But is it as simple as reforming planning to get more homes built?
To me, the report makes several leaps of logic that don't play out in the real world. Too many to cover in one post, but here are my top 3:
First, it focuses on the role of planning or allowing more housing, and ignores the (lack of) demand for said denser dwellings because of cost.
I've said it many times – the lack of zoned land has not been the reason we haven't seen more high-density housing built in our middle suburbs. It's because, for the most part, buyers won't pay the price such dwellings demand.
💰Granted, if higher-density development delivered far less expensive homes than alternatives, it would be different. Price point is a big factor.
But they can't. And none of the released reform will change this.
The report touches on the potential impact of lower costs, but provides no explanation for how you magically reduce them.
The second error is mistaking feasibility for affordability. Just because a project is #feasible – i.e. the potential sale price in a local market exceeds the cost of development + margin – doesn't mean there is an unlimited demand, again due to price.
Unlocking supply in high-value areas is better than nothing. But it doesn't solve for #affordability. New home buyers can only afford so much, even with government subsidies and grants.
The market will not get flooded by #housing if no one can afford to buy the completed product. The number of buyers for "feasible" apartments in Sydney's eastern suburbs is staggeringly low against overall need, no matter how much land is rezoned.
🤣(I also disagree fundamentally that areas like Monash have anywhere near the mooted levels of "commercially-feasible" capacity. Ask anyone holding land for apartment development in Oakleigh!)
Third, it repeats the same errors around the relative cost of infrastructure in new areas – ignoring that the bulk of this is funded by the development in the land cost, or that these estimates ignore things like open space costs. And even if there was a saving of $75k, that's a fraction of the extra cost of the equivalent dwelling.
Yes, densification has benefits, and I'm not against it. I just recognise it's no silver bullet against a high-cost, low productivity backdrop and where there are more meaningful things that can be done.
🤔Planning reform is desperately needed, but not just in terms of zoning for high-density homes. The predominant focus remains wrong.