Australia’s capital cities’ zoning restrictions and housing supply challenges
Consensus Summary
Both articles analyze Australia’s capital cities’ zoning restrictions and their impact on housing supply, highlighting Melbourne as the least restrictive city with only 45 per cent of its residential land highly restricted, compared to other capitals like Hobart (97 per cent) and Adelaide (92 per cent). Research by YIMBY Melbourne shows that restrictive zoning, including two-storey height caps and heritage protections, limits housing development across most Australian cities, contributing to a national shortfall in meeting the 1.2 million new homes target over five years. While Melbourne has made progress in allowing medium-density housing, challenges remain in inner-eastern suburbs like Boroondara, Yarra, and Glen Eira, where over 75 per cent of land remains restrictively zoned. The articles also note that while zoning reforms are underway, other barriers like construction costs, skill shortages, and regulatory delays continue to hinder housing supply, with Victoria and New South Wales showing modest improvements in reducing restrictions. Economists and housing advocates emphasize the need for broader reforms, including national townhouse codes and infrastructure investments, to address the housing crisis effectively.
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Key details reported by multiple sources:
- Melbourne has 45 per cent of its residential land deemed highly restricted, the lowest among Australian capitals.
- Hobart has 97 per cent of its residential land under highly restrictive zoning, the highest among Australian capitals.
- Adelaide has 92 per cent of its residential land under highly restrictive zoning.
- Darwin has 88 per cent of its residential land under highly restrictive zoning.
- Perth has 87 per cent of its residential land under highly restrictive zoning.
- Brisbane has 86 per cent of its residential land under highly restrictive zoning.
- Sydney has 81 per cent of its residential land under highly restrictive zoning.
- Canberra has 74 per cent of its residential land under highly restrictive zoning.
- A national target of 1.2 million new homes over five years was agreed in 2022 and 2023, with the window running from mid-2024 to June 2029.
- The YIMBY Melbourne group’s research found 81 per cent of residential land within 20 kilometres of Australia’s capital city centres is highly restricted.
- A 76-dwelling, four-storey redevelopment project in Melbourne’s Surrey Hills was proposed for a site with a two-storey height cap.
- Victoria completed 54,842 dwellings in the one-year period to March, the lowest number in a decade.
- New South Wales completed 44,700 new dwellings in the one-year period to March.
- A national townhouse code allowing three-storey development on non-heritage residential land could create 1.5 million extra homes in Melbourne.
- Boroondara, Yarra, and Glen Eira councils in Melbourne each have at least 75 per cent of their residential land restrictively zoned.
- The ACT reduced its restriction score from 88 per cent to 74 per cent through recent zoning reforms.
- Victoria and New South Wales improved their restriction scores by three and two percentage points, respectively.
- Hobart has 97 per cent of its residential land limited to two-storey buildings.
- Adelaide has 91 per cent of its residential land within 20 kilometres of its centre limited to two-storey buildings.
- Brisbane and Darwin have widespread restrictions on townhouses, with 66 per cent and 73 per cent of their land zoned for detached homes only, respectively.
Points of Difference
Details reported by only one source:
- YIMBY Melbourne’s research was released on Sunday.
- A $62 million project in Surrey Hills was submitted for fast-tracked approval by the state planning minister, with a 3 per cent contribution to Victoria’s social housing growth fund required.
- The chapel at the former St Joseph’s Home for Boys will be retained, but Boroondara Council is concerned about the demolition of a school building.
- RMIT Professor of Environment and Planning Michael Buxton argued against ‘tearing-up’ current zoning controls, citing Melbourne’s liveability.
- The Australian Bureau of Statistics released figures showing 54,842 dwellings were completed in the year to March, the lowest in a decade.
- The national target of 1.2 million new homes over five years is not on track, with projections reaching roughly 1 million.
- Victoria, Western Australia, and the ACT are close to their targets, while other jurisdictions are at least a year behind.
- Economist Peter Tulip from the Centre for Independent Studies noted Melbourne’s affordability has improved relative to other cities due to zoning reforms.
- The YIMBY group advocates for a national townhouse code allowing three-storey developments on non-heritage land, similar to a Grattan Institute proposal.
- Matthew Kandelaars from the Property Council warned that zoning reforms alone are insufficient, citing high costs, skill shortages, and regulatory delays.
- The federal government committed $2 billion in the May budget to a local infrastructure fund to unlock new housing sites.
- A Melbourne greenfield site takes 28 months after approval to be construction-ready, with fees and levies accounting for 40 per cent of a new home’s cost.
Contradictions
Conflicting information between sources:
- TheAge states Melbourne has 45 per cent of its residential land highly restricted, while ABC notes Melbourne is the only capital allowing medium-density housing on most of its residential land, implying a lower restriction rate than other cities but not explicitly quantifying it.
- TheAge mentions a ‘one-year period’ for dwelling completions without specifying the exact year, while ABC references a national target window from mid-2024 to June 2029 without directly linking it to the 54,842 dwellings figure.
- TheAge states the 1.5 million extra homes figure is specific to Melbourne, while ABC implies a broader national potential for unlocking millions of homes across capitals through similar reforms.
Source Articles
Melbourne has Australia’s least restrictive planning zones, but these suburbs remain ‘locked down’
A new report suggests more permissive zoning for three-storey development could unlock millions more homes, but those in low-rise inner-eastern neighbourhoods are already sceptical.
Most Australian cities make it hard to build homes, but one is bucking the trend
Four years on from a national pledge to unlock more housing, only one capital city allows townhouses or three-storey developments on most of its residential land.