Five years and $10,000 later: Why upgrading Melbourne apartments is proving impossible

Inner-city residents Carla Campbell-Redl and Ying-Lan Dann want to electrify their 1960s apartment block. The goal – to move away from gas – sounds simple.

But Campbell-Redl, who is chair of the Owners Corporation committee managing the low-rise brick building in North Melbourne she and Dann call home, say about $10,000 paid to five consultants in as many years has not yet yielded a solution.

“One of our biggest frustrations is that we have not been able to get reliable technical advice to establish even an approximate cost for the complete electrification project,” Campbell-Redl says.

Many owners at the Haines Street block “share the same values” and support the committee’s investigation into renewables to boost the building’s environmental credentials and save on bills, Dann says. But the hurdles are not unique to their block.

An expert review into the Owners Corporation Act found there is “strong” interest from many apartment owners across Victoria who want to install electric car chargers and replace gas stovetops with induction models, but reported many sustainable upgrades failed to proceed due to a 75 per cent threshold needed to approve changes to common property.

As the city’s population races to nine million, strata-titled apartments will be a key housing option for inner-city living. Growing calls from experts, consumer advocates and some inner-city councils, are pushing for laws to clarify the powers of individuals and committees seeking to upgrade sustainability measures.

Campbell-Redl says her two-bedroom unit is her “forever home”.

“It’s a place I can live in the city. When I’m old, and I can’t drive, I will be able to catch the bus and tram; I’m close to all the infrastructure,” she says.

“Living in the city is a choice about using the existing infrastructure in a way that benefits people without an undue cost,” she says.

Dann, who is raising her two children in her unit, doesn’t intend to leave either. She points out that “all this infrastructure already exists”, and notes there are hundreds of other apartment blocks from the same era that will likely want to make similar transitions and upgrades at some point.

Campbell-Redl and Dann’s best current estimate is that each of the 33 units in their block would need to chip in about $24,800 to cover upgrades to the block’s infrastructure – about $818,000 in total.

The infrastructure needed includes a new network cable ($300,000), a potential substation ($100,000), cable trays in common areas ($75,000), wiring into each apartment ($100,000), hot water plumbing and metering ($198,000), nine hot water units ($36,000) and electrical cabling ($9000).

The committee stressed these figures are indicative only and don’t include the cost to install solar panels or batteries. Campbell-Redl says the key point is that “we still cannot establish a reliable overall project cost”.

“We have had difficulty obtaining the technical expertise and information needed to determine what infrastructure will be required, particularly in relation to the electricity network and any substation or network upgrades,” she says.

An expert review into Victoria’s Owners Corporation Act reported that while solar uptake on Victorian homes has doubled since 2018 and now sits at over 30 per cent, it has occurred almost exclusively on detached houses.

“Eligible OC projects have failed to proceed due to challenges navigating the collective decision-making requirements embedded in strata governance, despite strong interest from OCs,” the review noted.

One major impediment is the requirement of a 75 per cent special resolution to approve changes to common property, with funding being another barrier, where projects stall unless an owners corporation has money in the bank to pay for sustainability upgrades, according to the report.

In its submission to the Owners Corporation Act review, the City of Melbourne said the law should define what “sustainability items” are – for example, electric-vehicle charging – to clarify what power committees and individual lot owners have to make sustainability upgrades.

City of Melbourne, the council area covering North Melbourne, has backed lowering sustainability upgrade resolutions from 75 per cent owner approval to 50 per cent owner approval.

Lord Mayor Nick Reece told The Age that apartment residents and owners corporations face a “maze of costs, regulations and technical decisions when trying to move away from gas and improve their buildings”.

“Medium and high-density apartments house more than 80 per cent of Melbourne residents - yet they’re being left to navigate the transition to a more sustainable future alone,” he said.

Responding to the particular challenges faced by residents in Haines Street, Consumer advocacy group Australian Apartment Advocacy director Samantha Reece says there was no support for older blocks to transition from gas to electric.

She backed lowering the voting threshold to 50 per cent for sustainability items only. “If you were to lower it to 50 per cent, there would have to be a very clear communication to strata managers and also OC committees that [lowering the threshold] was only to do with sustainability measures,” she said.

Reece says she supports recommendations made in the expert review, including the introduction of a strata commissioner who could administer grants to allow owners corporations to do energy audits.

Adam Promnitz, co-founder of Strata Owners Alliance, told this masthead he is reluctant to support a carve-out of particular items requiring lower voting thresholds.

“The loading thresholds are for significant alterations [common property]. This would say there are certain alterations that are more worthy than others,” he said.

“If you are going to reduce [the threshold] then it’s got to be for something that you can show there will be a financial gain.”

The Victorian government supported all the expert panel’s recommendations to review barriers stopping the introduction of sustainability options in existing and new buildings. The first tranche of legislation to update the Owners Corporation Act has passed, focussing on lot owners in financial hardship.

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