6) Gleeson, Dodson & Spiller 2012; Dodson 2010; Buxton, Goodman & March 2012.
(7) Birrell, B., & Healy, E.(2013). Melbourne's High Rise Apartment Boom. Melbourne: Centre for Population and Urban
Research, Monash University.
(8) Australian Bureau of Statistics.(2013). Quickstat household composition. Retrieved 24/06/2013
(9) Troy, P. N.(2012). Accommodating Australians: Commonwealth government involvement in housing: Federation Press.
(10) Australian Bureau of Statistics.(2010). Australian Social Trends December 2010: Moving house.
(11) Kelly, J.-F., Weidmann, B., & Walsh, M.(2011). The Housing We'd Choose. Melbourne: Grattan Institute.
(12) Fischer, H., & Ayturk, D. G.(2011). Residential Density(Liveable Communities) Market Perceptions. Adelaide:
Adelaide Thinkers in Residence program.
(13) Burke, T., & Hulse, K.(2010). The Institutional Structure of Housing and the Sub-prime Crisis: An Australian Case
Study. Housing Studies, 25(6), 821-838.
(14) Turner, J. F. C.(1976). Housing by people: towards autonomy in building environments. London : Marion Boyars.
(15) Rowley, S., & Phibbs, P.(2012). Delivering diverse and affordable housing on infill development sites Final Report no.
193. Melbourne: AHURI; Nathan, S.(2012). Melbourne Apartment Market V2.0. The Asian Executive, 6-11.
(16) Ibid; Kelly(2011) op. cit.; Newton, P. et.al. .(2011). Towards a new development model for housing regeneration in
greyfield residential precincts AHURI Final Report; no.171. Melbourne, Australia: AHURI
(17) Urbis.(2011). National Dwelling Cost Study.
(18) Keck, S.(2013). The Value of Good Design. Charter Insight, July 2013.
(19) Ibid; Birrell and Healy(2013) op. cit.
(20) Arthur, B.(1989). Competing technologies, increasing returns, and lock-in by historical events. The Economic Journal,
99, 116-131. p. 116.
(21) March, A.(2012). The Democratic Plan: Analysis and Diagnosis. Surrey: Ashgate.
(22)
Alves, T.(2006). Managing Medium Density Housing Development: A Municipal Case Study.(Doctor of Philosophy),
Swinburne University of Technology.
(23)
Burke, T.(2012). The Australian residential housing market: institutions and actors. In R. Tomlinson(Ed.), Australia’s
unintended cities(pp. 35-49). Collingwood: CSIRO.
(24) Franklin, B.(2006). Housing transformations. New York: Routledge.
