What’s the angle with Fishermans Bend?

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The Minister for Planning, Matthew Guy, is reported as saying that rather than “sprinkle high density housing across Melbourne”, the new Government will give priority to strategic developments on specific sites close to the CBD.

Mr Guy has already moved to water down the former government’s planning laws encouraging higher density residential developments (i.e. over three storeys) along public transport corridors.

He says the focus of urban renewal in future will be on locations like Fishermans Bend, the 20 hectare E-Gate site just off Footscray Road, and the area around Richmond station.

This is surprisingly reminiscent of Kenneth Davidson’s prescription for Melbourne. However unlike the Minister, who is moving to increase land supply in the Growth Areas as well, Mr Davidson sees major urban renewal projects as providing enough land to obviate the need for further fringe development.

Facilitating urban renewal in areas close to the city centre is a good thing. But it’s a big call to put all your higher density eggs in one basket when Melbourne’s population is projected to grow by 1.8 million between 2006 and 2036. According to The Age, Mr Guy doesn’t want higher density development in that part of the city that lies beyond the city centre i.e. virtually all of Melbourne*.

I’m not sure the potential of the brownfields basket is as great as Messrs Guy and Davidson imagine. Here are some constraints that individually might be a mere difficulty but collectively amount to a major impediment.

Not all the industrial land in the locations mentioned is disused or has no alternative use. Melbourne City Council envisages that Fishermans Bend – by far the largest of the areas cited – will be the municipality’s core industrial area. It has a strategy to “facilitate the growth of industry in Fishermans Bend (Port Melbourne) and in the Dynon Road precinct”.

The Council’s Municipal Strategic Statement describes Fishermans Bend as “a vibrant industrial precinct with head offices of leading manufacturers and nationally important clusters in aviation and aerospace and defence”.

The idea that industry is dirty, noisy and polluting (and should be dispatched to the outer suburbs post haste and replaced with nice housing) is out of date. Much of what is classified nowadays as manufacturing involves high levels of technology, knowledge and skill. And it pays well – workers in areas like Fishermans bend don’t tend to wear boiler suits anymore.

The ability to locate high tech industry close to inner city knowledge workers and to the financial, legal and technological resources of the CBD could be a key competitive strength of Melbourne. Similarly the city’s ability to accommodate very large projects (e.g. Synchrotron) in highly urbanised locations – something that requires that large sites be available – is a strength that ought to be preserved.

The 20 hectare E-Gate site on surplus railway land north of Docklands illustrates how different uses might compete for strategic sites – proposals for E-Gate include commercial uses, a football stadium and housing.

So the argument that all this industrial land is there for the taking by housing developers is not so straightforward. And the land that is available for housing might be expensive to convert. Former industrial sites are frequently contaminated. Remediation can add considerably to the cost of development. This is one of the reasons development of the paper mill site in Alphington has been delayed.

In any event, the sort of housing likely to be constructed in these locations would serve a narrow market. It would inevitably be very high density. The residential option for E-Gate, for example, envisages 6,000 people at 300 persons per hectare (compared to around 60 in the Growth Areas). Dwellings would just as surely be small, expensive and occupied primarily by small households of young professionals. Apartments in air space over railway stations like Richmond would be solely for the very well-heeled.

These locations simply wouldn’t be an option for most families and average income earners.

Nevertheless, redevelopment of strategic sites can contribute positively to the metropolitan housing market. If the young professionals who buy into new city centre developments would otherwise have bought elsewhere – say 10 km out in somewhere like Coburg – then their absence from that market is going to lower demand and moderate prices in Coburg.

This might just make Coburg affordable for a family who otherwise might have settled in more-distant Fawkner. In turn, Fawkner’s greater centrality might attract a lower income household that otherwise would settle in a lower priced part of a Growth Area. While highly simplified, this process can be seen as a ‘chain’ working itself outwards geographically (and down the price ladder).

But unfortunately this process doesn’t apply to all city centre buyers. For example, some would otherwise have been renting in a share house in (say) Coburg – so shifting one housemate into a one bedroom apartment in E-Gate won’t add another house to the purchaser market in Coburg.  Or some might have left their parents suburban home to live in Fishermans Bend, in which case they’ve not added to supply in the suburbs at all – in fact they’ve probably raised the floor area per person considerably at both addresses.

So it’s unlikely there’ll be a direct correspondence between adding a housing unit in a strategic site near the CBD and expanding supply in the more affordable suburbs.

It is a good thing to increase housing supply in the city centre but it’s important to appreciate that the total impact on the housing market won’t be that great in the context of a projected population increase of 1.8 million over 30 years. There’s an argument for looking at options for increasing higher density housing supply across a larger part of Melbourne.

* That’s surprising, because it was previously indicated that the Coalition supported higher densities in 100 inner city and suburban activity centres, within defined boundaries.

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7 Comments on “What’s the angle with Fishermans Bend?”

  1. Russ says:

    “The idea that industry is dirty, noisy and polluting (and should be dispatched to the outer suburbs post haste and replaced with nice housing) is out of date.”

    Wouldn’t this also imply that the notion that different uses need to be separated (ie. zoning) is also out of date? With appropriate environmental controls, low-impact high-tech manufacturing could easily co-exist with mixed use retail and high/medium density residential at Fishermen’s Bend; unless there is a large positive externality in providing exclusively industrial land in the inner-city that exceeds the marginal value of alternative land-uses? I can think of a few – mostly relating to ease of service delivery – but I doubt they could be considered large.

  2. Adam L says:

    Interesting article, although the Liberals have said they agree with activity centres being areas for high density development as well as Fishermans Bend, so you’re not correct in saying that bit has been abandoned. It’s in their policy which i’ve now read and re-read a number of times!

    • Alan Davies says:

      Yes, I wondered about that too, hence my footnote at the bottom of the article.

    • My hunch is this apparent contradiction will be resolved by the DPCD under the Libs ultimately pursuing pretty much status quo activity centres policy. All they rolled back were a few motherhood statements related to tram corridors, which were new additions anyway. That was inevitable because they had run a pretty shameless scare campaign on that material (references to “mandatory 30 storey development along tram corridors etc”).

      When pressed Guy’s talk is all about “certainty” and designated areas for development around activity centres (not just inner city areas). That sounds a lot like existing initiatives such as the Activity Centre Zones (and perhaps the previously mooted “Go Go” Residential Zone) to me. So business as usual.

      (We pushed him a bit on this in an interview for Planning News (November 2010), although unfortunately before a lot of their detailed policy announcements were out. Still, all his rhetoric ultimately seems to translate into roughly the same approach IMO).

  3. alexthemac says:

    Actually, someone leaving the share house in Coburg or frankston to move into a 1 bed apartment in the inner city will have downstream impacts on housing supply; they will be just more indirect. Someone has to pay the rent and clean the extra room, even if the young fledgings still like to be territorial about their old space.

    DPCD have done some interesting studies on recent and projected household formation that would contribute to this discussion, especially for the Victoria-in-Future 2008 studies (VIF2008) that identified the 1.8m population growth figure in the first place.

    http://www.dpcd.vic.gov.au/home/publications-and-research/urban-and-regional-research

    I wonder where the role of negative gearing implications for household creation and the growing numbers of homeless citizens fit into this equation?

    If the state (using our taxpayer dollars) and local refugees are paying exorbitant amounts for squalid rooms in emergency housing to avoid joining the homeless, is paying the same amounts of money to rent expensive inner city developments unviable?

    Are many rooming houses negatively geared, or is the squalid nature of many of them an aspect of black market tax-avoiding activity? Are we subsidising the squalor? Are clean suburban rooming houses a way to deliver the densities required if locals can’t afford to buy or even rent?

  4. […] are also a number of issues with Fishermans Bend that will need to be considered carefully, as I pointed out here. They include the value of the area for industry and possible contamination of the land. Obviously […]


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