Peter Quinn General Manager – Residential Folkestone Limited

Housing Affordability Developer Contributions Melbourne 2030 – Inner Melbourne

 What does it mean ?  Is it – “can you afford to live in the house that you choose in the suburb you desire?”  Or is it – “what form of accommodation can you afford or do you live in?”  Housing affordability affects everyone  Home ownership is a “big deal” and important to the economy – sense of community and belonging  Principal mechanism for savings and wealth creation - other than inheritance

 Affordability is directly related to demand and supply  Land for urban expansion has been severely rationed in the past and therefore lack of supply has had an inflationary effect on prices  Only 0.3% of Australia is occupied or developed - we don’t have a shortage of land  Supply isn’t effected quickly enough to meet the present expansive population demands  There are still too many levels and steps in the development processes

 What size house do we need?  Project home builders have conditioned the market’s housing expectations over the past decade  Lower priced lots in the growth corridors do not produce affordable housing - if we don’t then match the reality with the dream  62,000 people migrated to Victoria last financial year  People should not be disadvantaged by where they live  Commuting - new concept in some parts of the US

 most areas  2008 > 300 options  Belgrave  Melb Nth – 34  Morn Pen – 9  West – 6  East – 3  Buying power halved

 Government to rezone all land within the UGB to residential  Does not create one new additional lot  Statement removes a level of uncertainty about the future uses of all land within the UGB  Timing for approvals and implementation  Landholders now have higher expectations

 Development contributions/levies have been used as defacto planning controls  37 PSP’s currently underway mainly in growth areas  Additional resources and powers be given to the GAA to expedite more structure plans - larger structure plans ?  Development contributions are often referred to as TBA – creates uncertainty  There needs to be a consistency and transparency with development contributions

 Infrastructure - sporting/health/education/social/cultural should be identified and programmed into timeframes  Infrastructure needs to be committed and available within specific timeframes  Infrastructure creates wealth  Public Open Space levies – where do they go ?  Identify links to community benefits

 There needs to be known costs for all designated areas  State infrastructure levies ? – raised in Nov 2005

Western/ Northern Melbourne Eastern/ Southern Melbourne Population1.4 million2 million Parks and Reserves Hospital Beds MRI Machines117 People per GP Private Hospitals650 Top 50 schools240 Bottom 50 schools2910 Swimming pools3090 Bus Routes76221 Train and tram lines1127 Suburbs of social disadvantage 51

Objectives  Direction 1 - Build a more compact city  Direction 2 - Better management of metropolitan growth  Direction 3 - Networks with regional cities  Direction 4 - A more prosperous city  Direction 5 - A great place to be  Direction 6 - A fairer city  Direction 7 - A greener city  Direction 8 - Better transport links  Direction 9 - Better planning decisions, careful management

 Melbourne 2030 is not an action plan  Population is growing at an unforseen rate  Climate change and greenhouse issues not fully considered  Petrol prices have gone north  Inadequate public transport system exposed  Water was not an issue in 2002  Obesity and health issues now dominating public policy

 The principles of 2030 need to be reinforced  We can fit another 30,000 residences within existing inner urban infrastructure ?  Better use of existing infrastructure – transit cities  Brown Field sites – making better use of existing services  Environmental uncertainty and the role of the EPA  People want to live near “home”  Vertical retirement developments – role of family  New opportunities around activity centres

 Increase transport funding and services -fuel cost increases mean people cant live close to home/community  More inner city options are needed- lost opportunities are becoming compromised developments  More employment opportunities are needed in growth areas to precede and occur with development – but you need infrastructure to support the new investment

 Urban renewal  cut the red tape  less time in the planning processes  More resources for the EPA to speed up assessments  Public Open Space levies  Another level of charges to the developer  Dedicate these funds to improving amenity  Councils should have the “helicopter view” and plan their future municipality  Required accommodation options - service industries

 Developers cost the various risks in their feasibilities ◦ Financial Risk ◦ Planning Risk ◦ Development Risk ◦ Environmental Risk ◦ Marketing Risk  Funding is reliant on valuations – timing is the greatest risk  The purchaser will always bear the costs of delays  The banks receive the benefits of our development system, not purchasers