AusPol / Civil Society

Dictating minimum apartment sizes will only further stifle innovation

Minimum apartment sizes in Melbourne will decrease density, suppress diversity, and cost home-owners years of time paying off ballooning house prices, writes Darcy Allen.

Minister Richard Wynne recently had a discussion paper in Victoria called Better Apartments. The aim was to stimulate discussion over issues within the Melbourne apartment market — including minimum apartment sizes, lighting, adaptability, and car parking.

Unlike Sydneysiders, who must abide by contentious SEPP 65 minimum sizes, Melbourne residents are free to decide the size of their own homes. For the moment. There is support for imposing minimum sizes in Australia. However, as public choice theory would suggest, this support is coming largely from those who will benefit from the reforms — the rent-seeking planners and architects.

Planning traditionally began as a hands-off permit-free process. Many of these guidelines focused on external street-scape type rules. There may be some justification for intervention here based on externalities and collective action problems (although most of those arguments fall down, too).

But the latest latest proposed intrusions—under the elusive and arbitrary goal of ‘better apartments’—is a clear invasion of citizens property rights.

While sometimes these intrusions can be justified based on clear and large benefits to the community as a whole. Minimum apartment sizes are not one of those examples. There is little evidence such regulation will achieve their stated aims — it is even hard to conceive how the rules will not result in the opposite.

Among other aims, the recent discussion paper attempts to develop guidelines for increased density (the number of residents in a given space) and increased diversity in the housing stock (the number of different types of dwellings.).

Both goals are worthy and necessary for the future of Melbourne. Between 2011 and 2051 the population of Greater Melbourne alone is projected to double. And with growing numbers of individuals comes the growing need for density — so that each person is closer to public transport and the city in general.

The real solution to this problem, as with most problems, is innovation. These new rules will stifle the emergence of any civil society solution to our ballooning cities. As I wrote in a piece in the Sydney Morning Herald earlier this year:

Innovation will also suffer from these new rules. Minimum sizes provide no incentives to better use small and valuable amounts of space. Without this market pressure, developers are shielded from testing, experimenting and optimising with innovative methods. Around the world architects have been forced to optimise small space design and this has resulted in profound innovation. These innovations much be encouraged.

There is also a clear nanny state rationale here—that the government knows better than the people do about what ‘better apartments’ look like—as I wrote in FreedomWatch:

Aside from the scant economic rationale behind mandating apartment size – on top of existing housing affordability issues – there is no justification for enforcing rules on size and composition of private property. It is only the individual buyer and developer who decide on matters such as this; there is no need for the state to enter into such matters.

The Victorian government needs to get out of the way of apartment, and town, planning. As the fantastic urban scholar Jane Jacobs taught us, cities are a complex dance of top-down and bottom-up planning — and Melbourne is going in the wrong direction.

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One thought on “Dictating minimum apartment sizes will only further stifle innovation

  1. Pingback: Cold Soup: Competition, crypto, and Doug North | Meso Soup

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