I acknowledge the traditional owners of the land on which we meet today and pay my respects to their elders, past and present.
Thank you for asking me to speak to you today.
Last month, the Macquarie Dictionary named ‘shovel-ready’ the word of the year for 2009.
At first I was surprised.
In our world – me as Minister for Housing, you as urban developers – the word ‘shovel-ready’ has become so commonplace we never give it a second thought.
But words and communicating ideas hold a particular interest for me.
So I have given ‘shovel-ready’ a second thought.
It encapsulates brilliantly what the Australian Government is all about.
And of course it has entered the vernacular through the Nation Building Economic Stimulus Package that helped Australia navigate through the global recession more successfully than any other western nation.
But where does the word come from?
The precise origin is elusive but, like those other simple yet graphically descriptive words and phrases ‘heads-up’ and ‘rip-off’, it apparently comes from the United States.
I understand that ‘shovel-ready’ was used in 1998 by an American company looking for ways to stimulate brownfields development.1
The Washington Post reports that the company figured entrepreneurs would be more likely to develop brownfields if they knew in advance that the sites already had utilities in place and initial environmental plans.
They wanted a catchy way of saying that.
And ‘shovel-ready’ seemed to fit the bill.
A company executive said, ‘It has a nice ring to it’.
I could not agree more.
And I hope to hear a lot more of it.
Especially in relation to brownfields development, and to infill.
We are now ten years in to the urban century.
The internationally renowned urbanist Jeb Brugmann explains the significance of this in his book, Welcome to the Urban Revolution:
“Over the next thirty years, cities will replace much of their stock of housing and infrastructure.
“Their demographics will radically change as well.
“Along the way, we have a chance to replace much of the thinking, politics, design and technology that dominates and burdens our cities today.2
Australia’s urban revolution will be framed around a predicted population increase to 36 million by the year 2050.
All of whom will need housing.
The National Housing Supply Council’s second State of supply report – which will be released in the near future – confirms that the growth in the demand for housing will be concentrated around our major cities: Sydney, Melbourne, Perth and Brisbane.
Council Chair Owen Donald will discuss some of the new findings with you later this morning.
I do not want to steal Owen’s thunder but I can tell you that the Council’s findings indicate that the number of households in Australia is now 8.5 million – 200,000 more than last year.
And that number will increase to 11.8 million in the next twenty years.
In this time, the population will also change in composition.
The number of single person households is expected to grow faster than any other household type in Australia, due particularly to the ageing of the population.
Within the next twenty years, 32 per cent of our households – nearly one in three – will be single person households; almost as many as families, who will make up 38 per cent.
The Council expects that demand for smaller dwellings will therefore increase – both as a result of the increase in smaller households and because of changes in housing preferences.
There is nothing wrong with big houses for people with big families.
Yet in the 30 years to 2006, the average number of people per household in Australia declined from 3.1 to 2 – at the same time as the proportion of houses with four or more bedrooms increased by eleven per cent.
The State of Australian Cities report launched last week by Minister Albanese notes that in some areas up to 80 per cent of our new buildings continue to be single detached homes.
Single detached homes are great for people with big families.
The report concludes that:
“The overall implication for cities is an apparent mismatch between housing stock and the diversity of needs of households, especially in respect to the ageing of the population and changing demographic profile of households.”
The challenge for industry is to address these mismatches.
In Perth companies like the Satterley Property Group are already doing so.
They have developed a range of cottage housing in concert with the WA Department of Housing.
Nine years ago these cottages comprised 10 to 15 per cent of their work.
Last year it was 70 per cent – with just under 40 per cent of buyers over 55 years old.
A significant number of buyers are downsizers and singles, including separated or divorced parents.
The lesson is that builders and developers who diversify their market to meet emerging population trends are on a winner.
The sheer scale of housing needed to meet change and future demands is amazing.
No wonder you themed this conference, The Ride of Your Life.
As I have mentioned already – this year’s State of supply report estimates that more than three million houses are needed Australia-wide over the next twenty years, including more than half-a-million in Sydney alone. 3
Where are we going to put these homes?
Current metropolitan plans seek to build between 50 and 70 per cent of new housing within existing boundaries, that is, to meet the great number of present and future needs through brownfields and infill development.
The rationale is that infill can provide a diversity of choice.
It can allow people to stay within their own communities as they downsize or upsize.
It minimises environmental impact and allows substantial savings on infrastructure and transport costs.
It ensures people are near job opportunities.
The challenge for government is to take up Jeb Brugmann’s invocation to replace our thinking, to redesign and rebuild in existing urban areas with thought and imagination.
This needs to happen in a way that improves amenity for existing residents.
Local governments that deliver choice will respond to their communities and State and Territory Governments that deliver enough land will assist in tackling affordability.
To allow this diversification to happen local government also has to encourage and support greater diversity in the housing stock.
Local government is often in a difficult position balancing the aspirations of current residents with the needs of residents in the future.
In fact there is not always as much conflict between the two as it may appear.
Research from South Australia shows that even when people look to move to smaller houses as they get older they want them in the same communities that they have lived in.4
And, especially as the home becomes more of a central focus of life in old age, older Australians share with other Australians the desire for a quality in their housing and lifestyles.
When suburbs that were once full of young families with four people in every house, now have one or two, there is a direct impact on local shops and community facilities.
Appropriate development can see some of those areas return to the population densities that they once had and support better commercial and public services like public transport and schools.
Just look at Potts Point, here in Sydney.
I noticed an ad saying Potts Point is about to get a Harris Farm fruit and vegetable market to join the other supermarkets, greengrocers and specialist food stores.
The conversion of hotels to residential buildings has meant better shops, including proper supermarkets, and better community life for new and existing residents.
We do not need to clear-fell existing communities.
With careful planning increased population can improve suburbs rather than clear-felling them.
We should seriously look at changing land use around railway stations, or using more former brownfields or commercial sites to restore densities in older parts of our cities.
We already have some great examples.
Last week in Brisbane I used the example of Kelvin Grove.
Today in Sydney I can talk about the 278 hectares of land in Sydney’s oldest industrial area, centred around the Green Square Station on the Airport Link Railway.
This is one of the largest urban renewal projects in Australia.
And in Melbourne, a former quarry and brickworks nine kilometres from the CBD and 500 metres from a railway station is giving way to Tooronga – a mixed use development with 600 residential units including for older people.
I do not need to tell anyone here that one imperative is to get good planning outcomes as quickly as possible.
Last year’s National Housing Supply Council report found that it could take between six to 14 years from zoning land to getting housing on it.
Surely this can be reduced, with better master planning to solve community concerns at an early stage, and more efficient development assessment.
State and Territory Governments have a range of options available to them to encourage infill and support the achievement of their infill targets, including planning reform, and using government-owned land and government development agencies.
For its part, the Commonwealth is encouraging reform through the Council of Australian Governments and through programs such as the Housing Affordability Fund.
We have put funding into new approval systems like Target Five Days which should ensure that up to 95 per cent of residential applications across nine South East Queensland Councils are swiftly dealt with for example.
We are also supporting the move to code-based assessment to speed up the time it takes to bring new homes on to the market including looking at where code based assessment might be extended to multi-unit developments.
And we undertook very early in the life of the Government to look at selling surplus Commonwealth land as a practical step to help increase housing supply.
We currently have several sizeable surplus sites around the country and work on their disposal is progressing.
The release of these sites provides exceptional infill and redevelopment opportunities.
The disposal of former Defence land at Maribrynong in Melbourne is a great example.
VicUrban, the Victorian Governments sustainable urban development authority, will develop the site once it has been fully remediated by Defence.
This project will have a major impact on Melbourne’s inner west – including opportunities to deliver housing choice and affordability, river access, parkland and open space, community facilities, restored heritage buildings and job opportunities.
Exactly the sorts of outcomes the Australian Government wanted.
Australia is a great place to live.
The assessment was based on five broad criteria: stability, health care, culture and environment, education and infrastructure.
It will be no small feat to maintain this high standing as we confront the urban century.
But one of the reasons why I am confident and look forward to “the ride of our lives” is that we are approaching the task ahead based on evidence.
This country has suffered a knowledge vacuum in terms of housing.
That is why the Australian Government set up the National Housing Supply Council; to give us the data and the evidence on which to proceed.
Knowing where future demand and supply pressures are likely to be and knowing the sorts of housing that people are likely to want in the future gives Government the confidence that we are meeting community needs and aspirations.
And looking after the economy.
Importantly, for you, we are providing the data that reduces your risk.
My challenge to you is to act on it.
To provide, on the basis of the evidence, more diversity in housing choice – in a greater range of locations –with more infill as well as greenfields development.
And more of those “shovel-ready” projects.