I present to the Assembly today this report into draft variation 343, and I would like to say a few words about the findings and recommendations.

The committee thanks everyone who provided information and evidence to this inquiry, including the minister, directorate officials, interested organisations and members of the community. I also thank the secretary of the committee, Hamish Finlay, and other committee staff for their work.

Firstly, can I say that the issues this inquiry dealt with are issues that I know are difficult for many people in our community. The Mr Fluffy saga is one that has been going on for many years and will continue to go on for many more. It is a wide-ranging issue and one that will mean different things to different people. While the committee was not tasked with debating the merits of the Mr Fluffy buyback scheme, I wish to note the considerable impact of this issue on the Canberra community in general and the residents and home owners of Mr Fluffy homes in particular.

Those who have not been subjected to the trauma of the scheme cannot personally know the deep personal and financial difficulty of those individuals and families. I note the heartfelt evidence of a number of witnesses. There are some people who are still finding the scheme a difficult one for them to navigate personally. Equally, I note that other witnesses noted their gratitude for the scheme and the decisive and compassionate approach of the ACT government.

However, this was a specific inquiry into the matter of draft variation 343, which the Minister for Planning, Mick Gentleman, referred to the committee on 22 July 2015. The minister requested that the committee give consideration to the draft variation:

“…at its earliest convenience, noting that there are a significant number of Canberra families affected by the Mr Fluffy buyback scheme, and the expeditious consideration of this variation will assist them to move forward as soon as possible.”

The committee took this request seriously. Draft variation 343 provides for most residential blocks surrendered under the buyback scheme to be unit titled for dual occupancy. It allows for remediated Mr Fluffy blocks to have planning controls altered, reducing the minimum size for dual occupancy to 700 square metres, and allows unit titling. This affects one per cent of Canberra properties.

It does not rezone RZ1 blocks as RZ2. It does not allow for multi-unit development in residential areas. Indeed, dual occupancy is already allowed in RZ1, and changes associated with DV 343 would see stricter controls around footprint and height limits, with most dual occupancies restricted to single storey.

This inquiry was limited to the draft variation specifically and to its impacts. It was important to the committee to be clear-headed about this while still showing compassion and understanding to those people who did not support the scheme or some of the proposed changes in this draft variation. That was our responsibility.

The committee received 70 submissions and held three public hearings to hear from 26 witnesses. The committee was unable to reach agreement to recommend that the draft variation be approved. However, collectively we agreed to four recommendations. Dr Bourke and I recommended the draft variation be approved as well as two further additional recommendations: one to amend the draft variation and another to consider future amalgamation of blocks. I will discuss these in more detail shortly.

The minister stated that DV 343 was entirely consistent with the ACT planning strategy, the territory plan statement of strategic directions, and the RZ1 residential suburban zone objectives. When the scheme was announced in October 2014 the ACT government advised that it would seek to make planning changes as part of a range of policy measures that would enable the ACT government to minimise the cost of the scheme to the ACT community. The final impact of the Mr Fluffy buyback scheme on the ACT budget will be up to $400 million. We have not had sufficient assistance from the federal government to minimise these costs. Therefore, it is up to the ACT government to look for opportunities to recover some of the cost to ACT taxpayers from the cost of the scheme.

I make this point: the ACT government does not stand to make money from this scheme. We will never make money from this scheme, and this is an important point. But we should try to do everything we can to limit the costs of the scheme to the community, and the committee acknowledged that the cost of conclusively dealing with the issue of loose-fill asbestos in the community will limit budget options for future governments and impact upon ratepayers for years to come.

The committee received 70 submissions and held three public hearings to hear from 26 witnesses. A majority were opposed to DV 343, but many of the issues they raised were either outside the scope of the draft variation or showed a misunderstanding of its effect. One such misunderstanding concerned the possibility of two-storey residences being built in backyards, and many were against any dual occupancy in RZ1, opposing current policy that allows for dual occupancy over 800 square metres.

At the same time the committee heard evidence that there was considerable demand for dual occupancy and medium-density housing within Canberra’s established suburbs. For example, the Weston Creek Community Council noted that a lot of older people want to downsize in their community but that there are few options available to do so. The committee heard a submission from a 69-year-old former Mr Fluffy home owner who described the draft variation as “crucial”. She said the change would allow two unit title dwellings to be built on her block and for one to be sold as a means to finance the other. The result would be a new home suitable for her needs and in the location she had known and enjoyed for nearly 20 years.

The Housing Industry Association noted that there was a huge push at the moment for people in suburbs they have lived in for most of their lives to downsize and continue to enjoy their community and the amenity associated with that. A lot of younger people, potential first homebuyers and renters, also find it incredibly difficult to buy or rent a house in established suburbs due to the lack of diversity in housing stock.

As Caroline Le Couteur said in her evidence:

“… the current situation with plot ratios means that what people are doing when houses are redeveloped is they are being turned into much bigger McMansions and it is not really serving anybody. It is just that that is the way our system has been set up to do things.”

It was clear that there was some confusion around the draft variation, however, and how it differed to the current rules. Therefore, the committee made a unanimously agreed recommendation that where a draft variation to the territory plan proposes to amend a code, the existing sections of the code be reproduced alongside the proposed amendment to facilitate public understanding of the draft variation.

It became clear throughout the inquiry that there is a wider issue that needs to be considered, that is, urban intensification in some of our more established suburbs. Looking at the territory plan, it is clear that the vast majority of residential land is RZ1, but there is considerable variation within RZ1 in terms of block size and proximity to amenities.

Population density in Canberra is low, and this can lead to sustainability issues for government services, public transport and infrastructure. The committee formed the view that current policy settings are not sufficient to facilitate the kind of medium-density development that Canberra needs. To this end, the committee recommended that the ACT government review its planning framework in order to facilitate the supply of a much broader range of housing types to meet community desires and lay out a public consultation plan to discuss these proposals.

The committee also heard from a range of witnesses about the issue of unit titling. As demand for medium-density housing increases, so too does the need for fewer restrictions on titling. To that end, the committee recommended that the ACT government consider titling options as part of any examination to facilitate increased supply of medium-density housing.

It was good for the committee to hear from a number of Mr Fluffy home owners about how DV 343 affects them. Many home owners raised questions about amenity and the character of their suburbs, believing that the changes would benefit only developers. They said that because most home owners want to build a single dwelling they would have to pay a higher buyback price. There was a belief that many would be prevented from repurchasing their blocks. Other evidence made this unclear until the scheme has had the opportunity to roll out in our community and in the market.

While many contributors disagreed with the draft variation, many of these objections were not expressly towards the changes proposed by DV 343 but more broadly at the anticipated changes as a whole to suburbs affected as a result of having Mr Fluffy homes located in them. To help address this issue, the committee recommended the ACT government consider a mechanism to engage in a community conversation with particularly affected neighbourhoods about community recovery and redevelopment. In total the committee made four recommendations.

The legacy of Mr Fluffy means our suburbs will change. That much is certain. How we make the most of that change is something this inquiry sought to address. I regret the committee was unable to reach agreement to recommend that draft variation 343 be approved. However, Dr Bourke and I were of the belief that it should be approved by the minister.

Dr Bourke and I also agreed that DV 343 should be amended to allow a maximum plot ratio of 50 per cent for all dual occupancies on surrendered blocks to ensure the best possible design outcomes whilst keeping in line with single dwelling plot ratios. If a dual occupancy development is more accessible and offers a better design outcome at a slightly higher plot ratio, that should be considered rather than settle for a poorer design that benefits no-one, for the sake of a smaller plot ratio.

For me, this inquiry marks the start of a conversation we need to have as a community about how we plan for the future of our city and the way we live. We need to provide a wider range of affordable and sustainable housing choices that meet changing household and community needs. It is clear from this inquiry that our current policy settings are not sufficient to facilitate the kind of medium-density housing development that Canberra needs. I was disappointed this inquiry did not achieve an outcome that would enable us to test the option of changing these policy settings. This was a missed opportunity.

While it is reasonable to assume that many former Mr Fluffy owners have made plans already based on the assumption DV 343 would proceed, with some choosing to buy elsewhere based on an expected increase in the likely cost of repurchasing their block, I am sympathetic to the trauma this has caused those Mr Fluffy home owners who do not see this as a viable option. But the reality is that not everyone can or wants to live in a single dwelling home. Many people live very comfortably, raise families and grow old in dual occupancies, smaller homes, apartments, townhouses and units. Our city needs more of these types of housing options. I look forward to further debate on this issue and hope our community can find a way forward that will address these needs in the years to come.