Why trendy cafes won’t cut the mustard with lower income families

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Kids play area in an Auckland, NZ, library

Potential apartment purchasers would do well to look at the facilities for lower income families in and around their blocks, and not just the price tags on their on their new home, according to a new academic report.

Cheap and cheerless apartment developments, with poor services, little shared space and residents who are kept in the dark about their rights and responsibilities, could be heading for problems.

The recently released report Improving Outcomes for Apartment Residents and Neighbourhoods has found that families and individuals on lower incomes are over-represented in strata across Australia and warns that ignoring their needs could lead to the breakdown of “social cohesion”.

What that means could be as simple as people not talking to each other, not getting together socially and, consequently, having no sense of “home”.  The bad news for investors is a higher turnover in renters and lower rents.

So what should you look for ?  Ideally, if you are buying into a new scheme you want one involving a variety of developers who have a good track record of working with state and local governments to build communities.

What you need to be wary of is a single developer who is filling every last square metre of a large tract of land with housing, and isn’t responsive to community needs or even fulfills the commitments they made in order to get the planning approval.

When you go apartment hunting in older areas, you should be looking for communities that are established or have clear potential, with free or low-cost shared facilities, and active and supportive strata committees.

Compiled from studies by researchers at UNSW, Sydney University, University of Western Sydney and RMIT in Melbourne, the report, published by the Australian Housing and Urban Research Institute (AHURI) says the specific needs of lower-income residents are often overlooked by planners and politicians whose focus tends to be on the upper echelons of apartment housing.

And it’s not just having less money in their pockets that creates problems for people in this sector.

“Lower-income households are disproportionally affected by challenges associated with apartment living,” says the report, “yet most existing research and policy does not consider the impact of living in density for lower-income residents in particular.”

In other words, poorer tenants are more likely to be neglected, ignored and perhaps even discriminated against in apartment blocks, and less likely to be aware of their rights or responsibilities.

The report points to the importance to lower-income residents of public infrastructure, like open space, libraries and community centres, as well as the need for ‘soft’ infrastructure, such as community engagement programs and activities.

“There is much room for further innovation in both the design and management of high-density buildings  … including designing more useful shared spaces and clarifying shared responsibilities,’ says the report.

“Failure to address the needs of lower-income high-density residents risks undermining the prosperity and cohesion of Australian cities in future years.”

Strata communities that engage with ALL their residents, and provision of open space and free facilities nearby could be as important as proximity to transport and schools in the long term.

So when you are on the look-out for a new investment, be aware that having  a few trendy coffee shops around is not going to be enough when a sizable chunk of the local population could be struggling to put food on the table.

You can download a PDF of the AHURI report at ahuri.edu.au/research/final-reports/329.

A version of this column first appeared in the Australian Financial Review.

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