With respect to permit application no. PL04/631, the Responsible Authority's decision to refuse the grant of a permit is set aside.

A permit is granted for the part demolition, alterations and extensions to the existing building to create 19 dwellings and reduction in parking in accordance with the endorsed plans at 350-352 Wellington Street Collingwood. The permit must include the following conditions:

1 Before commencement of the development hereby approved, amended plans to the satisfaction of the Responsible Authority must be submitted to and approved by the Responsible Authority. When approved, the plans will be endorsed and will then form part of the permit. The plans must be drawn to scale with dimensions and three copies must be provided. The plans must be generally in plans TP5 to TP14 (all revision D) and TP15 to TP17 (all revision B) but modified to show:

(a)

Deletion of the third floor level of the building;

(b)

The second floor level of Unit 19 to be setback 2 metres off the east boundary and this unit redesigned to provide for practical living spaces;

(c)

Deletion of the vehicle access to the laneway;

(d)

First floor east facing windows to be glazed with obscure glass fixed to a height of not less than 1.7 metres above floor level to prevent direct views to the property to the east;

(e)

Notations on the east elevation confirming that second floor east facing deck screen has a height of 1.7 metres and windows having a sill height of 1.7 metres above floor level;

(f)

Notation to show the reinstatement of all redundant crossovers;

(g)

A sectional drawing showing satisfactory clearance to the stairs for car spaces 7, 8 and 9;

(h)

All proposed external plant and equipment (including roof top plant and equipment) which shall be concealed from view from street level and be acoustically baffled to the satisfaction of the Responsible Authority, and

(i)

A schedule of all external materials and finishes (including colour and material sample boards) to show materials, colours and finishes to all external wails, roof, fascias, window frames, glazing types, doors and fencing, paving and outbuildings, elevations to dearly depict window, door and balcony openings.

2 The development must accord with the endorsed plans. Any alterations must be approved by the Responsible Authority.

3 Before the commencement of the development hereby approved either:

(a)

Certificate of Environmental Audit indicating the land is suitable for residential use must be issued for the land in accordance with Section 57AA of the Environment Protection Act 1970; or

(b)

An environmental auditor appointed under the Environment Protection Act 1970 must make a statement in accordance with Section 53AA(5)(b) of the Act that the environmental conditions of the land are suitable for residential use.

4 A copy of the certificate of environmental audit and/or statement, and the complete audit report and audit area plan must be submitted to the Responsible Authority.

5 The development/buildings and works allowed by this permit must comply with the directions and conditions of any statement of environmental audit issued for the land.

6 Prior to the occupation of dwellings a letter must be submitted to the Responsible Authority by an Environmental Auditor accredited with the EPA, to advise that all construction and remediation works necessary and required by an environmental audit or statement have been carried out.

7 Any handling and disposal of contaminated site soil must be in accordance with the requirements of any statement of environmental audit issued for the land, the requirements of the Environment Protection Authority and the Environment Protection Act 1970.

8 Before the development starts, details of the measures to be taken during construction to maintain the health of the Boston Ivy on the northern and eastern walls of the building must be submitted to the satisfaction of the Responsible Authority. When approved, these measures must be implemented to the satisfaction of the Responsible Authority.

9 Air-conditioning units or air compressors must not be located on balconies to the individual dwellings and must be suitably screened from views outside the site to the satisfaction of the Responsible Authority.

10 No fewer than 19 car spaces must be provided on the land for the use and development at all times.

11 All areas set aside for parked vehicles and access lanes as shown on the endorsed plans must be:

(a)

used for no other purpose;

(b)

formed to levels, constructed, line marked, seated, illuminated and drained to specifications approved by the Responsible Authority; and

(c)

maintained at all times to the satisfaction of the Responsible Authority.

12 All damaged road(s) and footpath(s) adjacent to the development site must be reinstated to the satisfaction of the Responsible Authority.

13 Storm water drainage of the property must be provided to the nearest Council pit of adequate depth and capacity to the satisfaction of Council.

14 Areas must be provided inside the property line and adjacent to the footpath to accommodate pits and meters. No private pits, valves or meters on Council property will be accepted.

15 During the construction phase of the development, the following conditions shall be met:

(a)

only clean water shall be discharged to the storm water drainage system;

(b)

storm water drainage system protection measures shall be installed as required to ensure that no solid waste, sediment, sand, soil, clay or stones from the premises enters the storm water drainage system;

(c)

vehicle borne material from the premises shall not accumulate on the roads abutting the site;

(d)

all machinery and equipment must be cleaned (if required) on site and not on adjacent footpaths or roads;

(e)

all litter (including items such as cement bags, food packaging and plastic strapping) must be contained within the site boundaries, and disposed of responsibly; and

(f)

all site operations shall comply with the Environmental Protection (Residential Noise) Regulations 1997.

16 Prior to the commencement of construction or any works on the site (including demolition and material removal) the applicant must submit for approval to the Responsible Authority a Construction Management Plan Construction must be carried out in accordance with the plan to the satisfaction of the Responsible Authority. The plan must address, but not be limited to the following:

(a)

site contamination and disposal of contaminated matter in accordance with recommendations of an accredited environmental auditor;

(b)

containment of dust, dirt and mud within the site and method and frequency of clean up procedures in the event of build up of matter outside of the site;

(c)

on site facilities for vehicle washing;

(d)

parking facilities for construction workers;

(e)

delivery and unloading points and expected frequency;

(f)

a liaison officer for contact by residents and the Responsible Authority in the event of relevant queries or problems experienced;

(g)

an outline of requests to occupy public footpaths or roads, or anticipated disruptions to local services;

(h)

a waste minimisation and recycling strategy; and

(i)

any requirements outlined within this permit as required by the relevant referral authorities.

17 Except with the written consent of the Responsible Authority, demolition or 7 construction works must only be carried out between: 7.00am - 6.00pm, Monday-Friday (including public holidays) and 9.00am - 3.00pm, Saturday. No work is to be carried out on Sundays. All site operations must comply with the relevant Environment Protection Authority Guidelines on Construction and Demolition Noise.

18 This permit will expire if the use or development is not commenced within two years from the date of this permit. All development must be completed within four years from the date of commencement. The Responsible Authority may approve extensions to these time limits it requests are made within three months of expiry.

The responsible authority is directed to issue a permit in accordance with this order.

Mr Peter Strantzen, Ms Naomi Kumar and Mr Michael Kamien-Sarbinowski appeared on their own behalf and on behalf of the co-signatories on their respective statements of grounds.

1 This matter relates to an application under s 79 of the Planning and Environment Act 1987 by Delphic Wholesalers Pty Ltd against the Yarra City Council's failure to grant a permit within the prescribed time with respect to permit application PL04/631. The permit application sought permission to partially demolish an existing warehouse building and to construct new additions to facilitate its use for 19 apartment style dwellings 350-352 Wellington Street, Collingwood.

2 The permit application was lodged with the council on 30 April 2004. The council required notice of the permit application to be given and, in response, received 24 objections. Essentially the concerns raised in the objections were about building height; visual bulk; neighbourhood character; parking, traffic and vehicle access to the site as well as various amenity issues including loss of privacy and noise.

3 On the 4 March 2005, the council's delegate decided to refuse the permit application on the following grounds:

1. The proposed development is not representative of site responsive design and will result in unacceptable neighbourhood character outcomes particularly the second and third levels which results in the development having excessive height when compared to the surrounding low scale building stock.

2. The layout of the development would result in poor amenity outcome to future residents of dwellings particularly in terms of the usability of habitable rooms and access to daylight and ventilation.

3. The proposed development incorporates limited open space provision to several dwellings.

4 Contextually the subject site lies within one of Melbourne's inner suburbs, just a few kilometres north of the CAD. Specifically, the site is located on the northeast corner of Wellington Street and Hotham Street. The site is rectangular in shape with frontages of 29.16 metres and 30.48 metres to Wellington Street and Hotham Street respectively. The site, which is relatively flat, has an overall area of about 890 square metres.

5 The site is occupied by a 2 storey brick 1930's industrial building that was last used for the purpose of a clothing warehouse. The building covers the vast majority of the site, being constructed to all boundaries except for a small splay at its southwest corner opposite the intersection. The overall height of the building is about 11.5 metres to the ridgeline of its pitched roof; however, the boundary walls are about 9 metres high. No car parking has been provided on this site.

6 The site has a direct abuttal with 1 property, located directly north. This property is occupied by the southernmost of a group of 4 double storey Victorian terraces. This southernmost terrace is built to the common boundary with the site; abutting part of the northern wall of the warehouse building. The eastern half of the warehouse building's northern wall is exposed directly to the backyard area appurtenant to Victorian terrace. Notably, the exposed wall is covered with "Boston Ivy" which also extends around to cover part of the building's east wall.

7 A 3 metre wide laneway separates the site from the residential property to the east at 38 Hotham Street. Mr and Mrs Strantzen are the owners and occupiers of this property. It is occupied by a single storey Victorian cottage that is constructed to the building line with the laneway. This dwelling has a small alcove with windows on its west side adjacent to the laneway. The dwelling is the westernmost of a group of single storey cottages fronting the north side of Hotham Street between the site and Charlotte Street.

8 A double storey block of 1970's style walk up flats and single storey dwellings exist opposite the site on the south side of Hotham Street. Properties fronting the opposite side of Wellington Street are occupied by a mix of buildings including a 2 storey hotel, dwellings within a relatively new 3 storey building and a single storey shop.

9 Wellington Street and Hotham Street are both local roads. The road pavement in Wellington Street is divided by a central planted median strip that allows for one lane of traffic and kerbside parking on each side.

10 At the commencement of the hearing Mr Naughton sought leave amend the permit application by substituting amended plans.[1] There being no objection from the other parties, I allowed the substitution of the amended plans pursuant to Clause 64 in Schedule 1of the Victorian Civil and Administrative Tribunal Act 1998. The proposal that I have considered is based on these plans.

11 The proposal involves partial demolition of the existing building, retaining most of the external walls as a "shell"; the construction of additions to create a 4 storey building overall that would accommodate 19 apartments and on site car parking. The overall height of the building would be about 13.8 metres.

12 The ground, first and part of the second floor levels would be housed within the existing building shell, whilst the balance of the second floor level and the uppermost level would extend above this.

13 At ground level it is proposed to provide 5 one bedroom apartments[2], the lowest level of units 6 and 7, 19 car parking spaces, storage and bicycle parking facilities. It is of relevance to the consideration of the issues in dispute in this matter to note that in the case of 4 of the single bedroom apartments[3], the bedrooms do not have windows. It is proposed that the bedroom be separated from the open plan living area by way of a wall or partition that does not go up to the ceiling so as to gain borrowed light from the living area.[4] Open space would be in the form of covered porches at the front of each apartment.

14 The car parking spaces are to be accessed via 2 roller doors; one off Wellington Street, the other off the laneway. The first floor level of the building accommodates the lowest level of 12 apartments[5] as well as the middle level of units 6 and 7. The apartments at this level are separated into 2 groups by a central courtyard that provides for the entry into all units at this level. Access to this central area is via stairs off Wellington Street.

15 The second floor level of the building provides for kitchen and main living areas to Units 6-19. Notably the apartments are setback off the northern and southern boundaries to provide for balcony spaces.

16 The third floor level is the smallest. It is located toward the southwest corner of the building providing for a "sunroom" and second balcony space for units 9-12. The balconies would be setback 2.75 metres from Hotham Street with the wall of the sunroom about 3 metres further back.

17 The proposed additions are contemporary in design. In particular I note that the northwest corner of the building is to be demolished to provide for a contemporary façade fronting Wellington Street adjacent to the double storey terraces to the north.

18 Pursuant to the Yarra Planning Scheme, the land is located in a Residential 1 Zone, the provisions for which are found in Clause 32.01 of the Planning Scheme ordinance. "Dwelling" is an as of right use within the zone, although a permit is required pursuant to Clause 32.01-4 for the construction of more than one dwelling on a lot.

19 The site is also affected by two overlay controls.

20 The site is located within Heritage Overlay - HO321 [Gold Street Precinct]. The provisions for this overlay are found at Clause 43.01. Under this clause, a permit is required to demolish or remove a building and to construct new buildings and works. The relevant decision guidelines with respect to this overlay are at Clause 43.01-5. These require consideration to be given to, amongst other things, the provisions of the State Planning Policy Framework (SPPF) and Local Planning Policy Framework (LPPF); the significance of the heritage place and whether the proposal would adversely affect its significance; particularly by way of the demolition of existing building fabric as well as the location, bulk, form and appearance of the proposed building.

21 The site is also affected by the Design and Development Overlay - Schedule 3 "Secondary Boulevards" [DDO3]. The provisions for this overlay are at Clause 43.02. A permit is required under the DDO3 provisions for the construction of buildings and works.

22 Consideration must also be given to the matters set out in the decision guidelines at Clause 65. In addition to the planning scheme's policy frameworks, relevant decision guidelines include the purpose of the zone, orderly planning and the impact on amenity.

23 The SPPF sets out generally policies for planning in Victoria, with those relating to Settlement (Clause 14), Heritage (Clause 15.11), Housing (Clause 16) and Design and Built Form (Clause 19.03) particularly relevant to the consideration of this proposal. Under the policy at clause 19.03, consideration needs to be given to the "Guidelines for Higher Density Residential Development". Although not directly applicable to 4 storey buildings, in light of changes to the building height that I now propose, the provisions of Rescode [Clause 55] have also been considered.

24 The general thrust of the policies for Settlement and Housing is to encourage the consolidation of existing urban areas, to make better and more efficient use of infrastructure and to provide for a wider variety of housing, including well designed medium density housing which respects neighbourhood character.

25 The policy for Heritage states that "Planning and responsible authority should identify, conserve and protect places of natural or cultural value from inappropriate development" whilst the policy for Design and Built Form encourages development that achieves architectural and urban design outcomes that make a positive contribution to neighbourhood character and enhance the public realm. On heritage, Clause 19.03 states "New development should respect, but not simply copy, historic precedents and create a worthy legacy for future generations". This clause also makes reference to the "Design Guidelines for Higher Density Housing".

26 In relation to the LPPF I note that the most relevant policies are those set out in the following clauses of the MSS:

• Clause 21.04 Vision for the City of Yarra

• Clause 21.05-1 Element 1 - Urban Design Framework

• Clause 21.05-2 Element 2 - Residential Land Use

• Clause 21.05-7 Element 7 - Heritage

27 The Development Guidelines for Heritage Places policy at clause 22.02 is also relevant.

28 It is also relevant to consider the proposal against Melbourne 2030 which, as the tribunal found in O'Connell Street Developments Pty Ltd v Yarra City Council and Ors [2003] VCAT 448 is "a final Strategy adopted by the Minister which the tribunal may consider and if the circumstances so require, must consider under Section 60(1)(b)(ii)".

29 At the hearing, the persons appearing tabled and spoke to written submissions to which they added oral argument. In addition I was presented with an array of other material including various plans, maps and diagrams; photographs of the subject site and surrounding area as well as a photomontage depicting the proposed development.

30 Mr Naughton called expert evidence from Ms V Jackson, a town planning consultant; Mr C Czarny, an urban design consultant; Mr N Sideridis, traffic engineer, and Mr C Goss, consultant in imaging and visualization. All witnesses were made available to be cross-examined.

31 After the hearing I inspected the subject site and surrounding area, including nearby Mater Street. I also viewed the site from within the dwelling and backyard of the adjacent property at 38 Hotham Street.

32 After having reviewed the submissions and evidence presented by the parties, the matters to be considered under the planning scheme and legislation and the details of the proposal, it seems to me that the key issues in this matter are:

(a)

Are the height, form and design of the proposed development acceptable having regard to neighbourhood character and heritage considerations?

(b)

Would the proposed development result in unreasonable impacts on the amenity adjacent properties and the surrounding area?

(c)

Have the proposed apartments been designed to provide future residents with satisfactory?

33 Before turning to these issues, it is appropriate that I make some observations about other matters that are relevant to the consideration of this proposal as a whole.

34 First, it is relevant to note the council's submissions that "the subject site is highly suitable for some form of residential redevelopment and use"[6] . I agree that this is so. In inner suburban terms, the site is relatively large. It has the benefit of 2 street frontages with a third abuttal to a laneway. It is located within an established residential area where all infrastructure services and a range of facilities are readily accessible. All these factors favour its conversion and redevelopment for residential use.

35 Second, from a policy perspective, there was no substantive argument presented on behalf of the council or the objectors against Ms Jackson's view that the redevelopment of this site for some form of appropriately designed medium density housing accords with the general thrust of the planning scheme's housing and urban consolidation policies, as set out at clauses 14.01 and 14.02 of the planning scheme's State Planning Policy Framework or direction 1 of Melbourne 2030 that encourages, amongst other things, the location of a substantial proportion of new housing either within or around activity centres as well as other redevelopment sites that offer good access to services and transport.

36 In relation to the Local Planning Policy Framework, I note that the MSS objectives for residential land use and development [7] encourage development that would assist in reversing Yarra's population decline; the retention of diverse housing stock; with a greater range in type and affordability of new housing. The redevelopment of this site for residential use would achieve an outcome consistent with these objectives. I note that under the framework plan the site is located within an "Established Residential Area" and not one of the "Mixed Use" and "Residential Opportunity Areas" where higher density development is encouraged. This does not, however, mean that there can be no new residential redevelopment or medium density housing within this type of area. Rather it is an area where new infill development needs to be responsive to neighbourhood character. Ultimately whether this is so or not will depend on the details of a specific proposal.

37 In principle, I accept that the conversion of a redundant industrial site like this to residential use enjoys the support of the scheme's policies and, importantly, the purpose of the Residential 1 zone.

38 Third, although the site is located within an area covered by the Heritage Overlay, the council concedes that the existing warehouse building is not significant to this precinct. The Statement of Significance for the Gold Street Precinct [HO321] states that:

The Gold Street Heritage Overlay Precinct is of local significance within the City of Yarra. It remains a relatively intact area of mid to late 19th century working class housing interspersed with a small number of larger vials and 19th century industrial buildings. The precinct contains the largest group of nineteenth century residential buildings remaining in Collingwood which have the ability to demonstrate what was the more typical nature of the broader suburb. Also within the precinct are a number of buildings which are of individual significance within the broader context.

39 According to the council, the existing building dates from the 1930's. It does not form part of the building stock that is referred to in the above extract. Further, it is not graded as being significant to the precinct. As such, on heritage grounds, this building is not one that would be subject to the same constraints, in terms of both demolition and modifications, as a building that forms part of the fabric that gives this precinct its significance. The primary heritage issue in this case is not so much related to the impact that the proposed works would have on the building itself; rather, it is about the impact on the significance of the neighbouring properties and wider area. I will discuss this later.

40 Fourth, I note that a number of the resident objectors raised concerns about the density of the proposed development being too high. I assume that this means that there are too many dwellings proposed. I and other divisions of the tribunal have expressed the view in the past that dwelling density per se is not a particularly helpful measure of whether a particular development proposal is acceptable or not. Although documents like the "Good Design Guide for Medium Density Housing" included "techniques" or benchmarks for dwelling density, such benchmarks have not been included in either ResCode or the Guidelines for Higher Density Residential Development. The consideration of proposals like this requires more than simple number crunching to arrive at the answer as to what is an acceptable density figure.

41 Ultimately it will be necessary to take into account a range of factors in determining whether the overall level of development and number of dwellings proposed is acceptable. These include the outcome envisaged by planning policy having regard to matters such as whether the height and form of the development, amenity impacts on neighbours [eg; parking, traffic, shadows, overlooking etc] and the internal amenity for future residents are acceptable in the circumstances.

42 It is in this light that I now turn to the consideration of the key issues in this matter.

Are the height, form and design of the proposed development acceptable having regard to neighbourhood character and heritage considerations?

43 A key matter of concern to the council and the objectors relates to the height of the proposed building; particularly, the proposed third level.

44 Although the council acknowledges that the existing building is not significant from a heritage viewpoint. Despite this, Ms Dowsey did not argue that this is a case where the existing building should be demolished. Rather, Ms Dowsey argued that the height and setbacks provided for the new upper levels do not respond to those of the adjacent buildings that are of heritage significance as well as the "prevailing" height of development generally found in the area. Ms Dowsey argued that buildings in the area generally do not exceed 3 storeys and the introduction of a 4th floor, albeit modest in size, would be inappropriate from both a heritage and neighbourhood character viewpoints.

45 In support of the proposition that a building on this site should not extend beyond the prevailing height of other buildings in the area, Ms Dowsey relied on the comments of another division of the tribunal in Panorama Craft Pty Ltd V Yarra CC [2005] VCAT 521, a case that involved the development of a new 4 storey building located in nearby Mater Street. With respect height, the tribunal remarked:

The context of the subject site comprises predominantly single and two storey buildings. While there are some higher buildings in the broader area, including Buildings 17 and 18, they do not define the prevailing character. In the immediate area there not stark shifts in building scale.

46 The tribunal went on to find the proposed building height unacceptable having regard to the context of that site and offered the applicant the opportunity amend the proposal by deleting the uppermost level and stepping back the third level from the line of the 2 levels below.

47 I also note that the council's urban design and heritage consultants expressed concerns about the proposal. In particular, the urban design consultant remarked:

The third level extension should be set back behind the existing parapet line of the western and eastern façade.

The fourth level sunrooms appear bulky from some viewing points. The balcony screening fences contribute to this bulky appearance. Redesigning these to be lighter in appearance and reducing the number of pop ups may be acceptable.

48 I was presented with 2 memos from the council's heritage adviser, the first of which did not express any concern about the height or form of the building.[8] Concerns were expressed about external colours, but no more than this. The second memo[9], prepared by the same consultant a few days before the hearing goes on to express different views. In particular, the heritage adviser states that part of the west façade of the second floor should be setback 4.5 metres and 4 metres on the east side. It seems that this change of view came about because the heritage consultant took into account the "aims" of the heritage overlay at clause 43. I must say that I find the reason given for the change in view somewhat puzzling as I would have thought that the aims of the heritage overlay would be taken into account at all times when advice of this type is given. I also note that the change of heart came about just a few days before the hearing. I accept that professional views can change; however, I am somewhat surprised that a well known and experienced heritage consultant would give advice without having proper regard to the planning scheme's heritage controls. In the circumstances, I am inclined to treat the advice given in both memos with a great deal of caution.

49 In general terms, the objectors supported the council's position that the height of the building would be unacceptable.

50 In support of the 4 storey height of the building, Mr Czarny noted that the pattern of development in this part of Collingwood varies with an array of different building types and scales. In particular, Mr Czarny noted the co-existence and stark juxta positioning of residential cottages with larger industrial forms. Mr Czarny expressed the view that a 4 storey form would be acceptable in this context given that it is proposed to retain the double storey walls of the existing industrial building with the new upper levels designed to read as recessive elements projecting above. He pointed to various other local examples where industrial buildings have been kept and extended as proposed in this case.

51 Mr Czarny noted that the site abuts Wellington Street; one of Yarra's designated secondary boulevards under DDO3. Mr Czarny expressed the view that the design objectives provide support for a modest increase in height on secondary boulevards. Further, he noted that the greatest degree of change has been confined to the southern end of the site, so that the built form rises as it approaches the corner.

52 In relation to tribunal's observations in Panorama, Mr Czarny expressed the view that the circumstances in this case are somewhat different. In particular, this proposal involves the retention of the existing building; the site is located on a secondary boulevard and covered by DDO3; buildings around the site tend to be taller and the viewing context is more constrained.

53 The above only represents a snapshot of the various views presented to me on the issue of the building form; however it is sufficient to explain the positions adopted by the parties.

54 On reviewing the proposal, the context of the site and the various controls that apply, I am generally supportive of most of the proposal; however, I do have concerns about the uppermost level of the building.

55 I have not been persuaded that the uppermost or "pop up" level of the building is acceptable. I accept Mr Czarny's view that this site has a different context to Mater Street. However, whilst there can be shifts in building height from 1 to 3 storeys, nonetheless, there were no obvious exceptions to this building height range within the area.

56 Further, whilst the first DDO3 design objective seeks to "re-inforce the local strategic importance of secondary boulevards through the design, height and form of buildings", this objective must be considered together with the other objectives within the DDO3; other controls that apply to this location, particularly the heritage overlay; and the general strategies relating to development in "Established Residential Areas".

57 The DDO3 objective does not specifically call for increased height on secondary boulevards. I accept that the development of buildings with a greater height and scale can work towards emphasizing the importance of a particular road or area; however, it is not the only way that this can be achieved.

58 In this case I take into account that the site is located within the heritage overlay. Whilst the existing building is not of heritage significance, nonetheless other surrounding buildings are of importance. The height of development in this area is remarkably consistent and consistent with what one would reasonably expect in an inner suburban area where dwellings and industrial buildings are juxta posed.

59 Development on this site must fit in with what surrounds it to achieve the outcome of being respectful of neighbourhood character. In my view, development that has occurred in the area has already allowed for an increase in scale. The 3 storey medium density housing development to the north of the hotel and a nearby converted warehouse building to the south of the site further along Wellington Street are examples of modest increases in height and scale that have occurred. In my view, the addition of a fourth level on this building would mark a further shift in height and scale.

60 A further point to be made is that this site is not located within an area where substantial change is envisaged. The residential strategies do not earmark this area as one where great change is to occur; rather, more intense development is directed elsewhere.

61 In my view, the uppermost level of the building would be intrusive and represents an unacceptable shift in scale. It is true that this level of the building is relatively modest in size and setback sufficient distance so as not to be overly apparent when viewed in close proximity. However, this fourth level would result in a far more noticeable shift in scale when viewed at a distance; for example when travelling along Wellington Street.

62 I do not have the same view about the second floor level. This level would also project above the walls of the building; however, the overall height is more in line with that of buildings in the surrounding area. Further, from distant views, the roof of the existing building can be seen. I would think that the proposed second floor level would be seen in place of the roof.

63 In relation to concerns about the lack of setback to Wellington Street, I consider that what is proposed is reasonable given that the building is not of significance to the precinct from a heritage viewpoint. If the building were of significance, then I would have a different view.

64 In relation to Hotham Street, the second floor level has been setback away from the line of the lower level walls. This transition is acceptable.

65 The transition between the building and the terraces to the north was also raised as an issue. On this point, I accept Mr Czany's view that the use of contemporary design toward the northwest corner in particular is appropriate as this clearly defines the change between the heritage fabric to the north [ie. the terraces] and newer development on this site. Concerns about the "brightness" of colours can be dealt with by permit condition and negotiation with the council.

66 I find that the overall height of the building to be excessive as proposed. I agree with the council that the uppermost "pop up" level should be deleted. With this level of the building removed, I consider that the building would provide a better fit within the streetscape and broader neighbourhood context. The issue of the external colours can be dealt with by way of conditions requiring further negotiation with the council.

Would the proposed development result in unreasonable impacts on the amenity adjacent properties and the surrounding area?

67 The respondent objectors raised several concerns about the impact on the amenity. I will deal with these issues in turn.

68 In the previous section, I discussed the issue of building height insofar as it relates to the public realm. The issue of building height also relevant to the consideration of whether the overall visual bulk presented to neighbouring properties would be reasonable. I consider that the impact on the backyard of Mr and Mrs Strantzen's property to be the key matter requiring consideration. Other properties are set further away and do not have the same intimate relationship.

69 It is fair to say that the existing factory wall is already visible and apparent from the Mr and Mrs Strantzen's backyard. However, the separation created by the 3 metre laneway, the greening effect of the existing Boston Ivy and vegetation on Mr and Mrs Strantzen's property mitigate its impacts.

70 The introduction of the second level as proposed would, in my view, impact unreasonably on the amenity of this small backyard by way of the extent of visual bulk presented to it. In my view, the east wall of Unit 19 adjacent to the backyard should be setback 2 metres from the east boundary to provide a stepped setback. With this setback, it would be possible to see the top part of the new second floor level; but this would be as a minor recessive element. The extra setback to Unit 19 can be implemented by permit condition.

71 I appreciate that this would compromise the internal living space of this unit. I would consider it inappropriate to simply keep the existing design and set the wall back further. It may be necessary to redesign the unit itself, to incorporate it with Unit 18 or to redesign a number of units to enable a better fit. Ultimately, this is a matter that I consider can be dealt with by permit conditions.

72 Concerns were raised by objectors about the additional traffic associated with the proposed 19 dwellings. Specific concerns related to the ability for cars leaving the car park to exit via Wellington Street during the morning peak; pedestrian safety if cars have to prop across the footpath and the practicality of using the laneway as a secondary access given its adjacency to the dwelling to the east and sightline difficulties where the laneway intersects with Hotham Street.

73 Mr Sideridis' evidence was that the proposed dwellings would generate about 150 movements per day. This figure is based on a rate of 8 movements per dwelling each day. Further, Mr Sideridis expressed the view that about 10 per cent of these movements [say 15] would occur within both the am and pm peak hour. Mr Sideridis acknowledged that during the morning peak, traffic queues in Wellington Street extend from Johnston Street to beyond the site; however, in overall terms the additional traffic would only have a marginal impact during this period.

74 I note that the council's traffic engineer states that Mr Sideridis has adopted a conservative rate for traffic generation. I tend to agree with this view given the relatively small size of most of the dwellings proposed, the site's inner urban context and the availability of public transport; both buses and trams, within a range of 250 to 400 metres from the site.

75 Wellington Street carries about 900 vehicles during the morning and evening peak hour periods. I note that the council's traffic engineer agrees that vehicle movements into and out of the site should not adversely affect the traffic operation in Wellington Street. Again I agree with this. The overall volume of traffic that would be introduced by the proposed development is modest.

76 Whilst there could be times when cars may need to prop over the footpath for a short period during the morning peak, I would not expect this to occur often or for long periods. Traffic would be moving slowly and, in my view, would not pose an unusual level of risk compared to any other site where access from Wellington Street. Providing the access onto Hotham Street, as suggested by Ms Kumar, would be an acceptable alternative; however, the evidence does not support the view that access onto Wellington Street is unacceptable.

77 Mr Strantzen expressed concern about the use of the laneway access point on the east side of the building as an alternative to Wellington Street. In particular Mr Strantzen expressed concern about the possible impact on his dwelling given that it is constructed to east side of the laneway; noise associated with the roller door going up and down during the late evening/night and early morning periods as well as the constrained sightlines at the laneways southern end at Hotham Street.

78 Mr Naughton submitted that the laneway access provides a useful alternative access, particularly at peak times. Mr Naughton suggested that a condition could be imposed on the permit limiting the use of the secondary vehicle access to the laneway to either daytime hours or in case of emergency. I also understand that on reviewing the circumstances of this case, the council's traffic engineer has acknowledged the benefit associated with a second access off the laneway during times when traffic is queuing in front of the site's Wellington Street frontage[10] and that it is acceptable.

79 Whilst I accept that the second access point would be useful to the residents of the building, this must be balanced against the amenity impacts on the neighbouring property to the east. I have considered this issue and have essentially formed the view that it would be undesirable to have access onto the laneway in circumstances where other acceptable options exist.

80 The proposed access to the laneway is in close proximity to Mr and Mrs Strantzen's dwelling and I agree that the opening and closing of the roller door and noise associated with vehicle movements could cause disturbance. The relationship between the dwelling and the vehicle access point is an intimate one. I am also concerned about the sightlines for vehicles leaving the laneway given the constraints associated with the edge of the building and the vegetation on Mr and Mrs Strantzen's property. I accept that a mirror could be installed to help sightlines. However, in circumstances where alternative access is available directly onto adjoining streets, I do not consider it appropriate to allow the secondary access off the laneway. The laneway access is not essential for this development and can be deleted by permit condition.

81 The objectors expressed concerns about parking difficulties. Essentially, the view put forward was that there are not enough car parking spaces for both residents and visitors for the number of dwellings proposed.

82 Under clause 52.06, 38 car parking spaces are required for 19 dwellings at the rate of 2 car parking spaces for each dwelling. Under clause 52.06-1, a permit may be granted to reduce this requirement.

83 Mr Sideridis correctly points out that if the building height was 3 storeys, then the provisions of clause 55.03-11 [ResCode] would apply. Under Standard B16 of this clause, 25 car spaces are required. This includes the visitor requirement. Only 19 spaces are to be provided on the site. In considering whether the requirements of the standard can be varied, the decision guidelines allow consideration of parking availability in the surrounding area.

84 Whilst the objectors expressed concerns about car parking, I note that the council's position is that the car parking provided is satisfactory. Essentially, it seems that the council has adopted this view having regard to the availability of sufficient on-street spaces to accommodate visitor demand; the site's proximity to public transport and that all dwellings would be provided with 1 car space. Further, the council has also taken into account the on-street car parking demand generated by the previous use given that no on site parking was provided on the site.

85 I agree that the car parking provided is satisfactory, whether it be for a 3 or 4 storey building. The requirement of 2 spaces per dwelling as set out in clause 52.06 applies throughout the metropolitan area, both inner and outer areas. The provisions of this clause make it clear that there may be circumstances where a reduction in the rate of parking is justified. In my view, the provision of 1 space per dwelling as part of this development is sufficient to meet resident demand given the size of the dwellings and the availability of public transport. Further, on reviewing the car parking results set out in Mr Sideridis' report, I accept that the visitor demand can be accommodated in the surrounding street network.

86 Mr Strantzen and Mr Kamien-Sarbinowski expressed concerns about the potential for overlooking onto their respective properties to the east and north of the site.

87 The potential for overlooking onto Mr and Mrs Strantzen's property exists from first floor east facing windows. These windows would be appurtenant to a bedroom, passageway and stairwell to unit 13 as well as a window adjacent to the entry to unit 7. There are also windows at second floor level facing due east to both these units; however, both of these have sill heights of 1.7 metres above floor level.

88 Ms Jackson expressed the view that overlooking to the east from the first floor windows should not present a problem as the views would be over the dwelling and an outbuilding on Mr and Mrs Strantzen's property.

89 Attached to Mr Strantzen's submission were a series of photographs, one of which shows the relationship between the building's east facing windows and the backyard of 38 Hotham Street. There is a direct line of sight available. I observed the same line of sight during my inspection. In my view, it would be reasonable to require the first floor east facing windows to be either screened or glazed with obscure glass to a height of 1.7 metres above floor level to prevent direct easterly views into the backyard and windows of the property at 38 Hotham Street.

90 In relation to the potential for views to the north, I note that screens to a height of 1.7 metres above floor level are to be provided to north facing windows at first floor level and the balconies at second floor level. These measures would prevent direct views into neighbouring properties. There would be no unreasonable potential for overlooking to the north.

91 I note the concerns raised by Mr Strantzen about extra overshadowing of his property. Based on the shadow diagrams presented, I agree with Ms Jackson that the additional amount is negligible. The setting back of the Unit 19 by 2 metres would also reduce the impact.

92 Mr Kamien-Sarbinowski expressed concern about noise generated by the proposed use of the site. He submitted that appropriate sound-proofing barriers should be put in place. I appreciate Mr Kamien-Sarbinowski's concern about additional noise; however, any noise would be that associated with residential use. On this point, I cite and express my agreement with the views of another division of the tribunal in Potts v Glen Eira CC [2003] VCAT 1129 (1 September 2003) when it said:

The potential for the generation of noise is not a reason to refuse this proposal. It is possible to have neighbours who indulge in frequent loud parties, but that can occur in relation to detached houses, just as well as in relation to medium density townhouses. The prospect of finding oneself in close proximity to neighbours who create noise nuisances of that sort is one of the risks one takes in living in an urban area. Of course, if the noise generation amounts to a nuisance there are other laws appropriate to deal with that sort of problem.........Children playing, people talking, motor mowers operating and the like are all part of the ordinary incidents of life in an urban situation. They are part of the give and take of urban life that neighbours are obliged to accept (unless the problems get to the stage of being nuisances against which the law provides protection).

93 The conversion of industrial buildings for residential use within inner areas like this is not a ground breaking concept. Many examples exist. Nothing was presented to show that the noise associated with residential use would be unreasonable having regard to the site's inner suburban context.

Have the proposed apartments been designed to provide future residents with satisfactory amenity?

94 The council expressed concerns with respect to the internal amenity matters, particularly the design and layout of the 5 single bedroom units[11] at ground floor level fronting Hotham Street.

95 Particular concerns were expressed in relation to these units relying on south facing windows for daylight; the need for some bedrooms to rely on "borrowed" light from the main living areas; the functionality of the internal layout given the positioning of the laundry as well as the position and amount of open space provided adjacent to their Hotham Street frontage.

96 In relation to the southern orientation of these units and the availability of daylight, I note the following comments of another division of the tribunal in Stanley Street Pty Ltd v Melbourne CC [2004] VCAT 928:

In relation to sunlight, it is common place for there to be south facing apartments with very limited access to sunlight. In my view the existence of south facing apartments is not fundamentally unacceptable, the more important question is whether or not the design response which lead to the creation of south facing apartments is reasonable having regard to the orientation and planning context of the subject land. In my view, the design response in this case, is acceptable.

97 Whilst I accept that these ground floor units will have limited access to direct sunlight; the overall proportion of units that fall into this category is low.

98 The more significant issue relates to whether the south facing units would have a satisfactory level of daylight. Concerns in this regard relate to the depth of the apartments, the location of the kitchen area away from the windows providing daylight and the need for bedrooms to rely on borrowed light. Again I refer to the tribunal's comments in the Stanley Street case, particularly:

24 The issue of daylight in this case, as in many other cases, relates to daylighting to kitchens set well back from the main living room windows, and bedrooms. I have had cause to consider the amenity of dwellings which have resulted from the conversion of 19th century and early 20th century commercial buildings with the CAD, and in so called warehouse apartments, in Collingwood, in this case resulting from the conversion of early industrial buildings. It is my observation that dwellings with bedrooms which must rely solely on borrowed light, can nevertheless provide a high standard of amenity.

99 The units in question have their main source of daylight from the south; however, that is not to say that these apartments will not receive adequate daylight. Ms Goss' provided a pictorial "ambient daylight analysis" that sought to illustrate the variation in daylight that would be experienced in the units in question at various times during the day. Bearing in mind that the windows at the southern end of the apartments are reasonably large and the relatively small size of the apartments themselves, I am of the view that daylight to the living areas would be satisfactory.

100 This takes me to the issue of whether it is reasonable for the bedrooms to the units to rely on borrowed light. On this point I note the tribunal's view in the Stanley Street case that dwellings with bedrooms which must rely on borrowed light can provide a high standard of amenity.

101 In contrast I note the concerns expressed by another division of the tribunal in Station Street Constructions Pty Ltd v Stonnington CC [2004] VCAT 1694 when it said:

We have considered the various Tribunal decisions referred to us but do not draw any firm conclusions or 'positions' from them in relation to borrowed light. It appears to us that while borrowed light has been accepted by the Tribunal on some occasions, it comes down (as always) to the specific characteristics of the design being considered by the Tribunal at the time, and that in a number of instances the proportion of rooms borrowing light can have a bearing on whether such an outcome is reasonable. In this case only about one quarter of the bedrooms have direct access to daylight. We find this an unacceptably high proportion.

102 In considering whether or not some apartments with bedrooms relaying on borrowed light should be allowed, I think that it is reasonable to take into account that the proposal involves the conversion of an existing industrial building; the size and type of apartment in question as well as the overall number of apartments with such a condition.

103 This proposal involves the re-use and refurbishment of an existing building. Even though the building does not appear to have any significant heritage value, nonetheless it was not put to me that the building is so lacking in merit that it should be demolished. It seems to me that the re-use of an existing building that has formed part of the urban fabric is not undesirable. As such, I think that when a building like this is being re-used, it is not unreasonable to allow some flexibility. This can be contrasted with the circumstances before the tribunal in the Station Street case which involved the construction of a new building. In this regard I note that whilst the Design Guidelines for Higher Density Residential Development encourage direct natural light and ventilation to all habitable rooms, nonetheless, they also acknowledge that this may not always be possible when re-using an existing building. That is the circumstance in this case. Further, the light is being "borrowed" from the principal living area as suggested by the guidelines.

104 The apartments in question are relatively small, generally around 43 square metres. They are not dissimilar to "bedsit" style apartments in terms of their overall size. They are suited to very small households. One possibility would be to require the deletion of the partition that separates the bedroom area from the main living area to create a more typical "bedsit". This would allow for better daylight access to the bedroom area; however, what end? I could envisage the occupier of such a "bedsit" putting some form of non structural partition in place to provide separation between the bedroom space and the main living area.

105 Further, I note that the tribunal in the Station Street case expressed concern about the high number of apartments that relied on rooms with borrowed light with only about one quarter receiving of the bedrooms having direct access to daylight. The situation here is the opposite with only 4 of the 33 bedrooms proposed relying on borrowed light. As noted in the Station Street decision, the consideration of issues like this comes down to the specific circumstances of each case. I am satisfied that, in overall terms, there is not an excessive or unreasonable reliance on borrowed light.

106 Concerns were also expressed about the size and location of the open space for the ground floor units. Again I accept that they will receive very limited sunlight given their position. They are also small spaces. However, I do not agree with Ms Dowsey's assertion that they are unusable. They are small spaces that are elevated off the footpath level and screened. This will create some separation and privacy with the surrounding public realm. Further, these spaces are well connected to the units themselves with doors opening out onto them. I consider that the amenity they will provide is acceptable and not all that dissimilar to that provided by apartments with balconies facing streets.

107 Concerns about the position of the laundry were overstated. The layout is acceptable for small apartments that are likely to be occupied by 1, maybe 2, person households.

108 Mr Kamien-Sarbinowski raised other matters including the potential impact on the viability of the adjacent hotel if new residents complain about its impacts on amenity and safety issues associated with asbestos removal.

109 In relation to the impact of the hotel, that use is already located in a residential environment and with many dwellings close by. The hotel operation must take this into account. If it does not operate in a satisfactory way, then the potential for complaints already exists. I do not see why the residents of the proposed development would be more likely to complain than any others.

110 In relation to asbestos removal, this must be undertaken in accordance with the relevant regulations that control this particular activity. It is not a planning matter.

111 My conclusion is that a permit should be granted for the proposal; however, subject to modifications. I will set aside the council's decision.

112 The conversion of the subject site to residential use is encouraged b policy and the purpose of the zone. However, this site is not located in an area where substantial increases in the intensity of the built form are envisaged having regard to the thrust of the scheme's strategies. The appropriateness of the design response needs to take this into account in terms of neighbourhood character and heritage considerations. When these factors are taken into account, I consider that the 4 storey height is unacceptable.

113 The 2 main changes are the deletion of the uppermost level and Unit 19 being setback 2 metres from the east boundary at the uppermost level. In addition, I consider it appropriate to require screening to the first floor east facing windows to prevent unreasonable potential for overlooking. The deletion of the vehicle access to the laneway will also be required. These changes can be implemented by permit conditions.

114 I have settled the form of the conditions taking into account the views expressed by the parties. As discussed I have added conditions relating to the retention of the Boston Ivy and the need for a sectional plan to show adequacy of the clearance between some car spaces and stairs within the ground level.

[4] The arrangement is shown on the section plan marked as Exhibit B38

[6] Refer section 7.1.1 of the council's submission

[8] Refer Exhibit A27 - Memo dated 28 August 2004

[9] Refer Exhibit A25 - Memo dated 17 April 2005

[10] Refer Exhibit B36 Email from Council traffic engineer to CS Traffic surveys dated 4 April 2005