Howard Maclean | Territory Plan announced by Andrew Barr will not fix housing

Owners of blocks larger than 800 square metres would be able to build unit-titled single-storey large granny flats (120sq m size maximum). This policy is ineffective and insufficient.

The government should instead adopt the Missing Middle Canberra platform of upzoning all RZ1 to RZ2 and RZ2 to RZ3.

Firstly, these enhanced granny flats must pay the full lease variation charge, which is designed with the assumption that any subdivision would result in two full-size houses, making substantial charges appropriate.

In Inner Canberra, the lease variation charge for a variation to two dwellings on a block can range from $150,000-$310,000. The policy is taxing a modest home as if it was a much larger and high-value one, with the tax well above 100 per cent of the windfall gain of rezoning.

Secondly, these enhanced granny flats will require a development application.

This adds significant costs and delays to development, but more importantly it allows disgruntled neighbours to appeal the development in the ACT Civil and Administrative Tribunal.

These matters can take many months and consume hundreds of thousands of dollars of costs.

Standalone houses are usually exempt from the requirement for a development application - but if you build the main house and the granny flat at the same time, both become subject to a development application process and ACAT challenge.

By comparison, a developer who simply puts their money into a large apartment development on Lonsdale Street in Braddon will pay less than a third as much in lease variation charge per unit. And because the town centres are exempt from ACAT appeal, they don't run the risk of litigation from local NIMBYs. It isn't difficult to see which kind of development is more viable.

As a result, the small number of people using this option will do so for personal rather than financial reasons. They will be downsizers looking to stay in their suburb, and potentially to allow family to live on their block. They will be willing to risk fighting their neighbours in court and expensive lease variation charges for this reason.

It's good that people will have the option to build these granny flats, and good we're providing more options for modest sized homes - but we will not solve the housing crisis on the backs of home owners making decisions that don't stack up financially due to planning barriers and badly designed taxes. We expect that this policy will deliver very few new homes, and cannot be relied on to drive housing supply.

Even if both of these problems were resolved, in no world would these reforms have been sufficient to meet Canberra's housing needs.

Canberra is Australia's fastest growing city, and we have collectively chosen to limit further suburban sprawl.

That means that the vast majority of Canberra's future homes will need to occur in existing urban areas. This Territory Plan puts off the question of how that will happen to another day.

The results of this decision are clear: constrained housing supply, more greenfield expansion and suburban sprawl, higher rents and displacement, and longer commutes with greater transport emissions.

There is another path. The Missing Middle Canberra coalition called for a much more substantial and effective platform of RZ1 reform.

By upzoning all of RZ1 to RZ2, and all of RZ2 to RZ3, allowing block amalgamation in RZ1 areas, and allowing pre-approved, low-impact designs to be exempt from DA processes, we'd create the potential for over 100,000 homes in the ACT, with much fewer obstacles to adoption.

This platform had widespread community support - including from the Conservation Council, Master Builders, the ACT Council of Social Services and local architecture firms. It also had the support of both parties of government, with ACT Labor and the ACT Greens separately adopting it into their official policies.

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Instead, the government has delivered a granny flat policy that no one asked for. Everyone who would have opposed RZ1 zoning reform will still fight it bitterly, but now voices in support of reform are left with no choice but to call for more.

The bizarre result is that the Canberra Liberals now have the best formal position on zoning reform and housing supply. Peter Cain is right when he describes this granny flat policy as a "watered down version" of the policy the Canberra Liberals took to the 2020 election.

So who killed zoning reform in this Territory Plan? Chief Minister Andrew Barr pointed the finger at the Greens earlier this week, but Johnathan Davis fired back saying "our position [RZ1 to RZ2 upzoning] is pretty clear". No one seems to know.

The government should amend the new Territory Plan to enact the Missing Middle Canberra zoning reform platform in full. If this is not immediately possible, then they should outline a clear plan to deliver the rest of the reforms in 2024.

This Territory Plan represents a once in a generation opportunity to reform our zoning laws to create a more liveable, sustainable and affordable Canberra. We are in a housing crisis and a climate crisis. It is not good enough to say that meaningful reform is simply too hard.