Picture: ANDREW KACIMAIWAI
MIDDLE tier governments need to radically change zoning laws to boost housing supply, says the Business Council of Australia (BCA).
A new housing report from the BCA says zoning reforms are vital given that, on current construction rates, Australia will not be able to meet its target of 1.2 million new dwellings over five years.
ABS data for dwelling completions for the 2023-24 financial year shows around 176,000 new dwellings were built, about 64,000 homes short of the annual target.
In its report, the BCA wants:
- Extensive land rezoning in major cities and towns to allow medium and high-density development near infrastructure and services:
- Allow builders to propose ways of boosting housing supply through rezoning; and
- Consolidate zoning types on a national basis.
BCA Chief Executive Bran Black says rezoning is a national problem and significant changes are needed.
“We need state and territory governments to unlock more land for more homes in cities and towns across Australia so we can fix this supply crisis,” Black says.
“These changes need to allow for greater density and height near good transport services, while at the same time protecting the quality of life, green space and heritage of an area.”
Black says states like NSW and Victoria are addressing zoning issues to unlock more supply and build higher density housing in metropolitan areas like Sydney and Melbourne.
“Put simply, we need to build enough homes where people want to live so until we fix that problem, it will be very hard to hit our housing targets — building a home in the right place is as important as building it at all,” Black says.
“We’ve seen a focus on rezoning across Sydney in areas well-connected to train services and new metros — it’s a good start but we see so much more to do there to meet demand.”
Black says South Australia’s approach is a good example of consistent zoning with a single consolidated approach across the state.
“This makes a big difference when it comes to home builders getting housing projects off the ground.”
AUCKLAND EXAMPLE
Black points to New Zealand, and Auckland, is demonstrating how rezoning changes can improve supply and ultimately lower prices.
“In 2016, Auckland rezoned about three quarters of residential land, and a massive increase in home building followed — they’ve now shared a report showing that this has contained the cost of housing in the long run, approving affordability, with rents at least 26 per cent below what they would have been without the rezoning, and a stabilisation of long-term dwelling prices,” Black says.
Auckland City Council removed zoning restrictions in 2016, opening up suburban blocks to higher-density developments. This saw new home approvals take off while increases in rents and house prices were restrained.
More on the Auckland experience: New Zealand’s housing density experiment
