Search
  Advanced Search
 
Journal search
Journal cover: Property Management

Property Management

ISSN: 0263-7472

Online from: 1983

Subject Area: Built Environment

Content: Latest Issue | icon: RSS Latest Issue RSS | Previous Issues

Options: To add Favourites and Table of Contents Alerts please take a Emerald profile

Previous article.Icon: Print.Table of Contents.Next article.Icon: .

Measuring the impact of higher density housing development


Downloads: The fulltext of this document has been downloaded 624 times since 2012

DOI (Permanent URL): 10.1108/02637471211233909

Article citation: Valerie Kupke, Peter Rossini, Stanley McGreal, (2012) "Measuring the impact of higher density housing development", Property Management, Vol. 30 Iss: 3, pp.274 - 291


Options

References

Citations

Further reading

Marked list


Bookmark & share

Reprints & permissions

The Authors

Valerie Kupke, Centre for Regulation and Market Analysis, University of South Australia, Adelaide, Australia

Peter Rossini, Centre for Regulation and Market Analysis, University of South Australia, Adelaide, Australia

Stanley McGreal, Centre for Regulation and Market Analysis, University of South Australia, Adelaide, Australia, and School of Built Environment, University of Ulster, Newtonabbey, UK

Abstract

Purpose – The introduction of higher density housing development within suburban areas has been favoured by state governments in Australia as a means of improving the efficiency of land use, reducing the costs associated with the delivery of government services and promoting home ownership. However it has been hypothesised that such development may have a negative impact on neighbourhood social structure, for example reducing diversity as measured by economic status and family makeup or in local housing market performance as measured by price. This paper aims to test this hypothesis.

Design/methodology/approach – The methodology employs a quantitative approach with principal components analysis used to capture the main social structure of the Adelaide Statistical Division. Social constructs, the product of principal components analysis, are used to measure outcomes of higher density development as measured by community or household change.

Findings – The results in this paper show that densification has had significant impact on certain neighbourhoods in the Adelaide Statistical Division notably in relation to their built form but not necessarily in neighbourhood structure or housing market performance.

Research limitations/implications – The findings are significant in highlighting that increasing medium densities and improving tenure mix may not necessarily improve the opportunities for socio-economic mix or for cultural diversity with implications for policy makers seeking to follow strategies based on the promotion of mixed communities.

Originality/value – This paper seeks to add new research on the outcomes of higher density development in Australia in three ways. First, social constructs, the product of principal components analysis, are used to measure outcomes of higher density development as measured by community or household change. Second, the paper investigates the development at the local level where impacts are likely to be most important. Third, the analysis identifies a before and after scenario for those suburbs where higher density development has been most significant.

Article Type:

Research paper

Keyword(s):

Australia; Housing; Land; Residential areas; Urban areas; Social planning; Residential property.

Journal:

Property Management

Volume:

30

Number:

3

Year:

2012

pp:

274-291

Copyright ©

Emerald Group Publishing Limited

ISSN:

0263-7472

Introduction

Traditionally Australian cities have been associated with low-density detached housing development. Unlike cities in the UK, Europe or North America, Australia has only limited experienced of higher density living. However, in recent years state and local governments in Australia have favoured increasing the density of housing development as a means of improving the efficiency of land use, protecting green space, reducing the costs associated with the delivery of government infrastructure (Quirk, 2008) and promoting home ownership (SA Government, 2010). As such, higher density development has been seen as a fundamental step towards improving economic, environmental and social outcomes (Kearns and Mason, 2007). At the local level it represents an important shift in dwelling form but it may also be associated with significant changes in neighbourhood sociology (Johnson, 2006). Important research has begun in Australia into the social outcomes of higher density housing development for cities such as Sydney, Melbourne and Brisbane (Randolph, 2006; Bunker et al., 2005). However, Randolph (2006) raised a number of questions about the implications of this housing form both for the planning system and for social stability and cohesion. Other commentators in Australia have suggested that the impact of higher urban densities on the social structure and economic viability of local neighbourhoods needs further examination (Dodson and Gleeson, 2007).

Evidence from other countries provides mixed messages. According to Pendall and Caruthers (2003) in the US there has been little research on the connections between the various dimensions of the built environment and segregation at the local level as measured by social constructs such as ethnicity or income. The potential for such development having negative impact on neighbourhood social structure through reducing diversity, as measured by economic status and family makeup, or in local housing market performance as measured by price was highlighted by Bramley et al. (2007). There has also been concern expressed by social housing providers that higher density redevelopment may result in a reduction in the stock of affordable housing, in the displacement of original residents and in considerable community disruption (AHIU, 2008).

This paper seeks to add new research on the outcomes of higher density development in Australia in three ways. First, social constructs, the product of principal components analysis, are used to measure outcomes of higher density development as measured by community or household change. Second, the paper investigates the development at the local level where impacts are likely to be most important. Third, the analysis identifies a before and after scenario for those suburbs where higher density development has been most significant. This includes an analysis of local market performance with respect to house price as well as change in social structure. Adelaide, the state capital of South Australia, is used as a case study in order to identify whether higher density development has any impact on local housing market performance as measured by median price and whether there are associated changes in neighbourhood structure as measured by social constructs. As median prices were available at suburb level, for both attached and detached dwellings, these have been used to measure market performance (RPData, 2010). The Adelaide Statistical Division (ASD) contains a population of 1.19 million and has some of the smallest average lot sizes for new housing subdivision in Australia (HIA – RPData, 2009). Higher density housing in this study is defined as housing which is “attached” and includes dwelling forms which are home units, flats or apartments of one, two or three storeys (ABS, 2006).

The paper is structured as follows. First, an overview of higher density development in Australia is used to set the policy context followed by some of the main issues that have been raised in the wider literature with regard to this housing form. Second, the paper reviews some of the main trends that have occurred in the Australian and in the Adelaide housing and land markets within the last ten years. Next, the methodology section describes how change in the social and housing structure of areas with higher density development has been measured. Finally, the main results are presented followed by a conclusion on the implications of the findings for policy makers seeking the promotion of mixed communities.

Land use policy and higher density development

Formerly, land in Australia has been plentiful, and for over 50 years the typical housing form has been the single storey detached dwelling built on a large allotment (1,000 square metres) with substantial setbacks to side and street boundaries. Such development has provided considerable areas of private open space and has resulted in net urban housing densities as low as 17 dwellings per hectare (Planning SA, 2006) and correspondingly lower population densities. In state capitals such as Perth density is 1,200 persons per hectare and only slightly higher in Melbourne (1,600 per hectare) compared to international examples: London with a density of 5,100 per hectare, Paris 3,300 per hectare or San Francisco 2,200 per hectare (Demographia, 2009). The lower densities of Australian cities reflect spread across large tracts of land with Perth (1,035 square kilometers) comparable to London with an area of 1,623 square kilometers despite being one eighth its population size or Melbourne at 2,152 square kilometres comparable to San Francisco at 2,497 yet housing some 2 million fewer people (Demographia, 2009).

However, there has been a change of policy with state and local governments across Australia no longer considering this low density form of development to be viable and over the last decade urban containment strategies have been introduced to protect agricultural land, improve the efficiency of land use and reduce the costs associated with the delivery of government services (Quirk, 2008). These strategies have included the establishment of urban growth boundaries, the introduction of public transport corridors and the facilitation through planning codes of higher forms of dwelling density. Most state governments across Australia have drawn up strategic plans to facilitate higher density residential development in already well-established urban areas. These plans have included the Melbourne 2030 Plan (State Government of Victoria, 2005), Sydney's City of Cities: A Plan for Sydney's Future, (NSW Government, 2005), the South East Queensland Regional Plan (Queensland Dept of Infrastructure & Planning, 2009), Directions 2031 Spatial Framework for Perth (State Government of WA, 2009) and the most recent, the 30 Year Plan for Greater Adelaide (SA Government, 2010). The housing form that is to be encouraged is described as medium density; attached dwellings, typically but not exclusively units, flats or apartments of up to three storeys (ABS, 2006), on allotment sizes of less than 300 square meters with net dwelling densities of up to 67 per hectare (SA Government, 2010; DFC &DPC SA, 2011). At the same time high rise development of greater than ten storeys has attracted government interest though confined to central business districts (SA Government, 2010). High rise had traditionally been associated with public housing, especially in cities such as Melbourne, but over time has been abandoned in favour of medium-density dwelling forms considered more appropriated to community and family living (Costello, 2005).

Such urban consolidation strategies are in line with those adopted in the UK and the US (Dawkins and Nelson, 2002; Millward, 2006), Canada (Carruthers and Ulfarsson, 2003) and New Zealand (Ancell and Thompson-Fawcett, 2008; Dixon and Dupuis, 2003) and are consistent with two important urban population trends in Australia. One, that the number of persons per household is falling as the result of an ageing population combined with longer life expectancy, more childless couples and single parents (ABS, 2010a). Second, that the density of persons per square kilometre is increasing within major urban centres, such as Sydney, Melbourne, Brisbane and Adelaide which continue to attract a significant proportion of Australia's overseas immigration (ABS, 2010b). In 2010 overseas immigration accounted for some 53 per cent of Australia's population growth (ABS, 2010c). Both of these trends lend weight to the policy of higher density housing development.

For Australia higher density housing is a major change in dwelling form but is forecast to be the main source of future residential growth in Australian cities (Randolph, 2006). Such housing is seen as more affordable, better suited to lower household size, to offer greater housing choice in terms of size, dwelling type and price (SA Government, 2010), and to support a more cohesive socio-economic, family and cultural mix (Bramley and Power, 2009). However, in the literature a number of questions have been raised about the promotion of this type of development especially with regard to social outcomes (Randolph, 2006; Bunker et al., 2005). A key issue is that of households moving into medium density development and the outcomes for the original residents. One hypothesis is that such development may have negative impact on existing neighbourhood structure with new households over represented by single households, low incomes, and high levels of mobility and under represented by children (Bramley et al., 2007). Concern has been expressed that the residential upgrading of local areas “can be ad hoc with disruptive impacts on local character and amenity” (Bunker et al., 2005). Vallance et al. (2005) suggest in their study of Christchurch, New Zealand that “strong family, social and way-of-life senses of place” can be significantly affected by higher density infill housing. Zielenbach (2003) recognises that in the US redevelopment and upgrading of neighbourhoods can cause controversy and effectively displace lower income residents. In New Zealand, Dixon and Dupois (2003) discuss the difficulties of encouraging diversity within the community while propagating a relatively homogenous dwelling stock.

Another issue is whether medium density housing is a sustainable tenure for owner-occupiers in Australia and whether higher density living offers a real alternative to the detached dwelling. The replacement of public and private detached housing with higher density housing is often associated with substantial market activity (AHIU, 2008) generated by those seeking rental returns. If medium density housing is primarily sought as an affordable investment, tenure may become heavily skewed towards private landlords with the loss of affordable rental accommodation and owner occupiers under represented (Randolph, 2006). Dwelling prices are also likely to rise in response to investor demand effectively locking out first time buyers looking to buy an affordable home. Forster (1991, 2006) recognises that economic forces can cause house price appreciation and loss of affordability in areas of higher density development which may in turn increase social polarisation. Yates (2001) has shown empirically that urban consolidation policies may have “less impact on affordability and less impact on increasing choices for income constrained households than promised” (Yates, 2001, p. 516).

Another concern is with regard to the physical impacts of medium density development. In Australia planning legislation is the statutory responsibility of state government but is largely administered by local councils with most housing development applications considered against a standard set of land use and development controls (Planning SA, 2009). Some local government councils have been reluctant to approve higher density housing as a result of presumed externalities such as the disappearance of green space, the loss of privacy and an expected increase in traffic (Searle, 2007). Local neighbourhood groups perceive higher urban densities to be the antithesis of suburban life threatening urban amenity and quality of life (Searle, 2007; Quirk, 2008). Lewis (1999) has written of a suburban “back lash” against higher levels of housing density. In Australia, Easthope and Randolph (2009) have highlighted the challenges to effective and inclusive governance imposed by the strata titling of property, an ownership form typically associated with higher density residential development. Buxton and Tieman (2005) suggest that medium-density housing is objected to by local residents, who see themselves as defending their neighbourhood character. Associated with this resistance are perceived risks to house values. In the UK, Bramley et al. (2007) acknowledge that the physical form of suburbs in terms of housing density can have a significant effect on house prices. However, Bramley et al. (2007) also conclude that redevelopment may in fact increase house prices through improved social and environmental outcomes especially if associated with an increase in the level of home ownership within a neighbourhood. Zielenbach (2003) suggests that in the US the mix of private dwellings and rehabilitated public housing may improve property values with positive ripple effects on surrounding areas.

Background to housing and land markets

Analysis of medium- to long-term trends in the housing stock of Australia shows an increase in the percentage of dwellings classified as “attached” from 18.5 per cent in 1996 to 21 per cent by 2006 (Table I). An 11.1 per cent increase in the stock of semi detached, row or terrace house or townhouse dwellings was also reported between 1996 and 2006 (ABS, 2006) and a 16.6 per cent increase in the number of flats units or apartments. This compares with only a 6.7 per cent increase in the stock of detached dwellings (ABS, 2006) for the same time period.

Accompanying these trends there has been a parallel decline in detached dwelling completions relative to attached dwellings (Figure 1). The National Housing Supply Council (2010, p. 36) reports that in Australia “over the longer term there has been a decline in detached housing completions relative to flats, units and apartments” which is “likely to reflect the housing preferences if the increasing proportions of one and two person household are without children”. Buxton and Tiemans (2005) have identified that fewer detached houses were constructed in Melbourne in 2001 to 2003 than in 1988 to 1989 while the number of multi dwellings developments had increased by four-and-a-half times.

At the same time the average size for new homes within Australian cities decreased from 802 to 735 square metres between 1994 and 2004 (HIA, 2008). Data for 2009 indicates that median lot sizes in Australia have also declined (Table II) with Adelaide, at 411 square metres, representing the smallest average vacant lot sizes for any state capital. Declining block sizes and densification is associated with growth in median land values with significant increases in land values between 2001 and 2009 for cities such as Sydney, Melbourne, Brisbane and Adelaide. In the case of Adelaide, there has been an increase of 240 per cent in land price per square metre (Table II).

Analysis of housing tenure at a national level, over the period 1991 and 2006, highlights a decline in the proportion of dwellings that are owned outright and an increase in those that are still being paid off by means of a housing loan (Table III). Changing tenure trends are also apparent through a reduction in the per cent rented through public housing agencies down from 5.1 per cent in 1996 to 4.00 per cent by 2006 and an increase in those renting privately through real estate agents up from 11.7 per cent in 1996 to 13.7 per cent by 2006. As to counts of actual stock the total number of occupied dwellings classified as semi-detached, row, terrace or townhouse, flat, unit or apartment rented through a state housing authority in Australia dropped from 164,273 dwellings in 1996 to 156,007 in 2006. In contrast the total number of such dwellings rented through a real estate agent increased from 386, 345 dwellings in 1996 to 530,933 by 2006 (ABS, 2006).

For the case study city of Adelaide (Table IV) similar tenure trends prevail. Adelaide's housing market shows a decline between 1996 and 2006 in the per cent of all dwellings owned outright and an increase in those being purchased which, at 34 per cent of dwellings, has become the dominant dwelling tenure. Changing trends in tenure are also apparent in the rental market with an increase in the per cent of homes rented privately matched by a decline in the per cent of dwellings provided for rental through public housing agencies. However, contrary to Australia as a whole, Adelaide's privately rented sector as of 2006 was still dominated by detached rather than attached dwellings with 53.1 per cent of private rental stock classified as detached (ABS, 2006). This is almost five per cent higher than for Australia as a whole (48.5 per cent) (ABS, 2006).

On the ground the total number of occupied dwellings classified as semi-detached, row, terrace or townhouse, flat, unit or apartment rented through a state housing authority in Adelaide dropped from 28,711 dwellings in 1996 to 18,760 in 2006 in Adelaide. The total number of such dwellings rented through a real estate agent increased from 13,453 dwellings in 1996 to 18,202 by 2006 (ABS, 2006). As such, by 2006 and in contrast to the rest of Australia, the stock of attached dwellings in public and private rental was at a similar level.

For both Australia as a whole, and for Adelaide, falls in outright home ownership between 1996 and 2006 are likely to reflect the substantial decline in housing affordability which occurred from late 1996 through to 2008 (Figure 2). Median attached dwelling prices in Australia increased from $153,200 in 1997 to $358,200 in 2007, an annual increase of 13.3 per cent. In Australia, median prices for detached dwellings increased by 16 per cent per annum from a median price of $182,000 in 1997 to $471,200 in 2007 (Figure 2).

Despite these increases, historically low mortgage rates of below 7 per cent between 2001 and 2006 (RBA, 2011), combined with government subsidies, encouraged more first time buyers into the market. The years 2000, 2001 and 2008 saw substantial increases in the per cent of dwellings being purchased by first home buyers (Figure 3) despite average loan sizes growing to match the increased purchase prices.

For most purchasers the increase in house prices resulted in larger mortgages with average loan sizes increasing throughout Australia between 1996 and 2009 (ABS, 2010d). Loans to non first-home buyers in Australia increased from an average of $100,000 in 1996 to $275,000 by 2009, an increase of almost 20 per cent per annum (ABS, 2010d). In Adelaide average mortgages increased in size from $75,000 in 1996 to $220,000 by 2009; again an increase of some 20 per cent per annum (ABS, 2010d). Even in 1996 higher interest rates meant that repayments were still a substantial proportion of family income, at least 25 per cent (Figure 4). As loans size increased so too did repayments with the per cent of family income required to meet average loan repayments in Australia increasing from about 25 per cent in 2001 to close to 40 per cent in 2008. In Adelaide some 20 per cent of family income was required to pay the average mortgage in 2001. By 2008 this had increased to 38 per cent (Figure 4).

As attached and detached dwelling prices increased median land prices throughout Australia also trended upwards (HIA – RPData, 2010). In Adelaide the median land price increased by 114 per cent between 2001 and 2006 (from $61,000 to $131, 000) while median prices on a $per square metre basis increased by 160 per cent for the same period (from $145/sq metre to $377/sq metre) (DAIS, 2008).

Under these circumstances, greater affordability is offered to owner-occupiers and housing investors by the attached dwelling market and its smaller consumption of land parcels. Over the final quarter of 2003 and the first quarter of 2004 the Australian Treasury estimated that some 70 per cent of newly constructed medium density dwellings were purchased by investors (Commonwealth of Australia Treasury, 2003). For investors in Adelaide rental returns in attached dwellings between late 2003 and 2006 were likely to have been particularly attractive, when the five-year average annual returns exceeded 20 per cent per annum (Figure 5).

Research method

The methodology employs a quantitative approach with principal components analysis (PCA) used to capture the main social structure of the ASD (Hair et al., 1998). This multivariate technique is useful when attempting to summarise the main elements of an urban population, and to identify those characteristics within the population that are strongly aligned such as income and tenure (Reed, 2001). The key elements of the population are represented by so-called factors or components, which typically summarise characteristics of the population. When based on census data of population and housing, these factors are commonly associated with socioeconomic status, origin of birth, level of mobility, housing tenure or household makeup (Cadwallader, 1996). Each of the factors is labelled in accordance with the original variables they have summarised best.

In this study PCA was applied to census data for 2001 and 2006 (ABS, 2006) for 305 suburbs within the ASD. Those suburbs which had experienced the greatest amount of percentage increase in higher density dwellings were identified and t tests were used to test for differences between these suburbs and the rest of the ASD for both 2001 and 2006 enabling comparative analysis.

PCA was used to identify housing and social constructs using the Australian Bureau of Statistics (ABS) census data for 2001 and 2006. The method of classifying urban areas along lines of social constructs is an important area of housing research allowing for a better understanding of housing needs (Meen, 2001; Meen and Meen, 2003; Bunker et al., 2005), the structure of residential submarkets (Reed, 2001; Lockwood and Coffee, 2006), buyer behaviour (Ibrahim and Ong, 2004), and social polarisation (Reynolds and Wulff, 2005; Baum et al., 1999).

In this study 42 variables – which were consistent in their measurement across the two census periods – were used to identify the social and housing constructs. A number of these variables were based on those selected by the ABS in the construction of Socio Economic Indexes for Areas (SEIFA). There are four SEIFA indexes (ABS, 2006a), which are used to track relative socio-economic advantage and disadvantage, occupation and education and level of economic resources across statistical areas. However, a number of other variables not included in the SEIFA indexes were also used in this analysis in particular those pertaining to mobility, language, ethnic mix and housing form. These variables are common with other PCA studies using census data (Reed, 2001; Bunker et al., 2005). In the analysis, SEIFA indexes are used to investigate whether there were significant differences within a census period between those suburbs that had experienced high levels of flat and unit development and those suburbs where such growth had not taken place. PCA was carried out using percentage values for the 42 variables for each suburb to identify the core components or factors that cumulatively help to explain the housing and social fabric of each suburb for 2001 and 2006.

Those suburbs that had experienced higher levels of unit, flat and apartment development between 2001 and 2006 were identified. Development was measured as the per cent change at suburb level in the number of one, two and three storey flats, units and apartments between 2001 and 2006. Those suburbs that had experienced at least a 50 per cent increase in this type of dwelling form were selected for further analysis and compared to the rest of the ASD for each census period using the independent samples t test for difference. Items used to identify difference between the two groups included the census variables, the factors representing neighbourhood social structure identified by PCA, the SEIFA indexes, and median price and median price change for attached and detached dwellings.

Results

Based on the criteria of eigen values greater than 1, eight factors were produced by PCA for the 2001 census representing some 78.8 per cent of the variance and nine factors for the 2006 census, representing some 79.1 per cent of the variance within the data set. From these rotations six factors were identified for each data set based on the interpretation of those variables with factor loadings greater than 0.5. The characteristics of the population which each factor has summarised are reflected in the label give to the factor. As such for the 2001 data set the PCA factors are labelled as:

  1. socio-economic (based on the summary of variables representing items such as income, qualifications and occupation);
  2. familism (based on variables representing such items as age and family structure);
  3. mobility (based on variables covering dwelling change or stability in last one to five years);
  4. ethnicity (based on language and place of birth);
  5. medium density housing authority (based on selection of housing form and housing authority dwellings); and
  6. medium- to high-density other (representing higher density forms of private development).

These six factors represented some 70 per cent of the overall variance which were considered adequate for the purposes of the analysis (Hair et al., 1998). The final two factors were not summarised adequately. The positive and negative ends of each factor were interpreted with the positive end of the Socioeconomic construct representing high wealth; the positive end of the Familism construct representing low levels of couples with school aged children, and children under the age of five years; the positive end of the Mobility construct representing high levels of mobility and the positive end of the Ethnicity construct representing high levels of non English speaking, non Australian born households. Factor scores that measured the scale of each construct within a suburb were calculated and assigned to each suburb. These scores can be used to identify the nature and extent to which a factor is represented in a locality.

The results show that similar labels could be attached to the 2006 rotation although the importance of the individual factors in the variance explained was different to the 2001 rotation. The 2006 factors are labelled as Socio-economic, Mobility, Ethnicity, Familism, Medium Density Housing Authority and Medium to High Density Other. Cumulatively these six factors represented some 68 per cent of the overall variance. The final three factors were not summarised adequately. Again, the positive and negative ends of each factor were interpreted with factor scores determined for each suburb.

On comparing suburbs in terms of percentage change between 2001 and 2006 for units, flats and apartments of up to three storeys (Table V) it is apparent that some local areas have been considerably impacted by higher density development with 44 suburbs experiencing at least a 50 per cent increase in the volume of this built form. Collectively, this represented 14.5 per cent of all suburbs. Highlighting the differences across the ASD are the suburbs (53 per cent) which had experienced a decline in this form of higher density development.

The independent samples t-test (Table VI) identifies that those suburbs which went on to experience large increases in medium density development in 2006 (> 50 per cent) were characterised in 2001 by a significantly higher number of dwellings (1,612) on average compared to the rest of ASD (1,321) but by a lower average number of attached dwellings (68 compared to 151). The suburbs could also be distinguished by a significantly higher per cent of dwellings being purchased (27.7 per cent) compared to the rest of the ASD (24.6 per cent) while the median price of detached dwellings was significantly lower than for the rest of the ASD.

With regard to social structure these 44 suburbs were characterised in 2001 by a low score on Mobility which implies that most households had not moved in the last five years and by a low score on the Ethnicity Factor which denotes a higher percentage of Australian born, only English speaking households. The suburbs were also typified by a lower socio-economic Factor Score which indicates households with lower income, fewer qualifications and less years of schooling. Based on the score for Family structure, as measured by couples with school aged children and children under the age of five years, there was no distinction between these suburbs and the rest of Adelaide.

Overall in 2001 the suburbs could be summarised as fairly stable, lower socioeconomic localities similar to most neighbourhoods in Adelaide in terms of family structure but with a lower than average number of attached dwellings, cheaper than average detached dwellings and a higher per cent of dwellings being purchased.

The independent samples t-test (Table VI) shows that by 2006 the 44 suburbs were characterised by a higher number of dwellings on average, 1,520 compared to 1,217 for the rest of the ASD. They could no longer be identified by a significantly higher percentage of dwellings being purchased and in terms of the t test showed a significantly lower per cent of dwellings being rented privately, 8.5 per cent compared to 9.7 per cent for the rest of the ASD. Given the level of infill development it is to be expected that the suburbs could no longer be distinguished by lower levels of higher density housing. In terms of social structure, however, they were still characterised by significantly lower levels of mobility and by lower socio-economic status as measured by income and education qualifications relative to the rest of the ASD. The lower score on the Socio-economic factor is augmented in 2006 by a significantly lower SEIFA score for education and occupation status. By 2006 these suburbs still showed low levels of Ethnicity. There was still no distinction between these suburbs and the rest of Adelaide along lines of Family structure as measured primarily by the per cent of households who are couples with school aged children or children under the age of 5 years. In contrast to Vallance et al. (2005) and Zielenbach (2003) it would appear that the mix of population post development has not changed substantially. However, the median price for detached dwellings was still significantly lower than for the rest of the ASD as was the price for all dwelling types and this could be a positive for first time buyers. The results are supportive of Bramley et al. (2007) who suggest that higher density development may increase home ownership opportunities.

Overall, by 2006 the suburbs remained as fairly stable, lower socioeconomic localities, similar to most other neighbourhoods in terms of family structure with the majority of households Australian born. There were more dwellings on the ground but the percentage of these in private rental was significantly lower than for the rest of the ASD. Prices for detached dwellings remained significantly below the ASD average, as did prices for dwellings overall.

Comparison of the dwelling stock in these suburbs with the average for the ASD (Table VII) shows that the number of attached dwellings increased from 68 to 138 dwellings, while across the ASD, the average number of attached dwellings in a suburb decreased. An outcome of densification has been a doubling on average in the number of attached dwellings in these suburbs. The change in stock is accompanied by an increase in the number of dwellings being purchased (543) to a level that would appear to be appreciably above the average for the ASD (397) though this did appear significant in the t test. Increased investor activity is suggested by a rise in the number of dwellings being rented privately though dwelling numbers still remain below the average for the ASD. There has also been a fall in the number of dwellings available through public rental. Both these trends are consistent with the pattern for Adelaide as a whole.

Conclusion

In Australia, the traditional pattern of a low-density form of development, is no longer considered to be viable and over the last decade urban containment strategies have been to the fore-front. This paper considers the outcomes and impact of higher density development in Australia using the ASD as a case study. The paper measures the outcomes of higher density development in terms of community or household change with particular focus upon development at the local or suburban level where impacts on house price change and social structure are likely to be most important raising policy issues regarding the social, economic and demographic consequences of densification.

The recently released Housing Strategy for South Australia Green Paper (DFC & DPC SA, 2011) has highlighted the ongoing need for affordable housing, housing diversity and social mix within areas of urban renewal in the ASD. The Green Paper, which is available for public comment, emphasises that mixed communities and social inclusion should be a fundamental component of publicly funded, not for profit and joint venture housing developments. It also wishes to encourage more investment in private rental as the number and per cent of households in this sector continues to grow and looks to find ways of promoting longer-term tenures within the sector.

The analysis presented here suggests that densification may have significant impact on certain neighbourhoods in relation to their built form but not necessarily with regard to the makeup of their local population. At suburb level it would appear that even substantial change in, or addition to, housing form within a locality may not necessarily result in a measurable shift in the characteristics of the local population. The suburbs in this study, against a background of substantial housing development, appear to have remained stable in terms of socioeconomic status, ethnicity, family makeup and mobility. These findings are of significance in highlighting that increasing medium densities and improving tenure mix may not necessarily improve the opportunities for socio-economic mix or for cultural diversity. In this respect, the findings of this study have considerable implications for policy makers seeking to follow strategies based on the promotion of mixed communities.

It would appear that the process of densification does not necessarily signal the end of affordable housing and that housing opportunities remain for those on lower incomes; at least for those wishing to purchase. An increased level of investor activity is indicated by the higher number of rental properties. More affordable rents, or longer tenures, however, may not necessarily be an outcome of this activity.

The lack of mobility within neighbourhoods that have experienced significant housing development appears counterintuitive, and may reflect issues attached to the scale adopted for the study. A further breakdown of suburbs might reveal higher mobility levels in particular neighbourhoods. Or analysis of larger spatial units may be required to adequately capture the mobility changes that have occurred. However, further close analysis of the data would be required to support either explanation.

ImageFigure 1Dwelling completions, Australia
Figure 1Dwelling completions, Australia

ImageFigure 2Median dwelling price, Australia
Figure 2Median dwelling price, Australia

ImageFigure 3First home buyers, Australia
Figure 3First home buyers, Australia

ImageFigure 4Mortgage and household debt, Australia
Figure 4Mortgage and household debt, Australia

ImageFigure 5Average annual rental return, Adelaide
Figure 5Average annual rental return, Adelaide

ImageTable IHousing stock, Australia
Table IHousing stock, Australia

ImageTable IIMedian prices vacant land
Table IIMedian prices vacant land

ImageTable IIIHousing tenure, Australia
Table IIIHousing tenure, Australia

ImageTable IVHousing tenure, Adelaide statistical division
Table IVHousing tenure, Adelaide statistical division

ImageTable VChange in % attached dwelling stock 2001 to 2006, Adelaide Statistical Division
Table VChange in % attached dwelling stock 2001 to 2006, Adelaide Statistical Division

ImageTable VIIndependent samples t-test higher density suburbs and remainder of Adelaide statistical division
Table VIIndependent samples t-test higher density suburbs and remainder of Adelaide statistical division

ImageTable VIIComparison of higher density suburbs and Adelaide statistical division
Table VIIComparison of higher density suburbs and Adelaide statistical division

References

ABS (Australian Bureau of Statistics) (2006), Census of Population and Housing – Community Profile Series 2001.0-2006.0, ABS, Canberra, .

[Manual request] [Infotrieve]

ABS (Australian Bureau of Statistics) (2006a), “Socio-economic indexes for areas (SEIFA)”, technical paper, ABS, Canberra, .

[Manual request] [Infotrieve]

ABS (Australian Bureau of Statistics) (2009), Building Activity, Australia, 8752.0, ABS, Canberra, .

[Manual request] [Infotrieve]

ABS (Australian Bureau of Statistics) (2010a), Year Book Australia 2009-2010, 1301.0, ABS, Canberra, .

[Manual request] [Infotrieve]

ABS (Australian Bureau of Statistics) (2010b), Regional Population Growth Australia, 3218.0, ABS, Canberra, .

[Manual request] [Infotrieve]

ABS (Australian Bureau of Statistics) (2010c), Australian Demographic Statistics, 3101.0, ABS, Canberra, .

[Manual request] [Infotrieve]

ABS (Australian Bureau of Statistics) (2010d), Housing Finance, 5609.0, ABS, Canberra, .

[Manual request] [Infotrieve]

AHIU (Affordable Housing Innovations Unit) (2008), Local Government Affordable Housing Resource Kit, Department for Families & Communities, Adelaide, .

[Manual request] [Infotrieve]

Ancell, S., Thompson-Fawcett, M. (2008), "The social sustainability of medium density housing: a conceptual model and Christchurch case study", Housing Studies, Vol. 23 pp.423-41.

[Manual request] [Infotrieve]

Baum, S., Stimson, R., O'Connor, K., Mullins, P., Davis, R. (1999), Community Opportunity and Vulnerability in Australian Cities and Towns: Characteristics, Patterns and Implications, University of Queensland Press, Brisbane, .

[Manual request] [Infotrieve]

Bramley, G., Power, S. (2009), "Urban form and social sustainability: the role of density and housing type", Environment & Planning B: Planning & Design, Vol. 36 pp.30-48.

[Manual request] [Infotrieve]

Bramley, G., Leishman, C., Karley, N., Morgan, J., Watkins, D. (2007), Transforming Places: Housing Investment and Neighbourhood Market Change, Joseph Rowntree Foundation, York, .

[Manual request] [Infotrieve]

Bunker, R., Holloway, D., Randolph, W. (2005), “The social outcomes of urban consolidation in Sydney”, Paper No. 3, City Future Research Centre, Sydney, .

[Manual request] [Infotrieve]

Buxton, M., Tieman, G. (2005), "Patterns of urban consolidation in Melbourne: planning policy and the growth of medium density housing", Urban Policy and Research, Vol. 23 pp.137-57.

[Manual request] [Infotrieve]

Cadwallader, M. (1996), Urban Geography, Prentice Hall, Englewood Cliffs, NJ, .

[Manual request] [Infotrieve]

Carruthers, J., Ulfarsson, G. (2003), "Urban sprawl and the cost of public services", Environmental Planning B – Planning & Design, Vol. 30 pp.503-22.

[Manual request] [Infotrieve]

Commonwealth of Australia Treasury (2003), “Recent developments in the Australian housing market”, Economic Roundup Summer 2003-2004, Treasury, Canberra, .

[Manual request] [Infotrieve]

Costello, L. (2005), "From prisons to penthouses: the changing images of high-rise living in Melbourne", Housing Studies, Vol. 20 pp.49-62.

[Manual request] [Infotrieve]

DAIS (Department of Administrative & Information Services, South Australia) (2008), Vacant Land Sales, DAIS, Adelaide, .

[Manual request] [Infotrieve]

Dawkins, C., Nelson, A. (2002), "Urban containment policies and housing prices: an international comparison with implications for future research", Land Use Policy, Vol. 19 pp.pp1-p12.

[Manual request] [Infotrieve]

Demographia (2009), 5th Annual Demographia International Housing Affordability Survey: 2009, available at: www.demographia.com, .

[Manual request] [Infotrieve]

DFC & DPC SA (Dept. for Families and Communities and Dept. of the Premier and Cabinet, South Australia) (2011), Housing Strategy for South Australia Green Paper, Government of SA, Adelaide, .

[Manual request] [Infotrieve]

Dixon, J., Dupuis, A. (2003), "Urban intensification in Auckland, New Zealand: a challenge for new urbanism", Housing Studies, Vol. 18 pp.353-68.

[Manual request] [Infotrieve]

Dodson, J., Gleeson, B. (2007), “The use of density in Australian planning”, Proceedings of the Third National Conference on the State of Australian Cities, Adelaide, 28-30 November, .

[Manual request] [Infotrieve]

Easthope, H., Randolph, B. (2009), "Governing the compact city: the challenges of apartment living in Sydney", Housing Studies, Vol. 24 pp.243-59.

[Manual request] [Infotrieve]

Forster, C. (1991), "Restructuring and residential differenti8aion: has Adelaide become a more unequal city?", South Australian Geographical Journal, Vol. 91 pp.46-60.

[Manual request] [Infotrieve]

Forster, C. (2006), "The challenge of change: Australian cities and urban planning in the new millennium", Geographical Research, Vol. 44 pp.173-82.

[Manual request] [Infotrieve]

Hair, J., Anderson, R., Tatham, R., Black, W. (1998), Multivariate Data Analysis, Prentice Hall, Englewood Cliffs, NJ, .

[Manual request] [Infotrieve]

HIA (Housing Industry Association) (2008), Australian Dwelling Stock 1996-2006, HIA, Melbourne, .

[Manual request] [Infotrieve]

HIA (Housing Institute of Australia) – RPData (2009), Residential Land Report, March Qtr, HIA, Canberra, .

[Manual request] [Infotrieve]

HIA (Housing Institute of Australia) – RPData (2010), Residential Land Report, March Qtr, HIA, Canberra, .

[Manual request] [Infotrieve]

Ibrahim, M., Ong, Y. (2004), "Personifying public housing estates: evidence from Singapore public housing estates, personality", Singapore, Pacific Rim Property Research Journal, Vol. 10 pp.146-67.

[Manual request] [Infotrieve]

Johnson, L. (2006), "Style wars: revolution in the suburbs", Australian Geographer, Vol. 37 pp.259-77.

[Manual request] [Infotrieve]

Kearns, A., Mason, P. (2007), "Mixed tenure communities and neighbourhood quality", Housing Studies, Vol. 22 pp.661-91.

[Manual request] [Infotrieve]

Lewis, M. (1999), Suburban Backlash: The Battle for the World's Most Liveable City, Bloomings Books, Hawthorne, .

[Manual request] [Infotrieve]

Lockwood, T., Coffee, N. (2006), "Residential living structure as a basis for the spatial delineation of residential submarkets", Pacific Rim Property Research Journal, Vol. 12 pp.350-66.

[Manual request] [Infotrieve]

Meen, D., Meen, G. (2003), "Social behaviour as a basis for modelling the urban housing market: a review", Urban Studies, Vol. 40 pp.5-6.

[Manual request] [Infotrieve]

Meen, G. (2001), Modelling Spatial Housing Markets Theory Analysis and Policy, Kluwer Academic Publishers, Boston, MA, .

[Manual request] [Infotrieve]

Millward, H. (2006), "Urban containment strategies: a case study appraisal of plans and policies in Japanese", British, and Canadian cities, Land Use Policy, Vol. 23 pp.473-85.

[Manual request] [Infotrieve]

National Housing Supply Council (2010), 2nd State of Supply Report, Department of Families, Housing Community Services and Indigenous Affairs, Canberra, .

[Manual request] [Infotrieve]

NSW (New South Wales) Government (2005), Sydney's City of Cities: A Plan for Sydney's Future, Government of New South Wales, Sydney, .

[Manual request] [Infotrieve]

Pendall, R., Carruthers, J. (2003), "Does density exacerbate income segregation? Evidence from US metropolitan areas 1980 to 2000", Housing Policy Debate, Vol. 14 pp.541-89.

[Manual request] [Infotrieve]

Planning SA (2006), Understanding Residential Densities, Government of South Australia, Adelaide, .

[Manual request] [Infotrieve]

Queensland Department of Infrastructure & Planning (2009), South East Queensland Regional Plan, Government of Queensland, Brisbane, .

[Manual request] [Infotrieve]

Quirk, M. (2008), "Responses to increases in house prices; an overview", Australian Planner, Vol. 45 pp.28-49.

[Manual request] [Infotrieve]

Randolph, B. (2006), "Delivering the compact city", Urban Policy & Research, Vol. 24 pp.473-90.

[Manual request] [Infotrieve]

RBA (Reserve Bank of Australia) (2010), Household Finances – Selected Ratios, RBA, Sydney, .

[Manual request] [Infotrieve]

RBA (Reserve Bank of Australia) (2011), Statistical Tables Indicator Lending Rates, RBA, Sydney, .

[Manual request] [Infotrieve]

Reed, R. (2001), "The Significance of social influences and established housing values", Australian Property Journal, Vol. 7 pp.524-7.

[Manual request] [Infotrieve]

REIA (Real Estate Institute of Australia) (2010a), REIA Median House Prices, REIA Affordability Index, REIA, Sydney, .

[Manual request] [Infotrieve]

REIA (Real Estate Institute of Australia) (2010b), 5 Year Annual Rental Returns, REIA, Sydney, .

[Manual request] [Infotrieve]

Reynolds, M., Wulff, M. (2005), "Suburban socio-spatial polarisation and house price change in Melbourne: 1986-1996", Applied GIS, Vol. 1 pp.1-26.

[Manual request] [Infotrieve]

RPData (2010), Median Dwelling Prices by Suburb Adelaide 2001-2010, RPData, Brisbane, .

[Manual request] [Infotrieve]

SA (South Australia) Government (2010), The 30 Year Plan for Greater Adelaide, Government of South Australia, Adelaide, .

[Manual request] [Infotrieve]

Searle, G. (2007), “Sydney's urban consolidation experience: power, politics and community”, Research Paper 12, Urban Research Program, Griffith University, Brisbane, .

[Manual request] [Infotrieve]

State Government of Victoria (2005), State Government of Victoria Melbourne 2030 Plan, Government of Victoria, Melbourne, .

[Manual request] [Infotrieve]

State Government of WA (Western Australia) (2009), Directions 2031Spatial Framework for Perth, Government of Western Australia, Perth, .

[Manual request] [Infotrieve]

Vallance, S., Perkins, H., Moore, K. (2005), "The results of making a city more compact: neighbours' interpretation of urban infill", Environment & Planning B: Planning & Design, Vol. 32 pp.715-33.

[Manual request] [Infotrieve]

Yates, J. (2001), "The rhetoric and reality of housing choice: the role of urban consolidation", Urban Policy and Research, Vol. 19 pp.491-527.

[Manual request] [Infotrieve]

Zielenbach, S. (2003), "Assessing economic change in HOPE IV neighbourhoods", Housing Policy Debate, Vol. 14 pp.621-55.

[Manual request] [Infotrieve]

Further Reading

ABS (Australian Bureau of Statistics) (2004), Lending Finance Australia 5671.0, ABS, Canberra, .

[Manual request] [Infotrieve]

Corresponding author

Valerie Kupke can be contacted at: valerie.kupke@unisa.edu.au