A recent report from the Grattan Institute calls for significant changes to housing policies in Australia, advocating for increased density in residential areas to address the ongoing housing crisis. The report, titled More homes, better cities: Letting more people live where they want, recommends that three-storey townhouses and apartments be permitted on all residential land across capital cities. Additionally, developments of six storeys or more should be allowed around major transit hubs and commercial centres.
According to the report, housing in Australia’s major cities ranks among the least affordable globally. The restrictive planning controls currently in place add hundreds of thousands of dollars to new housing costs, exacerbating the affordability crisis. Brendan Coates, the report’s lead author and Housing Program Director at the Grattan Institute, emphasized the urgency of the situation. “For decades, Australia has failed to build enough homes in the places that people most want to live,” he stated. “Now we have a housing affordability crisis that is dividing families and communities.”
The report highlights that approximately 80 percent of residential land within 30 kilometers of the centre of Sydney and 87 percent in Melbourne is restricted to buildings of three storeys or fewer. Furthermore, over three-quarters of residential land in Brisbane, Perth, and Adelaide is limited to two storeys or less. This zoning contributes to Australia’s capital cities being among the least densely populated for their size worldwide.
Benefits of Increased Housing Density
By permitting more housing in established suburbs, the report argues that overall housing costs would decrease, benefiting all residents. This approach would enhance the quality of life for Australians by enabling them to live closer to high-paying jobs, transport options, schools, and other essential amenities. Moreover, it would lead to shorter commutes, thus reducing greenhouse gas emissions.
The report proposes that developments of up to three storeys which meet clear standards should not require planning permits. Larger projects that comply with set criteria would be evaluated through ‘deemed-to-comply’ pathways, streamlining the approval process. Implementing these changes could unlock capacity for over one million new homes in Sydney alone, significantly addressing the housing shortfall.
Projected Impact on Housing Construction
Modeling by the Grattan Institute suggests that these policy reforms could increase housing construction across Australia by up to 67,000 homes per year. Over a decade, this could lead to a 12 percent reduction in rents and decrease the cost of the median-priced home by more than $100,000, with even greater long-term benefits.
Mr. Coates concluded by stating, “Australia needs a housing policy revolution. The equation is simple: If we build more homes where people most want to live, housing will be cheaper, and our cities will be wealthier, healthier, and more vibrant.” As the discussion around housing affordability continues, the insights from the Grattan Institute’s report may serve as a crucial guide for future policy decisions in Australia.
