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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2008-04-30 Daily Xml
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PUBLIC WORKS COMMITTEE: IFOULD APARTMENTS

Ms CICCARELLO (Norwood) (11:44): I move:

That the 288th report of the committee, on Ifould Apartments, be noted.

In December 2003, approval was given for the South Australian Housing Trust to purchase the ex School of Music site at 263-279 Flinders Street. In 2004, the trust was given further approval to divide the site into three parcels. One of these, a smaller development site on Ifould Street, was to be retained whilst the other two lots were to be sold to fund the provision of affordable social housing on the retained site.

To ensure a properly integrated development over the entire site, urban design guidelines were established by the Housing Trust in conjunction with the Adelaide City Council and Heritage SA. An eight-level apartment building with 42 units is to be built on the retained site. It will consist of parking for 11 cars together with a lift entry area at the ground level and seven levels of six apartments per floor.

Significant consultation was undertaken with Heritage SA during the design development process and valuable input provided with respect to issues relating to building mass and selection of materials. Formal support for the final proposal was received from Heritage SA during the planning consent process.

The purpose of this project is to provide affordable social and private housing outcomes through the value-adding process of creating a three-lot land division, and the sale of two of the lots. The surplus generated, together with proceeds from the sale of 36 apartments, will subsidise the retained site and construction cost of six affordable units to be retained by the Housing Trust. Twelve other apartments will be acquired by community housing organisations, and eight of those will be affordable for social rent. A further 24 apartments will be available for sale, and 13 of those will meet the affordability benchmark of below $250,000 market value.

The Ifould Apartments will improve access to affordable social and private housing outcomes in an inner city location, ideally located with proximity to a broad range of amenities and facilities. They will also encourage a mix of social and private tenures to develop a sense of supporting community. The apartment designs will accommodate a diversity of tenancy groups, including single persons, couples and people with disabilities.

The affordable housing outcomes in the CBD will compare favourably to the Housing Trust metropolitan median price for house and land, which is approximately $185,000. The benefits of the development will include:

a reduction in housing stress;

an increase in the number of quality affordable housing options for people with low support needs;

accessible housing within the community for those who can independently maintain a desired standard of living whilst requiring some family or agency support in their own homes; and

housing built to appropriate standards with an environmentally sustainable focus to improve the energy, water and waste management efficiency of social housing.

An amount of $11.357 million is required to construct the eight-level apartment building. The Housing Trust's six apartments and one car park space will have an average cost of approximately $172,547 per apartment (compared to an estimated market value of $238,140). The revenue generated from the project, excluding the prior sale of two land allotments, is $9.946 million. The whole of construction net cost, including prior-year cash flows, is $1.035 million.

The proposed sale of 36 apartments on the top six levels of the building, and 10 car parks, will generate $9.946 million in revenue. This sales revenue forecast has been based on marketing advice which recognises the nature and mix of tenancies. Construction is intended to commence in August 2008 and be completed by August 2009. Based upon the evidence presented to it, and pursuant to section 12C of the Parliamentary Committees Act 1991, the Public Works Committee recommends the proposed public work.

Mr PISONI (Unley) (11:48): I stand in support of the report and in support of the project. Certainly, as a member representing the inner suburbs (the inner suburb in and around Unley, in particular), we have had an enormous amount of stress on our existing properties with subdivisions and urban infill. I understand that it is the policy of this government to continue to urbanly infill our inner suburbs. Minister Weatherill was quoted in the press just this week as saying that urban infill is part of the plan for bringing more people to South Australia and for dealing with the need to expand housing availability and the high cost of housing in South Australia.

I, for one, am concerned about what that is doing to the character of my electorate. It is, in actual fact, quite a distressing factor for many of those in my electorate, who have aspired to live in a lovely stone home with some land around it and a lovely streetscape, that over the last 15 months in Unley we have seen 65 pre-1940 homes be demolished, with developers coming in and subdividing those blocks. It is a concern.

One of the things that excites me about this project is that this is revitalising an area in the city. I think we all acknowledge that the city is very underutilised, particularly the southern end, and the south-west corner of the city is another area where it would be great to see much more housing choice developed for young South Australians and first home buyers.

That is one of the problems that we have in South Australia: we simply do not have choice of housing for our young people and part of the problem with that is that we have very high stamp duty. Young couples get married, and they are planning to have a family but that might be five, six or seven years away because they have decided that they want to pay a big chunk off the mortgage before one of the partners decides to stay home from work for a year or two. Some people like to stay home longer than that. Dr Fraser Mustard will tell you that those first three years are very critical for child-parent contact and the next three years after that for development of the child.

People want to make those choices to have a family later in life and, in the meantime, if we had a friendlier stamp duty regime, we could be encouraging people to buy one or two-bedroom apartments in the city. Having a friendlier stamp duty regime would make that very attractive. I am very interested and keen to see the ideas that will be presented to the Liberal Party's tax forum on 12 May here in this chamber. I know that people are very interested in tax. The Treasurer is not interested in tax; he told us that there is no need to change taxes. He is not interested in changing it, tweaking it or bringing it into the 21st century: he is interested in raising it and spending it. However, we are not bringing it into the 21st century: he made that clear. Then again, Prime Minister Rudd said that we do need some root-to-branch changes in our tax system, particularly state taxes. Of course, Mr Foley is saying that perhaps we do. So, he has gone from making fun of our tax summit to now wishing us luck with it. I thank him for coming around to that line of thought and seeing the light on state taxes.

Property taxes are a very big part of the state taxation collection. As I explained earlier, that has minimised the choice of housing in South Australia. Not only does that affect our first home buyers, but also it affects those people who are living in larger family homes whose children have grown up and left. Hopefully, their children have not left South Australia, although that is still continuing to happen. The people in question are left with a three or four-bedroom home with a study and a family room in the suburbs and they are reluctant to sell because they know that they will be spending $10,000 to $30,000 on stamp duty when they sell their family home and move to something smaller, so they are hanging on to their homes longer and that is causing some difficulty.

I am quite excited about this project. I would like to see a good mix of higher density housing in the city and, let's face it, we have a very centralised CBD. Many people come into the city to work, and it would be great if a lot of those people actually lived in the city. Imagine what that would do for reduction of greenhouse gases and dealing with our clogged and antiquated public transport system, not to mention our roads. It would be great to have more people—younger people, in particular—bringing vibrancy into the city square mile.

If you go to Melbourne when the shops are shut after hours, plenty of people are around the place because people are living within or around the CBD of Melbourne, and it makes a big difference to how the city feels. So, this is a very small step, and I would not even say it is a step; this is a shove, if you like, in the right direction to have this development within the square mile.

During the hearing, I established a contrast between the way in which minister Gail Gago is handling the sale of the Glenside property to the adjacent supermarket and the way in which the government handles the sale of property within the Housing Trust. Basically, what Mr Aggiss told us was that public tender is always done, that the way to achieve the best result in the way of profit for the organisation is to do it through public tender. When I asked whether there were situations where they would want to restrict who could actually buy a property because they wanted a particular outcome (whether that be for the community or the area), they said that they did do that occasionally but that they ask for a competitive tender process. So, for example, they invite those who want to develop supermarkets to bid on that particular property.

That is not what is happening at Glenside. What is happening there is that the minister has gone to one developer and said, 'You can buy this for market value.' The market value still has not been established; to this day it has not been established. It is a complete contrast to good practice, to what we are seeing being done with the Housing Trust.

I would like to draw the attention of the house to something else that emerged during the hearing—and this is what is so important about Public Works Committees hearings, you do have an opportunity to drill down and get some details—

An honourable member: When it meets.

Mr PISONI: When it meets, of course; I think it has been five weeks since we last met. However, we have the situation where these apartments were built without air conditioning, because they are relying on natural air flows. I think that is a great idea but, let's face it, this March we had 15 or 16 days over 35° and you will need air conditioning in that sort of situation.

That has not been addressed by the Housing Trust in this instance. We were told in this presentation that it will be up to individual tenants and new owners to put in their own air conditioning. So an opportunity has been lost to put in a consistent, environmentally-friendly, low energy use, clean air conditioning system. It is being left to these people. So, someone might have a split system, someone might put in an evaporative system—it will be a dog's breakfast in the way of air conditioning in this apartment development.

This is very disappointing, and it was very short-sighted of the government to do that. It is much cheaper to put in the air conditioning when you are building than it is to put it in afterwards, and of course you also then have the difficulty of dealing with the strata corporation regarding finding an air conditioning system for each unit with which everyone is happy. There is the potential here for residents to complain to each other about noise levels and about the look and placement of air conditioners, yet this could all have been dealt with in the building process.

I must say that that is disappointing. However, having said that, I understand that perhaps this is a learning exercise, and we would hope that the public works process gives us things upon which we can continue to work.

Time expired.

Ms CICCARELLO (Norwood) (11:57): I thank the member for Unley for his comments; however, I would like to point out that it is interesting that he indicates there should be a choice of housing for people yet at the same time he is objecting to people in his own area having a choice of housing, saying that there has been demolition of housing—

Mr Pisoni interjecting:

The SPEAKER: Order!

Ms CICCARELLO: I presume that the Unley council has its development plan, and that when developments happen they comply with that plan. Lifestyles have changed, and young people do want to have access to different accommodation. You will see that with some of the housing being put in place now. Young people do not even require kitchens in some of the smaller apartments because they like to eat out. So, we have to look at lifestyles, and the composition of families has certainly changed over the years.

I cite my electorate of Norwood as an example. We have had a lot of urban infill, and it certainly has not done anything to the quality of housing in the area, nor to the value of that housing, because some people now say that they would like to live in Norwood. With those comments I would like to commend the report.

Motion carried.

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