Affordable housing, planning and density are urgent issues to solve. In this article Philip Bull looks at the blocks to higher density in already well served areas.
OPINION: The proposition by our federal Treasurer Jim Chalmers is “big and bold”– an extra 20,000 affordable homes to be built over five years – or was it one million?
“The National Housing Accord would bring together all levels of government, the construction sector and investors to build the one million “well-located homes over five years from 2024’”, he said.
“The government wanted to see more housing developed close to jobs and transport hubs, noting development in regional centres was of particular importance.”
New houses close to jobs and transport hubs means in Sydney, Newcastle, Wollongong or the centre of a regional town.
There is no disagreement that Australia needs more housing in these locations. A peek at rental vacancy rates in just about any locality or our aging demographics confirms this need.
Rental vacancy rates of under 1 per cent are not uncommon in urban areas and have become particularly acute in regional Australia. The pandemic also has exacerbated rental scarcity and aging trends. The aging of Australia is less hidden and as people move out of cities, and hopefully back into them, the rental sector becomes more important.
The pandemic encouraged people to leave metropolitan areas. Why suffer in the city when you’re working from home? But for those with minimal housing capital, the move out of the city is through a one-way valve.
Once you leave you can’t go back, other than into the rough land of rental accommodation. There has been some movement back to the city but overall, the trend towards the coast and near regional areas is here to stay.
The pandemic laid bare the aging of Australia. The last Census was conducted in 2021 at the height of the lockdown and when our previous prime minister had advised all the students and short-term visa holders to go home.
These were all young people and this created something of a statistical anomaly when you look to the demographics of some localities from the 2016 to 2021 census. The long-term aging trend was laid bare. There were no young people from overseas to hide the geriatric structure emerging in our populations.
I would say time to import more young people but also to have some compassion for our aging population and build some suitable housing. As populations age, households tend to become smaller which means a need for smaller and more houses regardless of whether the population is growing.
The federal government appears to be aware of these trends and the obvious solution (more houses) but perhaps too polite to identify a holistic solution.
It would be nice if the federal government could fund – or partially fund one million new social housing homes.
Government could buy the land, use its public sector planning concessions to get the approvals, the community supposedly would feel less suspicion of public sector developers as opposed to evil private sector ones and tenants would have a not-for-profit landlord. All our housing problems would be solved without offending anyone living in a nice part of the city.
The irony, or rather unlikeliness, of this approach works on various levels.
Firstly, if you have ever worked on a public sector or community housing project you will appreciate how slow and cumbersome that sector can be. They are not efficient deliverers of housing, and projects are easily derailed by community objection and political obstacles.
From my experience a public sector housing proposal gets just as much and a little more community objection than a private sector one.
As Paul Keating used to say, “in the race of life, always back self-interest – at least you know it’s trying”. But more fundamentally, where is all this money going to come from? Your super fund, apparently.
Historically and today, the private sector, and I would say households themselves, are the most efficient creators of new housing. The terrace house townscapes of our inner cities were not built by government, but the private sector.
There is ample money in our household sector to build houses in locations where they are needed. The pandemic did a lot of things, but what it did for Australia is make us the Switzerland of our region. Loose money and rich people have become one of our big imports.
In an uncertain world we have what money wants – security, surety in our government and political institutions, distance, and a certain degree of self-sufficiency. Getting that money into the right place is the big challenge for our cities.
The structural challenges
However, the regulatory reality is that current land use policy via various levels of restrictions just does not allow that money to get to where Jim Chalmers wants it to go: established parts of our cities.
Relying on different levels of government – do we see a problem here?
What is also interesting about the federal push for housing is that it relies on all levels of government. Apparently, the current national housing and homelessness agreements are ineffective as they failed to foster collaboration between governments or hold governments to account.
The federal government wants state governments to commit to firm targets for new housing supply, including changes to planning laws and better coordination of infrastructure.
Wow, I didn’t know different levels of government didn’t work together and had different interests! Mosman, Hunters Hill and Woollahra are raising their housing targets as we speak: “Put the block of flats over there, Davo – next to the bungalow”.
New South Wales’s new state Labor government is trying to deliver on densification in Sydney. First call is an audit of government land!
My local state member Jo Haylen who is a now a senior minister in the state Labour government loves the “Save Dully” crowd (that’s our well organised NIMBY group that believes all new development should happen somewhere else). Every election the surrounds of the Dulwich Hill Rail Station is plastered with “Save Dulwich Hill” slogans courtesy of the local members electoral posters. I always wonder what existential threat is lurking: it’s just other people.
The member for Summer Hill is not the exception. Her full embrace of the local NIMBY group is standard politics in established Sydney. And why wouldn’t it be that way? The training ground for our politics is local government where NIMBYism is the dominant political culture.
How does the Labor state government, apparently committed to fairer housing targets and more housing around new Metro Rail stations deliver, when its senior members have built their political careers on opposing this type of change?
It is these soft barriers that so tightly hold back density on our cities.
Reform to increase density is easier than it looks because all that is holding it back is a lack of regulatory support, or what planners call “capacity”.
Regulations are invisible, made-up obstacles, unlike real things like flood, heat risk or just being a crap place, a long way away from stuff.
Low Density R2 zones, 8.5m building height or 0.5:1 floor space ratio controls, and of course heritage listings are arbitrarily made-up ways of looking at cities. But these type of controls and fear that non-compliance engenders dominates day-to-day housing decisions where people generally want to live.
The anti-development lobby in this town has managed to harness these levers more as fear mongering mechanisms than planning tools. The housing supply debate is at an FDR [Franklin D Roosevelt] point, all there is to fear is fear itself.
The fear is real for both sides. The fear of change, new neighbours and a big flock of bats on your northern boundary. That’s scary to some people. But then there is the flip side – stagnant, over polished, low-density suburbs full of smug old people. And in practice, change is OK – you know, as good as a holiday.
I would fear the real desperation of young people. When I was at university second year political awakenings were about the classics, feminism, socialism, “I am gay”, and the rest. Now for young politically aware 20-year-olds there is the realisation that “I must move out of Sydney to own a house (unless my parents are rich)”.
Banishment was never part of becoming a thinking adult in this city. Politician should fear the wrath of this emerging generation more than the declining baby boomer generation listening to their Joni Mitchell albums.
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Australian households have power via household ownership. I say use it. Let households solve some of these planning problems. These established households own the real estate and have the cash to do this. The good news for any government staring down a generational housing crisis is that this solution is budget neutral.
A household led housing recovery does not need low interest rates. As of the 2021 Census, 31 per cent of Australian households owned their home. Allowing for some strata titled households, that is nearly 2.5million sites that are debt free.
But what did household ambition face last time it attempted to solve its housing problems – council. Local government in Australia largely controls housing supply through land use planning (zoning) and its decision-making roles.
Local government has become the custodian of development rights in Australia. It seems like too big a role for them.
An up-zoning and loosening of local planning regulations on well-located land could provide the quickest solution to any housing crisis without much government costs. That’s why a treasurer should be really interested in this type of reform because you just have to turn a few buttons off, piss off a few people that had it coming (because any sane person who has travelled will realise successful cities are dense) and hey presto: housing supply, without spending a cent.
