Chief Minister Andrew Barr backs 'missing middle' housing for ACT population growth

Mr Barr said expanding the dual occupancy rules which allowed blocks cleared as part of the Mr Fluffy asbestos insulation buy-back program to be redeveloped would help deliver smaller, more affordable homes in established areas.

"There's a way to do this that would address legitimate concerns about neighbourhoods changing dramatically, but at the same time offer more product and a house size that's 100 to 150 square metres, so equivalent to a three-bedroom apartment probably, but at a single level, in a gentle transformation of some of the larger blocks in places where people want to live," Mr Barr said.

Mr Barr said reform of the ACT's planning system and updating zoning rules will be necessary to deliver more homes in a compact city.

"We've got to fill that missing middle," he said, speaking on the sideline of a Committee for the Economic Development of Australia event on Thursday.

Mr Barr said the market had not provided housing that met the needs of people who wanted to live in established areas but were unable to afford large houses.

"There's a lot of apartments in the 60 to 100 square metre range, and then there's a lot of very big homes. What's needed is properties between 100 square metres and 200 square metres at the upper end, probably principally between 100 and 150 square metres," he said.

Mr Barr earlier used a speech to the CEDA event to warn tough decisions would need to be made on infrastructure investment, as the government contended with delivering projects in an overheated and constrained market.

The ACT's infrastructure plan would be updated over the next 18 months, first focusing on music and entertainment before shifting to education and health projects.

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"The plan will outline how the territory seeks to carve out its own unique profile as an entertainment destination with a particular emphasis on more live music or theatre, musical productions," he said.

Mr Barr said a masterplan for a new University of New South Wales in the east of Canberra's city centre would be released in the coming months, and said students were a key driver of the capital's economy.

"I must take the opportunity to say change of government at the federal level has apparently ended the war on universities. And I think that's a good thing for Canberra but a great thing for our national economy," he said.

Mr Barr said there were good reasons to be optimistic about the ACT's economy, which had an unemployment rate close to full employment and a strong outlook for wage growth.

But debt financing was appropriate to pay for infrastructure that would serve the city for the next century or more, rather than expecting the current generation to pay for it up front with cash, he said.

Canberra's fast-growing population size was ultimately a good problem to have, Mr Barr said, but this would require the government to do more to deliver the housing required for Canberra.

Mr Barr said a growing and more diverse society would help Canberra establish a more diverse economy, but the government recognised it needed to invest now and plan to maintain the "core elements" of the capital city.

The Chief Minister said it clear the government could not meet the housing supply targets unless a reformed planning system would enable a more diverse range of housing options.

"A better mix of housing options is needed to ensure that Canberrans at all stages of the life cycle can find a home where they want to live and that suits their needs," he said.

"So our plan is one of gentle urbanism to increase housing choice, access and affordability."

Updated population growth forecasts have already forced the ACT government to bring forward the date by which 100,000 new homes will be required in the capital.

The government previously expected the new dwellings would be needed by 2063, but now says they will be needed by 2050.

Both Planning Minister Mick Gentleman and the territory's chief planner, Ben Ponton, have said changes to allow more dual occupancies in Canberra are firmly on the table as part of a planning system overhaul.

"It wouldn't just be a house in the backyard, I think that wouldn't be well received," Mr Ponton told The Canberra Times last month, arguing safeguards would be in place to ensure quality building and design outcomes were achieved.

Two decades ago, the ACT government introduced tight planning controls to curb the number of dual occupancies. The Garden City Variation was made to the territory plan after concerns mounted over dual occupancies, which at that point were not governed by any planning rules.

Dual occupancies are currently permitted on RZ1 blocks - which are zoned only to allow detached housing - if the block is more than 800 square metres.

However, the government slightly relaxed rules for former Mr Fluffy blocks, allowing dual occupancies to be built on blocks above 700 square metres.

Missing Middle Canberra, a coalition of planners, community groups and housing advocates, last month called on the ACT government to ditch rules limiting most suburban areas to detached housing in favour of controls that permit townhouses and terraces as well.

The group, which includes the housing advocacy group Greater Canberra, along with the YWCA, urban planning consulting firm Purdon and the Master Builders ACT, wants all areas currently limited to detached housing to allow townhouses, duplexes, terraces and small blocks of flats.

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