By Troy Schultz, Principal Engineer, PEAKURBAN
In recent years I’ve noticed an increasing trend of developer’s seeking acquisition sites with minimal planning risk (inside urban footprint, appropriately zoned and preferably with an approval in place). Who could blame them given the political and regulatory minefield they are facing these days.
More and more clients tell us they simply cannot find suitable, large scale acquisition opportunities. When they do, sites are hotly contested, vendor price expectations are very high and there is no room for error or delays in order to achieve a viable commercial outcome. Under these conditions, it is very hard to add significant value to the project other than delivering an ultra-efficient layout and hope for a quick approval timeframe.
Upon reflection, I question why then have we created a planning and regulatory environment that stifles entrepreneurial risk and limits the opportunity to create truly exemplar communities for Queenslanders?
Many of the most significant and high quality masterplanned communities in South East Queensland were established on land originally outside of the Urban Footprint. In fact, the urban footprint didn’t exist when many of these projects were conceived. Aura on the Sunshine Coast, Springfield City, North Lakes, Robina on the Gold Coast and Rochedale in Brisbane all spring to mind.
All of these projects started life as what could be considered a ‘speculative purchase’. Developers of these and similar landmark projects took a calculated risk and invested significant time and effort to create wonderful masterplanned communities that today are economic powerhouses, offer significant employment opportunities, and provide affordable and diverse living options, as well as much more open space and parkland when compared to inner city areas.
Research conducted by the Suburban Alliance comparing suburban communities (North Lakes and Springfield City particularly) to inner city living found that:
- Masterplanned communities (Springfield and Northlakes) offer 30% to 42% more open space than inner city, or 10 to 20 times the open space on a capita basis.
- Masterplanned communities more attractive to families with children (60% versus 27% inner city).
- Household incomes are very comparable but mainly due to dual incomes more prevalent in suburbs than inner city – inner city individual incomes significantly higher ($57k vs $39k).
- Masterplanned Springfield and North Lakes provide significant local employment, contrary to popular myth: 70% and 60% work locally (same suburb or surrounding area.
- Only 10% commute to work in inner city
- Housing is much more affordable (median house prices up to 50% cheaper than inner).
- Energy use per capita is very comparable – no evidence of more energy consumption in masterplanned communities (except possibility of more swimming pools in Springfield elevating this area somewhat).
- Solar energy household generation in Springfield is 4.4x that of inner city; and in North Lakes 2.4x that of inner city.
Please click here for more information on the research conducted by the Suburban Alliance.
Economics 101 tells us that as supply decreases with constant or rising demand, prices rise. It is no surprise that one of the biggest (if not the biggest) cost of new housing is the land component.
For instance, in September 2019, Ray White Special Projects assisted us with some recent sales data for englobo land sales. The data indicated average land prices of $940,000/ha for land inside the Urban Footprint/growth corridors and $91,000/ha for land outside (but adjacent) to the Urban Footprint. Using 15 dwelling/ha, this equates to $62,600 per lot for land inside the footprint vs $6,000 per lot for land outside the footprint. A tenfold difference in price. If developers could purchase land for around $6,000 per lot, then significantly more money could be put into infrastructure investment, open space and parkland and other social and community building infrastructure.
Whilst we must work with what we have and the need to fill the pipeline with short and medium term projects is absolutely necessary, I believe there is a key and important role that speculative, long term projects can deliver. Having the opportunity to purchase land at or close to rural prices, prepare a masterplan for a range of different but integrated land uses unconstrained by fragmentation and other “cookie-cutter” commercial metrics would be game changing.
Changes to the Urban Footprint needs to be considered or the regulations changed to allow land outside the footprint be considered for development based on its merits. Otherwise, where will the next great communities be?