Jad Silvester and Penny Fuller

The Nightingale housing model has licensed its first two Sydney architectural studios bring the Melbourne grown concept northwards.

Jad Silvester of Silvester Fuller and Adam Russell of RAW Architects both spoke to The Fifth Estate this week to say why they’d put up their hands. Both are now actively looking for sites, as well as equity investors who can help fund the developments until new owners come in. Investors, however, can’t hold a Nightingale apartment as a leased investment, since they are designed for owner occupiers only.

Not so far away, in Canberra, the newly re-elected Labor and Greens Coalition have listed in their Parliamentary Agreement a promise to create a new fund to support new approaches to affordable housing, including the Nightingale model.

So what will the Nightingale projects look in their Sydney iterations, where land is notoriously so much more expensive and almost non existent in the hottest demand areas? The apartments will be  expensive than Melbourne, sure, but not as expensive as comparable projects in Sydney, the two agree.

That’s an outcome that will be delivered by the Nightingale rule that says that the developers need to limit profit to 15 per cent instead of the industry standard of around 30 per cent.  They will also need to keep the books open so that the stakeholders can all see what things cost and what the margins are.

The design itself is for strong sustainability with no aircon and no display suite – a big saving – and owners might or might not choose to have private laundries and car parking, depending on location and whether they want  even bigger savings. In Melbourne the original Nightingale model opted out of private laundries and also car parking – until complaints from neighbours forced the project to include three car share spaces.

What will be delivered instead will be shared veggie gardens and other shared facilities. In other words, a design of 30-40 apartments, no more, designed for the bump factor to foster community.

Adam Russell
Adam Russell

So are the traditional developers threatened?

Maybe, but they do have the choice to review their business model.

For instance they could slash the cost of an apartment by doing without car parking.  In some areas that’s a saving of about $100,000 straight up, RAW’s Adam Russell says. There’s also the risk and unknowns of digging to basement level and how much it will cost.

Take off the cost of the display suite and the cost of marketing and you are almost down to the 15 per cent profit margin, without actually hurting much at all, Russell says.

It’s about thinking different.

The industry has believed it’s highly efficient because it can build in greenfields very cheaply and quickly, but it is also probably the most unreconstructed of all industries in the economy.

Now development has been disrupted by prefabrication and the use of timber as a material. Nightingale, it seems,  could well be the financial and design disruptor that could change so much.

Nightingale completely re-calibrates the risk /value equation of traditional developer driven housing,” Russell says.

He says sustainability and livability are prioritised in a “robust financial model” that will pretty much improve affordability by up to a massive 30 per cent.

Russell likes the model for its ability to connect the purchaser and the architect before the resolution of the design, not at the off-the-plan stage typically marketed.

“This gives owners agency in the design process with opportunity to inform and shape their project. Rather than designing the building for a generic investment market the architect can tailor the project to the specifics of this community,” he says.

“It brings the joy of bespoke design for the end users into a more socially and environmentally sustainable housing typology than the single home.”

The capped profits and an open-book approach provide a fair and equitable return to architects, consultants, investors and apartment purchasers, he says.

Track record

Russell specialises in medium density housing and points to recent projects such as The Mandolong at Mosman and the soon to be completed Freshwater at Harbord

The studio has also notched up some awards for projects such as 9-Dots Affordable Housing to explore the potential of open and adaptable community spaces within a three-storey apartment building.

Russell, an adjunct associate at the School of Architecture at University of Technology Sydney, is also deep in conversation with parties around town that are also keen on finding new models to deliver more affordable housing.

He says a big impediment to more creative solutions is zoning.

He teaches his students to first understand the rules and then break them in hypothetical projects that they discuss with real councils.

In one such project in south western Sydney, Russell’s team proposed a block of units of around 50 three bedders that could be easily reconfigured to 93 smaller units, changing spaces for changing family needs: getting the kids into their own space or inviting uncle, aunt or grandparents in for a period of time.

Council loved it he said but the idea became completely stuck on how to deal with the parking regulations that would relate to the different types of units – some single bedroom, some studio and some three bedroom. To underscore the strangeness of rules and regs, the project was over a railway station.

“No matter how clever the architect can be in making customizable flexible spaces, approvals can be an uphill battle,” he says.

“Nightingale is tried and tested in another state,” he says, so at least everyone can see it works.

“Ever so slowly policy is moving in that direction, moving at a snails pace, but swamped by the crisis of affordability that is upon us.”

“That’s why I love Nightingale – because it doesn’t rely on an individual policy or council; it’s a robust model that fits into the current land development paradigm. By cutting the development profit, the cost of marketing and a display unit you’re already delivering product at 20-30 per cent below developer margins.”

Flexible zoning could deliver benefits to all

Well before Nightingale, the Silvester Fuller studio has been immersed in alternative design ideas.

It’s worked with Urbis and UrbanGrowth NSW on a project to look at alternative housing models and, like Russell, has also looked at ways to tweak the zoning/planning agenda so that NSW’s well regarded SEPP65 that controls apartment designs, for instance, might be made more flexible alongside demonstrated need and evidence that changes need not be detrimental to amenity and the community, but a benefit instead.

“We’ve found that a lot of smaller apartment projects globally, not just in Sydney and beyond Australia are providing amenity in a different way rather than by providing a certain amount of area.

“It’s not just about achieving the minimum size; it’s questioning the amenity of the whole. So a smaller apartment size then needs to leverage surrounding amenity, so you could be sharing amenity with your neighbouring building.”

Partly this is about recognising who will be living in these apartments and understanding more clearly the needs of those people and the reality of how they live and don’t live.

“SEPP 65 guidelines have been great overall but they do limit creativity and the other thing we’re finding is that they are intended as a guide but developers are using them as rules because there is a development risk if they don’t follow the guidelines

“It’s risky if you go ahead and put something in the DA hoping to receive some concessions on the design guidelines, for design excellence.

The studio has just finished a project in Bondi Beach that could be a sign of things to come.

The owners, a family company that’s held the property long term and wants to continue doing so has chosen to lease the apartments on long five year leases, more akin to the European model of housing. And “a bit like a commercial model”.

The block of 16 apartments leased in quick time, showing a latent demand for this kind of solution, that’s so often talked about.

Silvester says he and partner Penny Fuller intend to collaborate with RAW’s Adam Russell and will no doubt be in “constant dialogue”.

How does he think Nightingale will fare in Sydney?

“It will take one or two and then I think this is going to explode,” he says.

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  1. Like any investment, the necessary profit margin for viability is in direct proportion to the risk. To reduce the margin, you need to reduce the risk – not simply presume to take (or give) less profit. A reduction in profit margin from the traditional 30% to say15-20% already accompanied the overheated market that has driven up the prices and fuelled the affordability problem. The required profit margin is defined by the financiers managing their risk.

    You can do away with a display suite IF the purchasers trust your design and delivery capacity (risk management). You can do away with the parking – over The Hills’ or most other Councils’ dead body! (fanciful risky business).

    You can, of course, increase the risk by inviting 40 independent thinkers to join you at the design table. At which point someone is going to need a healthier profit margin to cover it. I don’t mind if that is the architect, let’s be transparent about it, but there is more danger that the architect is going to be asked to ‘absorb’ still more of the development risk, and this is not sustainable. If the Architect goes under, the design quality goes with them.

    RISK : PROFIT : VIABILITY, tinker with 1 and the others will follow.

    I suspect the real strength of the Nightingale model is it presumes a level of ‘trust’, managing risk in a wonderful, traditional, civic minded way – I will be very pleased if our community attitude reverses to this extent. I will remain hopeful but am more concerned that the Nightingale ‘Trust Bubble’ bursts before the supposed Housing Bubble does.

    I don’t intend to sound as jaded as this reads, but we need to identify the ‘real’ societal issues, not just ‘stick it to the man’ putting in the hard yards. If Nightingale is successful in addressing community Trust, and for more than just 40 socially hopefuls at a time, and then moves forward to challenge the overprotective societal rules currently required to keep our communities just back from the edge of collapse, then we will be making progress. Otherwise we could all just have another go at moving to Nimbin,