The planning theory of everything™

It’s the planning, stupid - Part 1: Childcare Costs.

Myers, Bowman and Southwood [1] first outlined ‘the housing theory of everything’ noting how high housing costs exacerbated numerous other problems like sluggish productivity growth and climate change.

Recently every time I read about seemingly unrelated issues like the supermarket duopoly in Australia, the high cost of childcare and even healthcare issues the more I see land-use planning as a partial culprit slowing down progress and increasing costs.

To not subject readers to a 10,000 word substack piece, I’ll be writing this as a series on the planning theory of everything™ with the planned sequel going to discuss how the planning system prevents competition in the Supermarket sector.

Why does childcare cost so much and why are there not enough childcare places.

Singh v Casey CC 2025

26 Huon Park Road (Left) and 24 Huon Park Road (Right)

Casey Council received a permit application for an 86-place childcare centre in Cranbourne North in February 2023 [2]. The fast-growing Cranbourne area has a dire need for more childcare options with ABC classifying all 7 neighbourhoods in Cranbourne South as childcare deserts [3].

After taking 8 months to respond to further information sought by council, the council issued a notice of decision to grant a permit. The application was very uncontroversial with only 2 objections to council. However, 1 of those objectors owned the next-door property (26 Huon Park Road). He did not live there though as he had also been granted a permit to develop a larger 112 place childcare location. He then went to VCAT to seek councils permit to be revoked.

His principled disagreement to setbacks, traffic management and the ‘cumulative impact’ [4] of two childcare centres was obviously not driven by the potential additional competition and loss of potential profit. Thankfully VCAT upheld councils’ decision but only in March 2025, more than 2 years after the permit application was filed and not without requiring a further Parking and Traffic Management Plan.

Hub Centre v Whitehorse CC 2004

Only 8 people objected to a child care development in Nunawading. A council operated daycare already operated opposite the site so disruption and change were likely to be minimal. One individual objected to the horror of the potential “Noise generated from children playing”. Truly horrible imagine listening to the joy of kids on a playground. Another stated that the location was “not an appropriate site” despite the existing day care across the road! Another highlighted “safety concerns for residents” with 3 year olds in Nunawading being well known to be dangerous criminals.

The permit application filed in March 2003 was granted by council subject to conditions but then appealed to VCAT to remove some of these conditions imposed by council. VCAT ultimately required that the centre only be open between 7am and 7pm but required that the external playground areas could not be used before 8am or after 6pm. The boundary fence around the playground was to be increased to 1.8m high to prevent 4 year olds from viewing into neighbouring homes. No speakers outside could be used such as for “playing music” though the member also allowed fewer car spaces to be required (from 17 to 14).

The centre is still in operation today with its opening hours advertised as being 7am to 6pm. Therefore, its restriction on children outdoor play before 8am might still be in effect today, 21 years later. A generation of kids in Nunawading, due to a planning decision, might have lost literally thousands of hours in which children could not play outside to appease 8 people in 2004 who did not want to hear children playing at 7:45am. They could not listen to music outside for the same reason, as 4-year-olds are not typically well represented by lawyers at VCAT. Then finally at 8am when they are allowed to go on the playground, they have to look at a fence 1.8m high because a VCAT member preferred they stare at wooden fences or concrete than grass, trees and pets in the backyards around them.

Minnows Child Care Centre Pty Ltd v Kingston CC [2011]

A childcare centre was here opposed by council, against the findings of council officers, as well as by the Dingley Village Community Association and individual NIMBY’s. Council contended that the size of the proposed two-storey building was excessive, not fitting with the neighbourhood character and that the traffic impacts were too severe. The VCAT member here disproved the traffic argument simply, “Centre Dandenong Road carries several thousand vehicles each day. The amount of extra traffic generated by this proposal is insignificant in the overall scheme of things” noting how it provided for a maximum of 60 children.

Can you find the excessive visual bulk (the childcare centre is the rightmost building)

When NIMBY’s are sure to complain about traffic impacts and noise, it’s rational to avoid quiet, safe, neighbourhood streets and build only on large main roads on concrete blocks with barely any trees or neighbours. These issues just aren’t considered by the planning process. I haven’t read a VCAT case yet where a member mentions the safety of low-speed residential streets, the health benefits of avoiding polluted main roads on the health of growing kids or how quiet neighbourhoods are likely to be calming for children away from their parents or the difficulty of learning social skills while noisy cars drive past constantly.

Pearce v Darebin CC [2025]

Not all permits are granted however. A nearby resident who lived nearby but not directly abutting the proposal opposed to Darebin Council granting a permit for a childcare centre on a quieter residential street. A permit was granted at 192 Dundas Street about 200m nearby on a busier corner block along an intersection but the objector criticised the site at 164 Dundas Street for being too small. Puzzlingly, the VCAT decision weighs the childcare proposal in a Growth Residential Zone as being contrary to the objective to “establish more housing” failing to see how nearby essential services like childcare allow more density to be naturally desired and built. He only considers this a minor factor however in his decision to revoke the permit.

Perfect is often the enemy of good in planning decisions. The VCAT member outlined that “in broad terms, the contemporary architectural style and quality of materials is acceptable. I … have no difficulty with the height and setbacks of the built form, including two and three storey elements” but that the specific siting, massing and volume is inappropriate. It’s hard to parse what exactly is wrong with the building then. It ends up reading like Dennis Denuto in The Castle.

“It’s the vibe of it. It’s the Constitution. It’s Mabo. It’s justice. It’s law. It’s the vibe and ah, no that’s it. It’s the vibe. I rest my case.”

The already existing two-storey unit complex next door wasn’t considered a relevant factor

The contradictions in planning requirements are illustrated nicely when he discusses the acoustic fencing required to dampen the intolerable noise of toddlers playing. The fencing must be high enough to prevent noise but low enough to not be “uncharacteristic” of the residential environment but also it must be high enough to prevent overlooking into neighbouring backyards. Again, I don’t understand how anyone would be concerned by being looked at by a 3-year-old or how we must treat this as an actual issue.

The permit was denied in March 2025 after being filed in 2023 [8]. Again no cost benefit analysis was applied considering the potential benefits of leafy and quieter environments for childcare.

The planning cost to your childcare costs

How much is a childcare centre building worth? Probably much, much more than you expect.

Logan Village, a suburban shopping centre on 1.2 hectares including a Woolworths supermarket, pharmacy, and medical centre in the south of Brisbane sold for $16.3 million in 2025 [9]. At the time the net rent collected was around $820,000 annually. A single childcare centre in Artarmon, NSW sold for $22.79 million in 2021 [10]. The rent it was paying was just under $1.14 million per year! With 149 places that translates to over $7,500 per place in rent every year. That cost is logically reflected in the incredible cost in Australia and the rest of the anglosphere.

Table from CBRE of record childcare sales

The rent is so high because this lack of supply is caused by some of the same factors that cause housing supply to be reduced. Delays in the planning process slow new supply from being added and NIMBY’s, councils and judges sometimes reject new proposals to fill this need. Zoning limits the areas in which childcare centres could be built if they are not opposed by objectors. A CBRE agent explaining their record sale illustrates this, “The fact is the cost of buying and developing a new centre all-inclusive is often resulting in the same or an inferior yield to what can be achieved buying a passing and land-rich investment like the subject property,” [11]. In other words, it is expensive to build new childcare centres (which planning worsened) and so existing centres which were approved are incredibly valuable and expensive to rent.

Childcare centres are limited in how many children are allowed to be cared for so this rental cost is spread across only a few children. The Woolworths, pharmacy and medical centre in Logan combined pay less rent than that 1 childcare centre in NSW! The Woolworths alone would see thousands of customers daily too, compared to 149 childcare places.

It’s not just the most expensive, inner areas where this is occurring with suburbs such as Williams Landing and Watsonia, both in Melbourne, having childcare sales over $10 million. Headlines like this do not make me think that we are planning and building enough childcare places, “$98m childcare deal sealed as centres dubbed ‘the new bank’” [12].

YIMBYism means childcare too

The good news is YIMBY’s have already been arguing about removing parking minimums and neighbourhood character requirements, the silliness of setback rules and allowing taller buildings. We can do this for childcare too. The fact these rules are also used to block parents from having options for childcare is another strong argument for removing them for housing as well!

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[1] https://worksinprogress.co/issue/the-housing-theory-of-everything/

[2] PA23-0102 permit number Casey portal

[3] https://www.abc.net.au/news/2024-08-20/mapping-australia-s-growing-childcare-divide/104243302

[4] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2025/186.html?context=1;query=singh%20v%20casey%20cc;mask_path=au/cases/vic/VCAT#fn2 (Singh v Casey [2025])

[5] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2004/1066.html?context=1;query=hub%20centre%20v%20whitehorse;mask_path=au/cases/vic/VCAT (Hub Centre Pty Ltd v Whitehorse CC [2004])

[6] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2011/1199.html?context=1;query=minnows%20child%20care%20v%20kingston%20;mask_path=au/cases/vic/VCAT (Hub Centre Pty Ltd v Whitehorse CC [2004])

[7] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2025/200.html?context=1;query=pearce%20v%20darebin%20cc;mask_path=au/cases/vic/VCAT (Pearce v Darebin CC [2025])

[8] D/526/2023 permit number

[9] https://www.realestatesource.com.au/clarence-divests-brisbane-growth-corridor-woolies/

[10] https://www.theurbandeveloper.com/articles/brighton-melbourne-childcare-centre-record-transaction

[11] https://www.theurbandeveloper.com/articles/brighton-melbourne-childcare-centre-record-transaction

[12] https://www.realcommercial.com.au/news/98m-childcare-deal-sealed-as-centres-dubbed-the-new-bank