What made rents soar? It might have been COVID, and pairing off

Peter Martin is Business and Economy editor of The Conversation and a visiting fellow at the Crawford at the ANU. A former economics editor of The Age, he has reported economics since 1985.

So, you think you know why rents climbed.

You probably think was skyrocketing interest rates and a tsunami of migration.

It’s true that interest rates have jumped more over the past year than at any time on record, and it’s true that migration has roared back – in the six months to September 2022 (the latest month for which we’ve official figures) arrivals exceeded departures by 170,000.

But here’s the thing. Advertised rents began climbing sharply in late 2021 – six months before the Reserve Bank began pushing up interest rates, and at a time when it was forecast not to.

And “net migration” was negative back when rents were taking off – meaning the number of arrivals didn’t even match the number of departures.

It’s supply and demand

Something else made rents move.

As it happens, there’s no particular reason to think interest rates would have quickly affected rents even if they had been climbing. If higher rates force some landlords to sell, and they sell to other landlords, the number of properties for rent won’t change. If those landlords sell to owner occupiers who would otherwise rent, they cut both the number of rental properties and the number of renters.

What matters for rents, as for any price, is the demand for and the supply of the product being priced. More demand (more renters wanting properties) and the price climbs. More supply (more properties available for rent) and the price falls.

Read more: $1 billion per year (or less) could halve rental housing stress

On the face of it, neither demand nor supply was changing much during COVID as rents started climbing. Australia’s population was growing more slowly than at any time in modern history. And, as best as we can tell, the number of properties available for rent was climbing, albeit weakly.

What did change during COVID, according to the research department of the Reserve Bank, was the average number of people per household.

The change doesn’t sound big – the average fell from a bit above 2.6 residents per household to a bit below 2.55 – but applied to millions of households it meant about 140,000 more houses and apartments were needed than would have been.

The sudden change was awfully for hard for the building industry to respond to, especially when it was laid low by COVID.

Why did we suddenly want to live with fewer people?

The head of the Bank’s economic division, Luci Ellis, thinks it was COVID itself, and lockdowns. We suddenly became more precious about sharing space.

‘Love the one you’re with’

Ellis says proportion of Australians living in group houses declined and stayed low. Faced with the choice of living with a large number of housemates and just one other person, perhaps a romantic partner, a lot of renters left group houses and shacked up with each other.

As she put it last year:

On the question of who you would rather be locked down with, at least some Australians have voted with their removalists’ van, by moving out of their share house and in with their partner.

There’s more to it of course, but where the supply and demand for anything are roughly in balance (rents had been increasing by less than 1% per year in the four years before COVID, and fell in the first year of COVID) any sudden change in either supply or demand can move prices quickly.

Advertised rents aren’t typical …

Having said that, for most renters prices are still moving slowly. Advertised capital city rents are up 13% over the past year, and advertised regional rates up 9%. But average rents (the average of what all renters pay) are up only 4.8%.

The rents charged to ongoing tenants climb much more slowly than the rents charged to new tenants, in part because landlords often like their tenants, and in part because for the first year renters are usually on fixed contracts.

But over time as renters move home, and landlords become less squeamish, more and more renters tend to pay the rents advertised. It makes the increase in advertised rents an unwelcome sign of what’s to come.

… but they’re a sign of rents ahead

And it might get worse. Reserve Bank Governor Philip Lowe says population growth is set to climb to 2% – near the peak reached during the resources boom.

We won’t be able to build houses anything like that fast. Lowe says the last time Australia’s population surged it took about five years for housing supply to fully respond to housing demand.

We’ve ways of dealing with it of course. One is to re-embrace group homes, another is to delay moving out of our partents’ homes, or to move back in.

But even if this does happen, Lowe says, with typical understatement, that rent inflation – ultra-low before COVID – is likely to stay “quite high” for some time.

This article originally appeared in The Conversation. Read it here.

How your postcode predicts your health and life expectancy

And what governments can do to help

When it comes to our health, the cards are stacked against us - 50 per cent of Australians now live with chronic disease.

The Victorian Health Promotion Foundation (VicHealth) is a pioneer in health promotion – the process of enabling people to increase control over and improve their health. Our primary focus is promoting good health and preventing chronic disease.

At almost every point throughout our day, things make it harder for us to be healthy — and easier for us to increase our disease risk. 

The worst part? Most of that disease is preventable – and it starts with planning laws, zoning laws and the environments we live in.

Key points: 

• We want to see fair equitable and accessible infrastructure that promotes the health and wellbeing of all Victorians, regardless of their postcode, bank balance or background.

• Community-demand for healthier environments is growing locally and globally.

• In Victoria, we need our Government policymakers to take action and create healthier environments to reduce chronic disease. 

How does urban planning impact health? 

One of the strongest predictors of our life expectancy is our postcode. This is because the built environment shapes our health in many ways. Access to parks, healthcare services, public transport, education, and employment, all affect our ability to access and achieve good health. 

Exacerbating the issue is the fact that cities around the world are growing and increasingly more people are moving from rural to urban areas. Today, 55% of the world’s population lives in cities, and by 2050, the number is expected to be about 68%. And the resulting health issues are shocking. 

Kids in Australia could be the first generation in history to have a shorter life expectancy than their parents. So how do we turn this around?

This confronting revelation came up in an episode of ABC Radio Melbourne’s Conversation Hour with Richelle Hunt, where VicHealth CEO Dr Sandro Demaio joined the discussion. 

What's interesting is if you move to a new area, you take on the risk of that area... That is either helping us to be healthy or potentially making us sick... if you move to an area that has a much lower life expectancy, you will take on the risk and the life expectancy of that new area very quickly, which shows, again, it's about the environment

In wealthier suburbs of Melbourne like St Kilda, the average distance to a fresh food store is 400 metres vs 14 kilometres in some lower-income postcodes.

Almost 2.5 times as many unhealthy food outlets in poorer postcodes compared to wealthier ones. 

These stark differences between postcodes has created health issues all around the world.
This was emphasised in Lives on the Line: Life Expectancy at Birth & Child Poverty as a Tube Map, a version of the London Tube (train) map showing life expectancy from station to station. 
There is a 20-year difference in life expectancy between those born near Oxford Circus (a wealthy area) and others born close to some stations on the Docklands Light Railway (DLR) (poorer areas).

Beyond the shocking life expectancy gap, the map showed people living in poorer communities were more likely to experience delayed early child development, lower levels of education and employment and higher rates of smoking, obesity and harm from alcohol. 

Healthy and affordable food options, parks and accessible infrastructure make a difference to everyone – but a gigantic difference to some. Imagine the healthy lifestyle opportunities it could create for those on low incomes or experiencing any number of life situations that create health barriers? This is how we break the cycle of  circumstances beyond our control affecting our health. So it should be a priority.

Healthier planning and zoning

We can think about planning laws, zoning laws and the environments we live in in terms of food environments and how connected neighbourhoods are. 

Food Environments 

Where we live and the places we go as part of our daily routines have a big influence on the foods we buy and eat. 

Known as ‘food environments’, they typically play an even bigger role than our individual food preferences. 

The World Health Organisation officially defines the food environment as the surroundings that influence and shape consumers’ food behaviours, preferences and values – and prompt decisions. 

What does a food environment include?

• Economic access (are they affordable?) 

• Marketing (are unhealthy options more visible than healthier ones?) 

• Nutrition labelling (do food products have clear, easy to read information to support consumers to choose healthy food options?) 

• Food quality (is it fresh, prepared without too much factory processing?) 

• Food safety (is it prepared and stored hygienically, in safe temperatures?) 

• Digital food environments (as with marketing, are unhealthy options more visible than healthy ones?) 

Easy access to nutritious food choices where people live, work, study and play can help to maintain health and prevent diet-related chronic disease.

And with ultra processed food options bombarding some neighbourhoods more than others, governments must plan healthier environments as a disease-prevention priority. 

In the abovementioned episode of ABC Radio Melbourne’s Conversation Hour with Richelle Hunt, caller Sue tested the program about her son's new housing estate which is surrounded by fast food outlets with no ready access to healthy food store.

So how can we make sure that people like Sue's son don't live in places that compromise their health?

Governments, planners and urban designers can positively influence access to nutritious food by changing food availability and access at the local level through land use planning. 

Our latest report Land use planning as a tool for changing the food environment outlines further case studies and presents some specific recommendations in regards to promoting healthy food environments: 

1. Ensure local planning authorities have a (food) retail classification system and data visualisation tool 

2. Adopt combined approaches that discourage retailers selling predominantly unhealthy options and encourage retailers selling predominantly healthy options 

3. Focus on reducing inequalities and providing opportunities for all 

4. Use a health in all policies approach 

5. Better understand the barriers to adoption (of healthier lifestyle activities such as healthy eating, physical activity etc.) and the feasible steps to overcome these barriers 

6. Stronger evaluation of land-use initiatives.

Connected Neighbourhoods

Safe and accessible neighbourhoods that locals can move around without solely relying on a car promotes health and wellbeing.  

Infrastructure including green spaces, street lighting, footpaths, bike paths and pedestrian crossings can all affect leisure time and physical activity levels. Whether that’s for pedestrians, wheelchairs, prams or bikes. 

So it follows that planners can help to promote physical activity by improving the design of the built environment, for example through dedicated green spaces, better street lighting and redesigning stairs and ramps. 

The added bonus is that this can also improve safety and access for a range of social groups, including people with mobility requirements. 

Future Healthy Community Champion Jessi is regularly impacted by limitations of the built environment. 

“There's physical barriers everywhere for wheelchair access. Footpaths are broken everywhere, a wheelchair is very hard to get around in. It can be painful, I can get stuck.” 

Of course connected neighbourhoods aren't just about mobility, but about spaces to gather and enjoy recreation outdoors. 

Over the last few years Victorians became hyper aware of just how essential outdoor green spaces near your home are to your health and wellbeing. 
So planning that prioritises green spaces over commercial development is also hugely important to improving mental health and wellbeing.  

Growing community demand

“There is an increasing recognition by governments all around the world, and both state and local governments, that we can do better and need to do better for both existing and growing communities..”

- Dr. Jonathan Spear, CEO of Infrastructure Victoria (ABC Conversation Hour interview) 

Victorian community opposition to fast-food developments 

• Tecoma saw protestors mobilise with more than 1,170 written objections sent to Yarra Ranges Council when McDonald's wanted to open a new franchise there. Despite these concerns and after ongoing legal action, McDonalds opened three years later. This was met with protests at the opening. Without significant government legislation to support them, the people of Tecoma could not stop McDonalds from opening in their town. 

• Mansfield saw similar community opposition, with an online petition that opposed a new drive-through McDonalds gaining more than 1000 signatures in the first hour, building to around 3300 signatures (from a population of around 5000!). This time, VCAT sided with the Mansfield Shire’s refusal to grant a permit for a drive-through McDonalds. Although the people of Mansfield successfully stopped McDonalds from opening there, it took almost the entire population to do it. 

Without significant government legislation to support them, the people of Tecoma could not stop McDonalds from opening in their town. And although the people of Mansfield successfully stopped McDonalds from opening there, it took almost the entire population to do it. Policymakers can make all the difference in giving communities a chance to create healthier environments. See suggestions for policymakers here.

Further examples of change 

• Western Australia also has released a report that outlines the positive impact of prohibiting unhealthy food outlets near schools. 
  

• The City of Los Angeles passed a 2008 bill that stopped new fast food restaurants from being opened in low-income areas. 
  

• World Health Organisation's Healthy Cities Initiative looks at urban governance for health and wellbeing, detailed in their 2020 report Healthy cities effective approach to a rapidly changing world. 
  

• No Fry Zones in Wicklow, Ireland aimed to promote healthy living and reduce childhood obesity by excluding the construction/operation of new fast food retailers near schools or playgrounds. 
  Projected benefits included:  
  - Reduction in obesity rates by limiting easy access of school children to foods high in unhealthy fats, sugars or salt. 
  - Reduction in the promotion of fast food to school children 
  - Consistency in local planning regarding fast food outlets 
  

• Sweden works to create smart cities where social sustainability plays a major part. Green areas help create meeting places, and they also play the role of air cleaners, water collectors and noise reducers. By building in favour of bikes and pedestrians, car traffic has been reduced in the city centres, leading to better health among the residents. 
  

• There are many good Nordic initiatives and experiences, such as combining urban development with public transport, preserving biodiversity and cultural elements, foresting the city and calculating the balance between the green and built areas. 
   

How can Victoria’s State Government help? 

Planning schemes in Australia are developed under state enacted overarching planning laws, setting out objectives and policies, which are in turn implemented and overseen by local governments. However, at this point in time there is no provision for the inclusion, let alone prioritisation, of health impacts in planning decisions.  

There have been two Parliamentary inquiries on the topic and no action yet (2012 Inquiry into Environmental Design and Public Health in Victoria and 2022 Inquiry into the protections within the Victorian Planning Framework). 

State Government has a clear role to play in managing chronic disease and our planning laws and regulations could significantly help to keep people healthier for longer. 

Policymakers must change the current laws so health is in sharp focus when it comes to zoning and planning approvals.  

Principal planning instruments overarching planning law in most states, including Victoria ... do not allow for preventative health considerations to impact planning decisions.

- The Obesity Policy Coalition

Ultimately, we need our State Government to pass legislation that changes the planning act to 1) embed health as a priority consideration in planning and 2) allow consideration of community voice into the decision making process of planning and zoning.

This amendment should seek to promote and enable:

• The prioritisation of healthy food retail outlets 

• Local government and planning authorities to respect the wishes of community when they raise concerns about new or expanding footprints of harmful industry retailers including alcohol retailers, fast-food outlets and gambling venues

• Green spaces for mental and physical health

• Infrastructure that prioritizes active transport options and safe physical activity.

Without a health lens, postcodes will continue to determine preventable disease outcomes across Victoria. The future is in the hands of Victoria’s state and local government policymakers.

This has been republished with permission from VicHealth. Read the original article here.

Australians paying $6 billion for unused apartment parking

Experts are calling for planning policy to ‘unbundle’ parking spaces from apartments to reduce housing costs and alleviate street parking woes.

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RMIT University’s  goal is to bridge the gap between research and impact. RMIT was established, not just to pursue 'knowledge for knowledge's sake' but to apply research and innovation for the benefit all. Our distinctive capabilities deliver positive change. This is what we mean by passion with purpose

A new RMIT University study surveyed more than 1,300 apartment residents across Melbourne, Sydney and Perth to assess the adequacy of off-street parking for apartment households. 

Lead researcher Dr Chris De Gruyter from the Centre for Urban Research said two thirds of households owned the same number of cars as their allocated parking spots.

However, 20% of households had too much allocated parking, while 14% did not have enough.

De Gruyter said the imbalance of off-site parking for apartments reflected residents not having a choice in how many parking spots they needed when renting or buying an apartment. 

In Victoria, there are minimum parking provisions that state every one and two-bedroom apartment must have at least one parking spot, and apartments with three or more bedrooms must have at least two. 

“We found in our study that people living in larger apartments tend to have an oversupply of parking because of this policy, which means they’re paying for a space they’re not using,” De Gruyter said.

De Gruyter said 13.4% of the surveyed households did not own a car but most were still allocated a parking space.

With each parking space worth up to $100,000, he estimated the price of unused off-site parking is costing residents more than $6 billion.

“This oversupply is not just an inefficient use of space, it is exacerbating housing affordability issues,” he said. 

“Meanwhile, apartment households with an undersupply of parking are forced to park on the street, competing with visitors in the area.”

“It is very clear that there is actually plenty of apartment parking - it’s just allocated incorrectly.”

Unbundling for more choice

De Gruyter is calling for state and local governments to allow for unbundled parking in planning policy to help balance the over and undersupply of off-site parking.  

He said unbundling parking was not about taking away parking from residents – it was about giving people the choice to own or rent parking spaces in line with their needs.

“We can choose the number of bedrooms we want in our homes, yet we have no say in how much parking we need,” he said. 

“We want people to have the option to choose not to have parking instead of it being imposed on them. Similarly, those who wish to have additional parking can have this.”

Unbundled off-street parking in apartment buildings is still uncommon in Australia, but they can be seen in several newer complexes, such as Melbourne Square, Indi City Sydney and Arklife in Brisbane, choosing to unbundle parking from apartments. 

De Gruyter said it was promising to see the renewed Arden precinct in North Melbourne introduce planning policy to facilitate unbundled parking for their new buildings. 

“Unbundled parking is going to help with housing affordability, reduce car use and on-street parking issues,” he said. 

“We’re also going to see better health for residents as there will be more physical activity due to more public transport use, and better air quality from less car use.”

But waiting for the market alone to bring this change would be too slow, said De Gruyter, and state and local government had an important role to play. 

“Do apartment residents have enough car parking? An empirical assessment of car parking adequacy in Australian cities” is published in the Journal of Transport Geography (DOI: https://doi.org/10.1016/j.jtrangeo.2023.103542)

This research was led by RMIT University in collaboration with the University of Western Australia.

Chris De Gruyter, Paula Hooper and Sarah Foster are co-authors. 

This article was originally posted on the RMIT website. Read it here.

Why knocking down warehouses is on the rise

JLL are property financiers with a diverse range of clientele. With sustainability at the core of their ethos, JLL are working toward creating a world-leading sustainable property development firm.

Redeveloping industrial real estate in a strong market aims to address modern demands

The idea of demolishing and rebuilding warehouses in a flourishing industrial real estate sector may sound counterintuitive.

But for a growing number of warehouse owners, the old buildings just don’t have what their tenants need.

Demand is surging for high-quality industrial space at reasonable distances from city centres. In Australia, one of the tightest industrial markets in the world, last year’s take-up of 3.2 million square metres was the second highest ever, surpassed only by the 4.3 million square metres leased in 2021, according to JLL data. 

And year-on-year rental growth of 15% globally, as recorded last October – one of the highest lifts ever – reflects the appetite for industrial space.

But ESG-credentialed buildings can be a dealbreaker. Businesses want warehouses that are automation-ready and with sustainability features to help them meet their net zero carbon commitments, says Annabel McFarlane, head of strategic research, Australia, JLL.

Investors are taking note, pouring cash into sites that have older buildings, with a view to redeveloping.

“Many investors adopted ‘income-producing land banking’ strategies in 2021 and 2022 and as a result the volume of capital invested in income-producing industrial sites that are redevelopment-ready totalled A$2.3 billion (US$1.5 billion) over the past 24 months,” McFarlane says, speaking to the Australia market.

“Investors are cognisant of the strong demand for well-located assets for last mile distribution, along with the risks associated with greenfield developments, including the absence of income and potential increases in land holding costs,” she adds.

Proximity is everything

Industrial rebuild projects have been more common in ultra-high-density cities such as Tokyo and New York City, where developable land is scarce. Online shoppers are increasingly demanding same-day delivery, so traditional warehousing on the fringe of cities has had to be modernised and centralised via demolition and rebuild.

But even in Australia, where more land is available, proximity to major customer bases is a key driver of the knockdown-rebuild trend.

For example, in Melbourne there was the A$95 million purchase of the 12.21 hectare IVECO site in Dandenong South, where the Aliro Group and ISPT are set to establish a premium logistics estate. Then there’s the A$230 million transformation of the former Woolworths distribution centre in Broadmeadows to support e-commerce, distribution, food and cold storage.

“We expect the redevelopment theme to pick up over the medium term and obsolescence of some older stock to be brought forward as building sustainability features become essential considerations for occupiers,” McFarlane says.

Design benefits

The economics behind redevelopment projects make sense due to the improved capacity of new builds and their lower running costs, says Richard Phillips, JLL Australia's head of supply chain.

He points out that older assets will be up to 11 metres high, while new assets can be 15 metres high and hold 40% more product on the same footprint.

Automation is only appropriate in new-builds or retrofits where properties are expected to be functional for 15-plus years, Phillips says.

“You can’t even put some of the simplest automation into older warehouses because the infrastructure doesn’t enable their deployment,” he says. “So, you’ve got buildings that are 35-plus years coming up for refurbishment anyway, plus the appeal of automation and increased cubic capacity all driving owners and developers to look at the viability of knock down and rebuild.”

Market consensus

Back in 2021, a survey of logistics experts in JLL’s The Future of Global Logistics report found 90% of respondents felt redevelopment of brownfield urban infill sites would be an important opportunity to meet growing demand.

“If you can’t do something to improve the building, then that will reduce its effective life, and demolition could be the answer. You need to look at how old the building is and how it can be adapted,” says Phillips.

“The automation journey will continue to push people harder than previously to review their buildings,” he adds.

Green goals

As important as automation to the evolving industrial and logistics landscape is the increasing imperative around sustainability.

This was reinforced recently by Germany’s Supply Chain Due Diligence Act, introduced this year, which requires large companies to observe social and environmental standards in their supply chains, including their real estate. With Germany being the fourth largest economy in the world, this will have global implications.

“Our research tells us that 54 out of the top 100 largest industrial occupiers have net zero targets,” says Renae Gasmier, JLL Australia’s head of sustainability consulting. “That means these gold-class tenants need to be in net zero carbon emission buildings and we are very aware there's an undersupply.

“The problem we're all trying to solve is how to retrofit and upgrade all those assets that are not net-zero ready. In the industrial space the answer will be a combination of demolition and reconstruction and retrofitting what's there already.”

This article was originally published on the JLL website. Read it here.

‘Are you asking us to sleep under the Harbour Bridge?’: 3 myths about international students and the housing crisis

Dr Angela Lehmann is a sociologist who has spent 15 years working in the Australian and mainland Chinese university sector. She holds honorary positions with the ANU and the University of Xiamen. Angela is the author of 'Transnational Lives in China: Expatriates in a globalising city' (Palgrave 2014) and editor of 'Destination China: Immigration to China in the Post-Reform Era' (Palgrave 2019). She has several years experience in the international higher education sector in both Australia and China.

There is a story doing the media rounds that international students – particularly from China – will now “flood” back to Australia. It is claimed this will push up already high rents for scarce housing in our major cities.

This story is one of three myths that risk setting up international students as scapegoats for Australia’s ongoing housing crisis. However, immigration data and our monitoring of social media, where international students share their experiences, simply don’t support these narratives.

Indeed, these students’ social media posts highlight the challenges they are facing, including scams that seek to exploit their difficulties in securing accommodation.

What’s behind this story?

Part of this story stems from a Chinese government announcement in January that students will no longer have their degrees certified if they study online. This means students who have been studying with our institutions while based in China during the pandemic are being encouraged to return to campus.

The announcement was made less than two weeks before the start of the university year. It left students and institutions rushing to make sense of the change.

Media reports have since warned “more than 40,000 Chinese students” are about to arrive in Australia as a result. This has heightened fears about their impact on rents.

We use AI technology to listen to what international students are talking about on open online platforms such as Facebook, Twitter, Instagram and online forums. We also monitor Chinese platforms such as Weibo. We read comments students make about media posts to determine their reactions to events and issues.

We also monitor what Australians are saying about international students on platforms such as Twitter, Facebook and YouTube. This allows us to understand how the local community is responding to international students and to better understand the challenges students are facing.

Lately we are seeing negative sentiment on social media towards international students in Australian cities. Some claim these students pose a risk to local housing security. For example, one post reads:

Australia more interested in housing overseas students in high rise dog boxes than in its own residents.

Another reads:

All these international students taking up homes meant for Australians. Why aren’t Aussies being prioritised here?

Fears like these are being fuelled by three key myths that are increasingly circulating during the rental crisis.

Myth 1: 40,000 arrivals from China are imminent

Many of Australia’s international students have already arrived in time for the university year. As for Chinese international students who are currently offshore, myriad challenges are delaying their return to Australia. These include high airfares, visa delays, Australia’s requirement they provide evidence of a negative COVID-19 test and difficulties leaving jobs they have in China.

Australia’s housing crisis is being widely reported on Chinese social media. Students are actively talking about difficulties with accommodation and are worried about arriving without first securing a bed. One student’s post directed towards the Chinese government, “Are you asking us to sleep under the Sydney Harbour Bridge?”, attracted hundreds of reactions.

At a recent Senate estimates hearing, the Department of Home Affairs confirmed there had not been a significant spike in visa applications since the Chinese government’s announcement. A full return of students to Australia’s universities is not expected until later in 2023.

Myth 2: all these students can afford inner-city apartments

Survey analysis by global education services provider Navitas recently found the cost of study has risen from the fifth-most-important consideration to the second-most-important consideration for Chinese students deciding where to study abroad.

While some students may be able to afford top-price inner-city living, many can’t. And many of those who are already here are struggling with the cost of living. As one student posted:

It already costs so much for us to pursue studies in Australia but now it costs much more to afford basic needs. Already on loan and not all of us students come from rich families. I hope this is raised and some help is offered to those of us who are struggling.

The cost of living in the inner city is leading students to seek advice online from their peers in Australia about living in suburbs further away from campus. There is a need for information to be provided to these students about alternative suburbs, including travel times and facilities, along with reassurances about safety and cost.

Myth 3: students can walk into properties

International students who have not been in Australia for the past few years lack the rental and financial history that landlords require. Online, students talk about feeling discriminated against, with landlords considering them “high risk”.

Some students recount being asked for two or three months’ rent in advance to secure a property. Others are voicing fears about being scammed as a result of their lack of a paper trail.

I was asked to pay 2 months rent on top of my bond to secure a spot. I was told international students are not trustworthy so they required more payment upfront. Is this legal?

In recent weeks, various scams targeting international students have been aired on social media. These range from “fake” real estate agents requesting hefty deposits, and agents charging a month’s rent to “hold” the property, to threatening students who do not comply that this will slow down visa processing.

In response, the Chinese consulate in Sydney has issued a warning to students. The notice urged students to be wary of rental scams and to take care to ensure their safety and security in their dwellings.

The return of international students is an important sign of economic and urban recovery in Australia. Students support local economies as tourists, consumers, taxpayers and a vital source of labour.

Unless the challenges they face on their return are seen and addressed, we risk this group of young people being turned into scapegoats for a housing crisis that is the result of domestic policy failures over many years.

This article originally appeared in The Conversation. Read it here.

Tiny houses and alternative homes are gaining councils’ approval as they wrestle with the housing crisis

Heather Shearer has a PhD, which investigated household response to water demand policy; a Masters in Environmental Management and BA (Hons) in Environmental Science. She is also a member of the Planning Institute of Australia. She’s currently researching various aspects of urban sustainability, including housing affordability, water and energy use, environmental behaviour and attitudes to climate change.

Australia’s coastal cities and surrounding hinterlands have long been popular with tourists, sea-changers and retirees. But they have a darker side. In the early morning you will often find car parks crowded with cars, vans, caravans and even tents, where refugees from the housing crisis have spent the night.

People of all ages, including families with children, are cooking breakfast, using the cold-water showers and packing up for another day, always trying to keep one step ahead of council officers or police. These unhoused people don’t conform to homeless stereotypes. Many have jobs and children in school and no serious mental or physical health problems. They simply cannot find an affordable home to rent, or have lost or are unable to buy a home of their own.

Soaring rates of housing stress are forcing Australians to explore new options, including living smaller and in tiny houses. At Griffith University’s Cities Research Institute, we are surveying local government planners on whether they allow, encourage or limit tiny, temporary or alternative houses in their area.

In early findings (from a response rate of over 50% to date), nearly all respondents agree affordability is a problem for both home buyers and renters. While not representing formal council views, their responses indicate most councils now approve modular, manufactured and shipping container houses, despite a public perception they oppose such dwellings. Some have codes specifically for tiny houses on wheels.

As one planner explained:

We will have to think differently about how we live, given housing affordability, inflation, susceptibility to emergency events and the like, and perhaps be more lenient on allowing these types of dwellings – whether on a permanent or temporary basis.

All housing must comply with the law

Local governments in New South Wales and Queensland were the most progressive. Many councils (41%) already approve alternative housing types for permanent dwelling. But they must comply with local laws, be in an appropriate residential zone and approved as a residential dwelling, connected to services and protect local amenity.

For example, a planner from a large regional city in NSW said options like tiny houses were possible, “subject to approval and compliance with Planning and Environment Act and Building Act requirements. All need to be approved for permanent use and hence comply with requirements for all dwellings.”

Another NSW planner said:

There are some temporary exemptions in the legislation for disaster event accommodation for up to two years, and [it] had to comply with planning and building act requirements. Local laws become involved if these structures are parked on council land e.g. on the side of the road or on public land. And environmental health issues arise when there is no waste management measure in place.

The Fraser Coast Council in Queensland recently allowed property owners “to accommodate family or friends in a caravan on the dwelling allotment for up to six months in a 12-month period”.

What are the concerns about tiny houses?

Many respondents did voice concern about false advertising by the tiny house industry. As one said:

Tiny houses are the Uber and Airbnb of the housing industry. The idea that such structures can be temporary is in many cases fanciful.

Some manufacturers market their tiny houses as not needing council approval. They fail to mention the requirements that apply to water supply, waste disposal, bushfire and flood risk, and avoiding conflict with agriculture.

[Alternative housing] should be regulated to some extent to ensure that occupants and adjoining neighbourhoods experience a reasonable level of amenity (i.e. not unreasonably put a strain on existing infrastructure, not detract from local character (if prevailing), not cause overshadowing to adjoining neighbours, be fit for purpose etc).

Another concern is tiny houses that don’t comply with building regulations.

Most of these buildings do not comply with the minimum 2.4m ceiling height of the National Construction Code/Building Code of Australia. Even if they do comply […] unless a compliancy certificate has been issued by the manufacturer, there is practically no way of approving them as a certifier has no access to the specifications, can’t visually inspect the frame prior to cladding etc.

Potential conditions of approval that apply to tiny houses and alternative housing types as indicated by survey respondents. Data: Cities Research Institute survey/Griffith University, Author provided

A quest for creative solutions

The tiny house movement, despite its limitations, could help deliver some of the creative solutions the housing crisis demands. It has sparked an important conversation about alternative housing solutions, with broader implications for housing design, construction, regulation, finance and insurance.

I personally would like to see more flexibility in allowing diverse house types (including temporary dwellings) to put less financial strain on people (put people into homes/home ownership who can’t afford traditional houses or can’t find a rental) and create opportunities for alternative lifestyles (i.e. more nomadic, work less, co-op). Keeping in mind there should be measures to preserve amenity.

A focus on good design, adaptability and affordability can make smaller dwellings more attractive to more people. Assembling prefabricated components on site can cut costs.

Tiny homes can be deployed and redeployed quickly if necessary. This is important for areas hit by disasters.

Their small scale offers a way of increasing density sensitively in built-up areas. They can also be clustered together to create new communities.

Conventional strategies such as more greenfield land releases, relaxed planning controls and subsidies for first-home buyers have failed to solve the complex challenges of a seriously dysfunctional housing market. We need to experiment with new approaches to housing, and learn as we go.

Unconventional dwellings like tiny homes can make an important contribution. Our survey suggests planners around the country are willing to join in the process of developing and regulating these news ways of living.

This article originally appeared on The Conversation. Read it here…

How the ‘rent-a-demic' will affect today’s Industrial and Residential markets

CBRE’s research analysts and in-field market experts investigate the current ‘rent-a-demic' gripping Industrial and Residential markets.

CBRE Research provides thoughtful, forward-looking insight into real estate trends, strategies and opportunities around the world.

Fluctuations in rental demand are nothing new in Australia's property landscape. While minor trends are expected, the latest research from CBRE’s Pacific Market Outlook report indicates a major pivotal shift playing out this year.   

“We’ll see a reversion of history in 2023,” explains Sameer Chopra, Head of Research, Pacific for CBRE. “We expect weaker values and strong rent growth, with tight vacancy rates likely to lead to a ‘rent-a-demic’ in the industrial and residential markets.” 

This ‘rent-a-demic' is a newly coined CBRE term that perfectly depicts the outlook for rising rents. More importantly, it’s an event that deserves further analysis so that stakeholders can understand exactly what this means for today's market and how the Industrial & Logistics and Residential sectors will be affected. 

These crucial insights will touch on perspectives from both CBRE’s research analysts as well as in-field experts with first-hand knowledge of occupancy and real-world activity around market supply and demand. 

What’s driving the ‘rent-a-demic'?

In-house research shows that lower levels of new supply accompanied by surging construction costs have helped drive the current ‘rent-a-demic’. 

In the Industrial and Logistics (I&L) sector specifically, constrained levels of supply and a country-wide vacancy rate of 0.6% - the lowest I&L vacancy rate globally – are helping to fuel high single digit rental growth in most Australian markets in 2023. This is being propelled by the fact that 58% of the 2023 I&L development pipeline is already pre-committed. And even with the substantial incoming 2023 supply pipeline, this surging vacancy demand will not be met.  

“It’s not enough supply to meet demand,” explains Cameron Grier, Regional Director of I&L Advisory & Transaction Services for Australia and New Zealand.  

“If you look at the supply pipeline and overlay that with demand, there is some supply pipeline coming this year. But in most cities like Sydney for example, the supply coming on is half of what we need. And as of today, one third of that is already under agreement or pre-committed.  

“Sydney has the tightest vacancy of anywhere in Australia. Demand basically will not meet new supply coming on. And it’s the same for other markets in Melbourne and Queensland. Supply that comes on will get soaked up this year. Even if demand was cut in half, it still wouldn’t keep up. 2024 will be a different story but this year, definitely not.” 

So, what does this ‘rent-a-demic' mean for the real-world market beyond the figures?   

“It’s great if you’re an owner of land, very challenging if you’re an occupier,” he says. 

Owners of industrial property will see significant rental growth while occupiers will feel this supply squeeze.  

Sass J-Baleh who is CBRE’s Head of I&L Research Pacific and Director NSW Research attributes several factors to the onset of the rental crisis.  

“Construction delays, supply chain disruption and poor weather placed a lid on new supply over 2022, and hence many projects have been pushed to this year. 

“As a result, the forward pipeline has a high precommitment rate of circa 60%. The remaining supply, if not taken up by year’s end will not move the vacancy needle by much.  

“Sydney and Perth have the lowest vacancy rates in Australia which has driven rents in these cities to the highest year-on-year growth over 2022. Sydney and Melbourne naturally benefit from higher population, and therefore greater throughput of goods and logistic requirements. Melbourne is attractive for occupiers given the large rental differential to Sydney’s average rents, as well as being home to the largest port in Australia.” 

The story isn’t too dissimilar on the residential front where there’s also a clear distinction between standard rental demand and the current fight for prized vacancies driven by slowing apartment construction, robust jobs growth and migration. 

“When seasonal demand impacts on supply, the market is usually aware and the trend and the impact is relatively short-term,” says Tim Frazer, Director, Quality & Risk Management, Valuation & Advisory Services. 

“Tenants, owners and agents can plan around the short-term impacts. From a landlord’s perspective, seasonal fluctuations may not be enough of an incentive to displace a longer-term tenant or overlook the benefits of a more stable rental income provided by longer-term tenants. The ‘rent-a-demic' is different; it’s not seasonal; it appears it will be a challenge for the next few years and it’s likely to worsen before it improves.” 

Will rising interest rates affect industrial rental demand? 

Not likely, according to CBRE’s market experts and research analysts, who say it will only be a minor speedhump at most.  

“No, we don’t think we’ll see a huge cutback because of interest rates and people spending less,” says Grier.   

“I think we’ll see certain types of demand contract. Market items like televisions, fridges, furniture and items people bought during the pandemic - you only need to buy those every so often. But in terms of all the other things, we’re seeing expansion in most groups. Anyone in food, pharmaceuticals, 3PL logistics space and non-discretionary spend, they’re all needing floorspace.” 

J-Baleh agrees with this observation.  

“Less discretionary spend will have a short-term impact on e-commerce as well as the throughput of goods moving in and out of warehouses.  

“We expect there will be a pause on decisions to commit to new space from some occupiers. However, other larger occupiers in the market are preparing their supply chains for long-term e-commerce growth and they will still be in the market looking for the right facilities in optimal locations for their particular networks.” 

Even over the long term, experts don’t see the demand for industrial space slowing. This is due to the fact that Australia is still roughly five to seven years behind countries like the US when it comes to speed of delivery and warehouse logistics efficiency.  

“We look at where those groups are now, how much space they have and the trajectory for growth. It’s huge and we think we’ll follow that same pathway,” says Grier.

Will natural disasters affect industrial rental demand? 

Natural disasters have wreaked havoc in recent years across both Australia and New Zealand. This in turn has impacted supply chains and warehouse space under the industrial umbrella. How will industrial rental demand fare in future climate emergencies involving floods, fires or earthquakes?   

“If you look back at past natural events like earthquakes, people were looking for warehouses and that was tough. The hailstorm in Sydney was a natural disaster which demolished sheds. That just meant other groups needed to take up massive warehouses and the rents spiked. When there’s any impact to supply, that’s what will happen,” says Grier.   

The extended rain season in Sydney in 2022 was a perfect example which delayed construction and pushed rent prices north. Grier says that this scenario and similar ones down the track will come down to the simple case of supply and demand. 

Which cities will be impacted hardest? 

With the surge in demand for residential vacancies across multiple major capital cities, it’s important to know exactly which areas will see the most growth and its impact on suburbs further out of CBDs that historically experience less occupier interest.  

Frazer doesn’t believe this ‘rent-a-demic' will be exclusive to only the high-demand suburbs in capital cities.   

“I don’t think it will just be limited to areas around the CBD or universities, but they will be more affected as migration increases, and more students continue to return. This is likely to force other tenants further from major centres and this sprawl will contribute to the issue being more widespread. 

“Increased demand in more sought-after areas will force some tenants out of their preferred location. Whether the competition is from other tenants or properties being sold by investors to owner- occupiers, the reduced supply will contribute to rents increasing across most areas.” 

The higher rental growth experienced on Australia’s west coast compared to its east coast, as indicated in the Market Outlook report, was down to multiple factors.    

Western Australia has benefited from a high net migration over the past few years on the back of a strong local economy, meaning more residents needing somewhere to live.  

“Whilst they have had a housing construction boom over this period, the low interest rate environment and government grants mostly attracted owner-occupiers into the market initially,” adds Frazer.  

How long will the residential rent crisis last?

Answering this question is subjective and based on an individual’s definition of ‘temporary’.  

“In my opinion, the broader issue won’t be resolved in the short term and it’s likely to be a challenge for the next two to three years,” says Frazer of the residential market.  

“It’s difficult to see a short-term solution. Queensland changed legislation to allow secondary dwellings to be leased and whilst every additional occupancy helps, it’s not enough to have a real impact on a national issue. 

“To find an effective shorter-term solution, governments need to get creative as the core of the issue is the lack of supply and that can’t be remediated quickly. With the recent publicity surrounding challenges within the building industry, there’s a reluctance from some investors to purchase land and build. This also needs to be resolved.” 

Key expert takeaways  

Residential takeaways:  

• The winners in the ‘rent-a-demic’ are landlords as they can secure a premium for their property, but they need to weigh this up against getting a quality (I.e., longer-term) tenant to avoid the costs associated with leasing after a shorter tenancy.   

• The real-world market reflects the Market Outlook data and shows tenants struggling to find and/or afford suitable accommodation. 

• For some investors, the increased demand is timely, with the higher rental income needed to cover increasing interest costs. 

Industrial takeaways:  

• Industrial experts are cautiously optimistic about 2023 and 2024.  

• Landlords will be able to take advantage of rental growth in 2023. 

• There will be a fair amount of supply coming in 2024 to bring the market back to normal conditions, but this will still be lower supply compared to historical levels.   

• Vacancies aren’t expected to rise significantly over the next few years, and therefore medium to long run rent growth will remain elevated as Australia is in the early phase of a strong rent growth cycle, supported by a continued undersupply of floorspace across most major markets. 

• There could be some risk to the demand side of the equation this year as the country enters an economic downturn and there is less consumption growth.  

• Higher rents coupled with weakening consumer demand will place pressure on smaller occupiers, driving the expectation for greater sub-lease activity (‘hidden vacancy’). 

This article was originally published on CBRE. Read it here…

The Meteoric Rise of Cross-Laminated Timber Construction: 50 Projects that Use Engineered-Wood Architecture

James Wormald is a freelance writer and a current Organic Content Editor for the DAAily Platforms. His writing covers multiple sectors and industries including advertising, architecture, finance, food, graphic design, insurance, medical, product design and science & tech.

This article originally appeared on the Arch Daily.

Timber is a natural, renewable material, easy to fabricate, and with low-carbon emissions. As a construction material, however, when put under enough directional force along its grain, sawn timber is structurally unstable, so deemed unsuitable under higher loads. In comparison, the manufacture of cross-laminated timber (CLT) involves simply gluing multiple layers of timber together at right angles. By crossing the direction of the grains, CLT achieves a far higher level of structural rigidity along both axes. CLT boards start with a minimum of three layers but can be strengthened further with the addition of more. Simply put, due to the complex physics involved in the perpendicular lamination, the strength of CLT board is similar to that of reinforced concrete, and has proven performance under seismic forces.

To read the full article access it here - Arch Daily.

Wormald, J - The Meteoric Rise of Cross-Laminated Timber Construction: 50 Projects that Use Engineered-Wood Architecture, Arch Daily, first cited February 20 2023

https://www.archdaily.com/996319/the-meteoric-rise-of-cross-laminated-timber-construction-50-projects-that-use-engineered-wood-architecture

Sleepwalking into Oblivion – or The Dark Side of AI

Neil Leach is a professor at Florida International University, where he directs the Doctor of Design program. He has published two books on AI and architecture: Architecture in the Age of Artificial Intelligence: An Introduction to AI for Architects (Bloomsbury, 2022) and Machine Hallucinations: Architecture and Artificial Intelligence (Wiley, 2022).

"AI is putting our jobs as architects unquestionably at risk”

In the near future, architects may become a thing of the past. Artificial intelligence is quickly advancing to a point where it can generate the design of a building completely autonomously. With the potential to create designs faster and with more accuracy than ever before, AI has the potential to revolutionize the architecture industry, leaving traditional architects out of the equation. This could spell the end of the profession as we know it, raising questions of what the future holds for architects in a world of AI-generated buildings.

I did not write the paragraph above. It was generated by ChatGPT, a highly impressive AI text generator that was launched recently. Make no mistake. Despite its innocuous sounding name, ChatGPT is no simple chat bot. Rather think Deep Thought, the massive computer in The Hitchhiker’s Guide to the Galaxy, designed to give us the ultimate answer to ‘Life, the Universe and Everything’. ChatGPT is astonishingly capable. The key difference, however, is that while Deep Thought took 7.5 million years to come up with an answer, ChatGPT can do it in 3 seconds.

Architects have now woken up to the extraordinary potential of AI. This is mainly because of the remarkable capability of ‘diffusion models’ – such as DALLE, MidJourney and Stable Diffusion – to generate images. The quality of the images generated can be simply astonishing. Amazing as they are, however, these images are a potential trap. Some architects have become obsessed with them to the point that they are overlooking the real issue. Ultimately, the AI revolution is not about image production, but about the assistance that AI can offer throughout the entire design process.

ChatGPT is based on GPT3, a massive pre-trained Generative Pre-Trained Transformer (GPT) that uses Deep Learning to produce human-like text. DALLE, MidJourney and the other diffusion models are also based on GPT3. Both use ‘prompts’ – verbal cues that generate an outcome. But whereas diffusion models connect text with images through the logic of captions found on the web, ChatGPT operates purely from text to text. As such, ChatGPT is more direct.

I first became alarmed by ChatGPT, when a Brazilian colleague, upset that Neymar had not been selected to take the first penalty in the World Cup shoot out against Croatia, asked ChatGPT who should have been selected. The answer was Neymar. The ramifications of this are somewhat startling. Could not football coaches now use ChatGPT for advice during a match, just as referees use VAR? Or could not others use it for more general advice. Could we not use ChatGPT, for example, for advice on which material to specify for a building? In fact, could not anyone else do so – including non-architects?

Social media is now awash with reports about the jaw-dropping potential of ChatGPT. US Congressman, Ted Lieu, is freaked out by it, and calls for AI to be regulated.[1] Canadian academic, Jordan Peterson, tells us about how stunned he was with the outcomes generated by ChatGPT: “I asked it to write an essay, written in a style that combines the King James Bible and the Tao Te Ching. That’s pretty difficult to pull off. You know, any one of those things is hard. The intersection of all three, that’s impossible. Well, it wrote it in about 3 seconds. . . grammatically perfect, and quite impressive philosophically.”[2] There are, however, systems under development right now – such as GPT4, a substantial improvement on GPT3 – that surely will make the next version of ChatGPT even more impressive. As Jordan Peterson puts it, “There are things coming down the pipeline on the artificial intelligence front that are just going to make your hair stand on end.”[3] 

ChatGPT is already putting some jobs at risk – and not necessarily the jobs that you might think. We have all seen distribution plants for Amazon, or the floor of a TESLA car factory, with hardly a human being in sight, and we might imagine that blue collar workers would be the first to go. But progress in robotics has been relatively slow. Simple tasks, such as selecting and picking up a brick, remain challenging for a robotic arm. Meanwhile AI has been racing ahead, to the point that ChatGPT is now quite capable of writing code. As software engineer, Metehan Ozten, puts it: “This is terrifying. What ChatGPT means is that probably within five years from now, software engineers will be obsolete.”[1] Be afraid! Be very afraid! 

And so what about architecture? Rumours of the death of the architect are greatly exaggerated – or so we are led to believe. In his recent article, Will Wiles reassures us, ‘Architects can rest easy that AI isn’t coming after their jobs just yet.’ Comforting words. I beg to differ, however. There are signs that AI is becoming not only good, but terrifying good, to the point that it is beginning to expose our own limitations as human beings, and putting our jobs as architects unquestionably at risk. 

Architecture, it could be claimed, is already under threat. Early research by two Oxford scholars, Carl Benedikt Frey and Michael Osborne, suggests that designers will be relatively immune from the dangers of being replaced by AI.[2] The mistake they make, however, is to assume that there would be a simple one-for-one replacement of a human worker by a machine. In fact, the way that AI actually operates is as a form of ‘prosthesis’ that extends and augments the abilities of the architect. Of course, this can be incredibly helpful. Using AI, a single person office can now compete with bigger offices, and enter large scale competitions. However, the corollary is that practices will no longer need so many architects. Wanyu He of Xkool estimates that a single architect using AI can achieve as much as 5 architects not using AI. Does that mean that 80% of all architectural jobs are now at risk?

But what about further into the future? An interesting comparison can be made with taxi drivers, now that driverless taxis have been introduced in San Francisco. Once a taxi is self-driving, we no longer need a taxi driver. What happens then, when AI can generate architectural designs completely autonomously – as will surely happen very soon? Will we also not need an architect? The problem with AI, then, is not how evil it is. For how can anything be evil when it is incapable of even thinking? Rather, the problem of AI lies in its very capabilities. It is already better than us in some areas, and will eventually be better in every single domain. As Garry Kasparov noted, following his defeat at Chess by IBM’s Deep Blue computer, “Everything we know how to do, machines will do better.”[3]

So what is the solution? Most obviously, architects need to start taking advantage of AI as a way of staying ahead in an increasingly competitive world – ‘If you can’t beat ‘em, join ‘em,’ as the saying goes. We need to familiarize ourselves with the potential of AI, and upgrade ourselves to become ‘superusers’ – to use a term coined by Randy Deutsch. Indeed Spacemaker already claims that there is no future for architects unless they can use AI: “We do firmly believe that in the workplace of the future architects using AI will replace architects that don’t.”[4]Or, as ChatGPT puts it, “AI offers powerful tools to automate tedious tasks, to optimize decisions, and to design new and more efficient solutions. AI will allow architects to design more efficient and cost-effective buildings, and will no doubt be the future of architecture. By utilizing AI, architects can create faster, smarter, and more efficient designs. By not taking advantage of these capabilities, architects are missing out on the opportunity to stay ahead of the curve and remain competitive in the changing world of architecture.”

The most important issue, however, is to be aware of a problem. For, once a problem has been recognised, it becomes a different kind of problem – not one by which we are trapped, but one which we can address. Surely, what we architects should be designing right now is not another building, but rather the very future of our profession.

I will leave the final words to ChatGPT: “Architects who choose to ignore AI will be left behind and ultimately forgotten as the industry evolves and advances. Therefore, it is imperative that architects pay attention to AI and its potential to revolutionize architecture, or they risk sleepwalking into oblivion.”

This has been published with the permission of Neil Leach

To learn more about AI generated work follow @neilleach14

[1] Ted Lieu, ‘I’m a Congressman Who Codes. AI Freaks Me Out.’ New York Times, 23 January 2023. https://www.nytimes.com/2023/01/23/opinion/ted-lieu-ai-chatgpt-congress.html

[2] https://www.youtube.com/watch?v=WLehkWESDJ8

[3] https://www.youtube.com/watch?v=WLehkWESDJ8

[4] https://www.youtube.com/watch?app=desktop&v=1hHfoB4mSrQ

[5] Carl Benedikt Frey, Michael A. Osborne, ‘The future of employment: How susceptible are jobs to computerisation?’, Technological Forecasting and Social Change, Volume 114, 2017, Pages 254-280, ISSN 0040-1625, https://doi.org/10.1016/j.techfore.2016.08.019. https://www.sciencedirect.com/science/article/abs/pii/S0040162516302244

[6] Garry Kasparov, as quoted in Neil Leach, Architecture in the Age of Artificial Intelligence: An Introduction to AI for Architects, London: Bloomsbury, 2022, p. 50.

[7] Neil Leach, Architecture in the Age of Artificial Intelligence: An Introduction to AI for Architects, London: Bloomsbury, 2022, p. 124

Eight of the best: Celebrating some of Melbourne’s great buildings

Shane Murray is Dean of the Faculty of Art Design & Architecture at Monash University. BArch, MArch, PhD, LFRAIA, Reg. Architect. He is an award-winning architect and academic in the field of architectural design. Shane joined Monash in 2008 as Foundation Professor of Architecture to establish the university’s architecture program.

Cities are formed from streets, buildings, and the underlying landscapes on which they’re founded.

But they’re also formed from and for the myriad individual experiences that merge to create a city’s complex culture and identity; its stories and myths traced in urban structure, space and edifice, encompassing varied and shifting opinions about its essential character.

While each city building is part of an overall urban composition, its individual impacts are also important. Many remain largely unnoticed, but there are certain buildings that heighten our engagement with, and enjoyment of, urban life.

How well they work together; how they are conceived and resolved; how effectively they influence and create delightful spaces; streets, squares, courtyards, lanes and gardens – these aspects set them apart.

They are complex spatial and physical entities that balance multiple needs and elements to facilitate and serve people.

For us, the best city buildings are not only about a relevant conceptual and functional response, nor just an engaging aesthetic. The best city buildings fundamentally support and enrich our experience of place.

We’ve selected a few that we feel embody this view. None of them is perfect (no building is), but to us they’re all exemplars.

We’ve listed them in a rough walking order, from the city’s northeastern edge, looping down through the grid and south to King’s Domain.

Melbourne Museum, 11 Nicholson Street, Carlton

Architect: Denton Corker Marshall, 2000

DCM’s Melbourne Museum was completed in 2000, and is set in dialogue with the World Heritage-listed Royal Exhibition Building (REB), which opened in 1880 for the Melbourne International Exhibition. 

The REB was an emblem of architectural innovation in the days of “Marvellous Melbourne”, and the museum likewise communicates a powerful sense of ambition, vision and investment in civic life. 

Profoundly different from the REB in its contemporary style and architectural language, the museum is proud but also respectful, balancing its counterpart with its imposing size and assured presence. 

Its heroic canopy and generous plaza nod to the REB, while also inviting entry at a grand civic scale. The building is sensitively conceived and rigorously resolved.

Its architectural expression and detail work in concert with its planning to deliver an accomplished functional and experiential solution that seamlessly accommodates all of the complex functions associated with a major public museum.

Orica House (formerly ICI House), 1 Nicholson Street, East Melbourne

Architect: Bates Smart and McCutcheon (Osborn McCutcheon), 1958

Orica House was the first so-called “International Style” building in Australia, and the first to break the 40-metre height limit for Melbourne’s CBD.

While many now lament what the arrival of international commercial architecture eventually brought to the city, Orica House illustrates the optimism and beauty that was possible in that model.

Now presenting as somewhat diminutive in scale, it’s widely regarded as one of Australia’s first skyscrapers, and still stands as a benchmark for proportion, spatial flow, and the simple but expressive juxtaposition of materials.

True to International Style, its vision encompasses a landscape setting, and the northern garden, which was originally visible from Albert Street through an open ground-level undercroft, still provides a generous retreat from the surrounding traffic.

The masterful ensemble of rich materials, attentive detailing and flowing landscape setting demonstrates that, in the right hands, the abstract and restrained can be human and inviting.

The exceptional location, at the corner of Albert and Nicholson streets, gives it a commanding presence over the city below, and terminates the vista up Lonsdale Street, reminding Melburnians of the peculiar geometric collision between the CBD’s founding Hoddle Grid and the divergent street pattern beyond.

Monaco House, 22 Ridgeway Place, Melbourne

Architect: McBride Charles Ryan, 2007

Ridgeway Place is one of the many slender laneways that are so characteristic of Melbourne’s urban structure, offering people and industry a link between Collins and Little Collins streets.

Previously dominated by blank walls and an ambiguous endpoint, it was dramatically altered by the insertion of this small building, which is home to its client, the Honorary Consulate of Monaco.

It’s the product of a passionate and tenacious client who wanted to do something special – pertinent to its purpose and its context – working in close consultation with an excellent architect.

Monaco House’s distinctive character and integrity are idiosyncratic and authentic, responding sensitively to the structures and spaces that surround it.

The building is a delightful sculptural presence that brings vibrant colour and dynamic contemporaneity to the surrounding space. Its balconies overlook the street, creating activity, oversight and safety for laneway-users – a valuable contribution to the public realm that has reanimated the immediate precinct.

Well-considered down to the detail of its ground-floor cafe, it offers a place to pause and appreciate the beautiful historic masonry wall and mature tree canopies of the Melbourne Club’s private garden opposite.

The Urban Workshop, 50 Lonsdale Street, Melbourne

Architect: JWA (with Hassell and NH), 2006

This major commercial development is a six-star, 34-level office tower, but its power lies in the way the architecture works at ground and lower levels to create an engaging, inviting, layered and rich environment.

The tower is carefully placed, formed and set back to safeguard spatial proportions, access to sunlight, wind protection, and the pedestrian experience at street level. Here, the base structures are carefully planned and proportioned to create a lower street wall, delivering a series of lively, visually linked pedestrian laneways and diverse spaces that are activated through a curated mix of uses.

The lower-level architecture provides a strong edge and street presence. Each built element is located, scaled and carefully detailed to create warmth, texture and “grain” within a formal and spatial clarity that exposes and celebrates the former Black Eagle Hotel (1850), one of Melbourne’s oldest remaining buildings.

At the same time, spatial planning draws from the heritage of the site’s original lanes. A fluid, welcoming and connected public realm is created by clear lines of sight, and the continuity of textured, expressive bluestone and brick paving that extends throughout the foyer.

A significant public artwork by Rosslynd Piggott has been integrated within the design of the publicly-accessible foyer to honour archaeological artefacts that were unearthed during construction.

New Academic Street, RMIT University, Swanston Street, Melbourne

Architect: Lyons with MvS, NMBW, Harrison and White, Maddison,
with TCL Landscape Architects, 2017

Universities, and the vibrancy that student life brings to them, are an integral part of many great cities.

The RMIT campus has slowly become part of the CBD’s fabric, characterised by an eclectic range of buildings and styles, and an intriguing collection of streets, laneways, hidden courtyards and cul-de-sacs.

Recently, the importance of congenial and varied spaces for informal, flexible learning with peers has gained considerable traction, as has the importance of vibrant activation to make campuses attractive (or “sticky”) – inviting students to linger, as well as creating a seamless connection with the city.

The looming, blank walls of the three large modernist tower buildings 10, 12 and 14 on Swanston Street are the legacy of an incomplete masterplan that had worked against this desire. However, the New Academic Street is a terrific example of urban acupuncture, or regeneration, where rather than using a singular gesture, a range of strategic insertions and renovations have opened up the campus to Swanston Street.

This has created greater visibility and connectivity that enhances connections and seamlessly negotiates the challenging level difference between Swanston Street and the main operating level of Bowen Street.

The project creates a diversity of dynamic, active and engaging spaces by several different architectural firms, all coordinated by Lyons. The approach is sympathetic to the accretive nature of the campus, but provides cohesion through the larger spatial moves and their expression. This transformation of RMIT is an outstanding example of how successful cities entwine with their public institutions.

Former BHP House, 140 William Street, Melbourne

Architect: Yuncken Freeman (project architect Barry Patten), 1972

If Orica House was the city’s first International Style building, it prefigured the future from a vantage point just outside the city’s characteristic grid.

Conversely, 140 William Street represents the city’s commitment to its role as corporate centre, with the building proudly occupying a major corner in the traditional business end of town.

At the time of its completion, it was the second-largest tower in Australia, and it displayed significant technical advances, most importantly the column-free floors that aimed to provide as much internal flexibility as possible.

Most city buildings today are required to have a low-scale podium to provide street edge continuity and activation of the street frontages hard on the boundary.

The William Street development drew on earlier precedents in Chicago, and instead presents as an imposing, elegant tower set well back from both William and Bourke streets, on a sparse, free-flowing plaza running through to Little Collins Street via a generous pedestrian laneway and activated, landscaped spaces.

The overall arrangement detaches it from the surrounding city and heightens its sculptural presence and power. While notable for its height, it’s the purity of expression, exemplary proportions and attention to detail in both conception and execution that gives the building an enduring beauty, particularly pronounced in the context of more recent and lesser high-rise development on the edges of the CBD.

Sidney Myer Music Bowl, Kings Domain

Architect: Yuncken Freeman with Griffiths and Simpson (project architect Barry Patten), 1956

Demonstrating world-leading technical innovation at the time of its completion, “the Bowl” embodied new optimism and confidence as Melbourne emerged from a long period of post-war austerity.

It was Melbourne’s first major outdoor cultural venue and, like ICI House, its city-edge location gave Melburnians a unique perspective on the city’s core, which continues to this day.

But while ICI House provided a modernist anchor for the northeast corner of Melbourne’s grid, and a technically advanced alternative to the old CBD, the Bowl gave us an opportunity to look back from the extensive gardens sprawling south of the Birrarung, as the setting sun’s reflection illuminated its transforming skyline.

An intriguing icon for Melbourne, it remains an inclusive landscaped space, and holds a special place in the memories of many who have enjoyed performances under the canopy or in its wider spatial embrace.

It skilfully integrates land form, structure and a fluid connection with the extensive gardens of King’s Domain.

Currently marred by temporary fencing on the perimeter, we hope the new masterplan will achieve a more sophisticated security strategy that allows Sidney Myer’s gift to the people of Melbourne to live up to its ambition for public ownership and civic generosity by reinstating the sense of seamless connection with the gardens and cultural precincts beyond.

Collins Arch, 447 Collins Street, Melbourne

Architect: Woods Bagot and SHoP Architects, with Oculus Landscape Architects, 2020

In our choices of Melbourne’s best architecture, you’ll have noticed that most of the buildings are several decades old, with the most recent being completed in 2006.

This is partially because, in order to be convinced of their quality and their ongoing contribution to the city, we wanted to verify their endurance.

Another reason for the lack of recent examples is the scarcity of quality available. While architects have some responsibility for this, there has been considerable abdication of political will, policy and process to ensure quality in the oversight of the built environment.

Perhaps even more concerning is the enablement of a development culture to privilege expediency over civic responsibility.

Fortunately, we see signs of this abating, but the turnaround will require careful and sustained investment in the value and achievement of good design.

A reinvigorated desire to restore a quality agenda is evident to varying degrees within the Victorian state government. City of Melbourne is also taking positive and meaningful action with its recently-launched Design Excellence Program, comprising both the Melbourne Design Advisory Committee and Melbourne Design Review Panel.

One building that offers a significant contribution despite these governance shortfalls is Collins Arch.

The building occupies the site of the former National Mutual Building, which was important not least because of the generous and much-loved plaza that once occupied the northern section of the site fronting Collins Street.

A proposed heritage listing of the building and plaza was, regrettably, vetoed by a former minister for planning, and both are now lost.

The plaza in particular was important to Melbourne’s urban structure because it created a clearly demarcated open, accessible space that provided respite, northern sunshine, and a lung in the dense western end of the city.

In the context of financial pressures to maximise floor areas and without any legislative impediment to do otherwise, Collins Arch has still achieved a level of civic contribution and quality that is disappointingly rare in contemporary city development.

The scheme optimises its occupation of a whole city block to address each street differently, setting up localised responses suited to different scales, contexts and uses.

It consists of two towers, one holding the Collins and William Street corner, the other set back, and these are linked by an eight-storey “arch” elevated well above street level. The arch accommodates floor area that might otherwise have gone to height; instead, it mitigates overshadowing to the south, and allows more floor space for public functions.

The central set-back also hints at the original plaza, and reveals diverse, historic facades flanking Market Street.

In the context of financial pressures to maximise floor areas and without any legislative impediment to do otherwise, Collins Arch has still achieved a level of civic contribution and quality that is disappointingly rare in contemporary city development.

The strategy delivers true ground-plane porosity, creating multiple public routes throughout the site, and a variety of dwell spaces that cleverly navigate a major level change from Collins Street down to Flinders Lane.

These spaces are variously defined by landscape, terraced seating, fixed and loose outdoor furniture, and patches of lawn, and are activated by multiple ground-floor retail tenancies.

Through collaboration with the City of Melbourne, the open spaces are augmented by extension across the project boundary into half of Market Street, delivering much-needed public open space, and going some way to compensate for the generous plaza it has replaced.

The architecture is carefully articulated, considered and calibrated, offering a degree of dynamism within a singular language.

Like the towers, the upper-level facades are generally consistent in expression, but varied in their detail, providing diversity and visual movement. These meet the ground via a massive concrete colonnade that has a continuity across much of the site, strengthening the sense of spatial presence while creating a visual break from the tower language, and enabling a somewhat finer-grained street-level experience.

An open question

In the wake of emerging from the longest lockdown of any city in the world, there are immediate and long-term consequences for how Melbourne will develop, and be used and governed into the future.

The shift to online work has delivered many lessons regarding our engagement with technology and how we can occupy the city. In what way it is repopulated, and how we use and activate its buildings and public spaces into the future, remains an open question.

In the desire for reactivation, it will be tempting to accept development that provides short-term economic stimulus but fails to apply a focus on quality. To avoid this, we’ll need to be active and vigilant, and strive for outcomes that will best serve the city, its buildings and its people into the future.

Why loneliness is both an individual thing and a shared result of the cities we create

Dr Jennifer Kent

Dr Jennifer Kent is a Senior Research Fellow in Urbanism at the Sydney School of Architecture, Design and Planning. Jennifer’s research interests are at the intersections between urban planning, transport and human health. She specialises in combining quantitative and qualitative data with understandings from policy science to trace the practical, cultural and political barriers to healthy cities.

If you’re feeling lonely, you’re not alone. Loneliness is an increasingly common experience, and it can have severe consequences. People who feel lonely are at higher risk of serious health issues, including heart disease, immune deficiency and depression.

Traditionally, loneliness has been viewed as an individual problem requiring individual solutions, such as psychological therapy or medication. Yet loneliness is caused by feeling disconnected from society. It therefore makes sense that treatments for loneliness should focus on the things that help us make these broader connections.

The places where we live, work and play, for example, can promote meaningful social interactions and help us build a sense of connection. Careful planning and management of these places can create population-wide improvements in loneliness.

Our research team is investigating how the way we design and plan our cities impacts loneliness. We have just published a systematic review of research from around the world. Overall, we found many aspects of the built environment affect loneliness.

However, no single design attribute can protect everyone against loneliness. Places can provide opportunities for social interactions, or present barriers to them. Yet every individual responds differently to these opportunities and barriers.

What did the review look at?

Our review involved screening over 7,000 published studies covering fields such as psychology, public health and urban planning. We included 57 studies that directly examined the relationship between loneliness and the built environment. These studies covered wide-ranging aspects from neighbourhood design, housing conditions and public spaces to transport infrastructure and natural spaces.

The research shows built environments can present people with options to do the things we know help reduce loneliness. Examples include chatting to the people in your street or neighbourhood or attending a community event.

However, the link between the built environment and loneliness is complex. Our review found possibilities for social interaction depend on both structural and individual factors. In other words, individual outcomes depend on what the design of a space enables a person to do as well as on whether, and how, that person takes advantage of that design.

Specifically, we identified some key aspects of the built environment that can help people make connections. These include housing design, transport systems and the distribution and design of open and natural spaces.

So what sort of situations are we talking about?

Living in small apartments, for example can increase loneliness. For some people, this is because the smaller space reduces their ability to have people over for dinner. Others who live in poorly maintained housing report similar experiences.

More universally, living in areas with good access to community centres and natural spaces helps people make social connections. These spaces allow for both planned and unexpected social interactions.

Living in environments with good access to destinations and transport options also protects against loneliness. In particular, it benefits individuals who are able to use active transport (walking and cycling) and high-quality public transport.

This finding should make sense to anyone who walks or takes the bus. We are then more likely to interact in some way with those around us than when locked away in the privacy of a car.

Similarly, built environments designed to be safe — from crime, traffic and pollution — also enable people to explore their neighbourhoods easily on foot. Once again, that gives them more opportunities for social interactions that can, potentially, reduce loneliness.

Environments where people are able to express themselves were also found to protect against loneliness. For example, residents of housing they could personalise and “make home” reported feeling less lonely. So too did those who felt able to “fit in”, or identify with the people living close by.

Other important factors are less obvious

These factors are fairly well defined, but we also found less tangible conditions could be significant. For example, studies consistently showed the importance of socio-economic status. The interplay between economic inequalities and the built environment can deny many the right to live a life without loneliness.

For example, housing tenure can be important because people who rent are less able to personalise their homes. People with lower incomes can’t always afford to live close to friends or in a neighbourhood where they feel accepted. Lower-income areas are also notoriously under-serviced with reliable public transport, well-maintained natural spaces and well-designed public spaces.

Our review reveals several aspects of the built environment that can enhance social interactions and minimise loneliness. Our key finding, though, is that there is no single built environment that is universally “good” or “bad” for loneliness.

Yes, we can plan and build our cities to help us meet our innate need for social connection. But context matters, and different individuals will interpret built environments differently.

5 big questions real estate is asking in 2023

Following years of standstill in the wake of a global pandemic, industry players question ‘what’s next?’

JLL are property financiers with a diverse range of clientele. With sustainability at the core of their ethos, JLL are working toward creating a world-leading sustainable property development firm.

The past few years have been bumpy, with one event after the other challenging the economy, businesses, and the way we work.

This year looks set to be another year of transformation, with questions looming around corporate climate goals and hybrid work, to whether inflation will abate and the tech industry will grow.

At the start of the year, uncertainty remains high. Below, we weigh in on some of the biggest questions JLL experts say will drive decisions among investors and companies in 2023.

How will the balance between home and office evolve?

Hybrid work has become non-negotiable for many employees, and companies must incorporate and support effective work, whether in the office or at home.

Recent JLL research shows that younger generations and hyper-hybrid employees, who work more than three days a week remotely, tend to be least loyal and have left their jobs or plan to leave at a much higher rate.

“Employers are facing complex challenges, but they also have a unique opportunity, as the office takes on a new role and becomes the new central hub in the hybrid work ecosystem,” says Flore Pradere, JLL Global Work Dynamics Research Director.

With the office emerging as a place of collaboration, Pradere says in 2023, the evolution of hybrid work will see the office play a more significant role in helping alleviate the isolation employees face working from home.

“Balancing the need to provide flexible working arrangements – an imperative – against the need to offer a working environment that meets the complex demands of employees requires solutions aligned with the aspirations and priorities of a more demanding workforce,” Pradere says.

What’s next for the economy and investment?

Record-high inflation and rising interest rates have created an uncertain investment environment, with the potential for further economic deterioration possible as the year unfolds.

But it’s worth pointing out that any slowdown will likely be short and shallow. There is emerging evidence that inflation has peaked in the U.S. and potentially across Europe. Ebbing inflation also has tempered expectations for central bank rate tightening, suggesting that reference rates will not rise as high or fast as recently expected.

A challenge for commercial real estate is uncertainty over the adjustment’s size, speed, and duration. However, there’s still a significant amount of capital on the sidelines, and property owners and investors will take this as an opportunity, according to JLL’s 2023 economic outlook.

Questions remain in 2023 surrounding logistics and supply chain disruptions with the flow-through effects on commodity and energy prices.

Will companies really decarbonize their real estate?

Talk without action around climate-related initiatives and goals is no longer acceptable. The message was received loud and clear at COP27, where United Nations figures revealed that built environment emissions were at an all-time high.

This year, key players — consumers to shareholders — will be looking for action and systematic change from the real estate industry. For many companies, though, formulating a clear action plan, and collecting and analyzing data, proved to be pain points.

Guy Grainger, JLL Global Head of Sustainability Services and ESG, says moving forward, companies will need to implement solutions to decarbonize their operations, emphasizing a need to retrofit existing buildings and invest in renewable energy. For instance, shareholders and lawmakers are holding companies accountable by requiring them to disclose their greenhouse gas emissions and the climate risk their businesses face.

Reaching net zero targets can be daunting for companies of all sizes, but it is achievable, Grainger says. Created with the World Economic Forum, he points to JLL’s Green Building Principles as a roadmap for companies to use.

Where will the tech industry expand?

During the pandemic’s peak, the tech industry saw astronomical growth. However, in 2022 there were signs of slowing, and by the fourth quarter, headlines focused on layoffs rather than massive growth.

But it’s not precisely all grim news. The startup scene in many U.S. markets shows promise, according to JLL’s Tech Office Trends Outlook.

Industry experts see growth in tech clusters, such as in San Francisco, New England, and New York. With valuations coming down, investors are also placing bets on early-stage companies and focusing on exits in four to five years instead of the following year.

“Emerging innovator” markets are also gaining additional momentum as work becomes further distributed along geographic and cost lines. For example, in Bengaluru, nearly 1.3 million square meters of net occupancy growth on the back of inward tech investment and expansion since the beginning of 2020 has coincided with a 6.8% increase in rents. Similarly, Hyderabad has experienced a rental uplift of nearly 8% over the same time frame.

Looking forward, JLL’s tech outlook points to innovation around A.I., blockchain, cleantech, and cloud solution, saying the markets are poised to expand despite economic headwinds.

“A.I., cleantech, and blockchain specifically are in their nascent stages with considerable opportunity to grow beyond their current market size, indicating investors to look past the current market turbulence and consider the long-term opportunity available in these industry verticals,” says Alexander Quinn, JLL Research Director.

Can real estate give back to the community?

The impact of ESG on the real estate industry is moving beyond sustainability. Awareness is growing that the built environment can have a significant social impact through efforts that rehabilitate public spaces, add required infrastructure like care centers, or help attain environmental goals with green buildings.

Some successful examples can be found in smart cities such as Dubai, which has used tech innovation to impact transportation, tourism, energy, housing, and security, and Singapore, which uses street lampposts to monitor changes related to environmental conditions.

Julia Georgules, JLL head of Americas research and strategy, says real estate can be highly transformative on a community, even in minor ways. For example, she points to public art installments and greenspaces or parks as tokens developers can leave behind after working on a project. Georgules even points to some Boston developers who are incorporating childcare into a new project.

“The impact that development can have on a community is immense, and with a spotlight on ESG, these investors and builders must think about a broad range of social impact, from affordable housing to providing jobs to a diverse population,” Georgules says. “It’s a must now.”

What is Regenerative Architecture? Limits of Sustainable Design, System Thinking Approach and the Future

Ankitha Gattupalli is an architect and writer engaged in the intersection between spaces, ecologies and communities. She is an architect at ReDO and a writer at ArchDaily.

This article was originally posted on the Arch Daily website.

A heavily cited fact within the architecture industry is that the built environment accounts for 40% of global carbon emissions. The concerning statistic puts immense responsibility on construction professionals. The idea of sustainability in architecture urgently emerged as a way of bandaging environmental damage. A wide range of sustainability practices aims no higher than making buildings “less bad”, serving as inadequate measures for current and future architecture. The problem with sustainable architecture is that it stops with ‘sustaining’.

In order to maintain the current state of the environment, the architecture community has been working towards greener means of production. Conventionally, a green building employs active or passive features as a tool for reduction and conservation. Most sustainable designs view buildings as a vessel of their own rather than integrated parts of their ecosystem. With the planet’s current needs, this approach is not enough. It is not enough to sustain the natural environment, but also restore its processes.

What is Regenerative Architecture?

In biology, regeneration refers to the ability to renew, restore or grow tissues in organisms and ecosystems in accordance with natural fluctuations. When applied to building design, this can look like structures that mimic restorative aspects found in nature. Regenerative architecture is the practice of engaging the natural world as the medium for and generator of architecture. Living systems on the site become the building blocks of the structure built in harmony with the overall ecosystem.

Regenerative architecture demands a forward-thinking approach. In contrast to sustainably designed buildings, regenerative buildings are designed and operated to reverse ecological damage and have a net-positive impact on the natural environment. Shifting from a sustainability lens to a regenerative one means that architects should question how we can design structures that not only use limited resources but also restore them. Regeneration also seeks to facilitate a more resilient environment that can resist natural challenges.

Regenerative vs. Sustainable Design

Sustainable and regenerative design may seem like different approaches - sustainability limits resource use, while regeneration replenishes them. Sustainability, however, is a subset of a larger regenerative model. Both methods overlap and incorporate similar practices, each emphasizing different green goals. Just as ‘reduce’, ‘reuse’ and ‘recycle’ can’t operate in isolation, sustainability practices lend a hand towards regenerative goals by forming the first step towards replenishing resources - limiting their consumption.

One way both practices differ is in their scale of interventions. Regenerative design demands architecture be seen as an extension of the place, the site, the flora and fauna, and the ecosystem. Buildings are treated as part of a larger system, helping to produce and share resources like clean water, energy, and food. For example, Splitterwerk and ARUP’s SolarLeaf bio-reactive façade generates renewable energy from algal biomass and solar heat. The energy generated can be used by the building, stored for future use, or provided to the utility grid. 

Systems Thinking in Architecture 

When designing a regenerative environment, it is important to adopt a systems approach to thinking. All relevant and contributing entities must be considered, measuring their networks of impact on the overall ecosystem. The design must account for how a building relates to the microclimate, or how the soil can support local flora. The designed system must allow for mutually supportive relationships between entities, making sure that there is equal give and take. Each relationship builds on the other to create a strong, thriving human-nature ecosystem.

“Sustainability is all about systems and making sure we’re thinking about the entire picture so we can address a problem from all angles”, writes Nabil Nasr, the Director of the Golisano Institute for Sustainability. Rather than employing sustainable design elements as a method of greenwashing, architects must develop a deeper understanding of eco-architecture through a systems approach. Architects must move away from being mere object creators and be involved in the design of broader systems for our future. Systems thinking allows architects to recognize how the built world exists within social, environmental, and business networks, which are changing at a rate that traditional architecture must rush to support.

The Need for Regenerative Design 

The regenerative design process is fundamentally rooted in a system thinking approach. Interventions may include biomimicry to imitate nature, air-cleansing building skins, water-purifying structures, or carbon-capturing architecture. Shifting thoughts from sustainable to regenerative architecture will account for a better strategy to tackle the climate and biodiversity emergency that plagues society today. The regenerative architecture will allow the construction industry to “do good” rather than merely “less bad”.

Gattupalli, A - What is Regenerative Architecture? Limits of Sustainable Design, System Thinking Approach and the Future, Arch Daily, accessed 6 Dec 2022

https://www.archdaily.com/993206/what-is-regenerative-architecture-limits-of-sustainable-design-system-thinking-approach-and-the-future

Navigating the Great Office Exodus

This article was written by Sarah Marinos, a researcher at the University of Melbourne.

Working from home went from zero to 100 during COVID-19, but how have Australians coped with the shift away from the traditional workplace? The annual HILDA survey has some answers

Working from home went from zero to 100 during COVID-19, but how have Australians coped with the shift away from the traditional workplace? The annual HILDA survey has some answers

Pre-pandemic, if you worked mostly from home, you were in a small minority of Australians (about six per cent) and you were most likely self-employed.

Fast forward to 2020 and 35 per cent of people spent some of their working week at home, and 21 per cent spent most of their working hours in a home office, spare bedroom or at the kitchen table.

The latest annual Household, Income and Labour Dynamics in Australia (HILDA) Survey reveals COVID-19 has triggered a seismic shift in how and where Australians work.

“Prior to the pandemic people were discussing working from home as the new big deal in the workplace. In fact, only a minority of firms were encouraging working from home … then the pandemic came along and changed everything,” says Professor Mark Wooden, Director of the HILDA Survey project team at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne.

The rise and rise of job insecurity

Professor Wooden says the HILDA figures around working from home could also well be an under-estimate with the Household Impacts of COVID-19 survey conducted by the Australian Bureau of Statistics estimating that by December 2020, 27.4 per cent of Australians worked “mostly from home”

From a “Nice to Have’ to a ‘Must Have’

The HILDA Survey follows the lives of more than 17,000 Australians each year, over the course of their lifetime, collecting information on many aspects of life in Australia, including household and family relationships, income and employment, and health and education.

Associate Professor Christhina Candido, Director of the Sustainable and Healthy Environments Lab in the Melbourne School of Design, says whereas working from home was once a “nice to have” option, now it is a “must have” for employers wanting to attract and retain workers.

“The appetite for flexible working arrangements already existed, particularly for the millennial workforce. But there was an attitude from management that you couldn’t get promoted if you were working from “under the doona,” says Associate Professor Candido.

“Flexible working arrangements were available before COVID but at small scale uptake – there was a wrong assumption (and still is to some extent) that you climbed out of bed and worked in your pyjamas.

Employers can’t keep this narrow-minded approach anymore after the large-scale uptake of new ways of working.”

A COVID-19 State of Mind

At the time of the HILDA Survey in 2020, the Australian Capital Territory (at 33 per cent) and Victoria (at 33 per cent) – which was in the middle of a lengthy lockdown – had the highest number of people working from home.

In 2019, these figures sat at 2.4 per cent for ACT and Victoria. Numbers rose markedly in all states except Tasmania in 2020.

Industry-Wide Impacts

Only the agriculture, forestry and fishing industry bucked the working-from-home trend.

The financial and insurance services sector saw a 58 per cent rise in the number of employees working from home. Information media and telecommunications rose 40 per cent; professional, scientific and technical services rose 38 per cent; and public administration and safety saw 34 per cent more employees staying home.

Not surprisingly, industries where face-to-face contact is key had a very different experience.

The number of employees working from home in accommodation and food services rose by less than two per cent, in retail by five per cent, in health care and social assistance by eight per cent, in construction by five per cent, and in transport, postal and warehousing by four per cent.

Feeling Productive - Or Not

While workers saved time on their daily commute, did they feel more productive?

A third (33.3 per cent) felt productivity remained the same, 29 per cent felt it was a little worse and 13.4 per cent said their productivity was much worse.

Professor Wooden says this isn’t surprising as Australian workers had little time to prepare for the change to home working. Many didn’t have dedicated workspaces, while some may have shared a space with other family members or also had young children to supervise.

“Working from home is great if you have a large home, a separate office space and can remove yourself from noisy children. It might be a bonus for people living in McMansions who avoid the stress of the daily commute,” says Professor Wooden.

“When it is forced, it can penalise people from less advantaged backgrounds. Working from home isn’t equal for everybody.”

Associate Professor Candido says the productivity question is complex and she adds the stress of lockdowns, poor mental health, seeing work as a distraction and refuge from the pandemic or perhaps working too hard for too long may all have impacted productivity.

Do I Really Need to Go into the Office?

HILDA also found hybrid working arrangements may not be the silver bullet that allows organisations and employees to straddle the old and newer style of working.

But giving people a choice about where they work and a purpose for being in the workplace is important.

Associate Professor Candido says brainstorming, decision-making, future thinking and collaborative activities are purposeful opportunities for people to meet at work.

“We still want to be around colleagues, but simply telling employees to do three days in the office and two days at home is not enough. Showing up to an empty office or going to work simply to spend a day on Zoom calls is pointless,” she says.

I Can’t Get No Satisfaction

HILDA found working from home brought no significant increase in job satisfaction, at least when averaged across all workers, despite the potential for greater autonomy and flexibility as well as less time stuck in traffic or on public transport.

Professor Wooden explains this surprisingly small increase by the fact that working from home was forced on people whose home environment may have made work challenging.

“In the longer term, I suspect people who don’t find working from home satisfying will return to the workplace and those who want to stay at home will find their employers more accepting of that,” he says.

Victoria’s Ghost-Town CBD

This prediction appears to be accurate, particularly in Victoria. In September 2022, the Victorian Government lifted work from home recommendations put in place to help reduce the transmission of COVID-19.

Two months later, in November 2022, occupancy data from the Property Council of Australia revealed that buildings in Melbourne’s city centre were still less than half full during the working week.

In Perth and Adelaide, CBD offices are 78 per cent and 76 per cent full, while Brisbane’s CBD buildings sit at 64 per cent capacity.

Winners & Losers

The shift to working from home comes with a mixed bag of benefits and disadvantages.

The potential loss of social connectedness – an important part of maintaining good mental health – is an issue, as is ‘proximity bias’. This bias is the notion that employers are more likely to favour employees who are sat in front of them over more invisible remote workers.

“If working from home remains voluntary, some people will go to work to get ahead and others will miss out and there is the potential for all sorts of new inequalities to arise,” says Professor Wooden.

“Will working from home stick? At this point, we don’t know, but I doubt the number of workers in our CBDs will ever return to the levels they once were.”

Associate Professor Candido believes working from home – working from anywhere – is here to stay.

“The successful industries and businesses are changing the conversation. They are saying ‘let’s tap into this pool of talent that couldn’t work for my organisation before because of our workplace arrangements’.

“They are shifting the conversation from the time and place of work and are instead thinking about what needs to be achieved,” she says.

“These are unchartered waters and there is no doubt that the changes prompted by the pandemic are the most significant event in the workplace since the adoption of mobile technology. The pandemic unshackled us and that is both challenging and exciting.”

This article was originally published on the Pursuit. Read it here…

Queensland’s high-tech plan to make the 2032 Brisbane Olympic Games smarter and greener

Davina Jackson M.Arch (UNSW) PhD by Pubs (Kent) is a Sydney-based writer of books, exhibitions, sites and papers on architecture, design, geographical and urban technology themes. A former editor of Architecture Australia and a founder of the smart light city festivals in Sydney and Singapore, she is a visiting scholar with the University of Cambridge Department of Architecture and was the lead editor of the first comprehensive manifesto of the Global Earth Observation System of Systems (aka Digital Earth) project.

Davina Jackson

With Brisbane to host the 2032 Olympic Games, Queensland is accelerating “smart” and “green” infrastructure projects right across the coast from Coolangatta to Coolum.

So what practical steps is the state government taking to bring Brisbane closer to being a smart city while managing rapid growth? And what differences can city residents realistically expect to see for themselves?

Exploiting a quarter century of technological progress

Vastly more ambitious than the South Bank building boom, which preceded Brisbane’s World Expo 88 in the pre-internet era, Queensland’s current infrastructure programs are exploiting the last quarter-century of technological progress.

Think sensor-triggered street lights, automated air conditioning and watering of parks and green facades. Envision robots for cleaning and construction, satmaps, swipe cards and QR codes. Data technology will be embedded in 32 existing and planned Olympic venues, the future athletes’ village at Northshore Hamilton (near Breakfast Creek) and the international media centres.

Technology will also underpin a substantial city centre at Maroochydore. Here, a mid-rise precinct will be powered via a solar farm at nearby Valdora, and will include fibre-optic telecommunications cables. In what may be a first for Australia, a new system will sluice garbage from chutes through underground vacuum pipes.

A ‘New Norm’ Olympics

All Games facilities must align with a set of 118 reforms the International Olympic Committee (IOC) calls its “New Norm” guidelines.

These were introduced in 2018 to improve energy efficiency, cost-effectiveness and long-term value from the huge development expenditure required of host governments. There had been concerns about integrity and wastefulness in the IOC’s old-school supervision of Games bidding and delivery processes.

Brisbane’s Games win is accelerating and expanding some major public mobility programs offering “turn up and go” transport routes for the 4.4 million people expected to live in South-East Queensland by 2031.

Aerial taxis without pilots

The most provocative proposal – still speculative – is to introduce aerial taxis to fly passengers without pilots, but remotely supervised, between future “vertiports”.

A prototype eVTOL (electric vertical take-off and landing) aircraft is in Brisbane while its American manufacturer, Wisk Aero, seeks approval from the Civil Aviation Safety Authority to operate commercially before the 2032 Games.

Wisk (backed by Boeing) has completed more than 1,600 test flights with six generations of aircraft. The Brisbane model has 12 lift fans on two 15-metre wings and is powered by a battery in the tail.

Delegates at a recent Smart Cities Council transport workshop I attended noted the potential of autonomous aerial vehicles to change patterns of housing development beyond road and rail links. Even so, Queensland is rapidly expanding its terrestrial network.

Land transport projects

Brisbane’s Cross River Rail line is being extended northwards through a new twin tunnel under Brisbane River and four new underground stations at Boggo Road, Woolloongabba, Albert Street and Roma Street.

This project uses smart tunnel-boring machines to carve through the tuff (a type of volcanic rock, pronounced toof) that formed Brisbane’s geology more than 200 million years ago.

As well as supporting the new health, science and education precinct near Boggo Road, this rail extension will connect the city’s southern suburbs with the existing line north from Bowen Hills.

And work continues on extending the Brisbane-to-Gold Coast light railway (also known as the G:Link).

This extension will provide eight new stations along a 6.7km track from Broadbeach to Burleigh Heads. The G:Link service uses German Bombardier Flexity carriages that are bi-directional and air-conditioned, with low-level floors matching station platforms and storage for wheelchairs, bikes, prams and surfboards. These are electric-powered via 750V overhead cables.

Superfast bus charging

More innovative is the Brisbane Metro project, which is being tested to potentially supply 60 electric buses (or “trackless trams”) to supplement the city’s existing fleet. These would be battery-powered by a combination of 600kW, six-minute, superfast “flash chargers” at end-of-line stations and 50kW, overnight, slow chargers at depots.

Each bus can be recharged up to 85 times faster than an electric car at home – but the flash system degrades batteries more than slow charging overnight.

Healthy footbridges

Although two of Brisbane’s four proposed “green bridges” for pedestrians and cyclists were paused to prioritise flood recovery, new crossings from the city to Kangaroo Point and Newstead to Albion are expected to open in 2024.

The Kangaroo Point green bridge will include a restaurant overlooking the botanic gardens. Newstead bridge will join the 1.2km-long Lores Bonney Riverwalk.

These are examples of a new phenomenon in public transport planning – to not merely move people between destinations but also boost their health and enjoyment outdoors.

As Corey Gray, global CEO of the Smart Cities Council, told me at the Smart Cities Council conference:

Smart cities are not ultimately about data and technology, but improving human systems.

This article was originally published on the Conversation. Read it here…

Why hotel investors are opting for upgrades over new builds

JLL are property financiers with a diverse range of clientele. With sustainability at the core of their ethos, JLL are working toward creating a world-leading sustainable property development firm. In this article, JLL explore how the trend of “quiet quitting” can be stopped before it starts.

Facing higher costs, hotel Investors are finding ways to boost values as tourism surges

Hotel investors are moving away from new developments in light of expensive construction loans and skyrocketing costs for materials and labor.

Instead, they’re buying hotels with an eye toward upgrading. Around 80% of hotel investors in a recent JLL survey said they’re targeting value-add investment opportunities in the sector.

“Many investors are now preferring to buy existing assets needing refurbishment, repositioning, or rebranding, with the return prospects often much more appealing,” says Xander Nijnens, Managing Director, Advisory & Asset Management, JLL Hotels & Hospitality Group.

The strategies are largely down to inflationary pressures, with construction costs rising and with few development loans available. Development costs have risen by 10% to 30%, according to investors surveyed by JLL, while lending on new builds has become tighter.

In February, Australian hospitality fund manager Pro-Invest acquired the Primus Hotel Sydney and reopened it as luxury boutique hotel Kimpton Sydney following a refurbishment, offering innovative culinary experiences and new lifestyle programming.

“These deals are much easier to underwrite and are quicker to market, compared to building a new development from scratch which easily takes between 24 and 36 months,” says Nijnens.

Adding value to an existing asset

The rising costs of building materials isn’t just hitting hotels. Soaring inflation, the rising cost of debt, and higher wages have been causing delays to construction across real estate markets, according to JLL’s 3Q22 Capital Tracker.

Likewise for hotels, the high costs, which have escalated beyond pre-pandemic levels, are jeopardizing the feasibility of new developments, Nijnens says.

This has prompted investors to steer toward value-add investment strategies, which require a keen eye and a diverse skillset to identify and execute.

“Doing a value-add refit is, in many ways, more complicated than building a new site with new specifications,” says Nijnens. “An older asset is often more challenging because you have to figure out the state of the existing asset, where to prioritize, whether it can be more sustainable, and consider what guests are looking for.”

Common value-add enhancements for hotel assets include rebranding, expanding the room count or repositioning, which may involve introducing a lifestyle-oriented concept with higher non-room turnovers, and converting underutilized spaces into rooms or food and beverage (F&B) concepts.

These asset enhancements have to consider the evolving guest trends, such as the average length of stay, the type of clientele, or the blurring of lines between business and leisure travel, and how it will impact the overall design of the hotel, according to Nijnens.

Timing and tourism

The push for value-add investment in the hotels space comes amid a recovery in global tourism.

Maldives leads the way with a 128% recovery in revenue generated per available room (RevPAR) year-to-date relative to 2019 levels, with Southeast Asia and Australia following a similar trend, according to JLL data. In the U.S. and Europe, markets like Miami and Paris have seen RevPAR grow 125% and 113% respectively in the same period.

“Our projection of $10.7 billion in total hotel investment in Asia Pacific for 2022 remains unchanged, backed by improving sentiment on the long-term fundamentals of the industry in this region in the coming years,” says Nihat Ercan, Head of Investment Sales, Asia Pacific, JLL Hotels & Hospitality Group.

Hotel investment in Asia Pacific is expected to reach $11.5 billion in 2023, with Japan, China, Australia, and South Korea leading the charge, JLL data shows.

Within the value-add space, in particular, private equity investors are among the most active players, according to Nijnens. “They’re being pushed out of many high-ticket deals due to the higher cost of debt but they’re keen to deploy the capital they’ve raised in the hotel sector,” says Nijnens.

“We expect to see more private equity investors adopt a three- to five-year view and work with us to implement changes that enhance the value of their assets.”

This new ‘risky’ playground is a work of art – and a place for kids to escape their mollycoddling parents

Sanné Mestrom is a Senior Lecturer, at Sydney College of the Arts, University of Sydney. She is an Australian experimental and conceptual artist who works mainly in the mediums of installation and sculpture. Mestrom has a research-based practice and incorporates notions of "play" into social aspects of urban design.

Imagine this: a heap of colourful plastic buckets stacked on top of each other to form a climbable bridge, monolithic bluestone boulders holding up a contorted slide, a pile of concrete demolition debris moonlighting as a resting spot.

At every point, children can be seen swinging their bodies from warped, dented monkey bars and balancing along rope-webs strung between stones.

Would you let your kids come here and play?

This new playground in Melbourne’s Southbank is the work of artist Mike Hewson. The project can be confusing for the public. Is it a playground? A sculpture? Or an unfinished piece of infrastructure?

Hewson’s playable public art parks in Sydney and Melbourne are known to be “risky” – but risk means different things to different people. And it’s exactly the risks his art takes that makes it so valuable.

The risk of no risk

Urban play has long been synonymous with the cultural life of art and the city. In the decades of Europe’s baby boom, new playground concepts emerged with a focus on “free play” (distinct from earlier playgrounds resembling open-air gymnasiums), as one of children’s fundamental needs.

“Tufsen”, Egon Möller-Nielsen’s unusual sculpture was the first unscripted free play sculpture of its kind, created in 1949, bringing together abstract art and play in a public space.

This new approach generated a boom in playground sculptures.

In the early 1980s, we saw a significant shift in response to questions of risk, hazards and children’s safety, which resulted in fears and threats of litigation.

As play-safety standards were introduced in Australia, the United States and the United Kingdom, innovation in the arena of a playable public realm slowed. As soon as the standards began to be referenced in liability cases, playspace designers began to follow them.

Designs outside the specifications were avoided and playgrounds were standardised into the “boring” versions that still dominate most of our play spaces, where the potential movement of children is scripted: up, across and down.

Over the past 30 years, interpretations of these safety standards continue to regularly confuse the meanings of “risk” and “hazard”. A risk is something the child is aware of, forcing them to identify, analyse and overcome the challenge; a hazard puts one in danger because a condition for injury exists the user cannot perceive.

Conflating these meanings has resulted in a cultural attitude toward play that is highly risk-averse.

This risk-aversion is in contrast to the mounting research on the benefits of risk for children.

Risk-aversion can have long-term health implications on adolescence and into adulthood, potentially impacting the development of anxiety, depression, obesity and diabetes.

In fact, researchers Jonathan Haidt and Pamela Paresky suggest contemporary society “mollycoddles” children. The risk-of-no-risk is a question of resilience – not only physical but also, perhaps more importantly, psychological resilience.

Psychological resilience is the capacity for adaptation in the face of tragedy, trauma, adversity, threats or significant stress. Put simply, resilience is the ability to “bounce back” from challenging experiences.

Based on this premise, Hewson’s “risky” sculptural play environments can bolster, fortify and increase psychological resilience among children.

In contrast to the conventional playground where movement is predetermined, Hewson’s projects offer children the opportunity to explore unfamiliar, unscripted, innovative and playable sculptural worlds.

When given the chance, even very young children show clear abilities to negotiate unfamiliar spaces, manage risks and determine their own limitations.

Playable sculpture

Hewson’s sculptural playgrounds don’t just offer the opportunity for children to take risks. Their very construction appears to be risky: all playable parts appear to be improvised, cobbled together with cardboard and chicken wire, balanced just-so or teetering on the verge of collapse.

And yet nothing is quite as it appears. With Hewson’s background in engineering, each playable element has been meticulously designed, structurally engineered and thoughtfully integrated into the urban realm.

This illusion of danger gives the works a sense of the uncanny, appealing to art-lovers and children alike.

In the art world, Hewson’s works are important for their bold and cheeky irreverence of the traditions of public art.

By making these sculptures playable – and seemingly defective – they tip the hierarchy of “art” upside down.

Australia has a long-standing reputation of presenting “plonk art” in public spaces. Plonk art is a pejorative slang term for the large Modernist artworks intended for government plazas, corporate atriums and open parks designed to be looked at but not touched.

Hewson takes sculpture off its pedestal and integrates it directly into the public domain, while also engaging local communities in the creative development stages of his projects.

For this experimentation, he receives some backlash from certain sections of the community – but his convictions keep him pushing forward.

His works advance the role of public art in creating a more culturally rich, intergenerational public domain while also challenging conventions of the ubiquitous de-risked playground.

So what do you think? Is it time we integrate more playable art opportunities into the public realm?

This article was originally published on the Conversation. Read it here…

A Big Build or a Big Bet?

Janet Stanley is a Principal Research Fellow - Urban Social Resilience at the Melbourne Sustainable Society Institute, visiting Professor at the University of Hiroshima, Japan, and a Director of Stanley & Co., consultants in sustainable policy. Prior to this, Janet was Chief Research Officer at Monash Sustainability Institute, Monash University.

Melbourne’s Suburban Rail Loop aims to help the city become more equitable – but better integration of land use and transport could deliver more benefits for less money

By Associate Professor Janet Stanley, University of Melbourne, and Professor John Stanley, University of Sydney

Melbourne’s current long-term strategic land use plan, defined in Plan Melbourne 2017-2050, is grounded on two core ideas.

These are that Melbourne becomes a polycentric city based on a series of activity clusters, mainly in the middle suburbs (called National Employment and Innovation Clusters – or NEICs) and Melbourne would be organised into a collection of 20-minute neighbourhoods.

The NEICs are intended to promote productivity growth through agglomeration and to develop a more equitable city – particularly by increasing employment opportunities closer to the city’s outer urban growth corridors.

The idea of improving public transport access to middle urban activity clusters has appeal, as a way of supporting their growth potential.

And the Victorian Government’s Suburban Rail Loop (SRL), part of its Big Build program, is intended to play this role.But this solution is arguably too big for purpose.

Highly developed global cities that have circumferential rail services – that is, trains travelling around an urban area rather than radially to its centre – typically have densities much higher than Melbourne and their circular rail loops are quite short.

Most are also located in the higher-density inner parts of those cities where demand is strongest, whereas circumferential public transport further out typically requires transfers between services.

In 2022, Melbourne’s built-up land area has a population density of 1,746 persons per square kilometre and the SRL has a proposed length of 90 kilometres, from Cheltenham to Werribee.

Compare this to London, which data tells us has a population density of 6,504 persons per square kilometre – the city’s Circle Line is 27 kilometres long. Tokyo-Yokohama has a density of 4,584 people per square kilometre, with its Yamanote Line at 34.5 kilometres, and Berlin has 2,934 persons per square kilometre and the 37.5km long Ringbahn.

In short, Melbourne’s SRL is around three times the length of these circle lines, in a city with a much lower population density and a lower patronage potential.

The economics are against the SRL working.

The August 2021 SRL Business and Investment Case for the Cheltenham to Melbourne Airport segment of the SRL (SRL East plus SRL North) showed a positive result, with projected a benefit-cost ratio between 1.0 and 1.7.

However, there are two serious problems with this result.

First, the benefit-cost analysis was undertaken with a low discount rate (four per cent) to convert future benefits and costs over the project’s lifetime into present-day values (this is needed to derive benefit-cost ratios). The usual Australian discount rate for evaluating major infrastructure projects – seven per cent – would have delivered much lower returns for the SRL.

A good argument can be made for using a four per cent discount rate for a project with a long life span, like the SRL, but this is not the usual public policy approach in Australia (unlike in the UK).

The choice of this discount rate should be subject to wide debate, including consideration of implications for the evaluation of alternative investment opportunities whose impacts accrue over shorter time frames.

Second, as well documented in the media, the expected cost of the project has increased substantially. The cost was estimated at around $AU50 billion for the full project at the initial announcement in 2018, rising to $AU35-57 billion for SRL East plus North in the Business and Investment Case.

The figure now stands at $AU125 billion again for SRL East plus North, as estimated by the Victorian Parliamentary Budget Office.

This would take the capital cost for the full SRL to around $AU200 billion, or about four times the initial estimate made only a few years ago.

Unfortunately, the expected benefits do not grow anywhere near as quickly as this rate of cost inflation. If evaluated today with a more usual discount rate, the SRL would struggle to generate even 50 Australian cents of benefit per dollar of capital cost.

This should be a cause for concern.

Medium capacity transit (MCT) solutions, as proposed by the Rail Futures Institute, are likely to be a more cost-effective and flexible solution to meeting the circumferential public transport accessibility needs of Melbourne’s middle urban clusters in a faster timeframe.

This kind of cluster development could then be further enhanced by direct investment in cluster competitive strengths – like supporting further growth of their universities and hospitals or medical research facilities – together with investing in place-making.

These investments plus MCT would be a more integrated way of promoting polycentric growth in Melbourne than relying so much on the SRL.

The savings from not pursuing the costly development of the SRL could also be used to promote a much faster roll-out of the distinctive and very innovative Plan Melbourne idea of 20-minute neighbourhoods; this concept has been taken up by many European cities as well as others in Asia, Canada, South America and recently, Singapore.

A 20-minute neighbourhood offers most services that most people need most of the time, including shops, schools, health services, parks and recreation.

This form of land use reduces urban sprawl through higher-density housing, builds community and fosters social capital, improves accessibility and offers a greener environment.

As a result, the likely outcomes are improved health and wellbeing, increased social inclusion and increased economic productivity, along with a reduced need to travel, which also helps to reduce transport emissions.

The Victorian Government is trialling 20-minute neighbourhoods in Melbourne. However, these trials have overlooked the public transport component, instead relying on walking and cycling.

An 800-metre catchment, as used in the trials, and said to be an acceptable walking distance, is unlikely to offer access to many service needs. This dependence on active transport doesn’t offer equality in opportunity for all people, potentially leaving out many older people, those moving or carrying heavier loads, people with an impairment and people with multi-tasking requirements – like work, child-care and school drop-offs, shopping and the list goes on.

A larger neighbourhood is required to offer essential services, supported by a frequent neighbourhood local public transport service.

Improving circumferential public transport access to serve Melbourne’s middle urban clusters is an important requirement for delivering the city’s intended land use development. But the Suburban Rail Loop is an expensive solution to this challenge.

It comes at the cost of other important infrastructure and service improvements that are likely to be effective in reducing inequality and facilitating growth with lower emissions.

Medium Capacity Transit options plus direct investment in cluster development is a more cost-effective way forward, complemented by a greatly accelerated rollout of 20-minute neighbourhoods across middle and outer urban Melbourne, at increased densities.

This would give Melbourne big benefits without such a big bet.

This article was originally published on the Pursuit. Read it here…

Why has the RBA raised interest rates for a record 7th straight month? High inflation – and worse is on the way

Peter Martin is Business and Economy Editor of The Conversation and a Visiting Fellow at the Crawford School of Public Policy at the Australian National University. Peter has worked as Economics Correspondent for the ABC and as Economics Editor of The Age. In 2016 Peter was made a Distinguished Alumni of Flinders University; in 2019 He was made a member of the Order of Australia (AM).

Pushing up interest rates isn’t something the Reserve Bank does lightly.

But what’s worrying the Reserve Bank – and why it increased interest rates for a record seventh consecutive month on Melbourne Cup Tuesday – is that inflation seems to become completely detached from the bank’s target band.

That target band of 2-3% was introduced in the early 1990s, at a time when that’s where inflation was. With one brief exception during the introduction of the goods and services tax, at the start of the 2000s, inflation has never since been far away from the band – until now.

The jump in inflation from 6.1% to 7.3%, revealed last Wednesday, made it clear that, even after six consecutive interest rate hikes, inflation was further away from the Bank’s target band than it had ever been.

When the Reserve Bank began hiking its so-called cash rate during the May election campaign, the National Australia Bank’s standard variable mortgage rate was 3.45%. It’s now 5.95% and about to go to 6.2%.

For a borrower with a $500,000 mortgage, the increase in payments amounts to $800 per month. For a borrower on a fixed-rate loan of 2% that’s about to expire, the burden will be even greater.

So the Reserve Bank wants to be sure the jump in inflation to 7.3% is real.

How the cost of buying a home skews inflation

The first thing to say is that 7.3% is almost the real thing, but not quite.

The Bureau of Statistics collects information on millions of prices per week, at times by going into stores in eight cities and noting down what’s on price tags, at times by direct feeds from supermarkets, petrol stations and electricity suppliers, and at times by “scraping” prices quoted on the web for home deliveries.

The bureau categorises the things it prices as either essential or non-essential (its words are “non-discretionary” and “discretionary”).

It’s found that the prices of essential items (those we generally have to buy) climbed by more than 7.3% in the year to September – by an extraordinary 8.4% – whereas the prices of things we generally don’t need climbed 5.5%.For obvious reasons, food is among the bureau’s list of essential or “non-discretionary” items. Food prices continue to be pushed up by floods and labour shortages.

But what many people don’t realise is that also among that list of supposedly “non-discertionary” items is one type of purchase people don’t make often – and which some of Australians will never make.

And that single item – “new dwelling purchase by owner-occupiers” – makes up more of the consumer price index than anything else.

Buying a home is so expensive compared to the other things we buy (such as bread and milk) that it accounts for almost 9% of the consumer price index.

Worse still, being classified as essential, it makes up almost 15% of the “essentials” index, even though for most of us in any given year buying a home is optional.

In most years, this anomaly doesn’t matter much. The price of a new home (what’s priced is only the construction of the home, not the land) climbs pretty much in line with everything else.

But building material shortages, COVID-induced labour shortages, and an explosion in demand for building fed by the government’s HomeBuilder grant have pushed up the price of new dwellings by an astonishing 20.7% in the past year. That’s enough to add an awful lot to the reported rate of inflation.

The real cost of living is probably up 6%

A rough calculation suggests Australia’s inflation rate would be 6%, instead of 7.3%, if the price of new homes didn’t have such an outsized influence.

We will know more by mid-Wednesday. The bureau actually produces separate living cost indexes a week after the consumer price index that substitute mortgage payments for the cost of home-building.

Lately these indexes have been pointing to increases one to two percentage points below the official rate of inflation.

Accurately measuring rent rises

Another peculiarity is that the rent increases recorded in the consumer price index are so far below those we keep hearing about.

The bureau says in the year to September, average capital city rents climbed just 2.8%, compared to the figures of 10%, and in some suburbs, 20%, quoted by real estate analysts.

In part, this is because the bureau only reports capital city rents. But more importantly it is because it does its job better than real estate analysts.

It collects data on not only the rents that are advertised (these are climbing strongly), but also on the hundreds of thousands of rents paid by continuing renters, which either aren’t climbing at all or aren’t climbing as strongly.

The bureau compares the two by describing a bathtub of water.

The water in the tub represents all rents being paid by households, while the water entering the tub from the tap represents new rental agreements. The consumer price index is measuring the overall temperature of the bathtub whereas an advertised rents series measures the temperature of the water flowing into the tub.

Worse news ahead

Perhaps surprisingly, the bureau finds the average retail price of electricity only climbed 3.2% in the year to September, and the price of gas by only 16.6%, much less than the 56% and 44% mentioned in last week’s federal budget.

But the budget numbers were predictions of what’ll happen over the next two years unless the government provides relief. The bureau was telling us what has happened.

Which is why the Reserve Bank is worried. While gas and electricity prices will subside eventually, inflation is likely to climb even higher before it falls – the bank says to around 8%.

The way back to the target band of 2-3% is anything but clear. That means for homebuyers, there’s no relief in sight just yet.

This article was originally published on the Conversation.

Where is the Workforce?

Rohan Christie is a Founding Director of Kingfisher Recruitment, an organisation shaping futures in the built environment since 2005. Kingfisher strives to bring insight, expertise, and a high level of care to the recruitment process in line with its defined purpose and values. Kingfisher live and breath the built environment, recruiting for all that we market, finance, design, develop, build, operate, manage, and maintain to live, work and play.

2022 has solved the question of “When will we see the end of Covid?” Other questions have been posed such as:

• “Where is my luggage?”

• “How did the RBA get their prediction of interest rate rises so wrong?”

• and for those in Melbourne, “Is Ross Lyon really the right choice for St Kilda?”

 Another question being posed is “Where is the workforce right now?”

Unemployment in Australia at present is at 3.5%, which translates into there being more jobs than people that can fill those jobs. The fight for talent right now is very real, with organisations trying to fill key roles to facilitate business growth struggling to find the people they need.

One of the figures tracked by the Australian Bureau of Statistics is Job Mobility, which tracks people who have lost or left their job.  Between 2015 and February 2020, there were approximately 70,000 people every month who moved jobs wanting change or a better opportunity. As of August 2022, this number had jumped to 360,000 people in the quarter, or 120,000 per month. So the lack of people is not because of people unwilling to move into a better role.

The answer may therefore lie in migration. Because of Covid and international border restrictions, more people left Australia than arrived. Migrants historically have been younger than the Australian population average, meaning they offset challenges associated with Australia’s ageing population. The Centre for Population recently published a report titled “Australian labour force participation: historical trends and future prospects” highlighting that “Migrants also possess skills and qualifications that contribute to our economy. The sharp fall in overseas migration, and the role this plays in slowing population growth, is expected to have broad and long‐lasting impacts on the Australian population and economy.”

There is also an impact of how people view their working life, as highlighted in an Australian Government Treasury report published in April 2021, reviewing Australian Labour Force Participation: Historical Trends and Future Prospects. Their conclusion was there has been a significant shift from full-time to part-time workforce participation over several decades within the workforce. This means that individuals who used to have a job for life, are now moving to several part time roles, which makes finding full time employees more difficult.

Finally, there is now a global war being waged for younger talent required to fill the jobs required to keep an economy moving forward. Attending the recent UDIA Conference in Sydney and listening to a presentation on the global workforce, Australia was ranked the 3rd most desirable country for talent mobility in 2020. With our hard border closures, the impact on talented young people coming to Australia was immediate and there is now much higher global competition for this talent.

So what does this mean? For a start, to keep our businesses moving forward, we need to treat recruitment as a skill, not as a transactional event. Putting mechanisms in place to find great people now takes a lot of work and is an investment everyone needs to make. When great people are in demand they will take a more passive role in seeking new opportunities, expecting to be sought out, rather than them applying to roles. We also need to make sure that the great people we have want to stay, by building teams aligned to an organisation’s purpose and values. Remuneration is a consideration, but most people change roles for reasons other than money.

Finally, until we get more people into Australia, the fight for great talent will continue to be difficult and a game you must win to get ahead.