Doubling up

The why, how and where of building a secondary dwelling

The good old ‘granny flat’ isn’t just for your elderly relatives any more. Secondary dwellings have a lot to offer in a tight housing market, and the regulations that govern them are evolving. Victorian building designer Andrew Ferris gives us a rundown.

Unless you have been living under a rock, you will have noticed that Australia is experiencing some pretty stressful cost of living issues, along with a housing affordability crisis. (If you are living under a rock, that could well be the reason!)

At the core of the affordability issue is a housing shortage. According to the Australian Bureau of Statistics, in the year ending 30 September 2023, Australia’s population grew by 659,800 people. The average household size is 2.52, meaning around 260,000 new homes are needed each year to house them. However, according to PopTracks, just 170,000 new homes were built in the year to March 2023 – the most recent data available. And indications are that construction of dwellings is slowing, not increasing. We are simply not keeping up, and with so much demand and so little housing stock, rents have escalated to the point that they are no longer affordable to many (housing is considered ‘affordable’ when rent is a maximum of 30 per cent of a household’s income).

Governments have tried to solve the housing affordability crisis in various ways, including by applying pressure on landlords to sell up and providing incentives to retirees to downsize, all in the name of making more houses available to buy, but that’s kicking the can down the road. If a large percentage of your income is being directed to rent, then it’s very difficult to save a deposit for a home of your own. Our governments also regularly spruik plans to build ambitious numbers of new homes, but history shows us that this is not what governments do well. Arguably, they should instead focus on their key role: facilitating the framework and legislation to activate a private sector response to the crisis.

One option with promise is the secondary dwelling, also known as an ancillary dwelling or ‘granny flat’. A second, usually separate, habitable building on a block, this kind of structure is distinctly different from a dual occupancy development where the land is subdivided into separate titles. For many years, granny flats were something of an elephant in the room, with restrictive rules: usually not officially a dwelling by planning or building definitions, they were often required to be demountable, occupied only by a dependent family member, and removed when the dependent person no longer needed it (however, in practice they seldom were removed).

State governments have been reluctant to open the door to a broader, less restrictive definition of a secondary dwelling, and many councils have also pushed back. In the past few years, though, many states have made it easier to build one, and the sky has not fallen. In fact, this type of dwelling can play an important part in the multi-pronged approach to diversifying our housing stock that’s necessary for addressing the affordability crisis.

Whether it’s retirees moving into a unit in the backyard and renting the main house out for income, accommodation for young adult children, an elderly relative or a friend, or a smaller and more affordable place to live for students, people saving for their own home, or people who move often for work, secondary dwellings can be a solution.

Each state has its own definition of a secondary dwelling and its own planning and building requirements for approval to construct one (see facing page for an overview), but many of the principles and objectives are similar. Until late 2023, Victoria still considered such a dwelling a ‘dependent person’s unit’ (DPU) with its restrictive uses and requirement for removal once the dependent person no longer required it. However, newly minted ‘small second dwelling’ (SSD) regulations in the state now allow for the construction – in many cases, without the need for a planning permit – of a secondary dwelling of up to 60 square metres on blocks over 300 square metres with an existing house. Anyone can live in them, and they do not need to be relocatable. (In fact, the old DPU building type has been completely removed from the planning framework as part of the changes.)

Not only do updated regulations like Victoria’s – now more in line with other states – make it easier to build a secondary dwelling, but they should also lead to better-performing ones.

As they are now defined as Class 1a dwellings, the usual National Construction Code requirements (including energy efficiency requirements) must be met. Designers will need to consider design criteria such as overshadowing, orientation and passive solar design to achieve at least the minimum Star rating and deliver a quality product. This can only be a good thing; increased availability of energy-efficient, small-footprint dwellings that cost little to run will help alleviate the cost of living crisis.

If you are interested in building a secondary dwelling on your block, it is important to remember that planning and building rules, permitted uses, assessment criteria and so on are different in every state and territory, and there are also likely to be specific controls and limitations imposed by your local council. Do your research for what applies in your location. It is also important to seek proper financial advice.

Although secondary dwellings are certainly not a magic bullet for the housing affordability situation, I’m hopeful that with more appropriate regulations in place, in a pretty short timeframe this type of housing will not only be embraced, but will start to become embedded in strategic planning for housing needs.