Three years ago, an overhaul of planning rules in Victoria prompted fears on the part of many in the property sector that significant swathes of Melbourne’s inner and middle suburbs would be effectively locked up from the viewpoint of residential development.

Introduced in 2013, the changes saw the abolition of the former Residential 1, Residential 2 and Residential 3 zones along with the introduction of three new zones. The most restrictive of these, known as the neighbourhood residential zone (NRZ), is intended to apply to areas identified for urban preservation and limits dwelling numbers to a maximum of two per lot and building height to a maximum of eight meters (two storeys) – although this can be varied with approval from the Planning Minister.

On the reverse side, the residential growth zone (RGZ) is intended to apply to areas designated for housing growth and diversity and allows for a mixture of medium density townhouses and apartments and buildings of up to 13.5 metres in height (variable at the council’s wish.) In between these, a general residential zone (GRZ) allows for buildings of up to nine metres (three storeys) and enables a combination of detached and medium density dwellings.

To many, fears about lock-up following the implementation of the new zones were realised after a number of councils in affluent east and south-east areas applied NRZ to large portions of land within their municipalities despite enjoying good links to transport and reasonable proximity to the city. The middle-ringed municipality of Glen Eira in the south-east, for example, applied NRZ to 80 per cent of its residential land despite being serviced by five different railway lines, two major highways and numerous tram and bus routes as well as being home to Caulfield Racecourse, Monash University and a number of key local shopping centres.

Neighbouring Bayside has done likewise, whilst Boroondara in the middle to inner east has applied NRZ to more than three quarters of residential land despite being serviced by three railway lines, two major freeways, numerous tram and bus routes and being home to Swinburne University’s Hawthorn Campus as well as a campus operated by Melbourne University in the same suburb.

All this has prompted concern about land being tied up in exactly the type of areas which are well serviced by transport links and activity centres, and thus ideally suited to help cater for an expanding population. A review looking at the way in which the zones are being implemented is in progress.

Have the new rules been harmful or beneficial? According to Radley de Silva, chief executive officer of the Master Builders Association of Victoria, the former is unfortunately the case. The new processes, de Silva argues, allow too much flexibility for councils to restrict development at the expense of the longer term need to cater for anticipated growth in population.

Such flexibility, he argues, has also led to inconsistency about how the zones have been applied. Whereas the developer-friendly RGZ designation applies to 96 per cent of all residential land in Monash in Melbourne’s east, for example, de Silva says this designation applies to less than 50 per cent in neighbouring Manningham. In the municipality of Knox in Melbourne’s outer east, he adds, the restrictive NRZ has not been applied at all, whereas in nearby Boroondara (as mentioned above), it covers more than three quarters of the municipality.

“I think clearly the processes of implementing new zones appears to be heavily weighted in favour of individual councils rather than part of an overarching strategic plan for Melbourne and for Victoria,” he said.

“We have the reality that our population in Victoria is increasing that it’s currently around 4.5 million in Melbourne and going to increase to about 7.7 million in the next 35 years. (To accommodate this,) we need 1.6 million new dwellings, including about 480,000 to 500,000 apartments.

“Yet all we appear to have achieved (with the new zones) is to place greater restrictions on the areas that are capable of undertaking some of this growth.”

Hugh Smyth, director of planning at the Melbourne office of architecture, planning and interior design outfit SJB, agrees.

“I think it’s a statement of fact that the introduction of the residential zones has created a situation where vast tracks of residentially zoned land within inner and middle suburbs is now limited to development of no greater than two dwellings (on a lot),” Smyth said.

“If you look at municipalities like Boroondara, Bayside and Glen Eira, you are talking about 80 to 85 per cent of the municipality’s residential zoned areas which are now in a control which effectively limits the development of that land to no more than two dwellings (per lot). That has – and I don’t think it can be argued – reduced the capacity of those areas to deliver greater housing.”

Glen Eira Mayor Councillor Neil Pilling disagrees. Speaking particularly of his municipality, Pilling said his council had struck a suitable balance between promoting development in and around transport and commercial hubs whilst protecting the character of other residential areas. Compared with a number of vagaries associated with the former system, Pilling says the specific new maximum height limits specified under the new system provide greater clarity as to what can be built in each of the respective zones.

As for ideas about middle suburbs being locked up for development, Pilling says his council has heard criticism from groups such as the Property Council of Australia about this but has been able to demonstrate that the amount of development allowable within the 20 per cent of residential land which has been slated for high-rise development would in itself be sufficient to accommodate up to 70 to 80 years of anticipated residential growth.

“We would say to the Property Council that as a middle suburb, we are conscious of looking after our residents and preserving our neighborhoods but at the same time, we are quite open and have been in saying that we will do our fair share of accommodating a greater population over the next 50, 60 or 70 years,” Pilling said. “We demonstrated to the state government the capacity to do that and they accepted that.

“If you go down to Caulfield Station, you will see 2,000 apartments now going in. We’ve got 12-storey developments going up in multiple sites in Carnegie; eight or nine-storey apartments in Bentleigh.

“That is allowable in our present scheme. The state government acknowledged that. We aren’t just locking things up. We are accommodating development in appropriate places.”

Smyth and de Silva, among others, are not swayed by such talk, however. Whilst the new zoning may have delivered greater clarity, Smyth said it had also delivered absurd outcomes in some places. He singles out the municipality of Boroondara, where three quarters of residential land has been designated NRZ despite almost every part of the municipality being located within 800 metres of transport links and/or activity centres. There have been cases of commercial zones that have height limits of one to two storeys whereas residential land abutting those centres had no mandatory height control, he said. Large areas of Burke Road frontage had been designated as NRZ despite being a major arterial road, being serviced by tram and having good links to multiple train lines.

“Certainty is regularly bandied around as justification for how the zones have been implemented,” Smyth said. “But I would suggest to you that the certainty of an absurd outcome is still an absurd outcome and that there is a limited value in certainty if it leads to absurd outcomes.”

As to what should come out of the review, de Silva wants the state government to take control and implement a more prescriptive approach which delivers greater consistency of outcome across municipalities. Smyth would like to see a number of issues addressed with regard to how the zones are constructed as well as greater levels of equity with regard to how zones are being applied and how population growth will be accommodated. A number of municipalities in the affluent east and south east who thus far have applied the restrictive NRZ more widely compared with their counterparts in northern and western areas need to do more of the ‘heavy lifting’ in this area, he says. Pilling, meanwhile, would like to see greater clarity around the zone boundaries as well as more guidance with regard to heights on commercial zones.

Melbourne’s zoning changes have undergone a significant degree of reform.

Whether or not this has been beneficial remains a subject of considerable debate.