Australia should embrace gentle density to help solve the housing crisis

Reforms that allow modest increases to housing density could add close to one million new homes across Australia's five largest cities, a new CEDA report has found.

The report, A middle path: How gentle density can help solve Australia's housing crisis, in partnership with urban consultancy firm Urbis, shows that if just one-in-four standalone homes in Sydney, Melbourne, Brisbane, Adelaide and Perth were developed into dual occupancies, it would increase housing supply by nine per cent.

"Australia's housing crisis has been decades in the making and requires action on many fronts,” CEDA Senior Economist Danika Adams said.

“When it comes to housing supply, too often the solutions focus on the extremes – high-rise apartments or homes in sprawling outer suburbs.

"But 'gentle density' can deliver more housing in middle-ring neighbourhoods where people want to live, while making better use of existing infrastructure and transport networks.

"Australia should build more medium-density housing like dual occupancies, townhouses and low-rise apartments in well-located areas.”

The report looks at the lessons of planning reform in Auckland, New Zealand. Compared with what would have occurred without the reforms, there was an estimated 50 per cent increase in building consents within five years of their introduction in 2016, with house prices estimated to be 15 to 27 per cent lower than would otherwise have been the case.

"Auckland's experience shows what's possible when you implement planning reform at scale," Ms Adams said.

"The reforms abolished single family zoning and allowed medium-density housing across three-quarters of the city. It worked because it removed complex processes, allowed feasible development and was applied broadly."

Australia needs to build 240,000 homes every year to meet the Albanese Government’s National Housing Accord target of 1.2 million well-located homes by 2029. The nation has fallen short of that rate every year since 2016.

"The current approach clearly won't be enough to solve this crisis," Ms Adams said.

"We must make better use of the land, transport and services we already have, and give people more choice about where and how they want to live."

Australia's five largest cities rank among the top-200 most populous cities globally, but way down the list for density. Melbourne ranks 100th for population but 858th for density, while Sydney ranks 104th for population and 803rd for density.

To be successful, planning reforms must be large-scale, allow feasible development and enable 'by-right' development, where housing can be built without specific approval if it complies with local planning rules.

Some state governments are already taking action, with NSW and Victoria introducing reforms to streamline planning and unlock well-located development, while Western Australia has just announced plans to increase housing density around 10 train stations in Perth.

"But we need sustained effort and an ongoing culture of 'yes if' that promotes speed and predictability and gets more people into homes in neighbourhoods already rich in amenities,” Ms Adams said.

The report’s recommendations include:

• Increase the number of dwellings allowed per hectare across large areas such as entire local government areas;
• Introduce 'by-right' planning rules that specify what can be built without objection, based on land size;
• State governments should offer financial incentives to councils that meet housing targets, while penalising those that don't;
• The Federal Government should set clear criteria for planning reforms and reward state governments that deliver; and
• Continue to pursue planning policies aimed at speeding up housing delivery, such as Transport Oriented Development and infill housing.

"Australia's population is forecast to grow by more than 14 million people over the next 40 years,” Ms Adams said. 

"We must embrace gentle density in well-located areas, in addition to other forms of housing, to tackle Australia’s housing crisis."

CEDA media contact:
Justine Parker, Media Manager and Content Specialist 
Mobile: 0436 379 688 | Email: justine.parker@ceda.com.au  

Urbis media contact:
Courtney Robinson, Senior Marketing Manager
Mobile: 0493 277 576 | Email: courtneyrobinson@urbis.com.au 

About URBIS

Urbis is a multidisciplinary urban consultancy bringing transformation to cities and communities around the world. From inspiration to implementation, our team of more than 900 consultants and specialists create communities and places that address the complex needs of society.

Our approach to liveability extends beyond the build environment and involves sustainable, ethical, commercial, social and natural elements to deliver future-focused housing and precincts solutions.