Vision of the apocalypse! 250 Spencer St is No. 5. (exhibit from The Age)

About a month ago, The Age ran a story titled City apartment ‘frenzy’ about the large number of new apartment developments proposed for the western end of Melbourne’s CBD.

A “FRENZY” of apartment towers granted planning permission in one corner of Melbourne’s CBD could squeeze thousands of new residents into four city blocks and change the character of the city.

The proposed concentration of developments – many of which include tiny one-bedroom apartments – could see Melbourne follow the lead of Asian cities such as Hong Kong for extreme density, according to a prominent planning academic.

Associate professor in environment and planning at RMIT, Michael Buxton, said: “It’s changing the character of the CBD that people love irrevocably and it’s wrecking historic value.” And property experts fear a glut of apartments could affect property values and rents.

There’re lots of button presses in these opening paras – “squeeze”, “concentration”, “tiny apartments”, “extreme density”, “wrecking historic values” and even a reference to those scary “Asian cities”. There’s also “glut” and the spectre of lower “property values”.

Then just last week The Age followed up with a report, City within a city for Age site, that the new owner of 250 Spencer St (ironically, the former site of The Age) has received permission to build “a massive apartment development with an expected population of a small regional city.”

I think frenzy is an extreme term in this context. It’s a strong and emotive word, not least when capitalised. It either means anger and rage (a la Hitchcock), or tumult and turmoil.

The fact is it’s very unlikely all the proposed projects (see exhibit) will proceed and those that do will almost certainly be staged. Financiers are risk-averse – projects don’t start unless a very large proportion of units have been pre-sold.

So rather than developers building speculatively and risking a glut, supply is actually dependent on real demand. The developer of 250 Spencer St makes it clear that it’s expected to take more than a decade to build-out the project.

Notwithstanding the way it frames the issue, The Age actually acknowledges this point deep within the first story (para 11). The writers state that “history shows many projects never get built”.

But even if there were a glut, it’s not self-evident the effect on property values and rents would be the universally bad thing the story implies. Developers and investors would doubtless be unhappy, but renters and home-seekers would very likely welcome the improved affordability.

It’s true the proposed towers are tall. The developers of the 1.2 hectare site at 250 Spencer St envisage one of the six proposed towers will be 220 metres high – a long way short of the Eureka Tower’s almost 300 metres, but considerably higher than nearby Southern Cross Station.

There are some locations where tall buildings aren’t appropriate, but this isn’t the suburbs or even the inner city. It’s the Central Business District! It’s the established high-density part of Melbourne with plenty of tall office towers and, more recently, tall residential buildings.

In the context of a metropolitan area of more than four million people, the ultimate population envisioned for these four city blocks if and when they’re fully developed is modest. According to The Age only 7,800 apartments are proposed – so probably around 12,000 residents.

There’s no risk this area will turn overwhelmingly suburban Melbourne into Hong Kong!

But in the context of the CBD, that’s a lot of new people. These extra residents will go out to shop and socialise – they’ll bring life to a part of Melbourne that’s currently unattractive and offers little in terms of urban values (have a look at 250 Spencer St in Google Street View).

It’s true that tall multi-unit buildings generally use more energy than medium density ones, but this is the CBD. The disadvantage of height (e.g. elevators) is swamped by the sustainability benefits of place.

The CBD is about as good as it gets when it comes to walkability because it’s very dense and has a mix of uses. It’s by far the largest concentration of jobs in the metro area and it’s the centre of the radial metropolitan public transport system. Traffic congestion and the high cost of parking discourage car use.

It’s true new CBD apartments in Australian cities are small – even “tiny” – compared to traditional housing stock, but they’re no smaller than those in comparable cities in other countries.

The people who buy or rent CBD apartments are predominantly small households of singles and couples, mostly professionals (a big point of difference relative to Hong Kong, making the comparison questionable).

They know what they’re doing. They choose to live in the CBD because it’s accessible and exciting. They trade-off space for place.

There are nevertheless issues with large buildings, like possible adverse wind effects, street activation and overshadowing that need to be managed properly. But the basic principle of high-rise CBD living has considerable merit – there’s another side to this story that warrants the attention of readers of The Age.

250 Spencer Street