Conservation of Australia’s Historic Heritage Places

Response to the Productivity Commission Issues Paper

Introduction

This response has been prepared by Lovell Chen Pty Ltd, Architects and Heritage Consultants (formerly Allom Lovell & Associates, Conservation Architects).   The approach taken has been to address the questions raised in the issues paper by way of a dot point response to be further expanded upon at the Commission’s public hearings in Melbourne.   Where possible and appropriate, the responses have been related to the practical experience of the firm as a heritage and conservation focussed architectural practice, which has been in operation for over 23 years.

The contributors to the response are as follows:

Peter Lovell	Director
Robyn Riddett	Associate Director
Anita Brady	Associate Director
Kate Gray	Associate Director
Jane McKenzie	Conservation Architect 

Structure of the Response

All questions identified in the issues paper have been included.   Not all have been responded to either on the basis that the issue raised is so broad so as to not be easily answered in summary form, or on the basis that there are likely to be many other, more relevant submitters who can respond.   In general the responses are based on our experience in Victoria and while aware of related issues in other states we are not in a position to comment specifically. 

Figures indicated in this submission are approximate only.

1 About this inquiry

What is the rationale for government involvement in historic heritage conservation and what principles should guide that involvement?

•	No response

How does the policy framework for historic heritage conservation currently operate and what are its strengths and weaknesses?

•	No response

What are the current pressures and emerging trends influencing the conservation of historic heritage places and, in light of these, how can the policy framework be improved?

•	Move away from the more specialist/expert orientated approach to heritage to a far broader concept, diluted and confused with issues of urban character, amenity and the like.
•	Insufficient emphasis and consideration of viable reuse issues and the implications of heritage identification.
rarsid802898 How well do existing government regulations or activities specifically address market failures that are directly relevant to conservation of historic heritage places?

•	Past actions of the Victorian government have addressed this issue by way of direct intervention in the market place (acquisition of the Windsor Hotel and the Regent Theatre as a mechanism to save buildings) or through planning processes to encourage owners to conserve (the conservation and adaptation of the Princess, Regent and Athenaeum Theatres would not have occurred without the application of planning bonuses and financial contributions relating to development rights).
•	Current regulations and activities rarely address these issues other than for redundant Government owned buildings.   Government grants and loans are generally paltry amounts, often directed without a proper needs assessment and prioritising.
•	There is no equivalent of the Flora and Fauna conservation incentive scheme, which operates in Victoria.

Does government involvement in heritage conservation displace private sector involvement which would otherwise occur? If so, to what extent?

•	No.   Government (financial as opposed to regulatory) involvement in heritage overall is extremely small in the context of the investment by the private sector and in no sense does it displace the private sector involvement.   (Regent Theatre – conservation costs $40 million, ANZ Gothic Bank conservation costs $30 million, Victoria Brewery façade conservation costs $2 million etc.)   Most government involvement is at the essential works end on projects which, if the Government was not involved, would not happen because the owner could not afford to do them.

What are the costs of government involvement in the conservation of historic heritage places and who bears them?

•	The costs of government involvement by way of implementation of controls varies widely and are little different to any controls placed on a building owner through planning provisions, building regulations and the like.   It is not possible to generalise about the cost of controls on issues such as limitations on use or constraint on works as these again will be place and economic cycle specific.   The Windsor Hotel in Melbourne may have been worthless in the 1970s when there was no demand for such a heritage listed place but it sold in recent months for $40 million.
•	Government needs to address the moral cost of not conserving historical heritage places for future generations.  Communities constantly bemoan past inactivity, lack of sympathy and even hostility to the conservation of historical heritage places by state and local governments.., This particularly arises when heritage controls are proposed to conserve what is left which may not have been the most important.

Have these costs changed as a result of economic trends? For example, have pressures on government finances limited the amount of resources available for public heritage conservation?

•	Yes and Yes.   The current system of delivering (direct) heritage funding is totally inadequate at all levels of Government and totally subject to economic pressures in Government and on Government finances.   The system provides for no ability for historic heritage owners to plan ahead on the basis of an established and regularly funded scheme or schemes, or other forms of conservation incentives.
•	The evolving and more extensive regime of heritage controls has meant that the cost of those controls by way of limitations on potential may well have increased.

How do these costs vary depending on the nature and extent of conservation?

•	No response

Capturing the benefits of historic heritage conservation

Are there any regulatory barriers which prevent private organisations from capturing benefits from the conservation of historic heritage places?

•	In general no.   The regulatory barriers are little different to those which arise through the application of other built environment controls.    In historic heritage places in Victoria there is active encouragement of the acceptability of non-conforming uses to be allowed in heritage places where it can be demonstrated that this would assist in the long term conservation of the place.
•	The issue is also often the application, or lack thereof, of regulations which in the long term may unwittingly facilitate the virtual or actual destruction of the heritage place: continual permits which allow dilution of heritage fabric, government “calling-in”, political decision-making

What are the benefits from government involvement in the conservation of heritage places and to whom do they accrue?

•	The benefits of Government involvement at a statutory level – regulation and control - are diverse and fundamental.   Sense of place, cultural identity, pride in historical heritage, liveable cities, tourist icons and destinations, etc.   These benefits accrue equally to owners and the community.
•	Government involvement at a direct financial level is extremely limited and the benefits most immediately accrue to the owner.   The community benefit will depend upon the nature of the place, the nature of the works, the nature of associative benefits – apprentice training in specialist skills etc.
•	The former Public Heritage Program in Victoria funded conservation of places (at both state and local levels of significance), where there would be a direct community benefit (e.g. repair roof to historic grandstand at local oval, restore community hall, works to significant public gardens, etc).

How do these benefits vary depending on the nature and extent of conservation?

•	No response

What are the benefits to tourism from heritage conservation, and what impact does heritage tourism have on the conservation of heritage places?

•	Macro-level – the whole image of many of our cities is based on the image of heritage places – Melbourne’s MCG, Royal Exhibition Buildings, or Old Treasury Building, heritage precincts.
•	Heritage tourism is an important driver for conservation but not one to be over-rated.   Fashion plays a major role in the popularity or otherwise of heritage places for tourists.   Most heritage conservation occurs for reasons other than tourism.  Nevertheless we are interested in visiting cultural heritage areas overseas but we seem not to have the same enthusiasm for our own heritage places.  Governments should show leadership in turning this around.
•	The impacts – both positive and negative - of tourism can be great in a physical sense and in the presentation and enjoyment of the place by the local community.  The downside is the pressure of visitor numbers on significant but vulnerable places, such as historic mining sites in National Parks.

Do governments and public funding bodies use benefit–cost analysis in allocating funds between heritage conservation projects? Are any types of benefits or costs commonly omitted from these analyses? Are alternative approaches used, such as cost effectiveness?

•	Government heritage funding should not be seen only as applicable to projects which are not commercially viable.   Heritage funding is frequently used as an incentive to seed action or inspire a developer to go further (Young & Jackson’s Hotel Refurbishment cost $5 million – heritage grant of $50,000 towards façade restoration – David Jones façade restoration - $1 million low interest loan – local heritage restoration funds for rebuilding street verandahs in Queenscliff)
•	The degree and process of analysis will depend upon the quantum of funds being allocated.   Ideally funds should be allocated in the context of a broader strategy where cost effectiveness is as equally important as benefit-cost analysis.
•	Dangers of politically inspired funding programs – Federation Funds expenditure is a case in point.

Can the benefits and costs of the conservation of heritage places be satisfactorily quantified to aid decision making?

•	This is an area where more work is needed.   The costs are readily identifiable, the benefits not so.

How should tangible costs (such as repair costs) be compared with intangible and diffuse benefits (such as educational benefits and ‘sense of community belonging’)?

•	With great difficulty and care.   Overemphasis on such comparisons might well lead to a skewing of the approach to funding and conservation as a whole.
•	It is also a matter of judging short-term costs against the longer term benefits for future generations.

Current responsibilities for historic heritage conservation

3.1 Private sector

What proportion of historic heritage places are owned by the private sector?

•	No response

What are the strengths and weaknesses of private ownership of historic heritage places?

•	One strength is that more people use, care for and maintain historical heritage places not just the government.  This helps build a sense of place, and pride in historical heritage.
•	Weaknesses include:

•	lack of government support by way of grants or tax deductions for places in private ownership
•	continual upgrading in accord with transient (in the longer term context of the life of the place) lifestyle expectations of the present owner
•	subdivision of the curtilage and loss of setting because of development opportunities/pressures/economic factors eg church, mansion and historical agricultural places

How is the private sector contributing to the conservation of historic heritage places?

•	Through the process and investment in the ongoing care and maintenance of such places.
•	The investment of private funds in the conservation of historic heritage places by choice or as a result of statutory or other obligation is substantial and far in excess of Government involvement.

Are there impediments to commercial conservation activities (for example, perception by owners that conservation costs are prohibitive compared to benefits to them)?

•	Yes.   Costs are often higher.   Skills can be in short supply and non-competitive.   The result is often pressure to compromise and diminish the quality of the product.
Note: sometimes this is only a perception not a reality for say houses protected at the local level.
•	Yes.   The impact of conservation on operational activities – Sugar Australia Refinery Yarraville.

Have shortages of skilled tradespeople acted as an impediment to historic heritage conservation? If so, to what extent do these shortages reflect economic cycles in the building industry?

•	Shortages are relatively rarely an impediment although the quality of tradespeople varies widely.
•	Shortages when they occur do not reflect economic cycles as much as the take up in trades (or lack of), and popularity/activity in certain work areas.   More often than not major conservation projects operate outside the cycles.   A scarcity of stonemasons may simply arise because too many projects occur at once or equally there has been a gap in projects and the masons have gone elsewhere.

Are there constraints on the availability of finance or insurance for historic heritage buildings?

•	Funds for higher risk heritage/commercial developments may be more costly to obtain than for more conventional new build.   This is perhaps no different from the funding of any higher risk venture.
•	Insurance over the past decade has seemingly been harder to obtain, but the current situation is unknown.   The major impediment with insurance appears to be the issue of replacement value and the inability for many owners to afford insurance.  
•	Personal experience with insurers revolved around the issue (misconception) that local heritage controls would require total reconstruction of a heritage building in the event of it burning down (hence greater repair/rebuild costs).  In that eventuality the heritage view would be to not reconstruct what was there unless it was of considerable significance eg. St Kilda Pier Kiosk

Have technological trends improved the ability of the private sector to undertake heritage conservation (for example, by increasing opportunities for adaptive reuse)?

•	Technology trends have impacted on all aspects of the building industry and have benefited many.   Heritage conservation has not benefited ahead of other areas nor have such trends necessarily improved the ability to undertake such works.   In some cases they have acted against conservation practice as a result of the application of cheaper faster methodologies which are inappropriate to the heritage place.

What have been the impacts of social and demographic trends (such as population growth in inner city areas)?

•	Inner areas (suburbs) – greatly increased pressure on heritage fabric to accommodate more aggressive intervention and adaptation eg the ubiquitous family room or second storey extension.
•	Outer areas – increased pressure to demolish isolated remnants of rural heritage in the midst of sprawling suburbia and associated infrastructure.
•	Greatly increased awareness and action by local communities in relation to suburban heritage and its conservation for reasons of amenity, character, etc.

Are there specific issues for certain groups who own or manage historic properties (such as churches or universities)?

•	Yes – industry, churches, universities, defence, post offices, energy providers, etc. – diverse response to impact of regulatory change, compliance issues, hazardous materials, functionality, scale of property portfolios, redundant structures etc.

Non-government organisations

How do non-government organisations contribute to the conservation of historic heritage places?

•	No response

What are the strengths and weaknesses of the involvement of non-government organisations in historic heritage conservation?

•	There has been a long period where the focus of the activity of these organisations has been on identification and listing, and insufficient on management and active works.loped frameworks for facilitating historic heritage conservation?

•	Critical in establishing a balanced and directed approach within the reality of limited resource allocation and competing priorities.   

Are there major differences in legislation, and its implementation, between
States/Territories and, if so, do these differences affect historic heritage
conservation?

•	Yes and Yes.   Others to respond.

How does interaction between various Acts, and between State/Territory legislation and local planning regulation, impact on heritage conservation outcomes? Is there scope for improvement?

•	In Victoria State and Local heritage policies and processes are responsive to each other and linked as and where appropriate.   The system provides for a relatively ordered and managed process in which consultation and referral occurs between agencies as appropriate.   In Victoria the local planning heritage framework is about to be reviewed.

Are State and Territory heritage councils (or authorities) producing efficient
outcomes for heritage conservation? Are their functions appropriate? How well do they balance private and public development needs with historic heritage conservation?

•	In Victoria the Heritage Council and Heritage Victoria generally produce efficient (timely, responsible, balanced) outcomes from their process.
•	The functions of both are appropriate and the appeal process effective.
•	There is little distinction between private and public development needs.   The approach to both is the same.

How does the relationship between heritage councils and State/Territory
government departments/agencies function, and are their respective roles clear and mutually supportive?

•	No response.

Policy Framework Efficiency

To what extent (if at all) are current heritage approaches that separate conservation of historic, Indigenous and natural heritage places impeding conservation of historic heritage places?

•	In our limited experience it is rare that one impedes another.   Dealing with multiple agencies can complicate the process and cause delay.   Agencies do not always interact as well as they might.
•	There are occasions where there are competing conservation views – the preservation of huts on the high plains surrounded by exotic planting being seen as an important example of an historic heritage landscape as compared to the opposing view that the exotic species are invasive of more important natural flora and should be removed.  Another example is the Mt Buffalo Chalet or the view that some types of trees which were important in townscapes or historical heritage places (asylums etc.) are now inappropriate to plant or replace senescent specimens thus changing the aesthetic qualities (which have come to be valued in their own right) of the setting.

Are there conflicts between public policy in historic heritage conservation and in other forms of conservation (such as natural or Indigenous heritage)? If so, how are these conflicts resolved?

•	No response

Are government incentives for private participation in historic heritage
conservation comparable to those offered for participation in other forms of
heritage conservation? If not, what does this imply for the level of private sector participation in historic heritage conservation?

•	Government incentives for private participation in historic heritage conservation (eg tax relief, rate relief, direct funding, etc.) are so small as to be inconsequential for most private owners.   This is not to say that they are not welcomed, required and very necessary, but in the total quantum of private investment in historic heritage conservation they are a very small component.   (Royal Arcade Land Tax relief to fund restoration, Athenaeum Library Council rate relief to support the ongoing survival of the organisation as a cultural institution)
•	Federal government incentive schemes in the past have been so cumbersome that they have not to a degree discouraged private applications 
•	A major implication of the inadequacies of incentives is that the more marginal historic heritage - that where the value of the place does not warrant private investment at the level necessary to ensure conservation – simply languish.   

Heritage listing

Have the recent legislative changes by the Australian Government improved the administration of national lists and the overall conservation of historic heritage places?

•	No.   It has confused and in our limited involvement is a step backwards.

Are the criteria and thresholds for listing on the registers administered by the Australian Government appropriate? How are the terms ‘significant’ and
‘outstanding’ interpreted in practice?

•	No response

Should the potential costs of conservation be included in listing criteria to better target scarce government resources?

•	Absolutely not.   If the costs were to be included so should be the benefits.   How measured, by whom and over how long?   Costs and benefits are valid and appropriate considerations in allocating resources but not in the initial listing decision when more often than not the nature of resources which might be available now or in the future is uncertain, if not unknown.

Given that the lists are expanding and government conservation resources are scarce, is there need for further prioritisation such that some on the lists are able to receive more conservation activity than others?

•	Priority conservation action, other than when politically motivated, is generally determined on the direct basis of needs – urgency of works, consideration of risks and threats, levels of significance, etc.   Scarce resources are a reality of not only the heritage industry but many other public and private activities.
•	The size and content of lists is largely unrelated to the allocation of resources or the prioritising of works.
•	Scarcity of resources can be real or a function of political will or lack thereof.  Compare funding for the natural environment with the historical heritage environment

How do existing lists link with other heritage conservation policies and programs, including funding?

•	No response

How do listing criteria for the World Heritage list compare with criteria for
national lists? Given the existence of national lists, what additional benefits does World Heritage Listing provide?

•	Benefits or world heritage listing – this is a huge topic.  Suffice to say that it puts Australia’s historical heritage on the international map and gives it greater legitimacy in comparison with nations who have a longer history

Are there differences between States and Territories regarding breadth of coverage, list size and content, and processes for listing (such as criteria and extent of community consultation)? If so, do they affect conservation outcomes?

•	No response.   Clearly there are major differences in all of these areas.

Local government lists

How does local government recognise and protect historic heritage places?

•	Generally through statutory responsibility for recognizing and protecting heritage via heritage studies and responses to community lobby groups

What criteria do local governments use to list historic heritage places and how do these relate to those used by other levels of government?

•	In Victoria the AHC criteria and Heritage Victoria criteria are used.  The former can be problematic when applied at the local level as recent panels have found.

How well do local governments resolve conflicts between protecting private
property rights and achieving legitimate heritage conservation objectives?    Should governments (at any level) be required to compensate for their actions which infringe on the property rights of private owners?

•	Resolution of these issues is provided for by an appropriate system of approval and appeal processes at all levels of government.   The treatment of heritage conservation is no different to the other activities managed in the planning process.  Owners do not have unalienable property rights at present under the state and local legislation.

To what extent do local governments provide clear guidance about the rights and responsibilities of owners of heritage-listed properties?

•	Generally very clearly.

How do local government regulations designed to protect historic heritage places relate to more general planning regulations?

•	They are totally embedded into the planning system

Non-official lists

What criteria do non-government organisations use to list historic heritage places?

•	No response

How do the lists maintained by non-government organisations relate to those maintained by governments?

•	No response

Government ownership and management of heritage properties

Is there greater scope for adaptive reuse for publicly owned heritage places than for those in private ownership?

•	Not necessarily.   The ability for a building to be adaptively reused is dependant upon its assessed significance and the impact of the reuse.   Most adaptive reuse, as opposed to simple refurbishment occurs in privately owned heritage places.   The pressures to be able to adaptively reuse such places is generally greater.   On occasions approvals bodies are more responsive to private owners where it can be demonstrated that the adaptive reuse is essential to the broader conservation objectives of the place as balanced against consideration of reasonable and economic use.   Where public heritage is involved the expectations for preservation rather than adaptive reuse can be higher, simply because it is publicly owned (Point Nepean, the Abbotsford Convent)

Do management plans efficiently meet the objectives set out in the gazetted heritage principles? How useful and appropriate are the management principles in guiding management plans? Can they be improved?

•	No response.   Too little experience in their formulation at this stage.   The objectives and process appear on paper to perhaps unnecessarily complex.   There is the potential for such documents to become box ticking exercises rather than constructive and practical management tools.

Are there issues related to the management of historic heritage places of importance to Australia, but located in other countries?

•	There are instances where many overseas countries and cities have managed to conserve their historical heritage precincts better than we have done and we could learn from their approach and experience.

Does State ownership result in better conservation outcomes than private
ownership? Is State/Territory ownership of these places necessary or could
alternative arrangements be envisaged?

•	The outcomes are hugely diverse in both ownerships and generalisation is not particularly useful.   Outcomes more often than not are a product of funding/budgets combined with the application of appropriate skills.   Good and bad conservation outcomes can be generated in both areas.   State ownership can be as much a recipe for neglect as private ownership.

Do State and Territory government agencies follow best practice, such as the use of performance indicators, and if not, how can management practices be improved?

•	No response

Are the agencies currently responsible for historic heritage conservation on State and Territory land the most appropriate?

•	Not necessarily.   The models across states and territories varies and in Victoria the fragmentation of ownership of/responsibility for heritage assets between departments etc. does not necessarily lead to a cohesive and uniform approach.   The establishment of state based funding strategies based on a complete overview of such assets and the establishment of priorities is difficult.

Funding and other assistance

Are these the only ways in which governments can encourage greater private
involvement in historic heritage conservations? How effective are these policies at increasing private conservation activities? What are the costs and benefits of each of these policies?

•	The effectiveness of the various approaches varies dependant upon the nature of the project and the scale of the funding.   The seeding funds used in historic towns in Victoria to encourage owners to actively conserve have been very effective, but are also subject to fluctuation in use as townships mature and works are completed (Melbourne Heritage Restoration Fund on occasions has difficulty in finding suitable/interested recipients).   Other place specific direct grants and loans rather than encouraging greater private involvement tend to be used for works which are essential and in many cases desperately needed.   They do not necessarily encourage more expenditure.   Tax concessions and planning and zoning arrangements can act as a major incentive and encourage active participation in conservation works which might otherwise never occur – Princess Theatre, Royal Arcade, etc.   Advisory services are important but their impact is possibly small in encouraging greater private involvement, at least financially.

Does international experience offer any guidance to policies which might be
effective in Australia?

•	Yes.   USA Tax Relief and Incentives, UK Lottery funding.

How effective and efficient have grant programs, tax deductions and concession programs been (past and current) in conserving heritage places?

•