Key Takeaways:
- Australia could unlock around 1 million new homes by increasing "gentle density" in major cities
- The Committee for Economic Development of Australia (CEDA) and Urbis report suggests that developing one in four standalone dwellings into dual occupancies could increase housing stock by 9%
- The report recommends increasing density in middle-ring suburbs with existing services and transport networks
- States have begun introducing reforms to streamline approvals and unlock well-located development
- Local councils are key to implementing planning reform, but often have restrictive zoning regulations
Introduction to Gentle Density
The concept of "gentle density" has been proposed as a solution to Australia’s housing crisis. According to a report by the Committee for Economic Development of Australia (CEDA) and urban consultancy firm Urbis, increasing density in major cities could unlock around 1 million new homes. The report suggests that developing one in four standalone dwellings into dual occupancies could increase housing stock by 9%. This approach would involve increasing density in middle-ring suburbs with existing services and transport networks, rather than focusing on high-density inner-city developments or new masterplanned communities in outer suburban areas.
The Need for Increased Density
Australia needs to build 240,000 homes a year to meet the National Housing Accord target of 1.2 million well-located homes by 2029. However, the nation has fallen short of this pace every year since 2016. The report notes that large cities can afford more density, and that increasing density in middle-ring suburbs could help to meet this target. For example, Melbourne ranks 100th for population but 858th for density, while Sydney ranks 104th for population and 803rd for density. This suggests that there is significant potential for increasing density in these cities without sacrificing livability.
The Benefits of Gentle Density
The report argues that increasing density in middle-ring suburbs could have a number of benefits. For example, it could help to reduce pressure on infrastructure, decrease commute times, and increase access to services. It could also help to increase the supply of housing, which could help to reduce prices and improve affordability. The report cites the example of Auckland, which introduced sweeping "upzoning" changes in 2016 and saw a 50% increase in approvals and a 15% increase in housing stock. House prices in Auckland were also 15-27% lower than they otherwise would have been, while rental prices were reduced by up to 28%.
The Role of Local Councils
Local councils play a crucial role in implementing planning reform and increasing density. However, the report notes that zoning and planning regulations at local council level can be an impediment to development. Rules differ from council to council, and can be very restrictive. The report recommends that local councils should introduce "by-right" planning rules that specify what can be built without objection, based on land size. It also suggests that state governments could apply a carrot-and-stick approach to encourage local councils to meet their targets. For example, if local governments are not meeting their targets, state governments could take over some of the planning regulations.
The Impact of Planning Reform
The report notes that planning reform can have a significant impact on the supply of housing and affordability. For example, a recent report from the Grattan Institute found that Australian rents and house prices would be 12% lower than otherwise within a decade if all capital cities were rezoned to allow three-storey buildings. The report also notes that buying a home has never been harder, with housing affordability at its worst levels on record. Property research firm Cotality recently found that housing affordability had never been worse in Australia, with more than a decade needed to save a standard 20% deposit to buy a house in most capital cities.
Conclusion
In conclusion, the report suggests that increasing "gentle density" in major cities could be a key solution to Australia’s housing crisis. By developing one in four standalone dwellings into dual occupancies, Australia could unlock around 1 million new homes and increase housing stock by 9%. The report recommends that local councils should introduce "by-right" planning rules and that state governments should apply a carrot-and-stick approach to encourage local councils to meet their targets. With the right planning reform, Australia could increase the supply of housing, reduce prices, and improve affordability.