MOUNT PETER STRUCTURE PLAN PART 5 - TECHNICAL REPORT HOUSING - Cairns Regional Council
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TECHNICAL REPORT MOUNT PETER STRUCTURE PLAN PART 5 - TECHNICAL REPORT HOUSING
MOUNT PETER MASTER PLANNING
PART 5 - HOUSING STRATEGY TECHNICAL REPORT
This report is a Technical background report that informs the Mount Peter Structure Plan.
Specifically, this report is in support of, and in response to, elements of item 3.11 (Housing
Strategy) of Section 4.1 (Outputs) of the Mount Peter Master Planning Specification.
DISCLAIMER
This Technical Report is one of a series of reports which forms part of the draft Structure
Plan for Mount Peter. Please note that this Technical Report is a draft document only.
Whilst every care is taken to ensure the accuracy of this Technical Report and draft
Structure Plan, Cairns Regional Council (CRC) accepts no liability for the accuracy of or
inferences from the material contained in this publication, or for any action as a result of
any person's or group's interpretations, deductions or conclusions relying on this
material. The CRC accepts no liability for any loss, damage or injury (including
consequential loss, damage or injury) from any use of this Technical Report and draft
Structure Plan.
COPYRIGHT
This document is and shall remain the property of the Cairns Regional Council. Using or
copying this document or any part of it without specific authorisation is absolutely
prohibited.
P.O. Box 359 Cairns, Qld., 4870
Tel: (07) 4044 3044 Fax: (07) 4044 302
Document Control
Author Reviewer
Version Date
Name Initials Name Initials
Ver A May 2010 George Porter GHP MPMPG AS
MOUNT PETER MASTER PLANNING GROUP
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PART 5 - HOUSING STRATEGY TECHNICAL REPORT
HOUSING STRATEGY
TECHNICAL REPORT FOR
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................... 1
1 BACKGROUND................................................................................................................... 3
1.1 HOUSING AND SUSTAINABLE COMMUNITIES..................................................... 3
1.2 EXISTING HOUSING IN THE AREA ........................................................................ 4
1.3 LOCAL HOUSING MARKET ..................................................................................... 5
1.4 KEY DEMOGRAPHIC CHARACTERISTICS ............................................................ 7
2 ASSUMPTIONS/ METHODOLOGY .................................................................................... 8
2.1 STATE PLANNING POLICY 1/07 ............................................................................. 8
2.2 FAR NORTH QUEENSLAND REGIONAL PLAN...................................................... 8
2.3 METHODOLOGY ...................................................................................................... 8
3 OPPORTUNITIES/ CONSTRAINTS ................................................................................... 9
3.1 UNIVERSAL HOUSING DESIGN (ADAPTABLE HOUSING) ................................... 9
3.2 HOUSING DIVERSITY ............................................................................................ 10
3.3 HOUSING FOR OLDER PEOPLE .......................................................................... 11
4 ISSUES .............................................................................................................................. 12
4.1 DEPARTMENT OF COMMUNITIES’ HOUSING NEEDS ASSESSMENT ............. 12
4.2 HOUSING AFFORDABILITY................................................................................... 13
4.3 HOUSING MIX AND DENSITY ............................................................................... 15
5 DISCUSSION..................................................................................................................... 17
6 SUMMARY RECOMMENDATIONS.................................................................................. 17
6.1 AFFORDABLE HOUSING ....................................................................................... 17
6.2 ADAPTABLE HOUSING.......................................................................................... 17
6.3 ASSUMPTION RECOMMENDATIONS FOR THE STRUCTURE PLAN................ 17
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PART 5 - HOUSING STRATEGY TECHNICAL REPORT
EXECUTIVE SUMMARY
This report provides an overview of the key issues that have influenced Housing for Mount
Peter Master Planning Area (MPA).
The context for the report is provided by the existing housing situation in the area, and
statistical data is presented at the level of the Statistical Local Area (SLA) within which the
MPA is located, and at the level of Cairns Local Government Area (LGA). The following are
the salient factors:
• The vast majority of existing dwellings are detached (85% in the SLA).
• The median house price in the Cairns LGA was $385,000 in September 2008,
while the median unit price was $245,000.
• The increase in housing prices between 2000 and 2007 was steep. Houses
rose 132% from $146,000 and units rose 75% from $126,900. Only during the
course of 2008 have prices stabilised.
• Median rents have also risen steeply, and the median for a new letting of a 3
bedroom house was $320 a week in September 2008.
• The Cairns LGA has lower rates of home ownership than the Queensland
average.
• The LGA has a higher proportion of families and a lower proportion of older
people than the Queensland average.
There are three significant strategic opportunities at Mount Peter. The first is to provide a
wide diversity of dwelling types, to ensure that housing at Mount Peter suits a full range of
households and thus to promote a diverse and sustainable community. The second is to
apply the principles of Universal Housing Design to ensure that some of the new housing is
adaptable and therefore suited to people at all stages of their lives. The third is to cater
specifically for the increasing population of older people by providing opportunities for age-
specific housing and residential aged care.
The report presents a brief discussion of the Department of Communities’ (formerly the
Department of Housing) Housing Needs Assessment, which was prepared under the terms
of State Planning Policy 01/07. The Department stresses that the analysis is a contribution
to debate and not a target, and that the priority should be to ensure that the planning
framework for the MPA promotes the creation of an inclusive community by providing as
wide a choice of housing as possible – including housing suited to and affordable to first
time buyers.
The issue of housing affordability is outlined in the context of the observation that the
median-priced home in the Cairns area now costs five times the median annual income, up
from three times the median in 2001. Data on the increasing extent of affordability
problems is presented, along with recommended options that may improve affordability at
Mount Peter, including:
• Maximising housing choice, including construction of a proportion of small
dwellings;
• Investigating options post structure planning process for delivering sub-market-
priced housing, probably in partnership with government; and
• Ensuring that there is the opportunity for the Department of Communities’ to
build or acquire social housing.
The report’s analysis finds that a typical young couple in rental accommodation (ie. first
time buyers) could afford a purchase price of $238,000 for their first home.
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The issue of Housing Mix and Density is then outlined, recognising that this is a central
issue for all aspects of the planning process for the MPA. The report notes that the
proposed model for development, which is based on walkable neighbourhoods, facilitates
the provision of a wide variety of housing by identifying a series of centres, and by varying
the density and type of housing to be constructed according to the distance from a centre,
with generally the smallest, densest dwellings being built within each centre. It comments
that achievement of the an approximate population of 42,500 persons for Mount Peter will
involve the provision of a much larger proportion of small lot housing, attached homes, and
apartments than has been usual in most recent residential developments outside central
Cairns.
The report makes a number of recommendations which are presented as desirable
outcomes, as summarised below:
1. A wide variety of dwellings, suited to a wide variety of households, are provided.
2. Development provides opportunities for older people’s accommodation.
3. As an aspiration target, 15% of new dwellings are adaptable.
4. An affordable housing delivery strategy is negotiated and implemented, based on a
partnership between landowners, developers, and all levels of government. As a
benchmark, it is proposed that 10% of dwellings should be affordable for purchase
by households in the lowest 40% of the income range; and at least 20% are
affordable for rent by households in the lowest 40% of the income range.
5. In addition, market-priced housing includes smaller dwellings (65m2) and dwelling
types that are inherently low-cost (eg. shop-top housing).
6. The development framework allows flexibility for public and/or community housing
to be provided either through direct development or by spot purchase. In addition a
special purpose not-for-profit Housing Company model is investigated as a
potentially suitable management model for social and affordable housing.
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PART 5 - HOUSING STRATEGY TECHNICAL REPORT
1 BACKGROUND
1.1 HOUSING AND SUSTAINABLE COMMUNITIES
Mount Peter is to be planned and developed in response to the growing population
of the Cairns Region and housing will be the single most important “product”
delivered. However, housing is much more than a “product”. It provides much of
the physical context within which communities develop – or, in some case, fail to
develop. Housing is therefore central to the creation of sustainable communities.
Sustainable communities are often described as having four aspects (or “four
Pillars”) and housing is central to each of them. Principles that help to achieve
these include the following:
1. Environmental sustainability
i. Smart use of scarce land and other resources.
ii. Reduced car dependency (eg. by locating housing close to jobs and
services).
iii. Maintaining biodiversity and providing open spaces.
iv. Promoting energy efficiency and reduced greenhouse gas emissions.
v. Ensuring water conservation and efficiency.
vi. Minimising waste and maximising resource recovery.
vii. Efficient building taking account of health and lifecycle costs.
2. Social sustainability
i. Avoiding spatial segregation and income enclaves.
ii. Ensuring diverse housing choice to meet the needs of a full range of
households.
iii. Locating jobs and housing so that they are accessible to each other.
iv. Maximising safety and security.
v. Providing a healthy living environment and maximum amenity.
vi. Planning for social equity and empowerment of disadvantaged groups.
3. Economic sustainability
i. Integrating residential development with job creation and the local
economy.
ii. Ensuring housing affordability for all income groups.
iii. Designing housing for cost efficiency over time.
iv. Designing housing for adaptability at minimum cost.
4. Institutional sustainability
i. Ensuring “delivery capacity”, including clarity of roles and expansion of
capacity through new roles or agencies if required.
ii. Providing appropriate statutory powers.
iii. Ensuring transparency and accountability.
iv. Promoting innovative partnerships.
(Adapted from Blakely JE, and Yip WL: The Core of Sustainability – Housing Sustainability Policies. Planning
Research Centre, University of Sydney)
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The Queensland Department of Communities’ Local Government Housing
Resource Kit identifies several specific requirements for sustainable communities.
Priority is given to the first three:
i. An adequate supply of affordable housing is available for all households
including those in the lowest 40 per cent of the income distribution and
those who have particular needs.
ii. Housing and residential development respond effectively to the changing
character of households and housing need.
iii. A range of dwelling types and tenures is available to meet the needs of a
wide range of household types and to meet changing life cycle needs and
household economic circumstances.
In the interest of creating a sustainable community where people want to live, any
strategy for housing provision at Mount Peter should take account of these
principles.
1.2 EXISTING HOUSING IN THE AREA
Mount Peter lies within the Cairns (Trinity) Statistical Local Area (SLA), as defined
by the Australian Bureau of Statistics. The developed areas within this SLA run in a
narrow band to the south of Cairns, with Edmonton and Gordonvale as the main
centres, and are linked by the Bruce Highway. At the time of the last Census in
2006, the housing stock in the SLA comprised 85% detached homes with 5%
attached housing, 8% apartments and 2% other dwellings. This is a higher
proportion of detached housing than the Queensland average (79%).
Dwelling Structure, Cairns Trinity SLA
90
Cairns Trinity
80
Qld
70
60
Percent
50
40
30
20
10
0
Separate Attached Flat or Other
house house apartment dwelling:
Source: ABS Census 2006
The housing mix in the wider Cairns LGA contained a much larger proportion of
attached housing (8%) and, especially, apartments (17%), and therefore a lower
proportion of detached housing (73%) than the Cairns Trinity SLA (see next chart).
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Dwelling Mix (Cairns LGA)
90.0
Cairns LGA
80.0
Qld
70.0
60.0
50.0
%
40.0
30.0
20.0
10.0
0.0
Separate Attached Flat or Other
house house apartment dwelling
Source: ABS Census 2006
1.3 LOCAL HOUSING MARKET
Homes in the Mount Peter area are currently more affordable than the regional
average. According to data from Australian Property Monitors, the median price of
homes sold in the six months to September 2008 was $335,000 in Edmonton and
$310,000 in Gordonvale. This represents a fall since the previous six month period
from a median of $350,000 in both places.
Median Sales Price, 2007-8
Houses Units
Cairns LGA
Oct 07-Mar 08 $383,000 $248,000
Apr 08-Sep 08 $335,000 $245,000
Edmonton
Oct 07-Mar 08 $350,000 $205.000
Apr 08-Sep 08 $335,000 $177,000
Gordonvale
Oct 07-Mar 08 $350,000 N/A
Apr 08-Sep 08 $310,000 N/A
Source: Australian Property Monitors
The price of units in Edmonton fell slightly over this period, to $205,000. There
were insufficient sales of units to register meaningful data in Gordonvale.
Comprehensive data for the period 1999/2000 to 2006/7 was analysed by the
Department of Communities for the Housing Needs Assessment for Mount Peter.
This is presented in the following table, which shows growth in housing prices
across the MPA during this period. The growth in house prices across the Local
Government Area resulted in a rise of 172% from $145,000 in the year 2000.
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Dwelling prices (median) since 1999
Detached
1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 % change
Houses
Mt Sheridan $-- $154,000 $164,000 $170,000 $227,000 $255,000 $289,985 $334,000 117%
Bentley Park $149,250 $132,000 $135,000 $165,000 $198,000 $253,000 $267,250 $320,000 114%
Edmonton $125,000 $127,750 $130,000 $135,250 $184,000 $232,500 $255,000 $310,000 148%
Gordonvale $118,000 $107,000 $119,500 $120,000 $148,000 $207,000 $235,000 $275,000 133%
Cairns LGA $146,000 $145,000 $155,000 $172,000 $220,000 $265,000 $295,000 $338,500 132%
Flats/units/t
1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 % change
ownhouses
Mt Sheridan $-- $-- $-- $87,000 $127,000 $162,500 $249,250 $238,000 174%
Bentley Park $-- $-- $79,000 $95,750 $102,500 $120,000 $177,100 $177,500 125%
Edmonton $65,000 $62,500 $68,500 $46,500 $103,000 $124,000 $136,000 $155,000 138%
Gordonvale $-- $73,000 $85,000 $75,000 $96,000 $115,000 $203,000 $200,000 174%
Cairns LGA $126,900 $110,000 $100,750 $170,000 $142,000 $180,000 $197,000 $222,000 75%
Data Source: Queensland Department of Environment and Resource Management (formerly the Department of Natural
Resources), Sales database.
As the next graph shows, the fastest period of price growth in the Cairns LGA was
around the year 2005-6, (about a year later for units) and growth has subsequently
slowed since then.
Annual growth in house prices: Cairns LGA
Source: domain.com.au
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In relation to rent levels, the average yield in the LGA is reported to be around 4.5-
5% with low vacancy rates. In general, rents have not fallen in line with capital
values.
Across the LGA, the median rent for a new letting of a 1 bedroom unit in the
September Quarter 2008 was $195 a week, rising to $360 a week for a 3 bedroom
unit.
For houses, the range is from $250 for a 2 bedroom house to $360 for four
bedrooms.
In Gordonvale, rents were lower, especially for houses which ranged from $220 a
week for 2 bedrooms to $325 for 4 bedrooms.
Weekly Rent. New Bonds, Sept Qtr 2008
Cairns LGA Gordonvale
1B Unit 195 185
2B Unit 260 N/A
3B Unit 350 N/A
2B House 250 220
3B House 320 275
4B House 360 325
Source: Residential Tenancies Authority
1.4 KEY DEMOGRAPHIC CHARACTERISTICS
According to the ABS Census 2006, residents of the Cairns LGA have the following
characteristics.
• A high proportion of children (23.0% aged 0-14 years) and a low proportion of
older people (8.9% aged 65 or over) compared to the national average.
• Slightly higher median individual income ($530 a week) and household
income ($1051 a week) compared to the national average.
• Lower rates of home ownership (22.9% owned outright and 30.0% with a
mortgage) and higher rates of renting (34.7%) compared to the national
average.
• More technical and trades employment (16.7%) and less professional
employment (15.9%) than the national average.
• Largest fields of employment: Accommodation services (4.9%) and school
education (4.6%).
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2 ASSUMPTIONS/ METHODOLOGY
2.1 STATE PLANNING POLICY 1/07
The Policy addresses the preparation of Planning Schemes for new residential
areas, with the aim of facilitating the development of housing to meet the needs of
all sectors of the market.
The required process has three steps:
(a) undertaking a Housing Needs Assessment;
(b) reviewing any existing planning scheme to identify barriers to (and
opportunities for) providing housing options that respond to the needs
identified in the assessment; and
(c) preparing or amending the planning scheme to remove barriers to and
provide opportunities for providing the identified housing options.
The Preliminary State Agency Position Paper for Mount Peter (July 2008) notes
that the Structure Plan should appropriately reflect SPP1/07 by providing
opportunities for a range of housing options that respond to the needs of the
anticipated household groups. The Structure Plan should also provide
neighbourhoods with clearly defined centres and well defined edges, and
increased residential densities in well services locations.
2.2 FAR NORTH QUEENSLAND REGIONAL PLAN
In addition to supporting the provision of a wide range of housing the Regional Plan
also seeks (4.1.6) to achieve a “compact urban form” through residential
development densities averaging 15-20 dwellings per hectare. It is understood that
this refers to net density. The stated objective of this policy is:
• To enable efficient infrastructure and services, including public
transport, recreational space, community facilities and the retention of
green spaces within the corridor; and
• To reduce the need for future urban areas to be developed (on good
quality agricultural land).
2.3 METHODOLOGY
This report is based on a review of relevant policies, data and other documents,
and on discussions and input from key stakeholders, notably the Department of
Communities. Relevant inputs are described in the course of the report.
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3 OPPORTUNITIES/ CONSTRAINTS
3.1 UNIVERSAL HOUSING DESIGN (ADAPTABLE HOUSING)
In Queensland, housing adaptability is commonly referred to as Universal Housing
Design. Overseas it is often called Lifetime Housing. Universal housing design
aims to provide flexible housing that is suitable for people with varying abilities and
at different stages of their lives. It avoids building barriers that create problems for
people living in or visiting the home. A universally designed home can also be
readily adapted to meet changing needs.
Some of the most significant features of universal design are:
• absence of barriers (eg steps) and sharp turns in the approach to the
dwelling entry, between the garage and the front door, and thence to
main living areas;
• wide hallways and doorways;
• a bathroom/toilet and one bedroom accessible for a person with limited
mobility or in a wheelchair;
• simple, logical layout with no obstructions, hazards, or steps;
• lever door handles;
• gently sloped footpaths and driveway; and
• rocker-type light switches.
With an ageing population, more people will develop health and mobility
impairments. Adaptability does not mean that a dwelling must be fitted with
features and modifications for people with a disability; rather, it provides flexibility
for a wide range of existing needs and for future modification as and when needed,
avoiding the high costs associated with retrofitting. Its features are also popular
with (and helpful to) the wider population (eg doorways wide enough for a stroller.)
A recent study showed that the cost of modifications of a non-adaptable detached
house to AS4299 Class C could be as high as $24,600. The cost to provide the
same features in an adaptable house was estimated to be $4,400.
The Universal Housing Design Working Group for the Office of the Public Advocate
– Queensland has identified the following significant benefits for residents in
dwellings featuring universal design. These include:
• Physical restrictions due to ageing, childbearing and rearing, injury or
illness are more readily accommodated as the physical environment can be
easily adapted to individual needs.
• A wide range of individuals and families can occupy a dwelling cost-
effectively and equitably over the life of the building.
• Residents will benefit from these features throughout their lifetime as their
needs change.
• Residents can invite family and friends to visit or stay in their home for
extended periods at short notice – regardless of their age or physical
capability.
• Homeowners can expect an increase in resale value.
(Source: Housing Design for All, 2005)
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People with a disability (including those who develop a disability as they age) stand
to benefit most from Universal Housing Design. Currently, 20% of Australians live
with a disability, and rising. The rate increases with age: 4% of children under five
years old through to 41% of people aged 65–69 years, and 92% of people 90 years
and older. Most people with a disability, older people and their carers, live in private
dwellings.
Typically, a home changes ownership every seven years, but most new homes for
sale have little capacity to meet the changing needs of residents over lifetime of the
building. A dwelling lasting sixty years will accommodate nine households over this
time, several of which are likely to include someone with impaired mobility, vision
or other disabilities.
The amount of adaptable housing that could feasibly be delivered at Mount Peter
depends on a number of factors that will need to be assessed during the detailed
master planning of each stage of development including market acceptance,
dwelling mix, and site topography. However, a target for adaptable housing
provision is appropriate, and a proposed recommendation is included in the
conclusions to this Technical Report.
3.2 HOUSING DIVERSITY
A variety of housing promotes social diversity including variety in socio-economic
characteristics, household stages, and cultural background. Social diversity has a
range of benefits for the community. These may include:
• Availability of workers at all levels for local businesses;
• Economic robustness, so that an economic downturn in a particular sector
does not similarly affect the whole community;
• Improved social inclusiveness and cohesion as a result of social interaction;
• The ability to plan and maintain local facilities and services without having to
address bulges in the age structure;
• Better viability for shops and services (and potentially also reduced crime),
due to the presence of adults in residential areas during the daytime.
Existing housing diversity in the area is fairly limited, as illustrated in Chapter 1,
and the Mount Peter development provides an opportunity to respond to the needs
to the emerging community, ranging from single person households to traditional
family households.
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3.3 HOUSING FOR OLDER PEOPLE
As the population ages, it is increasingly important for new communities to cater for
the needs of older people, by supporting “ageing in place” - that is, ensuring that
residents do not have to relocate as they age. The ability for older people to age in
place depends on the availability of suitable housing and on the urban design of
the neighbourhood being “older person friendly”.
Three accommodation elements are relevant at Mount Peter:
• Mainstream housing options that suit older people. Most older people do not
live in specially-built housing. Indeed, most are happy to remain in
mainstream accommodation that meets their needs. Key options include
adaptable homes (Universal Housing Design) and smaller dwellings including
attached homes and apartments.
• Purpose built retirement housing. This includes managed retirement villages
and master-planned lifestyle communities, planned around leisure facilities.
• Residential aged care facilities, that is, hostels and nursing homes, for people
who are no longer able to live independently and require assistance with
activities of daily living, or on-going nursing care.
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4 ISSUES
4.1 DEPARTMENT OF COMMUNITIES’ HOUSING NEEDS
ASSESSMENT
Under the provisions of SPP 1/07, the Department of Communities has prepared a
Housing Needs Assessment for the MPA. The Assessment is essentially a
projection of the housing needs of the population of the area up to the year 2021.
The assessment relates to the Cairns (Trinity) Statistical Local Area, which extends
inland from the coast and includes the Mount Peter site and extensive surrounding
established areas. It is based on assumed growth in population from 36,088 in
2006 to 74,195 in 2021, and the report notes that, aside from infill development,
Mount Peter will be the only development front during this period.
• To meet the needs of the growing population, the Assessment projects a
need for 23,220 additional dwellings by 2021.
• It suggests that at least 30% of the housing stock in the area should be
“small dwellings, that is, two bedrooms or less, by 2021. Given the
relative paucity of small dwellings in the area at the moment, this would
involve the construction of 9870 small dwellings in the period to 2021.
Housing options and zoning definitions which should help to promote the
development of small dwellings are outlined in the Assessment report. During
consultations, the Department stressed that the Assessment report is intended to
promote forward planning that explores demographic, housing market and planning
control assumptions via different development scenarios, and that the planning
process should “think in terms of ranges of housing needs and options that could
satisfy future residents rather than working to identify one definitive set of numbers”
(Source: Appendix 1).
The Report does not include any assessment of the developable area or
development constraints at Mount Peter, and it is not suggested that the Mount
Peter MPA will necessarily be able to accommodate the number of dwellings
suggested. Furthermore, the suggested split between small and large dwellings is
based on a simple matching exercise (small households = small dwellings) and
does not take account of market factors, for instance the tendency of households to
acquire as much space as they can afford. In consultations, the Department of
Communities confirmed that the impact of such factors is such that projections in
the report should not be taken as targets but as a contribution to policy debate,
Several stakeholders involved in the development sector in FNQ have commented
that the current housing market in the area is primarily for larger homes, and that
demand for such a large number of small dwellings is unlikely to emerge. They
suggest that the mismatch between the report’s analysis and the real estate market
is illustrated by report’s suggestion that there is already a significant undersupply of
small dwellings in the local area – a conclusion that is not supported by local
market data.
In response, Department of Communities officers have said that they see the over-
arching planning goal to be the achievement of an inclusive community in the
Mount Peter MPA, and that an excessive focus on large homes aimed primarily at
change-over buyers (ie. those with a home elsewhere to sell) will not achieve this.
This is because locations closer to the CBD are probably more attractive to this
group and because many would not wish to live in a new estate setting. In addition,
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given the poor affordability situation in the area at the moment, smaller homes
which occupy less land (and which are therefore cheaper than larger homes) must
be provided in the area if first time buyers are to have access to Mount Peter.
Thus while market reality will ultimately override normative needs assessments in
determining the housing mix for the area, the issues raised in the Assessment
report are nevertheless relevant. In particular a flexible planning framework that
allows the market to be broadened (in terms of variety and affordability) is to be
desired. Long-term viability of development in the area probably depends on
provision being made to facilitate construction of a wider variety of dwelling types
than in the past, including some smaller cheaper products.
4.2 HOUSING AFFORDABILITY
Housing affordability is seen by all levels of government as a critical issue, and
approaches that promote affordability are supported in the FNQ Regional Plan and
in SPP 1/07. The decline in affordability in the Cairns area is illustrated by the fact
that the median house now costs 5 times the median household income, compared
to 3 times the median in 2001. (Source: UDIA Queensland)
In policy terms, the focus is on households in the lowest 40% of the income range,
and the target is that they should spend no more than 30% of their income on rent
or loan repayments. Household paying more than 30% are said to be in “housing
stress”.
Poor affordability can result in:
• increased personal hardship, particularly for people on low incomes;
• inability of local employers to retain and attract labour (particularly low-paid,
unskilled workers) and can therefore affect the local economy;
• social costs including family breakdown, depression and health problems
which impose costs on the wider community; and
• exclusion of lower and moderate income households from some areas,
resulting in a decline in social diversity, and social polarisation due to
concentrations of advantage and disadvantage.
The broad classification of affordable housing includes public and community
housing which is targeted to the lowest income groups in the community. However,
as this is provided through public funds, the strategic focus is on the needs of
slightly higher income households that earn too much to qualify for social housing
but too little to purchase (or rent) typical homes on the open market. There is an
expectation that the private sector will work with government to help meet the
needs of this group, whose households have earnings between the 20th and 50th
percentile of the income range.
The following table, prepared by the Department of Communities illustrates the
impact of declining affordability in the period since 2001. It compares the 40th
percentile house purchase price with the median income of, firstly, all households
and, secondly, young coupes in rented accommodation (the biggest population
group represented among first time buyers).
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Cairns LGA: Purchase affordability 2001-7
Purchase
cost as %
Median Purchase of median
income cost as % income
40th Weekly Median (renter of median (renter
percentile purchase income couples income (all couples
house price cost (all h/holds) aged 25-40) h/holds) aged 25-40)
2001 $135,000 $205 $777 $1,048 26% 20%
2002 $143,000 $212 $826 $1,090 26% 19%
2003 $159,000 $235 $877 $1,134 27% 21%
2004 $200,000 $311 $932 $1,180 33% 26%
2005 $248,000 $393 $991 $1,228 40% 32%
2006 $275,000 $539 $1,053 $1,277 51% 42%
2007 $320,000 $539 $1,119 $1,328 48% 41%
Source: Dept of Housing: Housing Needs Assessment
The table shows that in 2007 a household on median income had to spend 48% of
income to buy a home priced at the 40th percentile (up from 26% in 2001) and that
a young renting couple had to spend 41% (up from 20% in 2001) 1.
The same analysis found that 28.5% of purchasers in Cairns LGA with a household
income at or below the median, were paying over 40% of their gross income to
service their home loan in 2006. It also noted that an affordable home for a young
renting couple (ie. one on which home loan payments would represent 30% of
gross income) would be priced at $238,000. The equivalent figure for the Cairns
Trinity SLA was $228,000.
In the rental market, the Department of Communities’ analysis found that 33% of
Low and Very Low income households in Cairns LGA were paying more than 30%
of their gross income in rent in 2006.
Some of the options that could contribute to affordability at Mount Peter are
outlined below:
a) Small homes
Small homes are generally more affordable because they take up less land. Some
forms of multi-unit housing are more expensive to construct per square metre, than
detached homes, but can still be delivered at a price well below entry level for
detached housing.
Affordable small dwellings (1-2 bedrooms) could include
• Cottages on small lots;
• Apartments including some above commercial space, eg shop-top housing;
• Apartment houses;
• “Fonzie” units;
• Duplexes;
• Terraces.
1 Purchase costs are based on a 95% loan and a 25 year term, at the average interest rate for the year. .
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PART 5 - HOUSING STRATEGY TECHNICAL REPORT
b) Sub-market-priced housing.
If housing is to be delivered at below market price, there are two prior
requirements- firstly, mechanisms to support the cost of delivery and secondly
mechanism to ensure that owners do not “cash in” any benefit they receive.
Options to facilitate price reductions include the following:
• Planning incentives that have financial benefits for developers (eg. reduced
parking or open space standards) may be offered for affordable housing
products.
• Participation by the Department of Communities, particularly in
demonstration projects, may give access to extensive expertise and
experience and to State government subsidies. (Previous joint ventures like
that at Kelvin Grove Urban Village (Brisbane) have incorporated a
significant component of affordable housing).
• It may be possible to negotiate access to government owned land on
preferential terms.
An appropriate management structure for affordable rental dwellings, and a not-for-
profit Housing Company model similar to that used by the Brisbane Housing
Company has the significant benefit that it can develop its own housing and use
leverage to increase the amount of affordable housing provided. The model utilises
a component of government subsidy, a component of private borrowings, and
additional components from tax savings plus the value achieved through town
planning mechanisms, developer inputs etc. A similar Company has been set up
on the Gold Coast.
c) Social and community housing
In general, housing costs for households with very low incomes must be
subsidised. New social housing may be constructed directly by the Department of
Communities or purchased on the market, although funding limitations mean that
long term advance commitments are not generally possible. Community-based
housing associations provide an alternative management arrangement that allows
for local involvement.
4.3 HOUSING MIX AND DENSITY
The proposed development of Mount Peter is based upon walkable
neighbourhoods, each with a defined centre. Low density housing is constructed
on the edges of the neighbourhood, with increasing density towards the centre.
The highest densities are located in the core of the major centre, with mixed uses
within the densest area, the retail/commercial core.
Dwelling within Mount Peter may include:
• A large number of small housing lots across the site, including a large
proportion of house lots between 250 and 600 square metres;
• A substantial proportion of attached housing; and
• Inclusion of a significant supply of apartments in the centres.
Early (“pioneer”) residents in newly developed areas seeking larger, detached
homes and a market for smaller homes at Mount Peter can be expected to develop
over time as local facilities become established. Early stages of development will
therefore typically include a higher than average proportion of larger lot housing.
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PART 5 - HOUSING STRATEGY TECHNICAL REPORT
Ultimately, the mix of housing to be delivered at Mount Peter must be accepted by
the market. Changing demographics, reduced affordability and limited demand
from “change-over” buyers are expected to result in increased demand for smaller
homes over the next 20 years, but the need to respond to market demand
underlines the need for flexibility in the planning framework for the MPA.
The Department of Communities has suggested during consultations that the focus
at this stage should be on delivering a wide range or dwellings and lot sizes, and
on developing a planning framework to promote this, and not simply on density
targets.
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PART 5 - HOUSING STRATEGY TECHNICAL REPORT
5 SUMMARY RECOMMENDATIONS
5.1 AFFORDABLE HOUSING
In order to ensure that the needs of all income groups are addressed, it is
proposed that the housing delivered at Mount Peter should aim to achieve the
following affordability benchmarks: (where affordability is defined as housing that
can be bought or rented by households falling within the lowest 40% of the income
range for the LGA at a cost of no more than 30% of household income):
(a) at least 10% of dwellings at Mount Peter are affordable for purchase by
households in the lowest 40% of the income range; and
(b) at least 20% of dwellings at Mount Peter are affordable for rent by
households in the lowest 40% of the income range (including housing
delivered through the Department of Communities or community-based
housing organisations).
In practice, the amount of affordable housing that can be delivered will be affected
by the availability of external support and funds (eg. joint ventures with Dept of
Housing) and by the economics of development and construction, notably the level
of cross-subsidy required to deliver dwellings that achieve the benchmark.
5.2 ADAPTABLE HOUSING
A target for adaptable housing provision is appropriate, to help achieve
accessibility and flexibility for all sections of the population, including older people,
children, and people with a disability. A target of 15% is proposed, based on an
appropriate standard (eg AS 4299 Class C).
The amount of adaptable housing that can feasibly be delivered at Mount Peter will
in practice depend on a number of factors that will be assessed during the detailed
planning of each stage of development including market acceptance, dwelling mix,
and site topography.
5.3 ASSUMPTION RECOMMENDATIONS FOR THE STRUCTURE PLAN
The following outcomes are recommended:
Housing Diversity
1. Development at Mount Peter incorporates a wide range of housing options
(including different dwelling sizes and forms) that meet the needs and
expectations of a full range of household types and population groups.
2. Opportunities to provide accommodation that is especially suited to older
people (including open market housing, supported accommodation and
residential care) are explored and incorporated in Mount Peter’s housing
provision.
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PART 5 - HOUSING STRATEGY TECHNICAL REPORT
Universal Housing Design
3. A significant proportion of new dwellings in Mount Peter will feature Universal
Housing Design principles to maximise accessibility, flexibility and useability
for all sections of the population, including older people, children, and people
with a disability. A preliminary target of 15% of dwelling that achieve Class C
under AS 4299 is proposed.
Housing affordability
4. An affordable housing delivery strategy is negotiated and implemented,
based on a partnership between landowners, the Department of
Communities, Cairns Regional Council, and other stakeholders. The strategy
should seek to ensure that:
(a) at least 10% of dwellings at Mount Peter are affordable for purchase by
households in the lowest 40% of the income range; and
(b) at least 20% of dwellings at Mount Peter are affordable for rent by
households in the lowest 40% of the income range (including housing
delivered through the Department of Communities or community-based
housing organisations).
5. Market priced housing includes small and very small dwellings and dwelling
types that are inherently low-cost (eg. shop-top housing).
6. Planning for Mount Peter makes allowance for public and community housing
in the area. An eventual rate of provision at least equivalent to the
Queensland average (3.5% of all dwellings) is desirable if possible. Where
advance commitment of funds is not possible, flexibility is retained to permit
eventual spot purchase or site acquisitions for public and community
housing. Appropriate community based management and delivery
arrangements are put in place for affordable rented housing (and possibly
also for social housing), potentially based on a special purpose not-for profit
Housing Company model.
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