This is Allens
Emily and Michael on the future of our cities
Emily specialises in environment and planning law, advising clients on the energy transition, major infrastructure projects, property development and the water sector. Michael specialises in commercial property development and infrastructure projects, and leads our Real Estate and Development practice.
Emily Johnstone
Getting your environment and planning approvals for a project in Australia isn't always straightforward. You're dealing with three levels of government – federal, state and local, each with its own rules and policies. It's also a multi-disciplinary challenge – you need to think about land use planning, contamination, water supply and flood mitigation, and how to coordinate delivery of supporting infrastructure in time to support the new community.
All these moving parts mean it takes time and resources, and tenacity, to get a project off the ground. To make our cities and neighbourhoods liveable and resilient places to live and work, all these elements need to work together efficiently to deliver the housing and infrastructure we need to support our population and tackle affordability challenges.
There's a recognition that city sprawl is not the answer. We're now seeing genuine momentum towards densification – with appropriate controls – to deliver housing and infrastructure where we need it most. There's also a major push at national and state level to speed up project approvals and remove duplication while improving our standards of environmental protection. I think one thing industry and the community are looking for is clarity – defined expectations, clear timeframes and systems we can rely on, so projects can be delivered without compromising on the environment or community.
I think we're heading in the right direction. Our national environmental laws are under significant reform to strengthen protection, and make project decision making more streamlined, transparent and accountable. At state level, there are major reforms underway in Victoria and New South Wales targeted at faster decision making to boost housing supply. These changes will make it easier for complying development and high-priority projects to be approved quickly, while ensuring more complex proposals still get the attention they need. These changes will help get more homes to market, faster.
Flexibility and a willingness to be brave will change the way things are done, and really create the kinds of communities the big strategic documents describe.
But there’s still more to do. Good planning needs coordination between authorities and adequate funding to make our future cities and neighbourhoods safe and liveable. Our development contribution systems, to fund parks, playgrounds and other infrastructure, need to be easier to navigate and enforced appropriately, so the community has access to infrastructure and services when they need it. Development should work hand in hand with environment and sustainability objectives, with incentives to protect and expand our tree canopy, and encourage local biodiversity and restore our waterways. And with climate change bringing more frequent flooding and fire risk, we need meaningful funding and cooperation between governments to deliver the infrastructure required to protect people and property. Funding for infrastructure and smarter, more flexible approaches to local issues will be key.
I'm optimistic that we'll see real improvements. There’s broad recognition that it’s currently difficult and too slow to get projects approved. Governments are motivated to directly target these bottlenecks. People increasingly understand the need for infill and urban renewal, and there’s excitement about transforming former industrial areas into vibrant neighbourhoods.
I think the key to making these ambitious projects a success – beyond approvals and infrastructure delivery – is supporting the little changes that allow people to turn the places they live in into neighbourhoods. Encourageing new and inventive uses of spaces, whether for pop up businesses, markets or local community events, without over-regulation. These might seem like lower-tier issues, but they're the things that inspire people to come out of their houses and apartments and walk around a place. Flexibility and a willingness to be brave will change the way things are done, and really create the kinds of communities the big strategic documents describe.
One of my favourite things about my job is the opportunity to contribute to tangible projects that make a difference to people and our cities, and working with talented creative and technical specialists who have come up with clever new ways to use land. It's our job to work with those experts – engineers, architects, ecologists – to bring the ideas to life. Planning is like a puzzle, and it’s endlessly satisfying to help put all the pieces together to create a solution.
Michael Graves
The future of our cities depends on decisions we make today about housing, infrastructure and collaboration. If we want liveable, resilient cities, we need to expand housing choice in places where people most want to live and to embrace greater density but, at the same time, provide residents with more amenities, and forge creative partnerships between government and business. And we need to make better use of what we already have.
Australians are very aware of the housing challenges facing our cities, but there's also strong reason for optimism. Governments have placed housing affordability and the need for smarter urban planning at the top of their agendas. We've seen numerous examples of how public-private collaboration can unlock stalled sites and create vibrant precincts. There are plenty of opportunities, particularly for private sector developers willing to be bold and creative. Housing affordability sits at the heart of the challenge. If people can’t afford to live in our cities, they move further out, driving up transport and infrastructure costs and stretching public resources. Houses might look cheaper, but sprawl is one of the most expensive ways to house people.
We need real housing choices in places where people most want to live. Right now, options are limited, with most new developments targeting medium-to high-income earners. This is not by design but, rather, is a result of the high cost of residential development. Build-to-rent and build-to-sell models are struggling under the weight of construction costs and record-high state property taxes in delivering housing for key workers or lower-income households. We're in a drought of development in major cities, and that lack of affordable product is driving the cost-of-living crisis.
For me, the priority is clear: denser cities with greater massing around existing infrastructure. Let's make the most of what we already have, and reform our federal and state tax systems to stimulate investment in new housing projects and the commercial, retail and industrial and logistics assets that create jobs and reduce the cost of living. The development of new and enhanced ports and intermodal infrastructure also has the capacity to significantly reduce construction costs and make housing more affordable.
Affordable housing must be the most important policy objective, and while it is pleasing to see recent announcements of policies that seek to streamline the approval process for new housing developments, we also need policies that seek to remove economic barriers.
We need to reimagine what our cities could look like. It’s not about reinventing everything, but it does mean removing constraints and asking bold questions.
The tax system, especially in Victoria, is a major constraint. The Property Council of Australia has reported that 30 per cent of a new home’s purchase price can be attributed to one form of tax or another. Developers are waiting for reform, so we've ended up with very high taxes on very few developments. This has stifled development and led capital to invest elsewhere. This issue is particularly acute in Victoria.
Government policy is starting to shift in the right direction and I am optimistic that reform is on the way. Australia is a very attractive destination for capital investment and with the right stimulus, I think the property industry will bounce back quickly. That would buoy government revenue and deliver more housing, as well as creating a productivity uplift to overcome stagnant growth.
That recovery could be enhanced by even more creative collaboration between the public and private sectors. NSW has shown how unsolicited (or market-led) proposals can unlock infrastructure and housing projects in complex locations. Such mechanisms could be more widely employed across Australia to unlock development opportunities, and to tackle housing affordability, in particular.
The future of real estate demands thinking beyond transactions to how a development connects with its environment and the broader economy. For our clients, that means cross-sector and government collaboration is critical. The urgency of the cost-of-living crisis requires large, precinct-scale projects that deliver housing, services and amenities. The success of such projects so often demands a team of lawyers and advisors who understand power, water and other utilities, and how to secure them at competitive rates; and how to engage with government collaboratively, navigate planning frameworks, and structure deals that balance commercial and social objectives.
Ultimately, we need to reimagine what our cities could look like. It’s not about reinventing everything, but it does mean removing constraints and asking bold questions.
