Ensuring a liveability dividend from growth: A new Urban Renewal Community Compact

Posted June 13, 2017

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SGS Economics and Planning liveability dividend

Patrick Fensham proposes a new Urban Renewal Compact in growth and renewal areas in Melbourne and Sydney.

The Greater Sydney Commission (GSC) has proposed ‘Growth Infrastructure Compacts’ which will involve state agencies aligning their asset management and investment plans to government-endorsed development sequencing and infrastructure plans in major planned renewal areas. The first is to be developed in the Greater Parramatta to Olympic Peninsula (GPOP) region. In response, SGS Principal and Partner Patrick Fensham proposes a new Urban Renewal Compact in growth and renewal areas in Melbourne and Sydney.

SGS Economics and Planning Patrick Fensham

I commend the Greater Sydney Commission for this important initiative. In response, I have written a paper proposing a new Urban Renewal Compact in growth and renewal areas in Melbourne and Sydney. My proposed approach has a more local, 'liveability' focus than that proposed by the GSC, including a commitment to engagement with local government and local affected communities.

An unprecedented paradigm for infill development in Sydney and Melbourne

Sydney and Melbourne are experiencing historically high rates of population growth and housing development. Sydney has added 79,800[1] people and approximately 26,800[2] dwellings per year over the last three years, while Melbourne has grown by 91,800[3] people and 31,800[4] dwellings per year in the same period. The big historical shift in the provision of this new housing in Sydney and Melbourne has been its more recent ‘infill’ focus. Where these cities used to grow outwards in ‘greenfield’, new release areas on the urban fringe, an increasing share is now within the established areas. While Sydney has typically had anywhere from 70 per cent to 90 per cent of its housing built in established areas over the last 20 years, Melbourne is now catching up, with around 70 per cent of all new housing built in established areas since 2014[5].

Typically the land supply for recent infill development has come from the conversion of industrial sites to residential. The expectation in future is that corridors with existing rail transport and traditional inner or middle ring suburban residential subdivision patterns will host much more of the infill development. Both A Plan for Growing Sydney and Plan Melbourne identify centres and transport corridors in established areas for a much larger role in future.

An insufficient current commitment to 'productivity, liveability and sustainability' outcomes in renewal area planning

For some suburbs, renewal proposals represent a wholesale ‘reworking’ at much higher densities with hundreds of new dwellings per year. Communities often have reasonable concerns about what the redevelopment means, how the traffic and transport networks will cope, how street-level amenity will be affected, whether there will be sufficient open space and whether schools and other social infrastructure provision will be sufficient. ‘Business as usual’, incremental infrastructure provision, segmented amongst state government agencies and local government, is unlikely to deliver an urban outcome that meets the amenity and liveability aspirations of the communities that will emerge in these locations, as well as the wider productivity and sustainability aims that underpin metropolitan strategic planning.

With a longer and more established history in Australian cities, planning for greenfield development – while far from perfect – typically includes or at least promises some integration with local and state agencies for infrastructure provision and community development. Major renewal propositions should also be subject to comprehensive planning with commitments to integrated infrastructure provision, and enhancements to general neighbourhood amenity. Otherwise, the average quality of life for residents in a redeveloped precinct, and its surrounds is at risk of declining over time.

The potential scope for a new Urban Renewal Community Compact with the community

Unless infill renewal is undertaken with regard for place-based outcomes, we risk incumbent community resistance on a much greater scale than the recent outbreaks of so-called NIMBYism. We risk the advantage derived from Australia’s reputation for liveable cities and we risk our ability to meet international commitments we have signed up to such as the UN Sustainable Development Goals. The way to ‘bring people along’ is to show a dividend from growth and ensure that while the quality and character of life might be different, overall it will be better, not worse, than before.

A new ‘UrbanRenewal Community Compact’, involving a commitment to integrated planning by state and local agencies is suggested. This would have a local focus, on the assumption that alternative or equivalent processes for metropolitan, district or subregional physical and social infrastructure planning (for secondary school places or hospital beds for example) are in place or also established. The ‘Urban Renewal Community Compact’ would involve:

  • Declaring an Urban Renewal Community Compact Area where significant change is anticipated (there are no hard and fast thresholds but areas expected to grow at well above average rates, say at two to five per cent per annum, and anticipating a population of say 8,000 to 10,000 or above at ‘build out’, would-be candidates)
  • Establishing a formal governance arrangement including relevant state agencies, local government and genuine community representation in declared renewal areas (some suggestions for governance roles are discussed later)
  • Developing outcomes and indicators for ‘liveability’ in precincts slated for major renewal
  • Undertaking baseline measurements for each of the indicators
  • Making a commitment to the community, for example in the form of a Memorandum of Understanding, that through more effective integrated planning and intra-agency cooperation outcomes will be measured against these indicators post-development and be maintained or enhanced
  • Developing a robust funding and implementation framework.

For any particular precinct, the actual indicators and measurable outcomes are likely to vary depending on the baseline provision, but a Compact might ultimately include commitments to, for example:

  • Increasing area/quality/accessibility of active open space assets
  • Increasing the ratio of accessible community/cultural facilities with capacity
  • Increasing the length of dedicated bike paths and safe and 'off road' pedestrian paths
  • Increasing the ratio of accessible public education places to primary school age children'
  • Housing diversity to respond to the changing composition of households
  • Increasing the share of social and affordable dwellings
  • Increasing the share of accessible metropolitan jobs through local transport infrastructure improvements linked to metropolitan networks
  • Reduced car dependency
  • Improving the environmental performance of the precinct in terms of energy usage, CO2 emissions, water consumption, runoff (WSUD), waste, heat stress, biodiversity.

Structure and land use planning that has this suggested scope will inevitably involve the greater involvement of state agencies, and ultimately the preparation of more detailed accompanying infrastructure provision plans and schedules. Achieving the anticipated outcomes will require innovative thinking about, for example, land dedications for new open space provision, the shared use of existing and new facilities, mixed-use development and vertical formats including dedicating podiums for education and community infrastructure and the re-allocation of road space for a greater variety of transport modes. This is not conventional two-dimensional structure planning. This may seem an ambitious list but only because of the systemic absence of such aims in renewal area planning. These are reasonable expectations in rapidly growing, economically strong cities and the alternative of anticipating that ‘average’ liveability across these dimensions is expected to deteriorate over time should be unacceptable.

Funding and implementation

Clearly a governance framework needs to be established which will give the Compact meaning. For any identified renewal precinct this would involve a coordinating state agency (e.g. Landcom or the Greater Sydney Commission in Sydney, or the VPA in Melbourne), the relevant local council, key government agencies (e.g. those responsible for planning, transport and education), and ideally, local community representatives. More work would be required to consider their configuration, however, Neighbourhood Development Corporations[6] could be established to create genuine partnerships with affected communities. As well as involving the community in planning, these could assist in providing guidance or assistance to landowners in brokering deals with property developers.

Traditional mechanisms for local infrastructure charges or development contributions, and state government line agency budgeting, would fund a share of the cost of anticipated local and state infrastructure. However, achieving affordable and mixed housing outcomes, increased rates of open space provision and environmental management improvements for example, may require additional sources of funding and in this regard ‘value capture’ could have a significant role.

This could take the form of a ‘development licence fee’ as discussed in the recent SGS Occasional Paper, “Development licence fees to fund infrastructure and affordable housing.”[7] However, the intention to apply a value capture funding mechanism such as that outlined has to be signalled early. If land values rise in anticipation of future additional redevelopment potential without such a signal, then it will be more difficult to fund public benefit works anticipated by and committed through any Urban Renewal Community Compact.


[1] Department of Planning and Environment (2017) Metropolitan Housing Monitor Sydney Region
[2] Department of Planning and Environment (2017) Metropolitan Housing Monitor Sydney Region
[3] Department of Energy, Land Water and Planning (2016) Victoria in Future 2016.
[4] Department of Energy, Land, Water and Planning (2015, 2014, 2013, 2012, 2011) Urban Development Program
[5] Victorian Government (2017) Plan Melbourne 2017-2050, Housing distribution between established areas and growth area greenfields, Outcome 2, p.47
[6] Grattan 2011 Getting the Housing We Want,
[7], March 2017

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