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The future of baugruppen is looking bright in Perth

Professor Geoffrey London at the baugruppen information night.

HOUSING: Perth is setting itself up as a testing ground for an internationally successful co-housing model, with two baugruppen projects set to take off in the next few years.

The German baugruppen – translating to “building groups” – describes the process where individuals come together as a group and are assisted to act as developer of their own multi-unit housing project, often with a focus on sustainability, community and affordability. It’s been described as the “next step” to the growing Nightingale Model, which involves architects and impact investors as developers, though with a 15 per cent cap on profit. With baugruppen, as there is no developer, there’s zero per cent profit.

We’ve already written about one potential project being spearheaded by the City of Fremantle, which is keen to part ways with one of its unused sites for a baugruppen development. The recently closed expression of interest phase drew five interested parties, according to a council spokesperson, with the council now in the process of reviewing entries before a preferred party is selected.

Another exciting project is a collaboration between WA state land development agency LandCorp and the University of Western Australia, with a baugruppen development to be hosted at LandCorp’s White Gum Valley precinct, also located in Fremantle.

Judging by the response to an information night held earlier this week, interest is high. Around 100 people of all ages turned up to find out more about the project, and there’s now over 50 completed surveys from interested building group members, affectionately known as “baugruppies”.

But why is a state land agency getting involved in this patch?

According to project leader Geoffrey London, Professor of Architecture at UWA and former Victorian and Western Australian government architect, for LandCorp the success of a baugruppen model offers a strategy to facilitate broader take-up of medium-density infill housing. This is extremely important as Perth is falling behind on its already underwhelming infill target of 47 per cent, even though infill development is estimated to be three times cheaper for the government than greenfield.

London adds there are additional benefits LandCorp recognises, such as reduced costs, increased diversity of housing and the fact baugruppen projects are directed towards owner-occupiers.

“All of these are policy-driven issues,” he told The Fifth Estate.

He says there is an important role for government land agencies to play in helping initiate innovative processes in the broader community that aren’t yet able to be taken on by the private sector.

LandCorp’s participation involves providing a 2000 square metre site within WGV, which is already host to a number of innovative projects.

London says, however, that LandCorp won’t be providing the land for free or selling it at a discount. What LandCorp is doing is deferring settlement on the land until a baugruppen group is formed and construction is ready to commence. This will act to remove risk from the group, as they won’t have to put down equity on the land, he says.

As part of the project, London will be documenting the process, collating learnings and creating development tools to assist future building groups with their own projects. His plan is for the baugruppen project to be used as a demonstration model that can be taken on without government support, becoming a replicable and scalable solution for infill housing in Perth.

But would a private land owner agree to defer settlement as LandCorp is doing? London thinks so. To incentivise the transaction, the building group could even offer a price slightly above market expectations, with the landowner possibly charging rent while the group is formed.

What has been a sticking point with baugruppen, and early iterations of Nightingale, is financing.

Banks are currently seeking high levels of equity, most likely due to the novel nature of the process. At the moment banks in talks with the project are looking at 30 per cent equity, though London says he’d ideally like this figure to come down.

“We’re talking about 100 per cent pre-sales. There’s no great risk for banks.”

Like Nightingale, London says the team will be recommending a covenant be placed on the apartments to discourage speculation, though he also wants to add an element of flexibility, as sometimes owners may need to sell due to unforeseen circumstances like a death or bankruptcy. It will be entirely up to the group, though London has put forward a model whereby after a year, you can take 20 per cent of the sale profit, while 80 per cent goes back to the building group. After two years the profit allowed rises to 40 per cent, and so on in 20 per cent increments until a period of five years when you can retain 100 per cent of sale profits.

The proposal

As is typically the case with baugruppen developments, the project promises to be a display of sustainability, amenity and community.

For London the prospect of increasing the quality of medium-density product is the real attraction, having been “frustrated” with the inability of the regulatory process to stop poor amenity outcomes in medium and high-density apartments in Victoria, which he says has left a “dreadful legacy”.

Artist's impression of what the WGV baugruppen development could look like.

Artist’s impression of what the WGV baugruppen development could look like.

There will be around 20 apartments on the 2000 sq m site, though the configuration and total number of apartments will again be determined by building group members. There will be a team of consultants to help the building group settle on the exact details of the development, including architect Michael Patroni from spaceagency, development manager Phillip Gnech from Builtform and sustainability expert Josh Byrne from Josh Byrne and Associates.

An architectural template presented at the information evening by Patroni showed a range of innovative techniques that could be employed on the site. One idea is to use cross-laminated timber cassette construction, which as well as cutting costs and speeding up construction has sustainability benefits.

In order to further cut costs, baugruppen projects tend to include shared facilities. London says that while the German model of baugruppen originally started out as a pragmatic way to create less expensive housing in desirable areas, it has since grown into an expression of the potential of amenity, community and shared space. The key is giving group members the ability to consider their options and weigh up costs and benefits.

spaceagency’s Tobias Busch told The Fifth Estate the template has a focus on shared common space, and includes a ground floor shared kitchen, a studio apartment for guests, rooftop gardens and other shared external space, bicycle facilities, and electric and share car facilities.

An architectural drawing by spaceagency to show how the site could be configured

An architectural drawing by spaceagency to show how the site could be configured

Car parking is another area where group members will be able to weigh up the pros and cons. The WGV site will have a lesser number than required by current legislation, London says. And to give residents a better ability to weigh up the pros and cons, the car bays will be offered separately from the apartments for sale.

High sustainability outcomes guaranteed

With Josh Byrne as the sustainability consultant and the development occurring in WGV, which already demands high sustainability outcomes, there promises to be innovation in this space.

Byrne told The Fifth Estate that while the sustainability features would at the end of the day be up to the building group, WGV’s One Planet Living sustainability framework meant there were high expectations.

There are a number of precinct-scale sustainability initiatives the project will be part of, including a community bore water scheme for irrigation, a 90 per cent construction waste recycling project  requirement and tree canopy requirements. Under design guidelines for the precinct there’s also a 70 per cent potable water reduction target, though Byrne says this could be furthered with rainwater harvesting and reuse.

At the information evening, Byrne presented a number of concepts to “whet the appetite” of potential group members, including looking at creating a net zero energy development, with solar and battery storage meaning grid use could be reduced by 80 per cent or more.

Josh Byrne addressing the baugruppen information night crowd

Josh Byrne addressing the baugruppen information night crowd

Other concepts include looking at dematerialisation and a lifecycle assessment approach.

He told The Fifth Estate it was also important from a spacial design perspective to get the right balance of private, shared and public areas. As well as high building performance, he says it’s important the development contributes to a “very high quality standard of living”.

Gnech has released a potential timeframe for the development, which, if all goes to plan, will see completion in three years.

See the Baugruppen site for more.

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