fishermans bend urban renewal area: options for …...j confidential olume fishermans bend urban...

July 2013 - CONFIDENTIAL

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Fishermans Bend Urban Renewal Area:

Options for Delivery of

Affordable Housing

9/AffordAble Housing options pAper (JuditH stubbs & AssociAtes)

Fishermans Bend - Final ReportFishermans Bend - Final Report - Background Documents

Table of Contents


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Figures


Maps

Tables


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7

Bob is aged in his eighties and lives alone in a bedsit in Inner Melbourne. The unit is at the lower end of the market, and he pays $230 per week in rent. While his wife was alive they received a substantially higher pension, but now that he is living alone he is struggling with the cost of living. He pays 50% of his income in rent, leaving him with a disposable weekly income of $235 per week. This is just enough to cover essentials, such as groceries, clothing and footwear, purchase and maintenance of furniture and medical expenses. Being quite old and frail, Bob requires help with some day-to-day activities, such as grocery shopping. However, some weeks he struggles to pay for the cost of transport to the supermarket, as well as to other activities that help him to keep socially connected. Bob’s family have been trying to convince him to go to a nursing home. However, a sense of independence is very important to Bob, though lately he has been beginning to feel quite overwhelmed with maintaining an independent lifestyle on his current income.

When commuting becomes too expensive or too hard on family life, they often change jobs. The economy loses skilled workers and there are fewer families and older people in the community, and the quality of community life drops for everyone.

Fact 4: One third of low and moderate households in Greater Melbourne (almost 300,000 households) are in housing stress, or at risk of after housing poverty.

Fact 5: In City of Melbourne housing stress is extremely high (42% of low and moderate households, mainly low income renters).

But what can government do?

To a large extent, the future of Fishermans Bend will depend on whether government actively seeks to create affordable housing in the area. It can do this through the planning system at little cost to government.

For example, it can require that Fishermans Bend include a proportion of genuinely affordable housing, created through a range of mechanisms that are used elsewhere in Australia and overseas.

Fact 6: Government has a stated objective to promote affordable housing. The SPPF has an objective ‘to deliver more affordable housing close to jobs, transport and services’. A purpose of Places Victoria is to ‘promote affordable housing… in the urban renewal projects’ (cl 7(1)) under the Urban Renewal Authority Act 2003, and has special powers in this regard. A range of mechanisms are possible under existing legislation and policy, though some would need relatively straightforward amendments to the SPPF and/or local planning schemes.

The fact that all of these planning mechanisms are likely to be economically feasible and equitable means that government can take quite strong action in Fishermans Bend.

Based on current data, levels of potential developer profit in Fishermans Bend are likely to be relatively high due to lower land values and Capital City Zoning, especially when there is planning certainty and provision of transport infrastructure. Some of this profit can be taken for affordable housing (in addition to conventional developer contributions) without necessarily adversely affecting development decisions.

6 Affordable Housing Delivery Options Paper (FBURA)

Tom and Anna are a young couple with two children. They work full time, Tom as a labourer and Anna as a clerical assistant. The children are cared for by Anna’s mother during the day. They earn around $75,000 each year and pay 44% of their income for mortgage payments on their two bedroom apartment in FBURA. They have a disposable income of $545 per week, $175 less than similar households spend on necessities. To make ends meet, Tom services their car, their furniture is old and they eat cheaply. The car is quite old and they cannot afford to repair it or buy another. They would like to sell it, but, while Anna walks to work, there is no public transport running to Tom’s workplace. They never eat out, and, since buying the apartment, they spend their holidays at home. They have no savings. Anna’s mother has recently fallen ill and can no longer look after the children. They cannot afford child care, and are planning to sell up, find other work and relocate to the western suburbs.

Executive Summary What will Fishermans Bend look like?

There are two futures for Fishermans Bend Urban Renewal Area.

In one, Fishermans Bend is home to higher income singles and couples who can afford the high price of an apartment there. Low and moderate income families will join the exodus from inner Melbourne to outer urban areas an hour’s commute away from family, friends and employment.

In the second future, Fishermans Bend is a vibrant, mixed community where people of diverse ages, incomes, family types and occupations live. They can walk to work or catch public transport and can choose whether or not they own a car, a major cost saving for such families.

The choice of future will depend on whether government actively seeks to create affordable housing in the area.

Fact 1: 99%1 of very low, low and moderate income renters and purchasers will be excluded from Fishermans Bend if there is no intervention.2

Fact 2: Very low, low and moderate income households make up 60% of households in Greater Melbourne (that is, households earning up to 120% of gross median household income).

Refer tables 5-3, 7-11 and 7-15, the market will meet 1.3% of demand for affordable housing.Very low, low and moderate income households earn up to 50%, 80% and 120% of gross median household income respectively.

Fact 3: Over 90% of people who work in commercial and industrial areas in inner Melbourne commute from outer suburbs

Why does it matter?

Anyone in the community could need affordable housing.

Without it, families are forced to sacrifice basic necessities like transport, heating, medication, clothing or even food. They have to move from areas where they have strong attachments and have contributed to the social fabric over many years.3

All case studies are hypothetical but based on data including current housing costs, actual earnings, taxation rates, ABS household expenditure survey, tax benefits and Centrelink payments.


9

Different options have been tested and modelled to make sure that a wide range of families can be accommodated in Fishermans Bend in the future.

The ability to include these groups always involves some form of benefit capture or housing levy on development and the use of various leveraging opportunities. Options modelled are cost neutral to government however use of public land could provide additional leveraging opportunities.

It is strongly preferred that affordable housing be created in perpetuity. Shared equity means that the first owner will not sell the home for a ‘windfall profit’. Ownership or management of discount market rental properties by a community housing provider means they will be retained as affordable rental. This will also increase leveraging opportunities on funds raised through planning mechanisms or the use of government land.

If 20% affordable housing were to be provided for in Fishermans Bend then 8,000 of the proposed 40,000 dwellings to be created could be rented or purchased by very low, low and moderate income households. The target groups making up the 8,000 dwellings (or 20% of dwellings) are set out in Table 2-5, with this table based on current housing stress data for Greater Melbourne. Using this target and breakdown, the following four options explore the delivery of affordable housing to different mixes of target groups at minimal cost to government using a range of methods, including market delivery, mandated dwelling size, assisted purchase (shared equity), discount market rent and social housing. In each case, the model is fully funded by a developer levy with the levy increasing as

affordable housing is provided to more difficult to house groups.

In a business as usual model, there is no levy and affordable housing will be provided to 1.3% of the affordable housing target group,5 with those housed being half of moderate income renters6 and 10% of smaller moderate income purchasers7 in studio and one bedroom apartments. All low and very low income and all family households are excluded.

In an intermediate affordable housing model, a levy of 3.6% of saleable floor area is required to fund the model and 44% of the target group is accommodated. Those housed include all moderate income households; all smaller low income purchasers and renters; half of low income family purchasers; and 40% of low income family renters.8

In a pragmatic mixed model, a levy of 5.0% of saleable floor area is required to fund the model and 56% of the target group is accommodated. Those housed are all moderate income households including family households; all smaller low income purchasers and renters; half of low income family purchasers; 40% of low income family renters;

9 and all very low income renters, with social housing provided at levels for greater Melbourne.

That is, 1.3% of the households as set out in table 2-5. That is, the households will have incomes in the top half of the moderate income household band. That is, the households will have incomes in the top 10% of the moderate income household band.That is, the households will have incomes in the top 40% of the low income household band.That is, the households will have incomes in the top 40% of the low income household band.


Jenna and Cameron are a young couple with one child. Cameron works full time in retail, and Jenna stacks shelves at a local supermarket five nights a week while Cameron cares for the baby. They earn $50,000 per year and pay 49% of their income on mortgage payments for their one bedroom apartment in FBURA, leaving them $510 per week. They cannot afford to own a car so they walk or use public transport. Jenna finds it scary walking home alone late at nights, but a taxi is out of the question. They would like to have another child, but it is quite crowded in their apartment and they really need something larger. If they rent in Hobson Bay rather than buying a place, Cameron can keep his job and they can make ends meet, but Jenna will need to find local work. They are not happy with this option, as they see owning an apartment as ‘getting ahead’. Cameron is looking for work in the western suburbs, and he and Jenna spend the weekends looking at house sale advertisements.

Alternatively, or in addition, if a scheme overlay constrains the height of apartment buildings beyond the current Capital City Zoning, there may be an opportunity to offer height or density bonuses in exchange for a contribution of 50% of additional profit toward the construction of affordable housing in perpetuity, should the developer chose to take up this incentive.

In addition, if government adds a subsidy in the form of land or funding, more low and moderate income families will be able to live in Fishermans Bend, especially where funds raised through the planning system or land contributions are leveraged to create additional housing.

Fact 7: Use of public land in FBURA for leveraging affordable housing can add affordable dwellings with no funding cost to government. Possible land includes car parking areas, green space and council depots.4

Why should government act to create affordable housing in FBURA?

Government action is the only way that low and moderate income families will be able to live in Fishermans Bend.

Very little social housing for very low income renters has been provided in Docklands, Southbank or Melbourne CBD over the past decade, despite major growth in dwelling supply. And virtually none of the stock created is affordable to low and moderate income families either.

There is a narrow ‘window of opportunity’ to capture benefit for use as affordable housing, Refer table 7-7 for preliminary assessment.

or to acquire land at lower market prices. Any action in the future to create affordable housing in FBURA will be far more expensive for government.

Fact 8: Given the early stage in the life of this project, there are still likely to be major opportunities to create affordable housing through a development contribution or levy on the uplift or additional development profit.

What are the options to create affordable housing in FBURA?

Four broad options have been investigated for government to consider and develop further.


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11

Opt

ions

for t

he d

eliv

ery

of A

fford

able

Hou

sing

in F

ishe

rman

s Ben

d12

O

ptio

n 1:

‘Bus

ines

s as

Usu

al’ M

odel

O

ptio

n 2:

‘Asp

iratio

nal A

fford

able

Ho

usin

g’ M

odel

O

ptio

n 3:

‘Pra

gmat

ic’ M

ixed

M

odel

O

ptio

n 4:

Inte

rmed

iate

Af

ford

able

Hou

sing

Mod

el

Desc

riptio

n

Mar

ket d

eliv

ery

with

out p

lann

ing

inte

rven

tion

to c

reat

e af

ford

able

hou

sing

20%

of t

otal

dw

ellin

gs (p

oten

tially

8,

000)

incl

udin

g m

arke

t del

iver

y,

man

datin

g siz

e/ty

pe, d

iscou

nt

mar

ket r

ent,

assis

ted

purc

hase

&

soci

al h

ousin

g, a

ssum

ing

hous

ing

need

for G

reat

er M

elbo

urne

, and

30

% o

f inc

ome

for h

ousin

g st

ress

Per O

ptio

n 2,

but

soci

al h

ousin

g at

Gre

ater

Mel

bour

ne a

vera

ge

(3.1

%),

and

’mix

ed’ h

ousin

g st

ress

th

resh

olds

(30

%, 3

5% a

nd 4

0% o

f in

com

e fo

r diff

eren

t gro

ups)

13

Per O

ptio

n 3,

but

exc

ludi

ng so

cial

ho

usin

g du

e to

the

high

subs

idie

s re

quire

d

% o

f tar

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com

mod

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14

1.3%

80

%15

56

%

44%

Targ

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s lik

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to

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ouse

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FBU

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Hous

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subs

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disc

ount

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f 70

%; m

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r pu

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12 M

odel

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a ra

nge

of d

eliv

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mec

hani

sms,

with

som

e af

ford

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sing

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ided

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via

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and

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visio

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soci

al h

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ent b

ased

on

25%

of i

ncom

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13 A

ll ve

ry lo

w in

com

e ho

useh

olds

: 30%

; All

fam

ily re

ntin

g ho

useh

olds

: 30%

; Low

and

mod

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com

e sm

all r

entin

g ho

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: 35%

; Low

and

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mily

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chas

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5%;

Low

and

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all p

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: 40%

. 14

Tar

get g

roup

s are

set o

ut in

tabl

e 2-

5.

15 T

hat i

s, th

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wou

ld s

till b

e 20

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tock

‘affo

rdab

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o ho

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from

targ

et g

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ome

targ

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to p

rovi

de th

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pth

of s

ubsid

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In an aspirational model, a levy of 9.0% of saleable floor area is required to fund the model and 80% of the target group is accommodated. Those housed are from all groups with the exclusion of half of low income family renters10 and half of very low income purchasers. 11 Social housing is provided at rates commensurate with demand for affordable housing by very low income households in Greater Melbourne.

That is, those low income family households provided for will have incomes in the top 50% of the low income household band. That is, those very low income purchasers housed will have incomes in the top 50% of the low income household band.


13

Part A: OPTIONS PAPER 1 Background 1.1 Aim of the Options Paper

1.2 Background to development of Options Paper

18 Presentation by Places Victoria, 13 May 2013 12

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

O

ptio

n 1:

‘Bus

ines

s as

Usu

al’ M

odel

O

ptio

n 2:

‘Asp

iratio

nal A

fford

able

Ho

usin

g’ M

odel

O

ptio

n 3:

‘Pra

gmat

ic’ M

ixed

M

odel

O

ptio

n 4:

Inte

rmed

iate

Af

ford

able

Hou

sing

Mod

el

allo

w a

cces

s for

all

targ

et g

roup

s

Broa

d de

liver

y m

etho

ds

cons

ider

ed (%

of a

ll ho

usin

g in

FBU

RA, t

hat i

s %

of 4

0,00

0 dw

ellin

gs)

Min

imal

in te

rms o

f ta

rget

gro

ups w

ithou

t ot

her i

nter

vent

ion

Mar

ket d

eliv

ery

(0.3

%);

Man

date

d dw

ellin

g siz

e (3

.8%

);16 A

ssist

ed

purc

hase

(6.5

%);

Disc

ount

mar

ket

rent

(2.7

%);

Soci

al h

ousin

g (6

.8%

)

Mar

ket d

eliv

ery

(1.5

%);

Man

date

d dw

ellin

g siz

e (6

.6%

); As

siste

d pu

rcha

se (5

.2%

); Di

scou

nt m

arke

t ren

t (3.

6%);

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al h

ousin

g (3

.1%

)

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ket d

eliv

ery

(1.8

%);

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date

d dw

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g siz

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.8%

); As

siste

d pu

rcha

se (6

.2%

); Di

scou

nt m

arke

t ren

t (4.

2%)

Levy

requ

ired17

N

il 9%

of s

alea

ble

floor

are

a 5.

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f sal

eabl

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or a

rea

3.6%

of s

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are

a Co

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s N

il Ba

sed

on c

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ata,

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like

ly

to b

e ab

le to

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mm

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ed

with

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to g

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il

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ould

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by u

se o

f pu

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for d

evel

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of so

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unity

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, th

en c

ost t

o go

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men

t will

be

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imal

and

will

be

the

cost

of

adm

inist

ratio

n.

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levy

cou

ld b

e re

duce

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use

of

pub

lic la

nd fo

r dev

elop

men

t an

d so

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or a

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ndin

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al

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ndin

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, th

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imal

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16M

odel

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base

d on

50:

50 st

udio

s and

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ents

; and

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o be

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oom

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. Re

fer t

able

s 7-1

5, 1

6 an

d 17

for d

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17 T

he le

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cost

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term

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educ

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.


vo

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15


1.3 The Study Area

19 Review of internal working documents, May 2013 20 Presentation by Places Victoria, 13 May 2013 21 Presentation by Places Victoria, 13 May 2013


17

Map

1-2

: St

ate

Subu

rbs,

Stat

istic

al A

rea

2 an

d LG

As fo

r dem

ogra

phic

and

mar

ket a

naly

sis

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ce: J

SA 2

013,

usin

g da

ta fr

om A

BS C

ensu

s of P

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atio

n an

d Ho

usin

g 20

11

16

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Map

1-1

: Re

leva

nt S

tatis

tical

Are

a 2

for d

emog

raph

ic a

nd m

arke

t ana

lysis

So

urce

: JSA

201

3, u

sing

data

from

ABS

Cen

sus o

f Pop

ulat

ion

and

Hous

ing

2011


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19

2 Affordable Housing in the Greater Melbourne Context: a rationale for intervention

2.1 Overview

2.2 What is ‘Affordable Housing’?

2.2.1 Definition

22 The income benchmarks for very low, low and moderate income households used in this report differ from those used by the City of Melbourne in their report Future Living, although the overall ranges are generally consistent. City of Melbourne’s middle income earners are similar to low and moderate income households as defined in this report, and City of Melbourne’s low income households are similar to very low income households as defined in this report.


1.4 Format of the Options Paper


21

2.2.2 Aspirational benchmarks

Table 2-1: Relevant Affordable Housing Benchmarks for Greater Melbourne (1)

Very low-income household

Low-income household

Moderate-income household

Income Benchmark <50% of Gross Median

H/H Income for Greater Melbourne

50-80% of Gross Median H/H Income for

Greater Melbourne

80%-120% of Gross Median H/H Income for

Greater Melbourne

Weekly Income Range (Annual household income) (2)

<$682 p/wk ($0-$35,000 pa)

$683-$1,089 p/wk ($35,000-$57,000 pa)

$1,090-$1,634 p/wk ($57,000-$85,000 pa)

Affordable Rental Benchmarks (3) <$204 $205-$326 $327-$490

Affordable Purchase Benchmarks (4) <$177,500 $177,500 - $283,750 $283,750 - $426,250

Source: JSA 2012, based on data from ABS (2011) Census indexed to December 2012 dollars (TABLE NOTES FOOTNOTED)30

28 See reference in Places Victoria (2012) Project Afford: Leading the Innovative Delivery of More Affordable Infill Housing for Victorians, p. 2, where ‘Low Income’ is defined as households that earn up to 80% of gross median household income for Melbourne metropolitan area; and ‘Moderate Income’ is defined as households that earn between 80 and 120% of gross median household income for the Melbourne metropolitan area. 29 See, for example Places, Victoria (2013) FBURA Draft Affordable Housing Discussion Paper, which contains proposed definitions and benchmarks for ‘Affordable Rental Housing’ as ‘housing that is made available for rent for those households on low and moderate incomes who are unable to afford to rent on the open market’, and ‘Affordable Purchase Housing as ‘housing that is made available to purchase for those households on moderate incomes who are restricted in their ability to purchase on the open market’, with relevant benchmarks proposed as in accordance with definitions adopted by Federal and Victorian State Planning, Local Government and Housing Ministers in 2005. 30 (1) All values reported are in December 2012 dollars, and assumes that household will pay no more than 30% in rent or mortgage repayments; (2) Gross weekly household income; (3) Calculated as 30% of gross household income; (4) Assumes a current interest rate of 6.25% assuming a 20% deposit for a 30 year ANZ Standard Variable Home Loan.


23 In accordance with good practice, and with Places Victoria (2012) Project Afford: Leading the Innovative Delivery of More Affordable Infill Housing for Victorians, p. 2. 24 See for example Yates, J. 2007. Housing Affordability and Financial Stress, AHURI Sydney University, who notes that, often ‘housing stress’ is defined by the 30-40 rule, that is, that a low income household (in the lowest 40% of household income) will pay no more than 30% of its gross income on housing costs. This broad rule of thumb is often extended to the low to moderate income groups as defined under NSW State Environmental Planning Policy No 70 (Affordable Housing). 25 See for example Yates, J. 2007. Housing Affordability and Financial Stress, AHURI Sydney University. 26 See for example Flood, J. 2012. ‘Housing Stress: Keep or discard? Presentation to 6th Australasian Housing Researchers Conference, 8-10 February 2012, Adelaide, South Australia 27 For Example, the Environmental Planning and Assessment Act 1979 (NSW) defines ‘Affordable Housing’ and establishes benchmarks for ‘very low’, ‘low’, and ‘moderate income’ households in Environmental Planning Policy No 70 (Affordable Housing). These are consistent with relevant research and literature, and these benchmarks have been adopted for the purpose of this Options Paper.,


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2.3 What are the types of ‘Affordable Housing’?

Table 2-2: Types of Affordable Rental Housing

32 See Section 7 below.


2.2.3 Benchmarks used for sensitivity analysis

31 See for example Gleeson, B. and Randolph, B. (2002) ‘Social disadvantage and planning in the Sydney Context’, Urban Policy and Research Vol 20(1) pp101-107; and Kellett, J. Morrissey, J. and Karuppannan, S. 2012. ‘The Impact of Location on Housing Affordability’, Presentation to 6th Australasian Housing Researchers Conference, 8-10 February 2012, Adelaide, South Australia


25

Table 2-3: Types of Affordable Purchase Housing

33 Consumer protection agencies, such as NSW Fair Trading, publish warnings against such schemes where they are operated privately (as distinct from schemes offered by a social housing provider). 34 See for example Crabtree, Blunden et al (2013) The Australian Community Land Trust Manual, UWS and UNSW.


Source: JSA 2011 derived from various sourcesis co


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2.5 Why would Victorian State Government support the creation of ‘affordable housing’ in FBURA?

2.5.1 Affordable Housing is a Policy Objective Legislative support for affordable housing

35 See for example Carstens v Pittwater Council (1999) 111 LGERA 1, 25; and BGP Properties Pty Ltd v Lake Macquarie City Council (2004) 138 LGERA 237 at [113]. 36 Clause 16.01-5 Housing Affordability 37 Under s60(1A)(a) of the Planning and Environment Act 1987 (Vic) 38 Under s173(1)of the Planning and Environment Act 1987 (Vic) a responsible authority may enter into an agreement with an owner of land in the area covered by a planning scheme for which it is a responsible authority. 39 Under s174(2)(b) of the Planning and Environment Act 1987 (Vic) 40 Under s174(2)(c)(i) and (ii) of the Planning and Environment Act 1987 (Vic)


Source: JSA 2011, derived from various sources.

2.4 What principles should apply to ‘Affordable Housing’?


29

of development contributions in the form of a levy of a percentage of the proposed cost of carrying out development or any class of development’. Further, the Minister will determine what part (if any) a development contribution will be ‘for the provision of infrastructure by a council’ (s94EE(3A)). It is noted that, in determining the level and nature of contributions, the Minister will, as far as practicable make the contribution ‘reasonable with regard to the cost’ of infrastructure in relation to the development (s94EE(2)(a)). 47 Biruu Australia(2008), Advice on the Issues of the Inner Region Affordable Housing Overlay; and SGS Economics and Planning (2007) An Affordable Housing Overlay in the VPP – Implementation Model for Melbourne’s Inner Urban Region.


41 Carstens v Pittwater Council (1999) 111 LGERA 1, 25; and BGP Properties Pty Ltd v Lake Macquarie City Council (2004) 138 LGERA 237 at [113]. 42 For example, in NSW, SEPP 70 Affordable Housing (Revised Schemes) (SEPP 70) amends relevant local and regional environmental planning instruments to enable the levying of development contributions to provide for affordable housing. However, the provisions of s94F and s94G are operationalised and limited in practice by SEPP 70, which applies to a very limited number of housing schemes including Ultimo-Pyrmont, Willoughby and Green Square, and to only three council areas – Sydney, Leichhardt and Willoughby Councils. This would appear to preclude other councils from imposing a mandatory levy, at least under s94F and s94G, although some councils have done so unchallenged. 43 Under the Act, a responsible authority must consider: 60(1)(a) The relevant planning scheme; …and may consider 60(1A)(g) any other strategic plan, policy statement, code or guideline which has been adopted by a Minister, government department, public authority or municipal council; 44 Advice for Victorian Government Solicitor on developing a Contributions Plan for Low Cost Housing by City of Melbourne, letter dated 30 June 1997 raises issues related to its proper consideration as a form of ‘community infrastructure’ or ‘works and services’. 45 The ability to make voluntary planning agreements, including in relation to ‘affordable housing’ as a ‘public purpose’ under s 93F of the Environmental Planning and Assessment Act 1979 (NSW) 46 There is be scope under more recent provisions of the Environmental Planning and Assessment Act 1979 (NSW) to levy a contribution for affordable housing where nexus between the development or class of development and increased demand for affordable housing (as a form of ‘special infrastructure)’ is demonstrated, and where there is reasonableness in the assessment of the level of contribution levied. This includes contributions to ‘affordable housing’ in ‘special contributions areas’, and outside of them, at the discretion of the Minister (noting that Warnervale Town Centre is listed as a Special Contributions Area in Schedule 5A). This includes the provision, extension and augmentation of (or the recoupment of the cost of providing, extending or augmenting) public amenities or public services, affordable housing and transport or other infrastructure relating to land; and the funding of recurrent expenditure in relation to the above, or any studies or other support required (s94ED). Such contributions are not limited to land within a ‘special contributions area’, although such contributions are not to be required unless the provision of infrastructure ‘arises as a result of the development or class of development of which the development forms part’ (s94EE(2)(c)). Reasonable discretion also appears to be provided for in s94EE(3), which states that, despite the limitations of other provisions, ‘the Minister may…determine the level and nature


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Support by Relevant Local Authorities for Affordable Housing

48 See for example City of Port Phillip Municipal Strategic Statement, cl 16 Housing, in particular cl 16.01.5 Housing Affordability

49 See http://www.portphillip.vic.gov.au/amendment-c102.htm

50 City of Port Phillip, Housing Strategy 2007-2017 sets out Council’s vision for housing in the municipality as, ‘To direct residential growth to locations which offer the greatest access to shops, public transport and other services, and provide housing diversity by facilitating the development of affordable, accessible and suitable housing which meets the needs of all current and future residents, including the disadvantaged and those who are unable to adequately access the private housing market’.


Table 2-4 Potential Affordable Housing Mechanisms and Strategies under the Urban Renewal Authority Victoria Act 2003 (Vic) Places Victoria could: Relevant clause in the Act

Acquire land through purchase, consolidation, transfer, or otherwise that could then be developed for mixed use and include a minimum % of affordable housing

Part 2 Division 2 part 7 Functions (1) (a);

8 Powers of the Authority

Enter into a joint venture that will develop an innovative urban model of housing providing outcomes that are economically feasible and that contribute to sustaining a socially mixed environment

Part 2, 12 , Authority to enter into joint ventures etc

Establish an Affordable Housing Trust to collect and manage funds that could then be applied to the delivery of affordable housing, or contribute to an already established Trust (e.g. COPP)

Part 2, 12 , Authority to enter into joint ventures etc

Carry out a model development that demonstrates best practice in the delivery of housing diversity. The model would provide a mixed model of housing delivering a desired percentage of affordable housing whilst retaining economic feasibility.

Part 2 Division 2 part 7 Functions (1) (d)

Provide a consultancy service to developers who may have an interest in providing socially and economically sustainable housing

Part 2: Division 2 part 7 Functions (1) (d), (e), ( f), (g)

Enter into a reciprocal arrangement with public authorities that may hold assets in FBURA to apply these assets towards innovative housing that will promote social sustainability

Part 2: 13 Reciprocal arrangements with public sector agencies

Acquire land from public authorities (including any unalienated land) and contribute this to an Affordable Housing Trust (see above) to develop model affordable housing projects

Part 2: 14 Grant of Land to the authority

Part 3: Division2 – Obtaining land

Raise funds through charges on the owners, occupiers, or licensees of properties in the project area for the supply of services provided by or by agreement with the Authority where the service is the affordable housing that is needed to protect the social sustainability of the FBURA(subject to the recommendation of the Minister and approval of the Treasurer.

Part 3 -Subdivision 2 – General charges - 51F

Exempt a private development from duties, taxes, fees or charges in exchange for the delivery of an agreed percentage of dwellings as affordable housing

Part 3 Division 6 – Other Powers; 52 – exemption from duty, rates taxes or charges

Use the powers provided by the Act over transport corridors to consider the use of closed or removed roads, or the airspace over rail transport corridors, to provide opportunities for affordable housing

Part 3 Division 6 – Other Powers, 53 Transport Facilities; 54 Closing roads

Source: JSA derived from various sources and the Urban Renewal Authority Victoria Act 2003


33

Support for Affordable Housing by Places Victoria

54 Victorian State Government (2012) Discussion Paper, Melbourne, let's talk about the future, pgs. 35-36, noting that across Melbourne, just 0.3 per cent of one bedroom dwellings let in the March 2012 quarter were affordable (ie. no more than 30 per cent of gross income spent on rent) to a single person on Centrelink payments.. 55 Victorian State Government (2012) Discussion Paper, Melbourne, let's talk about the future, pgs. 35-36. 56 Victorian State Government (2012) Discussion Paper, Melbourne, let's talk about the future, p. 26. 57 Victorian State Government (2012) Discussion Paper, Melbourne, let's talk about the future, pgs. 36-38. 58 Victorian State Government (2012) Discussion Paper, Melbourne, let's talk about the future, p. 36. 59 Department of Premier and Cabinet (2013)


Support for Affordable Housing in Regional Strategic Plans

51 City of Melbourne (2013), Chapter 4: Housing Affordability 52 Workshop with staff of City of Melbourne and City of Port Phillip, 23 May 2013 53 For example, as provided for in cl 41 of City of Port Phillip LPS, which notes that, ‘If an overlay is shown on the planning scheme map, the provisions of the overlay apply in addition to the provisions of the zone and any other provision of this scheme. Because a permit can be granted does not im ply that a permit should or will be granted. The responsible authority must decide whether the proposal will produce acceptable outcomes in terms of the State Planning Policy Framework, the Local Planning Policy Framework, the purpose and decision guide lines of the overlay and any of the other decision guidelines in Clause 65’.


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63 Rental supplements to low income tenants 64 Gurran, N. and Whitehead, C. 2011. ‘Planning and Affordable Housing in Australia and the UK: A Comparative Perspective’, in Housing Studies, Vol. 26, Nos. 7-8, 1193-1214


The funding environment will not result in sufficient affordable housing

60 Darcy, M. and Stubbs, J. 2005. ‘Housing and Contemporary Social Work Practice’, in Alston, M. & McKinnon, J. (eds) Social Work Fields of Practice, Oxford University Press, UK. 61 Burke, T. and Hulse, K. 2010. ‘The Institutional Structure of Housing and the Sub-prime Crisis: An Australian Case Study’, in Housing Studies, Vol. 2. No. 6, 821-838, November 2010 62 See for example Stilwell, F. and Primrose, D. 2010. ‘Economic Stimulus and Restructuring: Infrastructure, Green Jobs ad Spatial Impacts’, in Urban Policy and Research, Vol. 28, No. 1, 5-25, March 2010


37

Implications for Potential Affordable Housing Targets


2.5.2 Extent and Nature of Affordable Housing Need

Figure 2-1: Housing Stress by Income and Tenure – Greater Melbourne (All households) Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder)

Figure 2-2: Housing Stress among Relevant Target Groups – Greater Melbourne (Renting and Purchasing Households) Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder)


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2.5.3 Likely exclusion of key target groups from FBURA based on the evidence

Overview

An expensive local housing market


TOTAL DWELLINGS RENTAL/PURCHASE BREAKDOWN

DWELLING SIZE BREAKDOWN65

HOUSEHOLD INCOME BREAKDOWN

Total 8,000 Dwellings

Rental 55%

4,400 Dwellings

Smaller Dwellings 27.5%

2,200 Dwellings

Very Low Income 18.5%

1,500 Dwellings

Low Income 7%

600 Dwellings

Moderate Income 2%

100 Dwellings

Larger Dwellings 27.5%

2,200 Dwellings


1,200 Dwellings

Low Income 9%

700 Dwellings

Moderate Income 3%

300 Dwellings

Purchase 45%

3,600 Dwellings


1,400 Dwellings


400 Dwellings

Low Income 6%

500 Dwellings

Moderate Income 6.5%

500 Dwellings


2,200 Dwellings


600 Dwellings

Low Income 9%

700 Dwellings

Moderate Income 11%

900 Dwellings

Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder)

65Smaller dwellings are those suitable for single person and couple households (typically studio and one bedroom), larger dwellings are those suitable for other households (typically two bedroom and greater).


41

Table 2-6: Changes in Social Housing Supply in Proxy SA2s 2001-2011 Social Housing 2001 2006 2011

Docklands (SA2) Number 0 6 60

Docklands (SA2) % of occupied private dwellings 0.0% 0.3% 2.2%

Melbourne (SA2) Number 133 108 150

Melbourne (SA2) % of occupied private dwellings 3.5% 1.7% 1.6%

Southbank (SA2) Number 3 7 10

Southbank (SA2) % of occupied private dwellings 0.2% 0.2% 0.2%

Source: JSA 2013, using data from ABS Census of Population and Housing 2001, 2006, 2011 (Time Series Profile, Place of Enumeration)

Mobility trends indicate a need to encourage social inclusion


Social housing not keeping pace with dwelling increase


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Most target groups excluded from FBURA on current trends


Table 2-7: Total commuters by selected SA2s and LGAs

Area People who live and work in the area

People who commute into the area

People who commute out of the area

Docklands SA2 605 31,407 2,562

Melbourne SA2 4,378 181,543 4,693

Southbank SA2 1,003 32,945 5,501

Port Melbourne SA2 926 2,844 6,947

South Melbourne SA2 822 20,176 4,152

Melbourne (C) 27,913 331,772 17,718

Port Phillip (C) 11,843 52,013 39,442

Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Work)


45

Economic Analysis Supports a Range of Mechanisms and Strategies


2.5.4 Strong Market Intervention is Effective and Economically Feasible

Market provision of affordable housing possible but limited


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Hypothetical Case Studies

Overview

Tom and Anna (a ‘Moderate Income Household’) – FBURA

66 Median price from quartile sales data. 67 ABS Household expenditure survey (includes $170 vehicle operating costs). 68 Figure includes rates, insurance, repairs, domestic fuel and power, food and non-alcoholic beverages, clothing and footwear, household furnishings and equipment, household services and operation, medical care and health expenses, personal care, miscellaneous goods and transport costs. The figure excludes alcoholic beverages, tobacco products and recreation.


2.5.5 ‘Affordable Housing’ could affect anyone in the community Overview


49

Arthur and Denise (a ‘Low / Very-Low Income Household’) – FBURA

71 Median combined balance for ages 65-69, ABS 4125.0. 72 Assumes rate of return equivalent to inflation. 73 Figure includes domestic fuel and power, food and non-alcoholic beverages, clothing and footwear, household furnishings and equipment, household services and operation, medical care and health expenses, personal care and miscellaneous goods. The figure excludes home ownership costs, alcoholic beverages, tobacco products, recreation and transport costs.


Jenna and Cameron (a ‘Low Income Household’) – FBURA

69 ABS Household expenditure survey 70 Figure includes rates, insurance, repairs, domestic fuel and power, food and non-alcoholic beverages, clothing and footwear, household furnishings and equipment, household services and operation, medical care and health expenses, personal care and miscellaneous goods. The figure excludes alcoholic beverages, tobacco products, recreation and transport costs.


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Alistair and Kate (a ‘Low Income Household’) – Inner Melbourne

Bob (a ‘Very Low Income Household’) – Inner Melbourne

80 Victorian Department of Human Services, Rental Report Data Tables, September Quarter 2012. 81 Administrative assistant jobs advertised on www.seek.com.au on 20 May 2013. 82 ABS Household Expenditure Survey 2009-10 – Household with Second Quintile Gross Weekly Household Income for Victoria (average $779 per week):

Groceries: an average of $105 per week. Clothing and footwear: $25 per week. Household furnishings and equipment: $40 per week. Household services and operation: $50 per week. Domestic power and fuel: $35 per week. Medical expenses: $35 per week. Personal care: $15 per week. Miscellaneous goods and services: $75 per week.

83 Victorian Department of Human Services, Rental Report Data Tables, September Quarter 2012. 84 JSA calculation, based on data from ABS Census of Population and Housing 2011. 85 http://www.superguide.com.au/how-super-works/age-pension-rates


Vivien and James (a ‘Moderate Income Household’) – Inner Melbourne

74 Including costs of home ownership 75 Victorian Department of Education and Early Childhood Development – Pay Rate for Accomplished Teacher (Level A-4), effective from 1 January 2012. 76 Victorian Department of Human Services, Rental Report Data Tables, September Quarter 2012. 77 ABS Household Expenditure Survey 2009-10 – Household with Third Quintile Gross Weekly Household Income for Victoria (average $1,333 per week):

Groceries: an average of $140 per week. Clothing and footwear: $45 per week. Household furnishings and equipment: $45 per week. Household services and operation: $60 per week. Domestic power and fuel: $40 per week. Medical expenses: $50 per week. Personal care: $20 per week.

78 JSA calculations, based on median sale prices published by the Victorian Department of Sustainability and Environment (September Quarter 2012) and data from RPData, properties sold in Docklands, Port Melbourne, South Melbourne and Southbank between 20 April 2012 and 19 April 2013. 79 Calculated by JSA using www.infochoice.com.au ‘Home Loan Calculator’.


53

3 Options for creation of Affordable Housing in FBURA

3.1 Overview

3.2 Mechanisms and Strategies Available to Retain or Create Affordable Housing

3.2.1 A range of mechanisms and strategies are needed


86 http://www.humanservices.gov.au/customer/enablers/centrelink/rent-assistance/payment-rates 87 ABS Household Expenditure Survey 2009-10 – Household with First Quintile Gross Weekly Household Income for Victoria (average $391 per week):

Groceries: an average of $85 per week. Clothing and footwear: $15 per week. Household furnishings and equipment: $25 per week. Household services and operation: $30 per week. Domestic power and fuel: $25 per week. Medical expenses: $35 per week. Personal care: $10 per week.


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sted

as ‘

perm

it no

t req

uire

d’

unde

r Sch

edul

e 1.

‘Ac

com

mod

atio

n’ c

ould

be

tran

sfer

red

into

Sec

tion

2 (r

equi

ring

a pe

rmit)

, and

‘A

ccom

mod

atio

n in

clud

ing

x% o

f affo

rdab

le h

ousin

g’

(as s

peci

fied

in a

rela

ted

polic

y or

sche

dule

) cou

ld b

e lis

ted

in S

ectio

n 1.

Thi

s cou

ld p

rovi

ding

an

ince

ntiv

e fo

r app

licat

ions

whi

ch p

rovi

de th

e re

quire

d co

mpo

nent

of a

fford

able

hou

sing

in F

BURA

pre

cinc

ts.

In th

e ev

ent o

f unc

onst

rain

ed h

eigh

t con

stra

ints

, de

velo

pmen

t cou

ld b

e st

ruct

ured

to su

ppor

t the

im

post

thro

ugh

addi

tiona

l hei

ght.

A po

licy

coul

d pr

ovid

e fo

r an

equi

vale

nt c

ash

or la

nd

cont

ribut

ion

(on

or o

ff sit

e), a

nd w

ould

pro

vide

for

Stre

amlin

ing

of a

ppro

vals

proc

ess t

o re

duce

tim

e co

uld

be a

n ef

fect

ive

ince

ntiv

e fo

r the

cre

atio

n of

affo

rdab

le

hous

ing

with

in th

e Ca

pita

l City

Zon

e. H

owev

er, t

his m

ay

be se

en to

wor

k ag

ains

t the

inte

ntio

n of

the

Capi

tal C

ity

Zone

to p

rovi

de fo

r a m

ore

liber

al a

ppro

vals

regi

me

incl

udin

g fo

r acc

omm

odat

ion.

JSA’

s ana

lysis

indi

cate

s tha

t sig

nific

ant p

rofit

is o

btai

ned

from

eac

h ad

ditio

nal f

loor

, so

that

a m

ore

liber

al

appr

oval

s pro

cess

whe

re a

dem

onst

rate

d Af

ford

able

Ho

usin

g ou

tcom

e is

achi

eved

cou

ld b

e qu

ite b

enef

icia

l (s

ee T

able

3.2

bel

ow).

√

58

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

etc

resu

lting

in a

fford

able

hou

sing

at

spec

ified

pric

e po

ints

)

√

FACI

LITA

TIVE

INTE

RVEN

TIO

N:

Incl

ude

affo

rdab

le h

ousin

g ob

ject

ives

, def

initi

ons,

ben

chm

arks

an

d ta

rget

s or K

PIs i

n re

leva

nt E

PIs,

po

licie

s and

pla

ns

Incl

ude

in S

truc

ture

Pla

n or

sim

ilar f

or F

BURA

(as a

w

hole

or p

reci

ncts

), an

d op

erat

iona

lise

for e

xam

ple

thro

ugh

amen

dmen

t to

LPS,

and

/or t

o SP

PF [f

or

exam

ple,

a c

lear

er d

efin

ition

, ben

chm

arks

, tar

get

grou

ps in

cl 1

6.01

]. Le

gal w

ith m

inist

eria

l app

rova

l for

re

leva

nt a

men

dmen

ts a

nd li

kely

requ

ired

to su

ppor

t a

Stru

ctur

e Pl

an o

r sim

ilar.

Shou

ld b

e su

ppor

ted

by a

po

licy

for t

rans

pare

ncy

and

cons

isten

cy. O

ther

m

echa

nism

s to

achi

eve

KPIs

/ tar

gets

are

disc

usse

d be

low

.

Impo

rtan

t, an

d ef

fect

ive

if in

clud

ed in

env

ironm

enta

l pl

anni

ng in

stru

men

ts, p

olic

ies o

r pla

ns th

at h

ave

lega

l fo

rce,

and

pre

fera

bly

supp

orte

d by

spec

ific

mec

hani

sms

√

Libe

ralis

e pe

rmiss

ibili

ty /r

emov

e im

pedi

men

ts fr

om L

PS, p

olic

ies,

co

ntro

ls (e

.g. z

onin

g th

at c

onst

rain

s di

vers

ity, c

ontr

ols t

hat i

ncre

ase

cost

) No

lega

l con

stra

ints

- th

e Ca

pita

l City

Zon

e pr

ovid

es

for a

libe

ral a

ppro

ach

to zo

ning

, and

a p

relim

inar

y au

dit s

how

s no

signi

fican

t bar

riers

, apa

rt fr

om

pote

ntia

l to

dela

y de

velo

pmen

t thr

ough

the

mer

its

asse

ssm

ent p

roce

ss, a

nd d

epen

ding

on

wha

t con

trol

s ar

e ul

timat

ely

over

laye

d on

FBU

RA.

Impo

rtan

t in

open

ing

up d

iver

sity

but o

f lim

ited

utili

ty

due

to li

bera

l nat

ure

of th

e Ca

pita

l City

Zon

e, a

nd th

e fa

ct th

at ‘d

iver

sity’

doe

s not

equ

al ‘a

fford

abili

ty’ f

or

mos

t tar

get g

roup

s.

?

Ince

ntiv

es to

incr

ease

dev

elop

able

ar

ea (r

elax

atio

n of

con

trol

s, e

tc)

invo

lvin

g de

nsity

or h

eigh

t bon

us in

ex

chan

ge fo

r a 5

0% sh

are

of

No

appa

rent

lega

l con

stra

ints

, tho

ugh

this

wou

ld li

kely

ne

ed m

inist

eria

l app

rova

l for

app

licat

ion

gene

rally

or

to h

igh

valu

e pr

ecin

cts.

Mec

hani

sm c

ould

be

oper

atio

nalis

ed th

roug

h an

am

endm

ent t

o LP

S

Mor

e co

nven

tiona

l app

roac

hes a

re u

nlik

ely

to b

e ef

fect

ive

in th

e Ca

pita

l City

Zon

e un

less

ther

e is

an

over

lay

of m

ore

rest

rictiv

e co

ntro

ls ov

er p

art o

r all

of th

e sit

e. W

hilst

art

ifici

al c

onst

rain

ts c

ould

be

impo

sed

on


6

1

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

for P

lace

s Vic

toria

/the

Vic

toria

n St

ate

Gove

rnm

ent t

o se

ek su

ch a

gree

men

ts p

roac

tivel

y in

rela

tion

to

indi

vidu

al la

rge

sites

to p

rovi

de p

lann

ing

cert

aint

y or

ot

her b

enef

it in

exc

hang

e fo

r the

cre

atio

n of

af

ford

able

hou

sing.

Aga

in, i

t is p

refe

rabl

e th

at th

is is

supp

orte

d by

a p

olic

y or

pla

n to

ens

ure

tran

spar

ency

an

d ac

coun

tabi

lity.

secu

re a

fford

able

hou

sing

in p

erpe

tuity

.

MAN

DATO

RY IN

TERV

ENTI

ON

Incl

usio

nary

app

roac

hes t

hat

spec

ify a

% o

f affo

rdab

le h

ousin

g (in

th

is ca

se, 2

0%) b

e pr

ovid

ed a

cros

s th

e w

hole

are

a, o

r spe

cifie

d pr

ecin

cts/

sites

:

Th

roug

h on

e m

echa

nism

, or

Th

roug

h a

rang

e of

mec

hani

sms

and

fund

ing

stra

tegi

es (a

s fa

vour

ed in

this

case

) .

No

appa

rent

lega

l con

stra

ints

to a

n in

clus

iona

ry

appr

oach

, tho

ugh

amen

dmen

ts m

ay b

e re

quire

d in

LP

S an

d/or

VPP

/SPP

F fo

r som

e m

echa

nism

s.

For e

xam

ple,

a S

truc

ture

Pla

n or

sim

ilar c

ould

requ

ire

20%

affo

rdab

le h

ousin

g at

spec

ified

ben

chm

arks

/ dw

ellin

g ty

pes a

nd te

nure

s for

a re

leva

nt ta

rget

gro

up

mix

, with

targ

ets,

KPI

s and

a su

ite o

f rel

ated

m

echa

nism

s req

uire

d to

ach

ieve

this

also

spec

ified

. Am

endm

ents

to L

PS a

nd/o

r the

SPP

F w

ould

be

need

ed to

the

exte

nt th

ey a

re re

quire

d to

supp

ort

mec

hani

sms s

peci

fied

(e.g

. man

dato

ry m

echa

nism

s se

t out

bel

ow),

and

to e

nsur

e th

e St

ruct

ure

Plan

has

le

gal f

orce

.

This

coul

d be

ach

ieve

d th

roug

h an

affo

rdab

le h

ousin

g ov

erla

y fo

r FBU

RA th

at sp

ecifi

es th

e re

quire

men

ts fo

r af

ford

able

hou

sing,

rele

vant

mec

hani

sms,

etc

,

√

60

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

tran

spar

ency

in d

ecisi

on m

akin

g.

No

appa

rent

lega

l con

stra

ints

, tho

ugh

this

wou

ld li

kely

ne

ed m

inist

eria

l app

rova

l to

amen

d LP

S, fo

r exa

mpl

e Sc

hedu

les 1

and

2 o

f the

Cap

ital C

ity Z

one.

(Cou

ld a

lso b

e im

plem

ente

d to

supp

ort m

anda

tory

m

echa

nism

s –se

e be

low

).

Ince

ntiv

es to

incr

ease

dw

ellin

g di

vers

ity /r

educ

e co

st

No

appa

rent

lega

l con

stra

ints

due

to th

e Ca

pita

l City

Zo

ne.

This

mec

hani

sm is

effe

ctiv

e in

mar

kets

whe

re c

ontr

ols

have

the

delib

erat

e or

uni

nten

ded

cons

eque

nce

of

cons

trai

ning

the

deve

lopm

ent o

f sm

alle

r dw

ellin

gs.

How

ever

, it i

s lar

gely

redu

ndan

t in

the

Capi

tal C

ity Z

one

and

the

mar

ket a

ppea

rs to

be

prov

idin

g sm

alle

r dw

ellin

gs, t

houg

h th

ese

are

not a

fford

able

to m

ost

targ

et g

roup

s with

out a

subs

idy.

?

Ente

ring

into

Pla

nnin

g Ag

reem

ents

un

der s

ectio

n 17

3 o

f the

Act

Lega

l mec

hani

sm fo

r neg

otia

ting

a pl

anni

ng

agre

emen

t, w

hich

cou

ld b

e ne

gotia

ted

with

rega

rd to

se

curin

g af

ford

able

hou

sing.

The

y w

ould

nor

mal

ly b

e en

tere

d in

to v

olun

taril

y as

par

t of t

he re

zoni

ng o

r de

velo

pmen

t app

licat

ion

proc

ess,

so le

gal a

dvic

e w

ould

be

requ

ired

rega

rdin

g th

e se

curin

g of

af

ford

able

hou

sing

as p

art o

f man

dato

ry m

echa

nism

s di

scus

sed

belo

w.

How

ever

, the

re w

ould

app

ear t

o be

an

oppo

rtun

ity

The

rezo

ning

to C

apita

l City

Zon

e of

the

who

le F

BURA

sit

e w

ell i

n ad

vanc

e of

stru

ctur

e pl

anni

ng o

r in

fras

truc

ture

pro

visio

n is

likel

y to

hav

e m

eant

a lo

ss o

f le

vera

ge b

y th

e re

leva

nt a

utho

rity

in n

egot

iatin

g su

ch

agre

emen

ts.

Non

ethe

less

, the

ir pr

oact

ive

use

on la

rge

sites

(whe

re

ther

e m

ay b

e ot

her a

dvan

tage

s to

the

owne

r) o

r to

secu

re m

anda

tory

con

trib

utio

ns if

this

can

be le

gally

ac

hiev

ed is

like

ly to

be

an e

ffect

ive

mec

hani

sms t

o

?


vo

lu

me

3

6

3

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

levy

in a

dditi

on to

con

vent

iona

l dev

elop

men

t co

ntrib

utio

ns.

th

e hi

ghes

t affo

rdab

le h

ousin

g yi

eld

of a

ny fu

ndin

g st

rate

gy a

vaila

ble

in th

e FB

URA

con

text

.

Affo

rdab

le H

ousi

ng L

evy

(e.g

. flo

or

spac

e or

equ

ival

ent u

nit)

acr

oss

FBU

RA o

r pre

cinc

ts (e

.g. u

nder

the

Urba

n Re

new

al A

utho

rity

Act 2

003)

A ke

y co

mpo

nent

in a

n in

clus

iona

ry a

ppro

ach,

ge

nera

lly le

vied

on

a flo

or sp

ace

basis

acr

oss a

ll re

siden

tial (

and

pote

ntia

lly) c

omm

erci

al u

ses i

n an

ar

ea, o

r spe

cific

pre

cinc

ts, a

nd le

vied

in u

nits

or

equi

vale

nt c

ash

or la

nd to

cre

ate

affo

rdab

le h

ousin

g in

per

petu

ity ,

and

com

pone

nt is

a fl

oor s

pace

levy

(w

hich

may

be

cons

truc

ted

as a

n in

-kin

d co

ntrib

utio

n in

uni

ts o

r lan

d).

It is

note

d th

at u

nder

the

Urba

n Re

new

al A

utho

rity

Act 2

003,

the

auth

ority

(Pla

ces V

icto

ria) m

ay le

vy fe

es

and

char

ges a

nd p

ursu

e a

rang

e of

stra

tegi

es to

cre

ate

affo

rdab

le h

ousin

g (s

ee d

iscus

sion

at S

ectio

n 2.

5.1

abov

e).

This

coul

d pr

ovid

e an

alte

rnat

ive

lega

l m

echa

nism

to d

evel

opm

ent c

ontr

ibut

ions

und

er P

art

3B o

f the

Act

, tho

ugh

in p

ract

ice

its re

mai

ns a

levy

,

As n

oted

, JSA

’s re

sear

ch in

dica

tes t

hat t

his a

ppro

ach

is lik

ely

to b

e ec

onom

ical

ly fe

asib

le (d

ue to

sign

ifica

nt

uplif

t in

FBU

RA p

reci

ncts

), eq

uita

ble

(not

requ

ired

to b

e pa

ssed

on

to fi

rst h

ome

owne

r, fo

r exa

mpl

e), a

nd to

pr

ovid

e fo

r by

far t

he h

ighe

st a

fford

able

hou

sing

yiel

d of

an

y fu

ndin

g st

rate

gy a

vaila

ble

in th

e FB

URA

con

text

.

√

Ince

ntiv

e to

redu

ce ti

me/

incr

ease

ce

rtai

nty

of a

ppro

vals

linke

d to

de

mon

stra

ted

affo

rdab

le h

ousin

g ou

tcom

es.

The

mec

hani

sms d

escr

ibed

abo

ve c

ould

be

cons

truc

ted

as a

man

dato

ry re

quire

men

t, w

here

all

‘acc

omm

odat

ion’

in S

ched

ule

1 of

the

Capi

tal C

ity

Zone

as i

t app

lies t

o FB

URA

only

is r

equi

red

to

cont

ain

‘20%

affo

rdab

le h

ousin

g’ in

per

petu

ity (a

s sp

ecifi

ed in

a re

late

d st

ruct

ure

plan

, pol

icy

or

Stre

amlin

ing

of a

ppro

vals

proc

ess t

o re

duce

tim

e co

uld

be a

n ef

fect

ive

ince

ntiv

e fo

r the

cre

atio

n of

affo

rdab

le

hous

ing

with

in th

e Ca

pita

l City

Zon

e. H

owev

er, t

his m

ay

be se

en to

wor

k ag

ains

t the

inte

ntio

n of

the

Capi

tal C

ity

Zone

to p

rovi

de fo

r a m

ore

liber

al a

ppro

vals

regi

me

incl

udin

g fo

r acc

omm

odat

ion.

62

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

supp

orte

d by

a tr

ansp

aren

t pol

icy

for i

mpl

emen

tatio

n,

acco

unta

bilit

y fo

r fun

ds c

olle

cted

incl

udin

g pr

iorit

ies,

ad

min

istra

tion,

etc

(per

cl 4

1 of

City

of P

ort P

hilli

p LP

S,

for e

xam

ple)

.

Man

datin

g dw

ellin

g si

ze, t

ype,

an

d/or

oth

er c

ontr

ols t

hat r

educ

e co

st o

f con

stru

ctio

n (e

.g. m

axim

um

or n

o pa

rkin

g)

No

appa

rent

lega

l con

stra

ints

, tho

ugh

this

wou

ld li

kely

ne

ed m

inist

eria

l app

rova

l to

amen

d LP

S, fo

r exa

mpl

e,

spec

ified

in a

n af

ford

able

hou

sing

over

lay

to su

ppor

t th

e FB

URA

stru

ctur

e pl

an.88

Like

ly to

be

of b

enef

it to

a n

arro

w ra

nge

of ta

rget

gro

ups

but n

onet

hele

ss v

alua

ble

to re

quire

this

in th

e ev

ent t

hat

the

mar

ket d

oes n

ot c

ontin

ue to

pro

vide

such

dw

ellin

gs,

or le

ss c

ostly

incl

usio

ns.

√

Deve

lopm

ent c

ontr

ibut

ions

und

er

Part

3B

of th

e Ac

t.

Requ

iring

a d

evel

opm

ent c

ontr

ibut

ion

for a

fford

able

ho

usin

g un

der a

DCP

und

er P

art 3

B of

the

Act

depe

nds u

pon

the

inte

rpre

tatio

n of

‘com

mun

ity

infr

astr

uctu

re’ o

r ‘se

rvic

e’ in

det

erm

inin

g its

lega

l st

atus

. The

re c

ould

also

be

con

stra

ints

to th

e am

ount

th

at c

ould

be

levi

ed d

epen

ding

on

com

petin

g de

man

ds fo

r the

se fu

nds,

alth

ough

as n

oted

a

signi

fican

t lev

y is

feas

ible

.

Requ

iring

such

a c

ontr

ibut

ion

may

requ

ire a

n am

endm

ents

to (o

r cla

rific

atio

n of

def

initi

ons u

nder

) Pa

rt3B

of t

he A

ct, o

r a sp

ecifi

c af

ford

able

hou

sing

Ther

e ar

e lik

ely

to b

e co

mpe

ting

dem

ands

on

such

co

ntrib

utio

ns, e

ven

if th

ey a

re d

eem

ed to

be

lega

l. Ho

wev

er, s

ome

form

of l

evy

on a

dditi

onal

pro

fit

gene

rate

d th

roug

h th

e op

erat

ion

of th

e pl

anni

ng a

nd

deve

lopm

ent a

sses

smen

t pro

cess

is b

y fa

r the

mos

t ef

ficie

nt a

nd e

ffect

ive

met

hod

for g

ener

atin

g af

ford

able

ho

usin

g in

FBU

RA.

JSA’

s res

earc

h in

dica

tes t

hat t

his a

ppro

ach

is lik

ely

to b

e ec

onom

ical

ly fe

asib

le (d

ue to

sign

ifica

nt u

plift

in F

BURA

pr

ecin

cts)

, equ

itabl

e (n

ot re

quire

d to

be

pass

ed o

n to

fir

st h

ome

owne

r, fo

r exa

mpl

e), a

nd to

pro

vide

for b

y fa

r

√

M

odel

ling

is ba

sed

on 5

0:50

stud

io a

nd o

ne b

edro

om a

part

men

ts; a

nd 7

0:30

two

bedr

oom

and

thre

e be

droo

m a

part

men

ts to

ens

ure

a sp

read

of a

part

men

t size

s.


6

5

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

DIRE

CT M

ARKE

T IN

TERV

ENTI

ON

:

Use

of g

over

nmen

t lan

d fo

r af

ford

able

hou

sing

deve

lopm

ent

/par

tner

ship

s

No

lega

l app

aren

t con

stra

ints

to u

se o

f cou

ncil

or

othe

r gov

ernm

ent l

and,

and

lega

l mec

hani

sms e

xist

to

prot

ect t

he p

ublic

aut

horit

y’s i

nter

est i

n th

e la

nd, t

o en

sure

that

land

or u

nits

cre

ated

are

use

d fo

r af

ford

able

hou

sing

in p

erpe

tuity

, etc

.

Furt

her,

unde

r the

Urb

an R

enew

al A

utho

rity

Act 2

003,

Pl

aces

Vic

toria

can

resu

me

land

in F

BURA

bas

ed o

n cu

rren

t lan

d va

lue,

con

solid

ate

land

, etc

and

do

othe

r th

ings

to a

chie

ve c

erta

in o

utco

mes

(inc

ludi

ng in

re

latio

n to

affo

rdab

le a

s a p

urpo

se o

f the

aut

horit

y).

Ther

e w

ould

app

ear t

o be

not

hing

to p

reve

nt it

from

do

ing

so to

ach

ieve

its p

urpo

se in

rela

tion

to

affo

rdab

le h

ousin

g un

der i

ts A

ct (s

ee d

iscus

sion

at

Sect

ion

2.5.

1 ab

ove)

.

PV c

an a

lso e

nter

into

join

t ven

ture

s with

oth

er

agen

cies

to d

evel

op la

nd fo

r a sp

ecifi

c pu

rpos

e, w

hich

ag

ain

coul

d le

gitim

atel

y in

clud

e af

ford

able

hou

sing

give

n th

at is

one

of t

he p

urpo

ses f

or w

hich

Pla

ces

Vict

oria

was

est

ablis

hed.

Lim

ited

gove

rnm

ent-

owne

d sit

es h

ave

been

iden

tifie

d th

at a

re u

ncon

stra

ined

or h

ave

the

pote

ntia

l for

futu

re

rede

ploy

men

t. Ho

wev

er, t

hose

that

hav

e be

en id

entif

ied

have

sign

ifica

nt p

oten

tial t

o yi

eld

affo

rdab

le h

ousin

g fo

r th

e ra

nge

of ta

rget

gro

ups i

nclu

ding

ver

y lo

w a

nd lo

w

inco

me

hous

ehol

ds a

s par

t of m

ixed

tenu

re

deve

lopm

ents

(inc

ludi

ng so

cial

rent

al, d

iscou

nt m

arke

t re

ntal

, sha

red

equi

ty a

nd m

arke

t hou

sing

to h

elp

fund

th

e de

velo

pmen

t). L

ever

agin

g op

port

uniti

es a

re

part

icul

arly

impo

rtan

t (se

e Ta

ble

3.2

belo

w a

nd S

ectio

n 7)

.

Furt

her,

the

pow

ers o

f Pla

ces V

icto

ria th

at c

an b

e us

ed

to g

ive

effe

ct to

its p

urpo

se in

rela

tion

to a

fford

able

ho

usin

g op

en u

p sig

nific

ant o

ppor

tuni

ties i

n cr

eatin

g af

ford

able

hou

sing

on g

over

nmen

t lan

d.

Thes

e ca

n be

dev

elop

ed th

roug

h an

EO

I pro

cess

in

part

ners

hip

with

a C

HP a

nd/o

r a su

itabl

e pr

ivat

e de

velo

per i

nclu

ding

und

er m

odel

s suc

h as

com

mun

ity

land

trus

t (CL

T) w

ith o

wne

rshi

p ve

sted

in a

n af

ford

able

ho

usin

g tr

ust o

r sim

ilar a

nd u

nits

man

aged

by

a CH

P.

√

Rede

ploy

men

t of D

HS fu

nds f

rom

th

e sa

le o

r red

evel

opm

ent o

f cap

ital

stoc

k in

City

of M

elbo

urne

or C

ity o

f

No

lega

l con

stra

ints

Po

tent

ially

impo

rtan

t str

ateg

y to

cre

ate

soci

al re

ntal

ho

usin

g in

FBU

RA, b

ut c

onsu

ltatio

n w

ith D

HS in

dica

te

that

this

is lik

ely

to b

e lo

w y

ield

as F

BURA

may

not

be

a

√

64

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

sche

dule

).

This

requ

irem

ent c

ould

be

prov

ided

in u

nits

as p

art o

f th

e de

velo

pmen

t or a

s an

equi

vale

nt c

ontr

ibut

ion.

Th

e de

velo

per w

ould

be

awar

e of

this

requ

irem

ent

and

coul

d fa

ctor

in th

is re

quire

men

t int

o th

e he

ight

of

the

build

ing,

num

ber o

f apa

rtm

ents

so a

s to

stru

ctur

e th

e de

velo

pmen

t to

acco

unt f

or th

is le

vy.

As n

oted

, the

re is

an

impl

ied

or p

oten

tial c

onst

rain

t th

e Ca

pita

l City

Zon

e re

gard

ing

appr

oval

s, d

espi

te

Acco

mm

odat

ion’

bei

ng li

sted

as a

use

for w

hich

a

perm

it is

not r

equi

red

unde

r Sec

tion

1 of

Sch

edul

e 1.

No

appa

rent

lega

l con

stra

ints

, tho

ugh

this

wou

ld li

kely

ne

ed m

inist

eria

l app

rova

l to

amen

d LP

S, fo

r exa

mpl

e Se

ctio

n 1

and

2 of

Sch

edul

e 1

to th

e Ca

pita

l City

Zon

e. JS

A’s a

naly

sis in

dica

tes t

hat f

or e

very

add

ition

al fl

oor,

prof

it w

ould

be

arou

nd $

3,00

0 pe

r squ

are

met

re o

r m

ore,

so th

at a

mor

e lib

eral

app

rova

ls pr

oces

s whe

re a

de

mon

stra

ted

Affo

rdab

le H

ousin

g ou

tcom

e is

achi

eved

co

uld

be q

uite

ben

efic

ial (

see

Tabl

e 3.

2 be

low

).

√

Prot

ectio

n of

exi

stin

g st

ocks

of

affo

rdab

le o

r low

cos

t hou

sing

Appe

ar to

be

prov

ided

for u

nder

soci

al a

nd e

cono

mic

im

pact

con

sider

atio

ns u

nder

s60(

1A)(a

) of t

he A

ct

Like

ly to

be

of li

mite

d ut

ility

as t

here

is n

ot a

hig

h co

ncen

trat

ion

of e

xist

ing

affo

rdab

le h

ousin

g on

the

FBU

RA si

te. E

xper

ienc

e in

oth

er st

ates

also

indi

cate

s tha

t re

fusa

l of a

pplic

atio

ns in

volv

ing

a lo

ss o

f sto

ck is

a

reas

onab

ly h

igh

risk

stra

tegy

as i

t is o

ften

lega

lly

chal

leng

ed d

espi

te le

gisla

tion

requ

iring

an

asse

ssm

ent o

f th

e so

cial

and

eco

nom

ic im

pact

s of a

DA,

and

miti

gatio

n to

offs

et th

e lo

ss o

f suc

h ho

usin

g is

mos

t effe

ctiv

e w

hen

supp

orte

d by

stro

ng p

olic

y pr

ovisi

ons.

X


vo

lu

me

3

67

3.4 Evaluation of Funding Strategies

66

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Mec

hani

sm /

Stra

tegy

Le

gal C

onsi

dera

tions

Ef

fect

iven

ess

Reco

mm

ende

d

Port

Phi

llip

to c

onst

ruct

stoc

k or

buy

la

nd in

FBU

RA

prio

rity

area

for D

HS in

vest

men

t str

ateg

ical

ly, a

nd

grea

ter y

ield

is li

kely

to b

e ac

hiev

ed in

low

er la

nd v

alue

ar

eas (

e.g.

rede

velo

pmen

t of l

ower

den

sity

stoc

k in

m

iddl

e rin

g su

burb

s).

The

exce

ptio

n w

ould

be

if so

me

form

of s

ubsid

y w

ere

avai

labl

e (e

.g. l

and

com

pone

nt p

rovi

ded

free

of c

harg

e or

at a

sign

ifica

nt d

iscou

nt, w

ith in

vest

men

t by

DHS

part

of

a p

artn

ersh

ip d

evel

opm

ent w

here

leve

rage

op

port

uniti

es w

ere

avai

labl

e).

See

also

disc

ussio

n be

low

rega

rdin

g fu

ndin

g st

rate

gies

.

Dire

ct fu

ndin

g fo

r soc

ial h

ousin

g fr

om D

HS

No

lega

l con

stra

ints

Per r

ow im

med

iate

ly a

bove

.

Disc

usse

d be

low

as f

undi

ng st

rate

gy.

See

also

disc

ussio

n be

low

rega

rdin

g fu

ndin

g st

rate

gies

.

√


6

9

Fund

ing

mec

hani

sm

Who

pay

s?

Co

mm

ents

Ho

w e

ffect

ive

in m

eetin

g id

entif

ied

need

?

road

rese

rves

, fire

stat

ion

or A

uspo

st si

tes)

, al

thou

gh th

ere

may

be

som

e pr

ice

on in

crea

sed

foun

datio

ns, s

ubst

ruct

ure

etc

Deve

lopm

ent c

ontr

ibut

ions

, flo

or sp

ace

affo

rdab

le h

ousi

ng

levi

es u

nder

incl

usio

nary

zo

ning

, etc

.

Deve

lope

r pay

s

Desp

ite C

apita

l City

Zon

ing

bein

g al

read

y ap

plie

d,

signi

fican

t upl

ift is

still

like

ly to

occ

ur in

the

futu

re

with

the

prov

ision

of t

rans

port

infr

astr

uctu

re a

nd

deve

lopm

ent c

erta

inty

.

JSA’

s ana

lysis

sugg

ests

that

leve

ls of

pro

fit b

ased

on

cur

rent

land

and

dw

ellin

g pr

ices

are

such

that

le

vies

can

be

requ

ired

and

deve

lopm

ent p

rofit

will

st

ill b

e w

ell a

bove

nor

mal

leve

ls of

pro

fit.

Asse

ssed

as t

he m

ost e

ffect

ive

fund

ing

stra

tegy

par

ticul

arly

giv

en th

e m

ix o

f dw

ellin

gs a

nd su

bsid

y re

quire

d un

der

scen

ario

s mod

elle

d.

Base

d on

our

mod

ellin

g, th

ere

is sig

nific

ant o

ppor

tuni

ty fo

r ben

efit

capt

ure

of th

e or

der o

f one

dw

ellin

g in

eac

h fiv

e to

se

ven

cons

truc

ted.

Ho

me

purc

hase

rs /r

ente

rs p

ay

JSA

anal

ysis

sugg

ests

that

the

dem

and

curv

e is

rela

tivel

y fla

t, th

at is

, the

incr

ease

d su

pply

from

co

nstr

uctio

n of

dw

ellin

gs in

FBU

RA w

ill n

ot le

ad to

a

decl

ine

in p

rice.

As n

oted

, up

lift i

s hig

h en

ough

that

the

cost

of

reas

onab

le c

ontr

ibut

ions

or l

evie

s doe

s not

hav

e to

be

pas

sed

on to

the

cons

umer

, and

pur

chas

ers i

n FB

URA

are

gen

eral

ly n

ot in

the

affo

rdab

le h

ousin

g ta

rget

gro

ups,

and

are

mor

e lik

ely

to b

e hi

gher

in

com

e ho

useh

olds

.

Not

app

licab

le.

Deve

lopm

ent i

ncen

tives

/c

once

ssio

ns o

r con

trol

re

laxa

tion

Who

le o

f com

mun

ity p

ays

Prof

it fr

om u

p lif

t and

apa

rtm

ent s

ales

pric

e is

likel

y to

be

suffi

cien

tly h

igh

to m

ake

such

in

cent

ives

att

ract

ive.

To

the

exte

nt th

at th

e de

velo

per g

ets e

xtra

floo

r spa

ce o

r hei

ght o

r tim

e th

an w

ould

oth

erw

ise b

e av

aila

ble,

it w

ould

be

cost

ne

utra

l or l

ikel

y in

crea

se p

rofit

.

Ther

e is

a no

n-m

onet

ary

‘cos

t’ to

the

com

mun

ity

to th

e ex

tent

that

am

enity

is c

ompr

omise

d by

the

As n

oted

abo

ve, s

uch

oppo

rtun

ities

are

lim

ited

due

to th

e sit

e al

read

y be

ing

rezo

ned

Capi

tal C

ity, a

nd y

ield

is li

kely

to

be lo

w. H

owev

er, t

his m

ay b

e re

- eva

luat

ed

once

con

trol

s (if

any)

are

kno

wn

for t

he

Capi

tal C

ity Z

one

as it

app

lies i

n FB

URA

.

68

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Fund

ing

mec

hani

sm

Who

pay

s?

Co

mm

ents

Ho

w e

ffect

ive

in m

eetin

g id

entif

ied

need

?

Man

datin

g dw

ellin

g siz

e an

d pr

ovis

ion

thro

ugh

the

mar

ket

Deve

lope

rs m

ay p

ay

To th

e de

gree

to w

hich

this

mec

hani

sm d

istor

ts th

e m

arke

t (is

not a

lread

y be

ing

prov

ided

by

deve

lope

rs),

it co

uld

be se

en a

s an

impo

st o

n th

em

rega

rdin

g us

e of

land

for h

ighe

st a

nd b

est u

se a

s th

ere

may

be

som

e lo

ss o

f pro

fit. H

owev

er, t

he

incr

ease

in su

pply

doe

s not

invo

lve

a su

bsid

y to

pu

rcha

sers

as t

hey

still

pay

the

mar

ket p

rice

for t

he

dwel

ling.

Som

ewha

t effe

ctiv

e fo

r sm

alle

r ho

useh

olds

but

fam

ilies

larg

ely

excl

uded

.

Smal

ler d

wel

lings

will

pro

vide

affo

rdab

le

hous

ing

to a

roun

d 19

% o

f the

dem

and

for

affo

rdab

le h

ousin

g us

ing

the

hous

ing

stre

ss p

rofil

e fo

r Gre

ater

Mel

bour

ne.

Fund

ing

tran

sfer

s, e

.g. d

isco

unt

mar

ket r

ent,

soci

al h

ousi

ng,

subs

idis

ed p

urch

ase.

M

echa

nism

s inc

lude

:

Prov

ision

of

publ

ic h

ousin

g by

DH

S (c

apita

l or f

undi

ng)

Gove

rnm

ent/

who

le o

f com

mun

ity

pays

Like

ly to

be

inef

ficie

nt in

FBU

RA d

ue to

hig

h dw

ellin

g pr

ices

, and

DHS

may

not

con

sider

FBU

RA

as a

prio

rity

for f

utur

e in

vest

men

t com

pare

d w

ith

othe

r are

as w

ith lo

wer

leve

ls of

soci

al h

ousin

g

Yiel

ds li

kely

low

com

pare

d w

ith a

reas

of

low

er la

nd v

alue

, and

DHS

ow

ns n

o la

nd in

FB

URA

Sale

of D

HS st

ock

and

rein

vest

men

t of f

unds

in F

BURA

Gove

rnm

ent/

who

le o

f com

mun

ity

pays

Like

ly to

be

inef

ficie

nt in

FBU

RA d

ue to

hig

h dw

ellin

g pr

ices

, and

DHS

may

not

con

sider

FBU

RA

as a

prio

rity

for f

utur

e re

inve

stm

ent o

f fun

ds

gain

ed fr

om sa

le o

f dw

ellin

gs n

ear F

BURA

Yiel

ds li

kely

low

com

pare

d w

ith a

reas

of

low

er la

nd v

alue

, and

DHS

ow

ns n

o la

nd in

FB

URA

Use

/ded

icat

ion

of p

ublic

land

fo

r JVs

, CLT

s, e

tc.

Gove

rnm

ent/

who

le o

f com

mun

ity

pays

Use

of g

reen

(ope

n) sp

ace

is lik

ely

to b

e at

a

prem

ium

and

unl

ikel

y.

Use

or r

edep

loym

ent o

f bro

wnf

ield

site

s will

in

volv

e an

opp

ortu

nity

cos

t (e.

g. C

OPP

dep

ot) (

or

coul

d be

‘airs

pace

’)

Use

of ‘

airs

pace

’ is c

ost f

ree

(e.g

. car

par

ks a

nd

Som

e op

port

uniti

es fo

r lev

erag

ing

of fu

nds

obta

ined

else

whe

re (e

g th

roug

h pl

anni

ng

mec

hani

sms d

iscus

sed

belo

w).

See

disc

ussio

n be

low

with

rega

rd to

yie

ld.


vo

lu

me

3

7

1

Fund

ing

mec

hani

sm

Who

pay

s?

Co

mm

ents

Ho

w e

ffect

ive

in m

eetin

g id

entif

ied

need

?

sens

e of

forg

one

prof

it.

Dire

ct g

over

nmen

t fun

ding

St

ate

and

fede

ral g

over

nmen

t und

er

the

NAH

A

The

curr

ent f

undi

ng e

nviro

nmen

t doe

s not

favo

ur

signi

fican

t add

ition

al fu

ndin

g by

stat

e an

d fe

dera

l go

vern

men

t for

soci

al h

ousin

g, a

nd F

BURA

wou

ld

need

to b

e pr

iorit

ised

for s

uch

new

inve

stm

ent,

or

rein

vest

men

t of p

rope

rtie

s sol

d or

rede

velo

ped

else

whe

re.

A re

lativ

ely

smal

l con

trib

utio

n un

less

FB

URA

is p

riorit

ised.

Leve

rage

opt

ions

com

bine

d w

ith u

se o

f pub

lic la

nd:

As

siste

d pu

rcha

se

The

purc

hase

r (th

eir s

hare

of e

quity

an

d ot

her c

osts

) and

the

com

mun

ity

/dev

elop

er

With

70%

equ

ity sh

are,

a le

vy o

f tw

o ap

artm

ents

will

yie

ld n

ine

apar

tmen

ts if

co

nstr

ucte

d on

pub

lic o

wne

d la

nd a

nd

oppo

rtun

ity c

ost i

s for

egon

e.

Di

scou

nt m

arke

t ren

tal

The

rent

er a

nd th

e co

mm

unity

/d

evel

oper

With

80%

disc

ount

mar

ket r

ent,

a le

vy o

f te

n ap

artm

ents

will

yie

ld 2

8 re

ntal

ap

artm

ents

if c

onst

ruct

ed o

n pu

blic

ow

ned

land

and

opp

ortu

nity

cos

t is

fore

gone

.

So

cial

Hou

sing

The

rent

er a

nd th

e co

mm

unity

/d

evel

oper

A le

vy o

f tw

o ap

artm

ents

, tak

en a

s cas

h,

will

yie

ld th

ree

apar

tmen

ts if

con

stru

cted

on

pub

lic o

wne

d la

nd a

nd o

ppor

tuni

ty

cost

is fo

rego

ne.

70

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Fund

ing

mec

hani

sm

Who

pay

s?

Co

mm

ents

Ho

w e

ffect

ive

in m

eetin

g id

entif

ied

need

?

gran

ting

of a

dditi

onal

floo

r spa

ce o

r low

er le

vel o

f sc

rutin

y fo

r app

licat

ions

.

Leve

rage

opt

ions

:

Assis

ted

purc

hase

(e.g

. sha

red

equi

ty)

The

purc

hase

r (th

eir s

hare

of e

quity

an

d ot

her c

osts

) and

the

com

mun

ity

/dev

elop

er

Whi

lst th

e pu

rcha

ser p

ays,

the

bene

fit to

the

purc

hase

r will

exc

eed

the

cost

as t

hey

have

ob

tain

ed a

goo

d at

bel

ow m

arke

t pric

e

With

a 7

0% e

quity

shar

e, a

levy

of o

ne

apar

tmen

t will

yie

ld th

ree

affo

rdab

le

apar

tmen

ts in

tota

l. W

ith a

50%

equ

ity

shar

e, a

levy

of o

ne a

part

men

t will

yie

ld

two

affo

rdab

le a

part

men

ts.

Disc

ount

mar

ket r

enta

l

The

rent

er a

nd th

e co

mm

unity

/d

evel

oper

Whi

lst th

e re

nter

pay

s, th

e be

nefit

to th

e re

nter

w

ill e

xcee

d th

e co

st a

s the

y ha

ve o

btai

ned

a go

od

at b

elow

mar

ket p

rice

Usin

g 80

% d

iscou

nt re

nt a

nd a

llow

ing

10%

fo

r adm

inist

ratio

n an

d m

aint

enan

ce, a

le

vy o

f ten

apa

rtm

ent w

ill y

ield

nin

etee

n af

ford

able

apa

rtm

ents

. W

ith 5

0% m

arke

t re

nt, a

levy

of f

our a

part

men

ts w

ill y

ield

fiv

e af

ford

able

apa

rtm

ents

.

Soci

al h

ousin

g Th

e re

nter

and

the

com

mun

ity

/dev

elop

er

Whi

lst th

e re

nter

pay

s, th

e be

nefit

to th

e re

nter

w

ill e

xcee

d th

e co

st a

s the

y ha

ve o

btai

ned

a go

od

at b

elow

mar

ket p

rice

Ther

e is

limite

d le

vera

ge o

ppor

tuni

ty h

ere

as so

cial

hou

sing

inco

mes

for c

omm

unity

ho

usin

g pr

ovid

ers a

re la

rgel

y co

nsum

ed in

op

erat

iona

l cos

ts

Use

of p

ublic

land

Th

e co

mm

unity

, ren

ters

and

pu

rcha

sers

Ther

e is

a co

nsid

erab

le g

ap b

etw

een

squa

re m

etre

sa

les p

rices

and

squa

re m

etre

con

stru

ctio

n pr

ices

fo

r mul

ti st

orey

apa

rtm

ents

and

the

land

co

mpo

nent

form

s a si

gnifi

cant

pro

port

ion

of th

e pu

rcha

se p

rice

of m

ulti

stor

ey d

wel

lings

. W

hile

th

ere

is a

cost

to th

e co

mm

unity

, thi

s cos

t is l

ost

oppo

rtun

ity c

ost (

retu

rn o

n ca

pita

l), a

nd so

doe

s no

t req

uire

to b

e fu

nded

, rat

her i

t is a

cos

t in

the

A le

vy o

f tw

o ap

artm

ents

, tak

en a

s cas

h,

will

yie

ld th

ree

apar

tmen

ts if

con

stru

cted

on

pub

lic o

wne

d la

nd a

nd o

ppor

tuni

ty

cost

is fo

rego

ne.


7

3

Deliv

ery

mec

hani

sm

Com

men

ts

How

eff

ectiv

e in

mee

ting

iden

tifie

d ne

ed

Assis

ted

purc

hase

/sha

red

equi

ty a

ppro

ache

s

Base

d on

Wes

tern

Aus

tral

ian

expe

rienc

e, 3

0% su

bsid

y is

sust

aina

ble.

High

er le

vels

of su

bsid

y ar

e re

quire

d to

pro

vide

affo

rdab

le p

urch

ase

to fa

mily

targ

et g

roup

s:

Thre

e be

droo

m a

part

men

ts fo

r 50%

of m

oder

ate

inco

me

fam

ily

hous

ehol

ds w

ill re

quire

a 4

2% su

bsid

y;

Thre

e be

droo

m a

part

men

ts fo

r 50%

of l

ow in

com

e fa

mily

ho

useh

olds

will

requ

ire a

62%

subs

idy;

and

Two

bedr

oom

apa

rtm

ents

for 5

0% o

f low

inco

me

fam

ily h

ouse

hold

s w

ill re

quire

a 4

6% su

bsid

y.

Som

ewha

t effe

ctiv

e fo

r sm

alle

r pur

chas

ing

hous

ehol

ds b

ut la

rger

fam

ilies

ex

clud

ed.

Assis

ted

purc

hase

of s

mal

ler d

wel

lings

will

pro

vide

affo

rdab

le h

ousin

g to

:

30

% o

f sm

alle

r ver

y lo

w in

com

e pu

rcha

sing

hous

ehol

ds (s

tudi

o ap

artm

ent)

all s

mal

ler l

ow in

com

e pu

rcha

sing

hous

ehol

ds;

al

l sm

alle

r mod

erat

e in

com

e pu

rcha

sing

hous

ehol

ds; a

nd

tw

o be

droo

m a

ccom

mod

atio

n to

90%

of s

mal

ler f

amily

mod

erat

e in

com

e pu

rcha

sing

hous

ehol

ds.

This

is 21

% o

f the

dem

and

for a

fford

able

hou

sing

usin

g th

e ho

usin

g st

ress

pr

ofile

for G

reat

er M

elbo

urne

.

Disc

ount

mar

ket r

ent

Base

d on

SEP

P AR

H an

d N

RAS,

a 2

0% su

bsid

y (8

0% d

iscou

nt m

arke

t re

nt) i

s sus

tain

able

.

High

er le

vels

of su

bsid

y ar

e re

quire

d to

pro

vide

affo

rdab

le re

ntal

to

man

y fa

mily

and

ver

y lo

w in

com

e ta

rget

gro

ups:

Th

ree

bedr

oom

apa

rtm

ents

for 5

0% o

f mod

erat

e in

com

e fa

mily

ho

useh

olds

will

requ

ire a

25%

subs

idy;

Th

ree

bedr

oom

apa

rtm

ents

for 5

0% o

f low

inco

me

fam

ily

hous

ehol

ds w

ill re

quire

a 5

1% su

bsid

y;

Tw

o be

droo

m a

part

men

ts fo

r 50%

of l

ow in

com

e fa

mily

ho

useh

olds

will

requ

ire a

34%

subs

idy;

O

ne b

edro

om a

part

men

ts fo

r 50%

of v

ery

low

inco

me

smal

ler

hous

ehol

ds w

ill re

quire

a 6

2% su

bsid

y; a

nd

Som

ewha

t effe

ctiv

e fo

r sm

alle

r ren

ting

hous

ehol

ds b

ut la

rger

fam

ilies

ge

nera

lly e

xclu

ded.

Subs

idise

d re

ntal

of s

mal

ler d

wel

lings

will

pro

vide

affo

rdab

le h

ousin

g to

:

90

% o

f sm

alle

r low

inco

me

rent

ing

hous

ehol

ds

al

l sm

alle

r mod

erat

e in

com

e re

ntin

g ho

useh

olds

;

two

bedr

oom

acc

omm

odat

ion

to a

ll sm

alle

r fam

ily m

oder

ate

inco

me

rent

ing

hous

ehol

ds; a

nd

th

ree

bedr

oom

acc

omm

odat

ion

to 4

0% o

f fam

ily m

oder

ate

inco

me

rent

ing

hous

ehol

ds.

This

is 11

% o

f the

dem

and

for a

fford

able

hou

sing

usin

g th

e ho

usin

g st

ress

pr

ofile

for G

reat

er M

elbo

urne

.

72

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

3.5

Eval

uatio

n of

Del

iver

y M

echa

nism

s

Deliv

ery

mec

hani

sm

Com

men

ts

How

eff

ectiv

e in

mee

ting

iden

tifie

d ne

ed

Incr

ease

in su

pply

of

deve

lopa

ble

land

Effic

acy

of m

echa

nism

is d

ebat

ed.

(See

disc

ussio

n at

7.1

.13)

No

evid

ence

from

hist

oric

al d

ata

that

incr

easin

g su

pply

lead

s to

long

te

rm d

ecre

asin

g pr

ices

.

Very

Lim

ited.

Mar

ket w

ill p

rovi

de a

fford

able

hou

sing

to:

50

% o

f sm

alle

r mod

erat

e in

com

e re

ntin

g ho

useh

olds

; an

d

10

% o

f sm

alle

r mod

erat

e in

com

e pu

rcha

sing

hous

ehol

ds.

This

is 1%

of t

he d

eman

d fo

r affo

rdab

le h

ousin

g us

ing

the

hous

ing

stre

ss

prof

ile fo

r Gre

ater

Mel

bour

ne.

Prov

ide

smal

ler d

wel

lings

/ no

par

king

Mod

ellin

g ha

s bee

n ba

sed

on th

e fo

llow

ing

max

imum

dw

ellin

g siz

es

(with

out p

arki

ng) a

nd e

xtra

cted

from

NSW

SEP

P AR

H:

St

udio

apa

rtm

ent 3

5 m

2

O

ne b

edro

om a

part

men

t 50

m2

Two

bedr

oom

apa

rtm

ent 7

0 m

2

Th

ree

bedr

oom

apa

rtm

ent 9

5 m

2

Som

ewha

t effe

ctiv

e fo

r sm

alle

r hou

seho

lds b

ut fa

mili

es la

rgel

y ex

clud

ed.

Smal

ler d

wel

lings

will

pro

vide

affo

rdab

le h

ousin

g to

:

50

% o

f sm

alle

r low

inco

me

rent

ing

hous

ehol

ds;

al

l sm

alle

r mod

erat

e in

com

e re

ntin

g ho

useh

olds

;

two

bedr

oom

acc

omm

odat

ion

to 5

0% o

f sm

alle

r mod

erat

e in

com

e re

ntin

g ho

useh

olds

;

all s

mal

ler l

ow in

com

e pu

rcha

sing

hous

ehol

ds (s

tudi

o ap

artm

ents

); an

d

all s

mal

ler m

oder

ate

inco

me

purc

hasin

g ho

useh

olds

Th

is is

19%

of t

he d

eman

d fo

r affo

rdab

le h

ousin

g us

ing

the

hous

ing

stre

ss

prof

ile fo

r Gre

ater

Mel

bour

ne.


vo

lu

me

3

75

3.6 Consideration of Four Delivery Options

74

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Deliv

ery

mec

hani

sm

Com

men

ts

How

eff

ectiv

e in

mee

ting

iden

tifie

d ne

ed

Tw

o be

droo

m a

part

men

ts fo

r 50%

of v

ery

low

inco

me

smal

ler

fam

ily h

ouse

hold

s will

requ

ire a

75%

subs

idy.

Soci

al h

ousin

g Es

sent

ially

rest

ricte

d to

ver

y lo

w in

com

e ho

useh

olds

Will

pro

vide

affo

rdab

le h

ousin

g to

ver

y lo

w in

com

e re

ntin

g ho

useh

olds

ho

wev

er v

ery

low

inco

me

wor

king

hou

seho

lds a

re li

kely

to b

e ex

clud

ed

due

to a

lloca

tion

polic

ies.

This

is 34

% o

f the

dem

and

for a

fford

able

hou

sing

usin

g th

e ho

usin

g st

ress

pr

ofile

for G

reat

er M

elbo

urne

.


77

O

ptio

n 1:

‘Bus

ines

s as

Usu

al’ M

odel

O

ptio

n 2:

‘Asp

iratio

nal

Affo

rdab

le H

ousi

ng’ M

odel

Opt

ion

3: ‘P

ragm

atic

’ M

ixed

Mod

el

Opt

ion

4: In

term

edia

te

Affo

rdab

le H

ousi

ng M

odel

Broa

d de

liver

y m

etho

ds

cons

ider

ed (%

of a

ll ho

usin

g in

FB

URA

) M

arke

t del

iver

y on

ly

Mar

ket d

eliv

ery

(0.3

%)

Man

date

d dw

ellin

g siz

e (3

.8%

)

Assis

ted

purc

hase

(6.5

%)

Disc

ount

mar

ket r

ent (

2.7%

)

Soci

al h

ousin

g (6

.8%

)

Mar

ket d

eliv

ery

(1.5

%)

Man

date

d dw

ellin

g siz

e (6

.6%

)

Assis

ted

purc

hase

(5.2

%)

Disc

ount

mar

ket r

ent (

3.6%

)

Soci

al h

ousin

g (3

.1%

)

Mar

ket d

eliv

ery

(1.8

%)

Man

date

d dw

ellin

g siz

e (7

.8%

)

Assis

ted

purc

hase

(6.2

%

Disc

ount

mar

ket r

ent (

4.2%

)

% o

f asp

iratio

nal a

fford

able

ho

usin

g ta

rget

gro

ups

acco

mm

odat

ed

1.3%

80

%

56%

44

%

Targ

et g

roup

s lik

ely

to b

e ho

used

in

FBU

RA (s

ee T

able

2.5

abo

ve fo

r re

leva

nt g

roup

s)

Smal

l mod

erat

e in

com

e re

ntin

g an

d pu

rcha

sing

hous

ehol

ds in

st

udio

and

1 b

/r d

wel

lings

At le

ast 5

0% o

f eac

h ta

rget

gr

oups

is a

ccom

mod

ated

All m

oder

ate

inco

me

hous

ehol

ds

At le

ast 4

0% o

f low

inco

me

hous

ehol

ds

Very

low

inco

me

rent

ing

hous

ehol

ds, t

houg

h w

ith re

duce

d qu

antu

m o

f soc

ial h

ousin

g

All m

oder

ate

inco

me

hous

ehol

ds

At le

ast 4

0% o

f low

inco

me

hous

ehol

ds

Targ

et g

roup

s lik

ely

to b

e ex

clud

ed fr

om F

BURA

(see

Tab

le

2.5

abov

e fo

r rel

evan

t gro

ups)

All o

ther

targ

et g

roup

s inc

ludi

ng

all f

amily

hou

seho

lds,

and

all

very

lo

w &

low

inco

me

hous

ehol

ds

Low

er 5

0% o

f low

inco

me

fam

ily

rent

ers,

and

low

er 5

0% o

f ver

y lo

w in

com

e pu

rcha

sers

Very

low

inco

me

purc

hase

rs

Low

er 5

0-60

% o

f low

inco

me

fam

ily h

ouse

hold

s

Very

low

inco

me

rent

ers a

nd

purc

hase

rs

Low

er 5

0-60

% o

f low

inco

me

fam

ily h

ouse

hold

s

76

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

O

ptio

n 1:

‘Bus

ines

s as

Usu

al’ M

odel

O

ptio

n 2:

‘Asp

iratio

nal

Affo

rdab

le H

ousi

ng’ M

odel

Opt

ion

3: ‘P

ragm

atic

’ M

ixed

Mod

el

Opt

ion

4: In

term

edia

te

Affo

rdab

le H

ousi

ng M

odel

Affo

rdab

le H

ousin

g Ta

rget

20

% o

f tot

al st

ock

20%

of t

otal

stoc

k 20

% o

f tot

al st

ock

20%

of t

otal

stoc

k

Hous

ing

Stre

ss L

evel

s ass

umed

30

%, 3

5% a

nd 4

0% a

ssum

ed fo

r se

nsiti

vity

ana

lysis

30

% h

ousin

g st

ress

for a

ll te

nure

, in

com

e an

d ho

useh

old

grou

ps

Mix

ed h

ousin

g st

ress

(1)

Mix

ed h

ousin

g st

ress

(1)

Hous

ing

subs

idy

assu

mpt

ions

N

o su

bsid

ies a

ssum

ed

Min

imum

disc

ount

mar

ket r

ent

as re

quire

d to

allo

w a

cces

s for

all

targ

et g

roup

s

Min

imum

equ

ity sh

are

for

purc

hase

r as r

equi

red

to a

llow

ac

cess

for a

ll ta

rget

gro

ups

Min

imum

disc

ount

mar

ket r

ent

of 7

0%

Min

imum

equ

ity sh

are

for

purc

hase

r of 5

0%

Min

imum

disc

ount

mar

ket r

ent

of 7

0%

Min

imum

equ

ity sh

are

for

purc

hase

r of 5

0%

Broa

d de

liver

y m

etho

ds

cons

ider

ed (%

of a

fford

able

ho

usin

g co

mpo

nent

pro

vide

d in

FB

URA

)

Mar

ket d

eliv

ery

only

Mar

ket d

eliv

ery

(1.3

%)

Man

date

d dw

ellin

g siz

e89 (1

8.9%

)

Assis

ted

purc

hase

(32.

5%)

Disc

ount

mar

ket r

ent (

13.6

%)

Soci

al h

ousin

g (3

3.8%

)

Mar

ket d

eliv

ery

(7.5

%)

Man

date

d dw

ellin

g siz

e (3

3%)

Assis

ted

purc

hase

(26.

1%)

Disc

ount

mar

ket r

ent (

17.9

%)

Soci

al h

ousin

g (1

5.5%

)

Mar

ket d

eliv

ery

(8.9

%)

Man

date

d dw

ellin

g siz

e (3

9.1%

)

Assis

ted

purc

hase

(30.

9%)

Disc

ount

mar

ket r

ent (

21.1

%)

89M

odel

ling

base

d on

50:

50 st

udio

s and

one

bed

room

apa

rtm

ents

; and

70:

30 tw

o be

droo

m a

nd th

ree

bedr

oom

apa

rtm

ents

to p

rovi

de a

n ap

prop

riate

mix

of d

wel

lings

. Re

fer t

able

s 7-1

5, 1

6 an

d 17

for d

etai

ls.


vo

lu

me

3

79

O

ptio

n 1:

‘Bus

ines

s as

Usu

al’ M

odel

O

ptio

n 2:

‘Asp

iratio

nal

Affo

rdab

le H

ousi

ng’ M

odel

Opt

ion

3: ‘P

ragm

atic

’ M

ixed

Mod

el

Opt

ion

4: In

term

edia

te

Affo

rdab

le H

ousi

ng M

odel

Levy

requ

ired

on sa

leab

le fl

oor

area

with

som

e de

velo

pmen

t on

publ

ic la

nd, N

RAS

fund

ing

and

DHS

fund

s 30%

of s

ocia

l hou

sing

com

pone

nt

Nil

7.

0% o

f net

floo

r are

a 3.

9% o

f net

floo

r are

a 3.

1% o

f net

floo

r are

a

Cost

to g

over

nmen

t of l

and

use

Nil

N

o fu

ndin

g re

quire

d, b

ut lo

st

oppo

rtun

ity c

ost o

n la

nd

No

fund

ing

requ

ired,

but

lost

op

port

unity

cos

t on

land

N

o fu

ndin

g re

quire

d, b

ut lo

st

oppo

rtun

ity c

ost o

n la

nd

78

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

O

ptio

n 1:

‘Bus

ines

s as

Usu

al’ M

odel

O

ptio

n 2:

‘Asp

iratio

nal

Affo

rdab

le H

ousi

ng’ M

odel

Opt

ion

3: ‘P

ragm

atic

’ M

ixed

Mod

el

Opt

ion

4: In

term

edia

te

Affo

rdab

le H

ousi

ng M

odel

Pote

ntia

l fun

ding

mec

hani

sms

N

il re

quire

d

Dire

ct g

over

nmen

t fun

ding

Deve

lopm

ent l

evy

Leve

ragi

ng o

ppor

tuni

ties

Oth

er so

urce

s

Dire

ct g

over

nmen

t fun

ding

Deve

lopm

ent l

evy

Leve

ragi

ng o

ppor

tuni

ties

Oth

er so

urce

s

Dire

ct g

over

nmen

t fun

ding

Deve

lopm

ent l

evy

Leve

ragi

ng o

ppor

tuni

ties

Oth

er so

urce

s

Levy

requ

ired

on sa

leab

le

com

mer

cial

floo

r are

a N

il

Poss

ible

in fu

ture

, but

mod

ellin

g sh

ows l

ow le

vels

of p

rofit

abili

ty

Poss

ible

in fu

ture

, but

mod

ellin

g sh

ows l

ow le

vels

of p

rofit

abili

ty

Poss

ible

in fu

ture

, but

mod

ellin

g sh

ows l

ow le

vels

of p

rofit

abili

ty

Levy

requ

ired

on sa

leab

le

resid

entia

l flo

or a

rea

Nil

9%

of n

et fl

oor a

rea

5.0%

of n

et fl

oor a

rea

3.6%

of n

et fl

oor a

rea

Levy

requ

ired

on sa

leab

le fl

oor

area

with

som

e de

velo

pmen

t on

publ

ic la

nd

Nil

8.

4% o

f net

floo

r are

a 4.

7% o

f net

floo

r are

a 3.

4% o

f net

floo

r are

a

Levy

requ

ired

on sa

leab

le fl

oor

area

with

att

ract

ion

of N

RAS

fund

ing

Nil

8.

8% o

f net

floo

r are

a 4.

8% o

f net

floo

r are

a 3.

3% o

f net

floo

r are

a

Levy

requ

ired

on sa

leab

le fl

oor

area

with

30%

DHS

fund

ing

of

soci

al h

ousin

g N

il

7.7%

of n

et fl

oor a

rea

4.4%

of n

et fl

oor a

rea

Not

app

licab

le


81

Figure 4-1: Percentage increase in population from 1991 – Selected LGAs Source: JSA 2013, using data from ABS Census of Population and Housing 1991-2011 (Time Series Profile, Place of Enumeration)

Figure 4-2: Percentage increase in population from 2001 – Selected SA2s ( Source: JSA 2013, using data from ABS Census of Population and Housing 2001-2011 (Time Series Profile, Place of Enumeration)


PART B: BACKGROUND REPORT

4 Population and Housing Market Trends 4.1 Overview

4.2 Population Growth 1991-2011


vo

lu

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3

83

4.4 Household type profiles and change over time


Figure 4-3: Percentage increase in population from 2001 – Docklands SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2001-2011 (Time Series Profile, Place of Enumeration)

4.3 Age Profile


85

Figure 4-4: Median established house prices – Capital Cities (CPI adjusted) (Source: ABS, JSA calculation)

(Source: ABS, JSA calculation)

0

100

200

300

400

500

600

700

Mar

-200

2Au

g-20

02Ja

n-20

03Ju

n-20

03N

ov-2

003

Apr-

2004

Sep-

2004

Feb-

2005

Jul-2

005

Dec-

2005

May

-200

6O

ct-2

006

Mar

-200

7Au

g-20

07Ja

n-20

08Ju

n-20

08N

ov-2

008

Apr-

2009

Sep-

2009

Feb-

2010

Jul-2

010

Dec-

2010

May

-201

1O

ct-2

011

Mar

-201

2

Established House Median Price ($2012)

Sydney

Melbourne

Brisbane

Adelaide

Perth

Hobart

Darwin

Canberra

0.0

50.0

100.0

150.0

200.0

250.0

300.0

Mar

-200

2

Oct

-200

2

May

-200

3

Dec-

2003

Jul-2

004

Feb-

2005

Sep-

2005

Apr-

2006

Nov

-200

6

Jun-

2007

Jan-

2008

Aug-

2008

Mar

-200

9

Oct

-200

9

May

-201

0

Dec-

2010

Jul-2

011

Feb-

2012

Sep-

2012

Price Index of Established Houses

Sydney

Melbourne

Brisbane

Adelaide

Perth

Hobart

Darwin

Canberra


4.5 Capital City Price Comparisons


vo

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3

87

Figure 4-7: Median unit/apartment prices – selected suburbs (CPI adjusted) (Source: Land Victoria, A Guide to Property Values 2011)

0

100000

200000

300000

400000

500000

600000

700000

800000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Median unit/apartment prices ($2012)

Melbourne Metropolitan area Melbourne

Docklands Port Melbourne

South Melbourne Southbank


4.6 Sales Prices over time

Figure 4-6: Median house prices – selected LGAs (CPI adjusted) (Source: Land Victoria, A Guide to Property Values 2011)

0

200000

400000

600000

800000

1000000

1200000

1400000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Median house prices ($2012)

Melbourne Metropolitan area Melbourne City

Port Phillip City Maribyrnong City

Hobsons Bay City


89

Figure 4-9: Median three bedroom house rentals for selected areas (CPI adjusted) (Source: Department of Human Services, Rental Report)

0

100

200

300

400

500

600

700

800

900

2007 2008 2009 2010 2011 2012

Median Rental 3 Bedroom House ($2012)



Hobsons Bay City


4.7 Rents over time

Figure 4-8: Median two bedroom flat rentals for selected areas (CPI adjusted) (Source: Department of Human Services, Rental Report)

0

100

200

300

400

500

600

2007 2008 2009 2010 2011 2012

Median Rental 2 Bedroom Flat ($2012)



Hobsons Bay City


vo

lu

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3

91

4.8 Dwelling Structure and change over time


Figure 4-10: Median one bedroom flat rentals for selected areas (CPI adjusted) (Source: Department of Human Services, Rental Report)

Figure 4-11: Median two bedroom flat rentals for selected areas (CPI adjusted) (Source: Department of Human Services, Rental Report)

0

50

100

150

200

250

300

350

400

450

500

2007 2008 2009 2010 2011 2012





0

100

200

300

400

500

600

700

2007 2008 2009 2010 2011 2012






9

3

Sour

ce: J

SA 2

013,

usin

g da

ta fr

om A

BS C

ensu

s of P

opul

atio

n an

d Ho

usin

g 20

11 (B

asic

Com

mun

ity P

rofil

e, P

lace

of U

sual

Res

iden

ce)



vo

lu

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3

95

Figure 4-14: Dwelling structure profile 2001-2011 (percentages) – Melbourne SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2001-2011 (Time Series Profile, Place of Enumeration)


Figure 4-13: Dwelling structure profile 2001-2011 (percentages) – Greater Melbourne Source: JSA 2013, using data from ABS Census of Population and Housing 2001-2011 (Time Series Profile, Place of Enumeration)


97

4.9 Tenure profile and change over time

4.9.1 General tenure profile


Figure 4-15: Dwelling structure profile 2001-2011 (percentages) – Southbank SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2001-2011 (Time Series Profile, Place of Enumeration)


vo

lu

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3

99

Figure 4-17: Household tenure type profile 2001-2011 (percentages) – Greater Melbourne Source: JSA 2013, using data from ABS Census of Population and Housing 2001-2011 (Time Series Profile, Place of Enumeration)

98

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Figu

re 4

-16:

Ten

ure

prof

ile –

Sel

ecte

d SA

2s a

nd L

GAs,

201

1 So

urce

: JSA

201

3, u

sing

data

from

ABS

Cen

sus o

f Pop

ulat

ion

and

Hous

ing

2011

(Bas

ic C

omm

unity

Pro

file,

Pla

ce o

f Usu

al R

esid

ence

)


101

Figure 4-19: Change in proportion of occupied private dwellings comprised of social housing, Melbourne and Port Phillip Local Government Areas, compared with Greater Melbourne and Australia, 2001-2011 Source: JSA 2013, using data from ABS Census of Population and Housing 2001, 2006, 2011 (Time Series Profile, Place of Enumeration)

Table 4-1: Changes in Social Housing Supply in Proxy SA2s 2001-2011 Social Housing 2001 2006 2011

Docklands (SA2) Number 0 6 60

Docklands (SA2) % of occupied private dwellings 0.0% 0.3% 2.2%

Melbourne (SA2) Number 133 108 150

Melbourne (SA2) % of occupied private dwellings 3.5% 1.7% 1.6%

Southbank (SA2) Number 3 7 10

Southbank (SA2) % of occupied private dwellings 0.2% 0.2% 0.2%

Source: JSA 2013, using data from ABS Census of Population and Housing 2001, 2006, 2011 (Time Series Profile, Place of Enumeration)


Figure 4-18: Household tenure type profile 2001-2011 (percentages) – Southbank SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2001-2011 (Time Series Profile, Place of Enumeration)

4.9.2 Social Housing Fails to Keep Pace with Population Increase/Demand


vo

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3

103

Map 4-2: LGAs from which residents have moved to Southbank SA2 2006-2011

Map 4-3: Net In-Migration to Melbourne SA2 from LGAs 2006-2011 Source: JSA 2013, using data from ABS Census of Population and Housing 2011


4.10 Mobility trends

4.10.1 Migration

Map 4-1: LGAs from which residents have moved to Melbourne SA2 2006-2011


105

Figure 4-20: In-Migration Summary 2006-2011 – Numbers Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Usual Residence)

4.10.2 Commuting trends


Map 4-4: Net Migration into Southbank SA2 from LGAs 2006-2011 Source: JSA 2013, using data from ABS Census of Population and Housing 2011

ABS table builder, 19.4% for Melbourne SA2, 14.8% for Southbank SA2 and 8.5% for Greater Melbourne.


vo

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3

107

Map 4-6: LGAs from which workers commute into Melbourne SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2011


Map 4-5: LGAs from which workers commute into Port Melbourne Industrial SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2011


109

Table 4-2: Total commuters by selected SA2s and LGAs


Table 4-3: Total commuters by industrial / commercial areas (SA2s)



Map 4-7: SEIFA Index of Education and Occupation by LGAs Source: JSA 2013, using data from ABS Census of Population and Housing 2011


vo

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3

111

Figure 4-22: Individual Income by Commuter Status – Southbank SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Work)


Figure 4-21: Occupation Profile by Commuter Status – Southbank SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Work)

17%

40%

6%

16%

10%

8%

0%

2%

18%

34%

8%

13%

15%

6%

1%

4%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Managers

Professionals

Technicians and Trades Workers

Community and Personal Service Workers

Clerical and Administrative Workers

Sales Workers

Machinery Operators and Drivers

Labourers

Southbank SA2

Lived and Worked in Area Commuted Into Area for Work


113

Figure 4-24: Individual Income by Commuter Status – Melbourne SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Work)

4.10.3 Car Ownership


Figure 4-23: Occupation Profile by Commuter Status – Melbourne SA2 Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Work)

14%

41%

7%

12%

14%

8%

0%

4%

16%

40%

5%

4%

26%

6%

1%

2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Managers

Professionals

Technicians and Trades Workers

Community and Personal Service Workers

Clerical and Administrative Workers

Sales Workers

Machinery Operators and Drivers

Labourers

Melbourne SA2

Lived and Worked in Area Commuted Into Area for Work


vo

lu

me

3

1

15

Figu

re 4

-26:

Mot

or v

ehic

le o

wne

rshi

p fo

r se

lect

ed a

reas

, com

pare

d w

ith G

reat

er M

elbo

urne

, 201

1 –

aver

age

num

ber

of m

otor

veh

icle

s pe

r ho

useh

old

by g

ross

wee

kly

hous

ehol

d in

com

e So

urce

: JSA

201

3, c

alcu

late

d us

ing

data

from

ABS

Cen

sus o

f Pop

ulat

ion

and

Hous

ing

2011

(Tab

lebu

ilder

, Pla

ce o

f Enu

mer

atio

n)

114

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

Figu

re 4

-25:

Mot

or v

ehic

le o

wne

rshi

p fo

r se

lect

ed a

reas

, com

pare

d w

ith G

reat

er M

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1 –

prop

ortio

n of

hou

seho

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by n

umbe

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m

otor

veh

icle

s ow

ned

Sour

ce: J

SA 2

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cal

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ted

usin

g da

ta fr

om A

BS C

ensu

s of P

opul

atio

n an

d Ho

usin

g 20

11 (T

able

build

er, P

lace

of E

num

erat

ion)


117


5 Housing Stress 5.1 Overview of housing stress is relevant areas

91 A household living in Greater Melbourne that is earning less than 120% of the median gross household income for Greater Melbourne and that pays 30% or more of its gross household income in rental payments or mortgage repayments is said to be in housing stress.92 Note that, by definition, higher income households cannot be in housing stress.


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5.2 Projected Population forecasts and implications for housing stress

93 Department of Planning and Community Development (2012) Victoria in the Future 2012: Population and Household Projections 2011-2031 for Victoria and its Regions, p 2.94 Department of Planning and Community Development (2012) Victoria in the Future 2012: Population and Household Projections 2011-2031 for Victoria and its Regions, p 2.95 Department of Planning and Community Development (2012) Victoria in the Future 2012: Population and Household Projections 2011-2031 for Victoria and its Regions, p 3.96 Cardinia, Casey, Hume, Melton, Mitchell, Whittlesea and Wyndham.97 Department of Planning and Community Development (2012) Victoria in the Future 2012: Population and Household Projections 2011-2031 for Victoria and its Regions, p 6.


Figure 5-1: Housing Stress among Relevant Target Groups – City of Melbourne Source: JSA 2013, using data from ABS Census of Population and Housing 2011 (Tablebuilder)


121

Total

Tenure Size99 Income


Rental 55%

4,400 Dwellings


2,200 Dwellings


1,500 Dwellings

Low Income 7%

600 Dwellings

Moderate Income 2%

100 Dwellings


2,200 Dwellings


1,200 Dwellings

Low Income 9%

700 Dwellings

Moderate Income 3%

300 Dwellings

Purchase 45%

3,600 Dwellings


1,400 Dwellings


400 Dwellings

Low Income 6%

500 Dwellings

Moderate Income 6.5%

500 Dwellings


2,200 Dwellings


600 Dwellings

Low Income 9%

700 Dwellings

Moderate Income 11%

900 Dwellings Source: JSA 2013, calculated using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Enumeration)

99Smaller dwellings are those suitable for single person and couple households (typically studio and one bedroom), larger dwellings are those suitable for other households (typically two bedroom and greater).


5.3 Three Scenarios as the basis of targets for Affordable Housing Created in FBURA

5.3.1 Overview

5.3.2 Greater Melbourne Scenario

98 Presentation by Places Victoria, 13 May 2013


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Table 5-2: Housing Targets based on Housing Stress Profile for City of Melbourne

Total

Tenure Size Income


Rental 85%

6,800 Dwellings

Smaller Dwellings 52%

4,200 Dwellings

Very Low Income 34%

2,700 Dwellings

Low Income 11%

900 Dwellings Moderate Income

7% 600 Dwellings

Larger Dwellings 33%

2,600 Dwellings

Very Low Income 20%

1,600 Dwellings

Low Income 7%


6% 450 Dwellings

Purchase 15%

1,200 Dwellings


800 Dwellings

Very Low Income 3%

250 Dwellings

Low Income 3%


4% 300 Dwellings

Larger Dwellings 5%

400 Dwellings

Very Low Income 2%

150 Dwellings

Low Income 1.5%


1.5% 125 Dwellings

Source: JSA 2013, calculated using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Enumeration)


5.3.3 City of Melbourne Scenario


125

Table 5-3: Housing Targets based on Housing Stress Profile for Main Commuting Areas (Brimbank (C), Hobsons Bay (C), Melton (S), Port Phillip (C) and Wyndham (C))

Total

Tenure Size Income


Rental 50%

4,000 Dwellings


2,000 Dwellings

Very Low Income 16%

1,300 Dwellings

Low Income 7%


2% 150 Dwellings


2,000 Dwellings

Very Low Income 15%

1,200 Dwellings

Low Income 8%


2% 150 Dwellings

Purchase 50%

4,000 Dwellings


1,600 Dwellings

Very Low Income 6%

450 Dwellings

Low Income 7%


7% 600 Dwellings


2,400 Dwellings

Very Low Income 9%

700 Dwellings

Low Income 10%


11% 900 Dwellings

Source: JSA 2013, calculated using data from ABS Census of Population and Housing 2011 (Tablebuilder, Place of Enumeration)


5.3.4 Scenario based on main areas from which commuters are drawn


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Table 6-1: Results of linear regression analysis – separate houses

Constant +$295,000 This is the base component of price and could be considered as representing land value.

Number of bedrooms +$168,000 Each bedroom adds this amount to the sales price.

Number of bathrooms +$101,000 Each bathroom adds this amount to the sales price.

Number of garages / parking spaces

+$138,000 Each garage/parking space adds this amount to the sales price. The high value reflects the premium placed on parking in the area.

Source: RP Data sales data, 12 months to March 2013, JSA analysis

Quartile analysis

Table 6-2: Quartile analysis – separate houses

One $640,500 $745,000 Sample less than ten

Two $674,500 $795,000

Three $900,000 $1,050,000

Four $1,112,000 $1,200,000 Sample less than thirty



6 Assessment of current and likely future affordability

6.1 Overview

6.2 Analysis of Sales Data

6.2.1 Separate Houses Introduction

LRA results

100 RP Data.101 The 95% level of significance was used as the test variable.


129

Table 6-3: Results of linear regression analysis – apartments

Area +$7,387 per m2 Note that care is required when extrapolating outside of the data range, particularly with regard to negative values below.

South Melbourne -$68,000 A locational discount is associated with South Melbourne by comparison with the study area.

Constant -$21,000 This constant is not statistically significant.


Apartment type


6.2.2 Apartments Introduction

LRA results

Introduction

Apartment size

102 RP Data sales data, 12 months to March 2013.


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131

Southbank All $447,500 $540,000

One $378,000 $400,000

Two $489,750 $540,000

Three $622,500 $700,000

South Melbourne All $446,250 $521,000

One $366,500 $406,000 Sample less than thirty properties.

Two $512,000 $535,000

Three $551,250 $655,000 Sample less than ten properties.

Port Melbourne All $500,000 $620,000

One $402,500 $459,500

Two $526,500 $630,000

Three $868,750 $1,167,500 Sample less than ten properties.



Table 6-4: Results of linear regression analysis – apartments Variable Impact on price Notes

Constant -$66,000 Care should be taken extrapolating outside the range of data.

Number of bedrooms +$197,000 Each bedroom adds this amount to the sales price.

Number of bathrooms +$167,000 Each bathroom adds this amount to the sales price.


+$81,000 Each garage/parking space adds this amount to the sales price. The high value reflects the premium placed on parking in the area.


Quartile analysis

Table 6-5: Results of quartile analysis – apartments

All All $460,000 $550,000

One $379,250 $407,250

Two $500,125 $560,000

Three $640,000 $850,000

Docklands All $453,600 $547,500

One $368,750 $415,000

Two $498,750 $570,500

Three $756,250 $957,500 Sample less than thirty properties.


133

Quartile analysis

Results are set out in the table below.

Table 6-7: Results of quartile analysis – separate houses Number of bedrooms

First quartile weekly rent

Median weekly rent

Comment

One $408 $475 Sample less than ten properties.

Two $500 $555 Sample less than thirty properties.

Three $750 $875

More than three $1,150 $1,300 Sample less than thirty properties.

Source: Rental advertisements (snapshot at end March 2013), JSA analysis

6.3.2 Apartments Introduction

LRA results

104 www.realestate.com.au


6.3 Analysis of Rental Data

6.3.1 Separate Houses Introduction

LRA results

Table 6-6: Results of linear regression analysis – separate houses Variable Impact on weekly rent Notes

Constant -$228

Number of bedrooms +$170 Each bedroom adds this amount to the rent.

Number of bathrooms +$284 Each bathroom adds this amount to the rent.


+$124 Each garage/parking space adds this amount to the rent.


103 www.realestate.com.au


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Quartile analysis

Table 6-9: Results of quartile analysis – apartments

Suburb Number of bedrooms

First quartile weekly rent

Median weekly rent

Comment

All All $450 $550

One $400 $425

Two $520 $560

Three $749 $893

Docklands All $480 $588

One $410 $450

Two $540 $600

Three $840 $950

Southbank All $450 $530

One $400 $430

Two $520 $550

Three $699 $845

South Melbourne All $410 $510

One $375 $400

Two $513 $550

Three $695 $750 Sample less than 30

Port Melbourne All $472 $596

One $398 $440

Two $500 $596

Three $750 $878 Sample less than 30



Table 6-8: Results of linear regression analysis – apartments

Variable Impact on

weekly rent Notes

Constant -$35

Number of bedrooms +$135 Each bedroom adds this amount to the rent.

Number of bathrooms +$216 Each bathroom adds this amount to the rent.


+$43 Each garage/parking space adds this amount to the rent.

Southbank +$35 On average Southbank attracts higher rents.

South Melbourne -$48 On average South Melbourne is associated with slightly lower rents.



137

7 Delivery mechanisms for Affordable Housing

7.1 Principles and discussion

7.1.1 Affordability Target

7.1.2 Target Groups

7.1.3 Housing Affordability Benchmark



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139

Proportion of gross household income spent on rent or mortgage payments

Very Low income

Low income

Moderate income

Rental Households

30% $204 $326 $490

35% $239 $381 $572

40% $273 $436 $654

Purchasing Households

30% $178,000 $284,000 $426,000

35% $208,000 $294,000 $497,000

40% $237,000 $303,000 $568,000

Source: JSA 2012, based on data from ABS (2011) Census indexed to December 2012 dollars, ANZ loan calculator

7.1.4 Affordable Housing in Perpetuity

7.1.5 Minimum dwelling sizes



1

41

Tabl

e 7-

3: D

etai

led

deve

lopm

ent s

cena

rios

Scen

ario

Es

timat

ed M

axim

um G

FA

Cons

truc

tion

Cost

per

Apa

rtm

ent

Sale

s Cos

t per

Ap

artm

ent

Expe

cted

Pro

fit

per A

part

men

t Ap

artm

ent

Affo

rdab

ility

Five

stor

ey d

evel

opm

ent,

with

lift

, 35

squa

re m

etre

ap

artm

ents

(stu

dio)

with

no

par

king

(Mon

tagu

e pr

ecin

ct)

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

x

5 flo

ors =

3,6

00 m

2

Allo

win

g 35

m2 p

er a

part

men

t gi

ves 1

03 d

wel

lings

.

Land

Pur

chas

e

$3,5

00,0

00 /

103

= $3

4,00

0

Apar

tmen

t

35 m

2 X $

2,93

3106 /0

.8=

$128

,000

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3107 /

103

= $1

00

TOTA

L: $

162,

000

$170

,000

$1

70,0

00 -

$162

,000

=

$8,0

00.

(Rat

e of

retu

rn

abou

t 5%

).

Affo

rdab

le to

all

low

inco

me

hous

ehol

ds

Five

stor

ey d

evel

opm

ent,

with

lift

, 35

squa

re m

etre

ap

artm

ents

(stu

dio)

with

no

par

king

(oth

er

prec

inct

s)

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

x

5 flo

ors =

3,6

00 m

2

Allo

win

g 35

m2 p

er a

part

men

t gi

ves 1

03 d

wel

lings

.

Land

Pur

chas

e

$1,0

00,0

00 /

103

= $1

0,00

0

Apar

tmen

t

35 m

2 X $

2,93

3 /0

.8=

$128

,000

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3 / 1

03 =

$10

0

TOTA

L: $

138,

000

$170

,000

$1

70,0

00 -

$138

,000

=

$32,

000.

(Rat

e of

retu

rn

abou

t 23%

).

Affo

rdab

le to

all

low

inco

me

hous

ehol

ds

106 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

bas

ic st

anda

rd fi

nish

apa

rtm

ents

, and

allo

win

g 40

% fo

r pro

fit, o

verh

eads

, GST

etc

.10

7 Raw

linso

ns A

ustr

alia

n Co

nstr

uctio

n Ha

ndbo

ok 2

012,

usin

g ra

tes f

or o

pen

park

ing,

and

allo

win

g 40

% fo

r pro

fit, o

verh

eads

, GST

etc

.


Table 7-2: Rents and prices for minimum dwelling sizes Dwelling size Rent (No parking space) Purchase price

Studio $270 $170,000

One bedroom $270 $280,000

Two bedroom $400 $428,000

Three bedroom $540 $613,000

Source: JSA calculation based on results of linear regression analysis

7.1.6 Mandating dwelling type and size Purchase Market

105 MacroplanDimasi, FBURA Real Estate Market Assessment, quotes values of $800-1,000 for Sandridge, Wirraway and Lorimer with higher values of $3,000-$3,500 reported for Montague.


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1

43

Scen

ario

Es

timat

ed M

axim

um G

FA

Cons

truc

tion

Cost

per

Apa

rtm

ent

Sale

s Cos

t per

Ap

artm

ent

Expe

cted

Pro

fit

per A

part

men

t Ap

artm

ent

Affo

rdab

ility

Five

stor

ey d

evel

opm

ent,

with

lift

, 70

squa

re m

etre

ap

artm

ents

(tw

o be

droo

m) w

ith n

o pa

rkin

g (M

onta

gue

prec

inct

)

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

x

5 flo

ors =

3,6

00 m

2

Allo

win

g 70

m2 p

er a

part

men

t gi

ves 5

1 dw

ellin

gs.

Land

Pur

chas

e

$3,5

00,0

00 /

51 =

$69

,000

Apar

tmen

t

70 m

2 X $

2,93

3 /0

.8=

$257

,000

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3 / 5

1 =

$241

TOTA

L: $

326,

000

$428

,000

$4

28,0

00 -

$326

,000

=

$102

,000

.

(Rat

e of

retu

rn

abou

t 31%

).

Just

affo

rdab

le to

m

oder

ate

inco

me

hous

ehol

ds

Five

stor

ey d

evel

opm

ent,

with

lift

, 70

squa

re m

etre

ap

artm

ents

(tw

o be

droo

m) w

ith n

o pa

rkin

g (o

ther

pre

cinc

ts)

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

x

5 flo

ors =

3,6

00 m

2

Allo

win

g 70

m2 p

er a

part

men

t gi

ves 5

1 dw

ellin

gs.

Land

Pur

chas

e

$1,0

00,0

00 /

51 =

$20

,000

Apar

tmen

t

70 m

2 X $

2,93

3 /0

.8=

$257

,000

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3 / 5

1 =

$241

TOTA

L: $

277,

000

$428

,000

$4

28,0

00 -

$277

,000

=

$151

,000

.

(Rat

e of

retu

rn

abou

t 55%

).

Just

affo

rdab

le to

m

oder

ate

inco

me

hous

ehol

ds

Sour

ce: J

SA c

alcu

latio

n ba

sed

on re

fere

nces

cite

d.

142

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

Scen

ario

Es

timat

ed M

axim

um G

FA

Cons

truc

tion

Cost

per

Apa

rtm

ent

Sale

s Cos

t per

Ap

artm

ent

Expe

cted

Pro

fit

per A

part

men

t Ap

artm

ent

Affo

rdab

ility

Five

stor

ey d

evel

opm

ent,

with

lift

, 50

squa

re m

etre

ap

artm

ents

(one

bed

room

) w

ith n

o pa

rkin

g (M

onta

gue

prec

inct

)

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

x

5 flo

ors =

3,6

00 m

2

Allo

win

g 50

m2 p

er a

part

men

t gi

ves 7

2 dw

ellin

gs.

Land

Pur

chas

e

$3,5

00,0

00 /

72 =

$49

,000

Apar

tmen

t

50 m

2 X $

2,93

3 /0

.8=

$183

,000

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3 / 7

2 =

$200

TOTA

L: $

232,

000

$280

,000

$2

80,0

00 -

$232

,000

=

$48,

000.

(Rat

e of

retu

rn

abou

t 21%

).

Affo

rdab

le to

all

mod

erat

e in

com

e ho

useh

olds

Five

stor

ey d

evel

opm

ent,

with

lift

, 50

squa

re m

etre

ap

artm

ents

(one

bed

room

) w

ith n

o pa

rkin

g (o

ther

pr

ecin

cts)

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

x

5 flo

ors =

3,6

00 m

2

Allo

win

g 50

m2 p

er a

part

men

t gi

ves 7

2 dw

ellin

gs.

Land

Pur

chas

e

$1,0

00,0

00 /

72 =

$14

,000

Apar

tmen

t

50 m

2 X $

2,93

3 /0

.8=

$183

,000

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3 / 7

2 =

$200

TOTA

L: $

197,

000

$280

,000

$2

80,0

00 -

$197

,000

=

$83,

000.

(Rat

e of

retu

rn

abou

t 42%

).

Affo

rdab

le to

all

mod

erat

e in

com

e ho

useh

olds


145

108 RPdata and JSA analysis109 Using rates from Rawlinsons Australian Construction Handbook 2012.110 Using rental advertisement data from www.realcommercial.com.au for South Melbourne, accessed 3 May 2013.


7.1.7 Benefit Capture Feasibility and quantum

Table 7-4: Summary of development scenarios

Source: JSA calculation


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lu

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3

1

47

Deta

iled

mod

ellin

g

Tabl

e 7-

6: D

etai

led

deve

lopm

ent s

cena

rios

Scen

ario

Es

timat

ed M

axim

um G

FA

Cons

truc

tion

Cost

per

Dw

ellin

g Sa

les C

ost p

er

Dwel

ling

Expe

cted

Pro

fit

per D

wel

ling

Bene

fit c

aptu

re

Five

stor

ey d

evel

opm

ent,

with

lift

, ave

rage

ap

artm

ent (

88 m

2 in

clud

ing

gara

ge, t

wo

bedr

oom

s,

one

bath

room

)

(Mon

tagu

e pr

ecin

ct)

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

x

5 flo

ors =

3,6

00 m

2

Allo

win

g 88

m2 p

er a

part

men

t gi

ves 4

1 dw

ellin

gs.

Land

Pur

chas

e

$3,5

00,0

00 /

41 =

$85

,000

Apar

tmen

t

62 m

2 X $

3,16

4113 /0

.8=

$245

,000

Gara

ge

$21,

00011

4

Balc

ony

8m2 X

$1,

09211

5 = $

9,00

0

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3116 /

41 =

$30

0

TOTA

L: $

360,

000

$7,3

87 X

88

- $6

8,00

0 - $

21,0

00 =

$5

61,0

00

$561

,000

- $3

60,0

00 =

$2

01,0

00.

(Rat

e of

retu

rn

abou

t 56%

).

(Pro

fit p

er m

2 of

land

is $

201,

000

X 41

/1,0

00 =

$8

,241

)

($56

1,00

0 -

$360

,000

X 1

.1) X

0.

5 =

$83,

000.

This

is eq

uiva

lent

to

one

apa

rtm

ent

in se

ven.

Five

stor

ey d

evel

opm

ent,

with

lift

, ave

rage

ap

artm

ent (

88 m

2 in

clud

ing

1,00

0 m

2 X

0.9

(ass

umes

10%

of

area

is o

pen)

X 0

.8 (a

llow

20%

for

com

mon

are

a an

d ex

tern

al w

alls)

Land

Pur

chas

e

$1,0

00,0

00 /

41 =

$24

,000

$7,3

87 X

88

- $6

8,00

0 - $

21,0

00 =

$5

61,0

00 -

$299

,000

=

($56

1,00

0 -

$299

,000

X 1

.1) X

113 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

med

ium

stan

dard

fini

sh a

part

men

ts, a

nd a

llow

ing

40%

for p

rofit

, ove

rhea

ds, G

ST e

tc.

114 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

par

king

stat

ions

, and

allo

win

g 40

% fo

r pro

fit, o

verh

eads

, GST

etc

.11

5 Raw

linso

ns A

ustr

alia

n Co

nstr

uctio

n Ha

ndbo

ok 2

012,

usin

g ra

tes f

or m

ediu

m st

anda

rd u

nit b

alco

nies

, and

allo

win

g 40

% fo

r pro

fit, o

verh

eads

, GST

etc

.11

6 Raw

linso

ns A

ustr

alia

n Co

nstr

uctio

n Ha

ndbo

ok 2

012,

usin

g ra

tes f

or o

pen

park

ing,

and

allo

win

g 40

% fo

r pro

fit, o

verh

eads

, GST

etc

.


Table 7-5: Assessment of commercial uses for benefit capture

Offices (low rise two stories, finished)

$300 $255 $2,576 10%

Offices (4-7 stories, finished)

$300 $255 $3,164 8%

Offices (high rise, finished)

$300 $255 $4,158 6%

Retail (Shopping Centre – medium standard, two storey)

$616 (Using all data)

$524 $2,961 18%

Retail (Shopping Centre – medium standard, two storey)

$548 (Excluding data from regional shopping centre)

$411 $2,961 14%

Warehouses (Multi Storey)

$223 $190 $2,058 9%


111 Allowing 15% for rates, maintenance, depreciation etc.112 Using rates from Rawlinsons Australian Construction Handbook 2012 and allowing 40% for builders profit, GST, overheads etc.


1

49

Scen

ario

Es

timat

ed M

axim

um G

FA

Cons

truc

tion

Cost

per

Dw

ellin

g Sa

les C

ost p

er

Dwel

ling

Expe

cted

Pro

fit

per D

wel

ling

Bene

fit c

aptu

re

120

m2 X

$12

3119 =

$15

,000

TOTA

L: $

958,

000

Tow

n ho

use

deve

lopm

ent,

with

lift

, ave

rage

dw

ellin

g (b

lock

size

186

m2

incl

udin

g ga

rage

, thr

ee

bedr

oom

s, o

ne b

athr

oom

)

(oth

er p

reci

ncts

)

Allo

win

g ef

fect

ive

plot

ratio

of

0.5,

dw

ellin

g ar

ea =

93

m2 w

ith

sepa

rate

gar

age

of 1

8 m

2 .

Land

Pur

chas

e

186

m2 X

$1,

000

= $1

86,0

00

Dwel

ling

93 m

2 X $

2,93

3120 =

$27

3,00

0

Gara

ge

18m

2 X

$1,0

4312

1 = $

19,0

00

Allo

wan

ce fo

r lan

dsca

ping

120

m2 X

$12

3122 =

$15

,000

TOTA

L: $

493,

000

$295

,000

+ $

168,

000

X 3

+ $1

01,0

00 X

1 +

$1

38,0

00 X

1 =

$1

,039

,000

$1,0

39,0

00 -

$493

,000

=

$546

,000

.

(Rat

e of

retu

rn

abou

t 110

%).

(Pro

fit p

er m

2 of

land

is $

546,

000

/1

86 =

$2,

935)

($1,

039,

000

- $4

93,0

00 X

1.1

) X

0.5

= $2

48,0

00.

This

is eq

uiva

lent

to

one

dw

ellin

g in

fo

ur.

Sour

ce: J

SA c

alcu

latio

n ba

sed

on re

fere

nces

cite

d

119 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

ope

n pa

rkin

g, a

nd a

llow

ing

40%

for p

rofit

, ove

rhea

ds, G

ST e

tc.

120 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

hig

h st

anda

rd to

wn

hous

es, a

nd a

llow

ing

40%

for p

rofit

, ove

rhea

ds, G

ST e

tc.

121 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

bric

k ga

rage

s, a

nd a

llow

ing

40%

for p

rofit

, ove

rhea

ds, G

ST e

tc.

122 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

ope

n pa

rkin

g, a

nd a

llow

ing

40%

for p

rofit

, ove

rhea

ds, G

ST e

tc.

148

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

Scen

ario

Es

timat

ed M

axim

um G

FA

Cons

truc

tion

Cost

per

Dw

ellin

g Sa

les C

ost p

er

Dwel

ling

Expe

cted

Pro

fit

per D

wel

ling

Bene

fit c

aptu

re

gara

ge, t

wo

bedr

oom

s,

one

bath

room

)

(oth

er p

reci

ncts

)

x 5

floor

s = 3

,600

m2

Allo

win

g 88

m2 p

er a

part

men

t gi

ves 4

1 dw

ellin

gs.

Apar

tmen

t

62 m

2 X $

3,16

4 /0

.8=

$245

,000

Gara

ge

$21,

000

Balc

ony

8m2 X

$1,

092

= $9

,000

Allo

wan

ce fo

r lan

dsca

ping

1,0

00 m

2 X 0

.1 X

$12

3 / 4

1 =

$300

TOTA

L: $

299,

000

$561

,000

$2

62,0

00.

(Rat

e of

retu

rn

abou

t 87%

).

(Pro

fit p

er m

2 of

land

is $

262,

000

X 41

/1,0

00 =

$1

0,74

2)

0.5

= $1

16,0

00.

This

is eq

uiva

lent

to

one

apa

rtm

ent

in fi

ve.

Tow

n ho

use

deve

lopm

ent,

with

lift

, ave

rage

dw

ellin

g (b

lock

size

186

m2

incl

udin

g ga

rage

, thr

ee

bedr

oom

s, o

ne b

athr

oom

)

(Mon

tagu

e pr

ecin

ct)

Allo

win

g ef

fect

ive

plot

ratio

of

0.5,

dw

ellin

g ar

ea =

93

m2 w

ith

sepa

rate

gar

age

of 1

8 m

2 .

Land

Pur

chas

e

186

m2 X

$35

00 =

$65

1,00

0

Dwel

ling

93 m

2 X $

2,93

3117 =

$27

3,00

0

Gara

ge

18m

2 X

$1,0

4311

8 = $

19,0

00

Allo

wan

ce fo

r lan

dsca

ping

$295

,000

+ $

168,

000

X 3

+ $1

01,0

00 X

1 +

$1

38,0

00 X

1 =

$1

,039

,000

$1,0

39,0

00 -

$958

,000

=

$81,

000.

(Rat

e of

retu

rn

abou

t 8%

).

(Pro

fit p

er m

2 of

land

is $

81,0

00

/186

= $

435)

Not

app

licab

le

117 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

hig

h st

anda

rd to

wn

hous

es, a

nd a

llow

ing

40%

for p

rofit

, ove

rhea

ds, G

ST e

tc.

118 R

awlin

sons

Aus

tral

ian

Cons

truc

tion

Hand

book

201

2, u

sing

rate

s for

bric

k ga

rage

s, a

nd a

llow

ing

40%

for p

rofit

, ove

rhea

ds, G

ST e

tc.


vo

lu

me

3

151

124 The rest of the money goes towards interest payments.125$10,000 per year over ten years at 7%.


Benefit capture delivery models

Introduction

Affordable Purchase Housing

Affordable Rental Housing

123 Using minimum dwelling sizes from NSW SEPP Affordable Rental Housing


1

53

Tabl

e 7-

7: P

ublic

ly o

wne

d la

nd w

ithin

FBU

RA p

reci

ncts

Num

ber

Addr

ess

Curr

ent U

se

Acce

ss to

pr

opos

ed p

ublic

tr

ansp

ort l

inks

Acce

ss to

se

rvic

es

Lot s

ize

Prob

able

dw

ellin

g yi

eld

(ass

umin

g te

n st

orey

dev

elop

men

t)

Rest

rain

ts

(H

erita

ge, F

lood

pr

one,

co

ntam

inat

ed,

fire

pron

e)

Com

men

ts

1 Co

rner

W

illia

mst

own

and

Proh

asky

Ope

n Sp

ace

with

so

me

land

scap

ing

Ow

ners

hip?

2-30

0 m

etre

s fro

m

prop

osed

ligh

t rai

l in

Plum

mer

stre

et

400

met

res f

rom

bu

ses a

t cor

ner o

f W

illia

mst

own

and

Salm

on

3.0

kms t

o sh

ops i

n Ba

y St

reet

11,5

50m

2 11

,550

× 0

.45

×

(1

0 ÷

(66

÷ 0.

8)) =

630

N

ot k

now

n O

pen

spac

e lik

ely

to b

e in

sh

ort s

uppl

y in

FBU

RA

2 JL

Mur

phy

Rese

rve

Corn

er

Will

iam

stow

n an

d Gr

aham

Ope

n Sp

ace,

Sp

orts

Fie

lds,

Co

unci

l Dep

ot

Adja

cent

to p

ropo

sed

light

rail

in P

lum

mer

st

reet

Adja

cent

to b

uses

in

Will

iam

stow

n Ro

ad

1.5

kms t

o sh

ops i

n Ba

y St

reet

Depo

t:

9,10

0m2

9,10

0 ×

0.45

×

(1

0 ÷

(66

÷ 0.

8)) =

500

N

ot k

now

n Sp

orts

fiel

ds e

tc li

kely

to b

e at

a p

rem

ium

in F

BURA

The

depo

t site

is m

ostly

car

pa

rk a

nd is

und

erut

ilise

d

3 Co

rner

W

illia

mst

own

and

Grah

am

Fire

Sta

tion

Adja

cent

to p

ropo

sed

light

rail

in P

lum

mer

st

reet

Adja

cent

to b

uses

in

Will

iam

stow

n Ro

ad

1.5

kms t

o sh

ops i

n Ba

y St

reet

1,80

0m2

1,80

0 ×

0.45

×

(1

0 ÷

(66

÷ 0.

8)) =

100

Lim

ited

yiel

d

Herit

age

(?)

Poss

ible

inte

grat

ed

deve

lopm

ent?


7.1.8 Recipient sites for benefit capture

The estimated construction cost (including builder profit) of a two bedroom apartment in a five storey lifted development is $277,000, compared with a likely spot purchase price of $428,000. On this basis, a levy of two apartments, taken as cash, can be used to construct three similar apartments on public land.


vo

lu

me

3

1

55

Num

ber

Addr

ess

Curr

ent U

se

Acce

ss to

pr

opos

ed p

ublic

tr

ansp

ort l

inks

Acce

ss to

se

rvic

es

Lot s

ize

Prob

able

dw

ellin

g yi

eld

(ass

umin

g te

n st

orey

dev

elop

men

t)

Rest

rain

ts

(H

erita

ge, F

lood

pr

one,

co

ntam

inat

ed,

fire

pron

e)

Com

men

ts

7 Co

rner

Bo

unda

ry a

nd

Whi

te

Garb

age

Tran

sfer

st

atio

n 30

0 m

etre

s to

prop

osed

ligh

t rai

l in

Ingl

es st

reet

200

met

res t

o bu

ses

in N

orm

anby

Roa

d

1.5

kms t

o sh

ops i

n Ba

y St

reet

and

nea

r So

uth

Mel

bour

ne

Mar

kets

N

ot su

itabl

e

Exist

ing

uses

wou

ld n

eed

to

be re

loca

ted

8 Co

rner

Bo

unda

ry a

nd

Fenn

ell

Ambu

lanc

e Se

rvic

e 70

0 m

etre

s to

prop

osed

ligh

t rai

l in

Ingl

es st

reet

600

met

res t

o bu

ses

in N

orm

anby

Roa

d

300

met

res t

o bu

ses

in L

orim

er S

tree

t (p

edes

tria

n ac

cess

?)

2.0

kms t

o sh

ops i

n Ba

y St

reet

and

nea

r So

uth

Mel

bour

ne

Mar

kets

N

ot su

itabl

e

Exist

ing

use

unlik

ely

to b

e re

loca

ted?

9 Co

rner

Gl

adst

one

and

Mon

tagu

e

Seco

ndar

y Co

llege

100

met

res t

o tr

am

stop

200

met

res t

o bu

ses

in N

orm

anby

Roa

d

700

met

res t

o sh

ops n

ear

Sout

h M

elbo

urne

M

arke

ts

N

ot su

itabl

e

Exist

ing

use

unlik

ely

to b

e re

loca

ted?

154

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

Num

ber

Addr

ess

Curr

ent U

se

Acce

ss to

pr

opos

ed p

ublic

tr

ansp

ort l

inks

Acce

ss to

se

rvic

es

Lot s

ize

Prob

able

dw

ellin

g yi

eld

(ass

umin

g te

n st

orey

dev

elop

men

t)

Rest

rain

ts

(H

erita

ge, F

lood

pr

one,

co

ntam

inat

ed,

fire

pron

e)

Com

men

ts

4 Co

rner

W

illia

mst

own

and

Bert

ie

Aust

post

sort

ing

cent

re

300

met

res t

o pr

opos

ed li

ght r

ail i

n In

gles

stre

et

Adja

cent

to b

uses

in

Will

iam

stow

n Ro

ad

1.2

kms t

o sh

ops i

n Ba

y St

reet

Carp

ark:

5,00

0m2

5,00

0 ×

0.45

×

(1

0 ÷

(66

÷ 0.

8)) =

270

A go

od p

art o

f the

site

is a

n at

gra

de p

arki

ng a

rea.

Ho

usin

g co

uld

be d

evel

oped

on

this

area

and

par

king

le

vels

mai

ntai

ned

5 Co

rner

Ingl

es &

W

illia

mst

own

Port

Mel

bour

ne

Cric

ket G

roun

d Ad

jace

nt to

pro

pose

d lig

ht ra

il in

Ingl

es

stre

et

Adja

cent

to b

uses

in

Will

iam

stow

n Ro

ad

1.3

kms t

o sh

ops i

n Ba

y St

reet

and

ar

ound

Sou

th

Mel

bour

ne

Mar

ket

N

ot su

itabl

e

Spor

ts fi

elds

etc

like

ly to

be

at a

pre

miu

m in

FBU

RA.

Ther

e is

curr

ently

rest

ricte

d ac

cess

to th

e cr

icke

t gro

und,

an

d it

does

not

app

ear t

o be

pu

blic

ope

n sp

ace

6 Co

rner

Bo

unda

ry a

nd

Gove

rnor

Port

Phi

llip

Coun

cil W

orks

De

pot

200

met

res t

o pr

opos

ed li

ght r

ail i

n In

gles

stre

et

100

met

res t

o bu

ses

in N

orm

anby

Roa

d

1.5

kms t

o sh

ops i

n Ba

y St

reet

and

nea

r So

uth

Mel

bour

ne

Mar

kets

N

ot su

itabl

e

Exist

ing

uses

wou

ld n

eed

to

be re

loca

ted


1

57

Tabl

e 7-

8: L

arge

r par

cels

of D

HS la

nd in

adj

acen

t are

as

Num

ber

Addr

ess

Curr

ent U

se

Acce

ss to

prop

osed

pub

lic

tran

spor

t lin

ks

Acce

ss to

serv

ices

Rest

rain

ts

(H

erita

ge, F

lood

pro

ne,

cont

amin

ated

, fire

pro

ne,

zoni

ng)

Com

men

ts

1 Ar

ea a

roun

d Ho

we

Para

de

Sepa

rate

hou

sing

(sem

i-det

ache

d)

1,00

0 m

etre

s fro

m

exist

ing

light

rail

stop

500

met

res f

rom

bus

es in

W

illia

mst

own

Road

2.0

kms t

o sh

ops i

n Ba

y St

reet

Ch

eck

herit

age

zoni

ng

Opp

ortu

nity

to in

crea

se

dens

ity

2 Ar

ea n

ear G

raha

m

and

Prin

ces

Two

stor

y to

wnh

ouse

s 30

0 m

etre

s to

exist

ing

light

rail

stop

45

0 m

etre

s to

shop

s in

Bay

Str

eet

Po

ssib

le re

deve

lopm

ent s

ite

for m

ulti-

stor

y ap

artm

ents

3 Ba

rak

Esta

te

Two

stor

y to

wnh

ouse

s 80

0 m

etre

s to

exist

ing

light

rail

1.3

kms

to sh

ops i

n Ba

y St

reet

Site

cov

erag

e re

lativ

ely

low

co

mpa

red

to su

rrou

ndin

g us

es

4 Ba

th P

lace

Fo

ur st

ory

high

den

sity

apar

tmen

ts

300

met

res t

o ex

istin

g lig

ht ra

il st

op

300

met

res t

o sh

ops

in B

ay S

tree

t

Apar

tmen

ts a

ppea

r qui

te o

ld

5 Ar

ea a

roun

d Co

vent

ry S

tree

t Tw

o st

ory

tow

nhou

ses

500

met

res t

o ex

istin

g lig

ht ra

il st

op

600

met

res t

o sh

ops

arou

nd S

outh

M

elbo

urne

Mar

ket

N

ew d

evel

opm

ent

Sour

ce: J

SA si

te e

valu

atio

n

156

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

Num

ber

Addr

ess

Curr

ent U

se

Acce

ss to

pr

opos

ed p

ublic

tr

ansp

ort l

inks

Acce

ss to

se

rvic

es

Lot s

ize

Prob

able

dw

ellin

g yi

eld

(ass

umin

g te

n st

orey

dev

elop

men

t)

Rest

rain

ts

(H

erita

ge, F

lood

pr

one,

co

ntam

inat

ed,

fire

pron

e)

Com

men

ts

10

Doug

las a

nd

Ferr

rars

O

ld M

elbo

urne

Th

eatr

e Co

mpa

ny

Site

200

met

res t

o tr

am

stop

650

met

res t

o bu

ses

in N

orm

anby

Roa

d

500

met

res t

o sh

ops n

ear

Sout

h M

elbo

urne

M

arke

ts

N

ot su

itabl

e

Prop

osed

scho

ol si

te –

cu

rren

t ow

ners

hip?

11

Doug

las a

nd

Ferr

rars

Ap

pear

s to

be

indu

stria

l lan

d 20

0 m

etre

s to

tram

st

op

650

met

res t

o bu

ses

in N

orm

anby

Roa

d

500

met

res t

o sh

ops n

ear

Sout

h M

elbo

urne

M

arke

ts

N

ot su

itabl

e

Sour

ce: J

SA si

te e

valu

atio

n


vo

lu

me

3

159

7.1.11 Very Low Income Households

7.1.12 Very Low and Low Income Purchasing Households

7.1.13 Economic Efficiency

http://www.nab.com.au/wps/wcm/connect/nab/nab/home/personal_finance/22/2/11/1 NAB borrowing power calculator, noting that results are an approximate guide only. This concept is a technical term whereby the maximum utility is obtained from the available resources. It is discussed more broadly below. Relative efficiency can be empirically observed through the operation of markets and hence is measurable.Defined as fairness or distribution of resources. The meaning of the notion itself is contested, for example does equity mean equality of opportunity or equality of outcome? The two approaches have quite different policy implications. See for example Friedman L, (2002), The Microeconomics of Public Policy Analysis, Princeton, Princeton University Press, page 58.Ibid, page 66.


7.1.9 Occupier share in purchase schemes

7.1.10 Discount Market Rent

Table 7-9: Values adopted for modelling



161

Ibid, Figure 5.Department of Sustainability and Environment (2013) Victorian Property Sales Report – September 2012 quarter, pp 2-4, taking a simple average of reported medians for groups of suburbs.Refer Appendix ARefer Appendix A


7.1.14 Australian Housing Market Context

See for example Cox, W. & Pavletich, H. (2013) 9th Annual Demographia International Housing Affordability Survey, page 1. “In every market where there has been a sustained and significant increase in the Median Multiple, there has also been the implementation of more restrictive land use policy, which is referred to in this survey as "urban containment". Berry, M. and Dalton, T. (2004) Housing Prices and Policy Dilemmas: A Peculiarly Australian Problem, Urban Policy and Research, 22:1 69-91. The authors identify nine factors affecting housing affordability including interest rates; investment demand; economic climate; financial deregulation and innovation; land supply and the land use system; government taxes, levies and charges; demography; economic growth; and wealth levels and distribution.Stapeldon, N. (2010) A History of Housing Prices in Australia 1880-2010, Australian School of Business, University of NSW, discussion paper 2010/18, figure 1.


vo

lu

me

3

163

7.3 Options

7.3.1 ‘Business as Usual’ Option


7.2 Assumptions

7.2.1 Overview

Refer Appendix A


1

65

hous

ehol

ds

Very

Low

inco

me

fam

ily a

nd g

roup

ho

useh

olds

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Low

inco

me

singl

e an

d co

uple

ho

useh

olds

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Low

inco

me

fam

ily a

nd g

roup

ho

useh

olds

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Mod

erat

e in

com

e sin

gle

and

coup

le

hous

ehol

ds

10%

of h

ouse

hold

s can

pur

chas

e a

one

bedr

oom

apa

rtm

ent i

n FB

URA

40

% o

f hou

seho

lds c

an p

urch

ase

a on

e be

droo

m a

part

men

t 60

% o

f hou

seho

lds c

an p

urch

ase

a on

e be

droo

m a

part

men

t

Mod

erat

e in

com

e fa

mily

hou

seho

lds

Excl

uded

from

FBU

RA

Excl

uded

from

FBU

RA

3% o

f hou

seho

lds c

an p

urch

ase

a tw

o be

droo

m a

part

men

t in

FBU

RA

Sour

ce: J

SA c

alcu

latio

n

164

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

Very

Low

inco

me

singl

e an

d co

uple

re

ntin

g ho

useh

olds

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Very

Low

inco

me

fam

ily a

nd g

roup

re

ntin

g ho

useh

olds

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Low

inco

me

singl

e an

d co

uple

re

ntin

g ho

useh

olds

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

10

% o

f hou

seho

lds c

an li

ve in

FBU

RA

Low

inco

me

fam

ily a

nd g

roup

rent

ing

hous

ehol

ds

Excl

uded

from

FBU

RA

Excl

uded

from

FBU

RA

Excl

uded

from

FBU

RA

Mod

erat

e in

com

e sin

gle

and

coup

le

rent

ing

hous

ehol

ds

50%

of h

ouse

hold

s can

live

in F

BURA

80

% o

f hou

seho

lds c

an li

ve in

FBU

RA

All h

ouse

hold

s can

live

in F

BURA

Mod

erat

e in

com

e fa

mily

rent

ing

hous

ehol

ds

Excl

uded

from

FBU

RA

5% o

f hou

seho

lds c

an re

nt a

two

bedr

oom

ap

artm

ent o

r hou

se in

FBU

RA

40%

of h

ouse

hold

s can

rent

a tw

o be

droo

m

apar

tmen

t or h

ouse

in F

BURA

Purc

hasi

ng H

ouse

hold

s

Very

Low

inco

me

singl

e an

d co

uple

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Ex

clud

ed fr

om F

BURA

Med

ian

data

has

bee

n us

ed a

s it i

s mor

e lik

ely

to re

pres

ent n

ewly

con

stru

cted

stoc

k


vo

lu

me

3

1

67

30%

hou

sing

stre

ss c

riter

ion

Very

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

NA

NA

NA

NA

All

hous

ehol

ds

Very

Low

inco

me

fam

ily

and

grou

p re

ntin

g ho

useh

olds

N

A N

A N

A N

A Al

l ho

useh

olds

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds N

A O

ne b

edro

om o

r stu

dio

apar

tmen

t affo

rdab

le to

50

% o

f hou

seho

lds

NA

One

bed

room

or s

tudi

o ap

artm

ent

affo

rdab

le to

90%

of h

ouse

hold

s N

A

Low

inco

me

fam

ily a

nd

grou

p re

ntin

g ho

useh

olds

N

A N

A N

A N

A N

A

Mod

erat

e in

com

e sin

gle

and

coup

le re

ntin

g ho

useh

olds

50%

of h

ouse

hold

s can

live

in

FBU

RA

One

bed

room

or s

tudi

o ap

artm

ent a

fford

able

to a

ll ho

useh

olds

N

A N

A N

A

Mod

erat

e in

com

e fa

mily

re

ntin

g ho

useh

olds

N

A Tw

o be

droo

m a

part

men

t af

ford

able

to 5

0% o

f ho

useh

olds

N

A Tw

o be

droo

m a

part

men

t affo

rdab

le to

all

hous

ehol

ds a

nd th

ree

bedr

oom

apa

rtm

ent

affo

rdab

le to

40%

of h

ouse

hold

s N

A


7.3.2 Assessment of affordability of different delivery methods


1

69

35%

hou

sing

stre

ss c

riter

ion

Very

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

NA

NA

NA

One

bed

room

or s

tudi

o ap

artm

ent a

fford

able

to 1

0% o

f ho

useh

olds

All

hous

ehol

ds

Very

Low

inco

me

fam

ily a

nd

grou

p re

ntin

g ho

useh

olds

N

A N

A N

A N

A Al

l ho

useh

olds

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

NA

One

bed

room

apa

rtm

ent a

fford

able

to

80%

of h

ouse

hold

s N

A O

ne b

edro

om a

part

men

t af

ford

able

to a

ll ho

useh

olds

N

A

Low

inco

me

fam

ily a

nd

grou

p re

ntin

g ho

useh

olds

N

A N

A N

A Tw

o be

droo

m a

part

men

t af

ford

able

to 4

0% o

f hou

seho

lds

NA

Mod

erat

e in

com

e sin

gle

and

coup

le re

ntin

g ho

useh

olds

80%

of h

ouse

hold

s can

liv

e in

FBU

RA

One

bed

room

apa

rtm

ent a

fford

able

to

all

hous

ehol

ds

NA

One

bed

room

apa

rtm

ent

affo

rdab

le to

all

hous

ehol

ds

NA

Mod

erat

e in

com

e fa

mily

re

ntin

g ho

useh

olds

Two

bedr

oom

apa

rtm

ent

affo

rdab

le to

5%

of

hous

ehol

ds

Two

bedr

oom

apa

rtm

ent a

fford

able

to

90%

of h

ouse

hold

s

Thre

e be

droo

m a

part

men

t af

ford

able

to 2

0% o

f hou

seho

lds

NA

Thre

e be

droo

m a

part

men

t af

ford

able

to a

ll ho

useh

olds

N

A

168

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Purc

hasi

ng H

ouse

hold

s

Very

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to 5

% o

f ho

useh

olds

St

udio

affo

rdab

le to

30%

of

hou

seho

lds

NA

NA

Very

Low

inco

me

fam

ily

and

grou

p ho

useh

olds

N

A N

A N

A N

A N

A

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to a

ll ho

useh

olds

One

bed

room

affo

rdab

le to

4%

of h

ouse

hold

s

One

bed

room

affo

rdab

le

to 8

0% o

f hou

seho

lds

NA

NA

Low

inco

me

fam

ily a

nd

grou

p ho

useh

olds

N

A N

A N

A N

A N

A

Mod

erat

e in

com

e sin

gle

and

coup

le h

ouse

hold

s

10%

of h

ouse

hold

s can

pu

rcha

se a

one

bed

room

ap

artm

ent i

n FB

URA

One

bed

room

affo

rdab

le to

al

l hou

seho

lds

Two

bedr

oom

affo

rdab

le

to 9

0% o

f hou

seho

lds

NA

NA

Sour

ce: J

SA c

alcu

latio

n


vo

lu

me

3

1

71

40%

hou

sing

stre

ss c

riter

ion

Very

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

NA

NA

NA

One

bed

room

or s

tudi

o ap

artm

ent

affo

rdab

le to

20%

of h

ouse

hold

s Al

l ho

useh

olds

Very

Low

inco

me

fam

ily a

nd

grou

p re

ntin

g ho

useh

olds

N

A N

A N

A N

A Al

l ho

useh

olds

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

One

bed

room

or s

tudi

o ap

artm

ent a

fford

able

to

10%

of h

ouse

hold

s

Two

bedr

oom

apa

rtm

ent

affo

rdab

le to

20%

of h

ouse

hold

s N

A Tw

o be

droo

m a

part

men

t affo

rdab

le

to 7

0% o

f hou

seho

lds

NA

Low

inco

me

fam

ily a

nd

grou

p re

ntin

g ho

useh

olds

N

A Tw

o be

droo

m a

part

men

t af

ford

able

to 2

0% o

f hou

seho

lds

NA

Two

bedr

oom

apa

rtm

ent a

fford

able

to

70%

of h

ouse

hold

s N

A

Mod

erat

e in

com

e sin

gle

and

coup

le re

ntin

g ho

useh

olds

All h

ouse

hold

s can

live

in

FBU

RA

Affo

rdab

le to

all

hous

ehol

ds

NA

Affo

rdab

le to

all

hous

ehol

ds

NA

Mod

erat

e in

com

e fa

mily

re

ntin

g ho

useh

olds

Two

bedr

oom

apa

rtm

ent

affo

rdab

le to

40%

of

hous

ehol

ds

Two

bedr

oom

apa

rtm

ent

affo

rdab

le to

all

hous

ehol

ds

Thre

e be

droo

m a

fford

able

to

50%

of a

ll ho

useh

olds

NA

Thre

e be

droo

m a

part

men

t affo

rdab

le

to a

ll ho

useh

olds

N

A

170

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Purc

hasi

ng H

ouse

hold

s

Very

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to 2

0% o

f ho

useh

olds

Stud

io a

fford

able

to 4

0% o

f ho

useh

olds

One

bed

room

affo

rdab

le to

5%

of h

ouse

hold

s

NA

NA

Very

Low

inco

me

fam

ily a

nd

grou

p ho

useh

olds

N

A N

A N

A N

A N

A

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to a

ll ho

useh

olds

One

bed

room

affo

rdab

le to

20%

of

hous

ehol

ds

One

bed

room

affo

rdab

le to

al

l of h

ouse

hold

s N

A N

A

Low

inco

me

fam

ily a

nd

grou

p ho

useh

olds

N

A N

A N

A N

A N

A

Mod

erat

e in

com

e sin

gle

and

coup

le h

ouse

hold

s

40%

of h

ouse

hold

s can

pu

rcha

se a

one

bed

room

ap

artm

ent i

n FB

URA

One

bed

room

affo

rdab

le to

all

hous

ehol

ds

One

bed

room

affo

rdab

le to

al

l hou

seho

lds

NA

NA

Mod

erat

e in

com

e fa

mily

ho

useh

olds

N

A Tw

o be

droo

m a

fford

able

to 3

0% o

f ho

useh

olds

Two

bedr

oom

affo

rdab

le to

al

l hou

seho

lds

Thre

e be

droo

m a

fford

able

to

30%

of h

ouse

hold

s

NA

NA

Sour

ce: J

SA c

alcu

latio

n


1

73

30%

hou

sing

stre

ss c

riter

ion

with

50%

shar

ed e

quity

and

dis

coun

t mar

ket r

ent

Very

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

NA

NA

NA

One

bed

room

or s

tudi

o af

ford

able

to 7

0% o

f ho

useh

olds

All

hous

ehol

ds

Very

Low

inco

me

fam

ily a

nd

grou

p re

ntin

g ho

useh

olds

N

A N

A N

A Tw

o be

droo

m a

fford

able

to

2% o

f hou

seho

lds

All

hous

ehol

ds

Low

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

NA

One

bed

room

or s

tudi

o ap

artm

ent a

fford

able

to

50%

of h

ouse

hold

s N

A O

ne b

edro

om o

r stu

dio

apar

tmen

t affo

rdab

le to

all

hous

ehol

ds

NA

Low

inco

me

fam

ily a

nd

grou

p re

ntin

g ho

useh

olds

N

A N

A N

A

Two

bedr

oom

apa

rtm

ent

affo

rdab

le to

all

hous

ehol

ds

and

thre

e be

droo

m

apar

tmen

t affo

rdab

le to

40%

of

hou

seho

lds

NA

Mod

erat

e in

com

e sin

gle

and

coup

le re

ntin

g ho

useh

olds

50

% o

f hou

seho

lds c

an

live

in F

BURA

One

bed

room

or s

tudi

o ap

artm

ent a

fford

able

to a

ll ho

useh

olds

N

A N

A N

A

Mod

erat

e in

com

e fa

mily

N

A Tw

o be

droo

m a

part

men

t af

ford

able

to 5

0% o

f N

A Th

ree

bedr

oom

apa

rtm

ent

NA

172

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

Purc

hasi

ng H

ouse

hold

s

Very

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to 3

0% o

f ho

useh

olds

One

bed

room

affo

rdab

le to

20

% o

f hou

seho

lds

Stud

io a

fford

able

to 5

0% o

f ho

useh

olds

NA

NA

Very

Low

inco

me

fam

ily a

nd

grou

p ho

useh

olds

N

A N

A N

A N

A N

A

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to a

ll ho

useh

olds

One

bed

room

affo

rdab

le to

30%

of

hou

seho

lds

One

bed

room

affo

rdab

le to

al

l hou

seho

lds

NA

NA

Low

inco

me

fam

ily a

nd

grou

p ho

useh

olds

N

A N

A Tw

o be

droo

m a

fford

able

to

5% o

f hou

seho

lds

NA

NA

Mod

erat

e in

com

e sin

gle

and

coup

le h

ouse

hold

s

60%

of h

ouse

hold

s can

pu

rcha

se a

one

bed

room

ap

artm

ent i

n FB

URA

One

bed

room

affo

rdab

le to

all

hous

ehol

ds

One

bed

room

affo

rdab

le to

al

l hou

seho

lds

NA

NA

Mod

erat

e in

com

e fa

mily

ho

useh

olds

3% o

f hou

seho

lds c

an

purc

hase

a tw

o be

droo

m

apar

tmen

t in

FBU

RA

Two

bedr

oom

affo

rdab

le to

50%

of

hou

seho

lds

Thre

e be

droo

m a

fford

able

to

50%

of h

ouse

hold

s N

A N

A

Sour

ce: J

SA c

alcu

latio

n


vo

lu

me

3

1

75

7.3.

3As

pira

tiona

l affo

rdab

le h

ousin

g m

odel

140

Very

low

inco

me

singl

e an

d co

uple

re

ntin

g ho

useh

olds

(1,5

00)

0 0

0 0

1,50

0 (1

br,

stud

io)

18.8

%

3.8%

Very

low

inco

me

fam

ily re

ntin

g ho

useh

olds

(1,2

00)

0 0

0 0

360

(3 b

r)

840

(2 b

r)

15.0

%

3%

90%

of l

ow in

com

e sin

gle

and

coup

le re

ntin

g ho

useh

olds

(600

)

0 30

0 (1

br,

stud

io)

0 30

0 (1

br,

stud

io –

80

% o

f mar

ket r

ent)

0

7.5%

1.

5%

50%

of l

ow in

com

e fa

mily

rent

ing

hous

ehol

ds (7

00)

0 0

0 49

0 (2

br –

66%

of

mar

ket r

ent)

0

8.8%

1.

8%

140 M

odel

ling

base

d on

50:

50 st

udio

s and

one

bed

room

apa

rtm

ents

; and

70:

30 tw

o be

droo

m a

nd th

ree

bedr

oom

apa

rtm

ents

to p

rovi

de a

n ap

prop

riate

mix

of d

wel

lings

. Re

fer t

able

s 7-1

5, 1

6 an

d 17

for d

etai

ls.

174

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

rent

ing

hous

ehol

ds

hous

ehol

ds

affo

rdab

le to

all

hous

ehol

ds

Purc

hasi

ng H

ouse

hold

s

Very

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to 5

% o

f ho

useh

olds

St

udio

affo

rdab

le to

50%

of h

ouse

hold

s N

A N

A

Very

Low

inco

me

fam

ily a

nd

grou

p ho

useh

olds

N

A N

A N

A N

A N

A

Low

inco

me

singl

e an

d co

uple

hou

seho

lds

NA

Stud

io a

fford

able

to a

ll ho

useh

olds

One

bed

room

affo

rdab

le

to 4

% o

f hou

seho

lds

One

bed

room

affo

rdab

le to

all

hous

ehol

ds

NA

NA

Low

inco

me

fam

ily a

nd

grou

p ho

useh

olds

N

A N

A Tw

o be

droo

m a

fford

able

to 7

0% o

f ho

useh

olds

N

A N

A

Mod

erat

e in

com

e sin

gle

and

coup

le h

ouse

hold

s

10%

of h

ouse

hold

s can

pu

rcha

se a

one

be

droo

m a

part

men

t in

FBU

RA

One

bed

room

affo

rdab

le

to a

ll ho

useh

olds

O

ne b

edro

om a

fford

able

to a

ll ho

useh

olds

N

A N

A

Mod

erat

e in

com

e fa

mily

ho

useh

olds

N

A N

A Tw

o be

droo

m a

fford

able

to a

ll ho

useh

olds

an

d th

ree

bedr

oom

affo

rdab

le to

80%

of

hous

ehol

ds

NA

NA


1

77

140

50%

of l

ow in

com

e fa

mily

pu

rcha

sing

hous

ehol

ds (7

00)

0 0

490

(2 b

r – 5

4%

owne

r equ

ity)

210

(3 b

r – 3

8%

owne

r equ

ity)

0 0

8.8%

1.

8%

100%

of m

oder

ate

inco

me

singl

e an

d co

uple

pur

chas

ing

hous

ehol

ds

(500

)

50

450

(1 b

r)

0 0

0 6.

3%

1.3%

90%

of m

oder

ate

inco

me

fam

ily

hous

ehol

ds (9

00)

0 0

630

(2 b

r – 8

0%

owne

r equ

ity)

270

(3 b

r – 5

8%

owne

r equ

ity)

0 0

11.3

%

2.3%

Tota

l 10

0 (1

.3%

) 1,

510

(18.

9%)

2,60

0 (3

2.5%

) 1,

090

(13.

6%)

2,70

0 (3

3.8%

)

1 br

/stu

dio

100

(1.3

%)

1,30

0 (1

6.3%

) 40

0 (5

.0%

) 30

0 (3

.8%

) 1,

500

(18.

8%)

2 br

0

210

(2.6

%)

1,54

0 (1

9.3%

) 49

0 (6

.1%

) 84

0 (1

0.5%

)

3 br

0

0 66

0 (8

.3%

) 30

0 (3

.8%

) 36

0 (4

.5%

)

Sour

ce: J

SA c

alcu

latio

n

176

Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

140

21

0 (3

br –

49%

of

mar

ket r

ent)

100%

of m

oder

ate

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds

(100

)

50

50 (1

br,

stud

io)

0 0

0 1.

3%

0.3%

100%

of m

oder

ate

inco

me

fam

ily

rent

ing

hous

ehol

ds (3

00)

0 21

0 (2

br)

0

90 (3

br –

80%

of

mar

ket r

ent)

0

3.8%

0.

8%

50%

of v

ery

low

inco

me

singl

e an

d co

uple

pur

chas

ing

hous

ehol

ds

(400

) 0

0 40

0 (s

tudi

o 48

%

owne

r equ

ity)

0 0

5.0%

1.

0%

50%

of v

ery

low

inco

me

fam

ily

purc

hasin

g ho

useh

olds

(600

)

0 0

420

(2 b

r – 2

0%

owne

r equ

ity)

180

(3 b

r – 1

5%

owne

r equ

ity)

0 0

7.5%

1.

5%

100%

of l

ow in

com

e sin

gle

and

coup

le p

urch

asin

g ho

useh

olds

(5

00)

0 50

0 (s

tudi

o)

0 0

0 6.

3%

1.3%


vo

lu

me

3

179


7.3.4 ‘Pragmatic’ mixed model

6.5% X 72/88 = 5.9%400 X 0.52 + 420 X 0.8 + 180 X 0.85 + 490 X 0.46 + 210 X 0.62 + 630 X 0.2 + 270 X .42 = 1,2922.7% X 69/88 = 2.1%390 X 10/19 + 700 X 4/5= 7656.8% X 58/88 = 4.5%9.0% X 7500/8000 = 8.4%


1

81

147

100%

of m

oder

ate

inco

me

fam

ily

rent

ing

hous

ehol

ds (4

70)

0 33

0 (2

br)

0

140

(3 b

r – 8

0% o

f m

arke

t ren

t)

0 5.

9%

1.2%

100%

of l

ow in

com

e sin

gle

and

coup

le

purc

hasin

g ho

useh

olds

(40%

str

ess)

(7

90)

0 79

0 (s

tudi

o)

0 0

0 9.

9%

2.0%

50%

of l

ow in

com

e fa

mily

pur

chas

ing

hous

ehol

ds (3

5% st

ress

) (1,

100)

0

0 1,

100

(2 b

r –

60%

ow

ner

equi

ty

0 0

13.8

%

2.8%

100%

of m

oder

ate

inco

me

singl

e an

d co

uple

pur

chas

ing

hous

ehol

ds (4

0%

stre

ss) (

790)

470

320

(1 b

r)

0

0 0

9.9%

2.

0%

100%

of m

oder

ate

inco

me

fam

ily

purc

hasin

g ho

useh

olds

(35%

str

ess)

(1

,410

) 0

420

(2 b

r)

570

(2 b

r – 8

0%

owne

r equ

ity)

420

(3 b

r – 5

8%

owne

r equ

ity)

0 0

17.6

%

3.5%

Tota

l 60

0 (7

.5%

) 2,

640

(33.

0%)

2,09

0 (2

6.1%

) 1,

430

(17.

9%)

1,24

0 (1

5.5%

)

1 br

/stu

dio

600

(7.5

%)

1,89

0 (2

3.6%

) 0

190

(2.4

%)

690

(8.6

%)

180

Affo

rdab

le H

ousin

g De

liver

y O

ptio

ns P

aper

(FBU

RA)

147

Very

low

inco

me

singl

e an

d co

uple

re

ntin

g ho

useh

olds

(690

)148

0 0

0 0

690

(1 b

r, st

udio

) 8.

6%

1.7%

Very

low

inco

me

fam

ily re

ntin

g ho

useh

olds

(550

)149

0 0

0 0

165

(3 b

r)

385

(2 b

r)

6.9%

1.

4%

100%

of l

ow in

com

e sin

gle

and

coup

le

rent

ing

hous

ehol

ds (3

5% st

ress

) (94

0)

0 75

0 (1

br,

stud

io)

0 19

0 (1

br,

stud

io –

80

% o

f mar

ket r

ent)

0 11

.8%

2.

4%

40%

of l

ow in

com

e fa

mily

rent

ing

hous

ehol

ds (1

,100

)

0 0

0 1,

100

(2 b

r – 7

0% o

f m

arke

t ren

t)

0 13

.8%

2.

8%

100%

of m

oder

ate

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds (3

5%

stre

ss) (

160)

13

0 30

(1 b

r, st

udio

) 0

0 0

2.0%

0.

4%

147 M

odel

ling

base

d on

50:

50 st

udio

s and

one

bed

room

apa

rtm

ents

; and

70:

30 tw

o be

droo

m a

nd th

ree

bedr

oom

apa

rtm

ents

to p

rovi

de a

n ap

prop

riate

mix

of d

wel

lings

. Re

fer t

able

s 7-1

5, 1

6 an

d 17

for d

etai

ls.

Base

d on

3.1

% o

f dw

ellin

gs b

eing

soci

al h

ousin

g

Base

d on

3.1

% o

f dw

ellin

gs b

eing

soci

al h

ousin

g


vo

lu

me

3

183

5.2% X 75/88 = 4.4% 1,100 X 0.40 + 570 X 0.2 + 420 X 0.42 = 7303.6% X 69/88 = 2.8%1,430 X 10/19 = 7503.1% X 58/88 = 2.0%5.0% X 7500/8000 = 4.7% 18

2 Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

147

2 br

0

750

(9.4

%)

1,67

0 (2

0.9%

) 1,

100

(13.

8%)

385

(4.8

%)

3 br

0

0 42

0 (5

.3%

) 14

0 (1

.8%

) 16

5 (2

.1%

)

Sour

ce: J

SA c

alcu

latio

n


1

85

156

100%

of l

ow in

com

e sin

gle

and

coup

le

rent

ing

hous

ehol

ds (3

5% st

ress

) (1,

120)

0

900

(1 b

r, st

udio

) 0

220

(1 b

r, st

udio

–

80%

of m

arke

t ren

t)

14.0

%

2.8%

40%

of l

ow in

com

e fa

mily

rent

ing

hous

ehol

ds (1

,300

)

0 0

0 1,

300

(2 b

r – 7

0% o

f m

arke

t ren

t)

16.3

%

3.3%

100%

of m

oder

ate

inco

me

singl

e an

d co

uple

rent

ing

hous

ehol

ds (3

5% st

ress

) (1

90)

150

40 (1

br,

stud

io)

0 0

2.4%

0.

5%

100%

of m

oder

ate

inco

me

fam

ily re

ntin

g ho

useh

olds

(560

) 0

390

(2 b

r)

0 17

0 (3

br –

80%

of

mar

ket r

ent)

7.

0%

1.4%

100%

of l

ow in

com

e sin

gle

and

coup

le

purc

hasin

g ho

useh

olds

(40%

str

ess)

(930

) 0

930

(stu

dio)

0

0 11

.6%

2.

3%

50%

of l

ow in

com

e fa

mily

pur

chas

ing

hous

ehol

ds (3

5% st

ress

) (1,

300)

0

0 1,

300

(2 b

r – 6

0%

owne

r equ

ity

0 16

.3%

3.

3%

156

Mod

ellin

g ba

sed

on 5

0:50

stu

dios

and

one

bed

room

apa

rtm

ents

; and

70:

30 tw

o be

droo

m a

nd th

ree

bedr

oom

apa

rtm

ents

to p

rovi

de a

n ap

prop

riate

mix

of d

wel

lings

. Re

fer t

able

s 7-

15, 1

6 an

d 17

for d

etai

ls.


7.3.5 Intermediate affordable housing model


vo

lu

me

3

187

6.2% X 75/88 = 5.3%1,300 X 0.40 + 670 X 0.2 + 500 X 0.42 = 860 4.2% X 69/88 = 3.3%1,690 X 10/19 = 8903.6% X 7500/8000 = 3.4% 18

6 Af

ford

able

Hou

sing

Deliv

ery

Opt

ions

Pap

er (F

BURA

)

156

100%

of m

oder

ate

inco

me

singl

e an

d co

uple

pur

chas

ing

hous

ehol

ds (4

0% st

ress

) (9

30)

560

370

(1 b

r)

0

0 11

.6%

2.

3%

100%

of m

oder

ate

inco

me

fam

ily

purc

hasin

g ho

useh

olds

(35%

str

ess)

(1,6

70)

0 50

0 (2

br)

670

(2 b

r – 8

0%

owne

r equ

ity)

500

(3 b

r – 5

8%

owne

r equ

ity)

0 20

.9%

4.

2%

Tota

l 71

0 (8

.9%

) 3,

130

(39.

1%)

2,47

0 (3

0.9%

) 1,

690

(21.

1%)

1 br

/stu

dio

710

(8.9

%)

2,24

0 (2

8.0%

) 0

220

(2.8

%)

2 br

0

890

(11.

1%)

1,97

0 (2

4.6%

) 1,

300

(16.

3%)

3 br

0

0 50

0 (6

.3%

) 17

0 (2

.1%

)

Sour

ce: J

SA c

alcu

latio

n


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