TOD or not TOD: Can Sydney sustain its future population?

For years, Sydney has been regarded as one of the world’s most dynamic cities. But as housing prices continue to soar and young professionals leave in droves, policymakers are confronting an urgent question: Can the city sustain its future population?

Between 2016 and 2021, the Harbour City lost 70,000 residents aged 30 to 40, more than twice the number who arrived, according to data from the New South Wales Productivity Commission. The exodus, largely fuelled by skyrocketing housing costs, has placed pressure on government officials to address affordability concerns. 

The median home price hit AUD$ 1.6 million dollars last year, and rents have risen sharply—8 percent in 2023, followed by another 5 percent this year.

There seems no respite from these increases any time soon.

New South Wales Premier Chris Minns is spearheading a plan aimed at reversing this trend. His proposal hinges on increasing density through "transport-oriented development (TOD)," which would permit taller buildings around key transit hubs. The concept, he argues, is a logical step for a city that, despite its global prominence, ranks only 800th in density worldwide.

“We haven’t been doing a great job,” Minns admitted at the Nikkei Forum in Sydney last September. He pointed to the city’s restrictive housing culture, which has historically resisted high-density developments. 

According to a new report by the ABC, forecasts by the Housing Industry Association (HIA), New South Wales will fall 120,000 homes short of its 2029 target, despite commencing construction of 252,060 dwellings in the five-year period from 2024-25.

That number is more than 120,000 short of the 377,000 homes the state committed to build by 2029 under its share of the National Housing Accord, says the news report.

Compared to Melbourne and other major Australian cities, Sydney has well and truly lagged in new housing TOD construction, exacerbating the crisis.

For its part, Melbourne has begun a massive project, the Suburban Rail Loop, whereby in the first of four stages (SRL East), 70,000 dwellings will be built around six new stations.

Image: NSW government

According to Anthony Veal, Adjunct Professor, Business School, University of Technology Sydney and Awais Piracha, Associate Professor of Urban Planning, Western Sydney University, “Growing populations and housing shortages are affecting cities worldwide, including in Australia.”

“It’s driving them to adopt high-density development near public transport hubs instead of endless suburban sprawl on city fringes,” Veal and Piracha write.

In Sydney, the state government has said that it plans for transport-oriented developments within 400 metres of 37 existing train stations that will include thousands of new dwellings.

But geography can be cruel can be a cruel mistress. Unlike many sprawling metropolises, Sydney is hemmed in by natural borders—the harbour, the Blue Mountains, and vast national parks. Expansion, which has long been pushed to the city’s outskirts, has created logistical headaches, longer commutes, heavier reliance on cars and increased congestion. For some urban planners, the answer lies not in further sprawl but in rethinking how space within the city is used.

“If I had a magic wand, I would draw a red line around the city and stop expanding,” said Philip Vivian, a director at architecture firm Bates Smart. “The future city is a polycentric city: compact clusters of density around a public transport centre, and Sydney already has the bones of that.”

The Minns administration has outlined a plan to build 377,000 new homes across New South Wales by 2029, with a significant portion concentrated in designated transit-oriented zones. These developments, cantered around key train stations and Sydney’s expanding metro system, are intended to ease pressure on the city centre while preserving its character.

Yet not everyone is convinced. The plan has met resistance from Sydney residents who fear that increased density will erode the city’s charm and replace its signature low-rise neighbourhoods with clusters of high-rises akin to Hong Kong or Singapore. While some planners contend that high-density living does not necessarily mean a skyline dominated by towers, opposition remains fierce.

“Paris is one of the densest cities in the world, but those opposing density here go there on holiday,” Vivian says. “Do they visit Phoenix to explore the suburbs?”

Beyond public sentiment, a raft of logistical and legal challenges also loom. Some local councils have resisted state-mandated density increases, while ambiguity over affordable housing requirements has deterred developers from committing to large-scale projects. High interest rates and soaring construction costs further complicate efforts to accelerate housing supply.

Even among those who support the transit-oriented development strategy, concerns persist that the plan is reactive rather than visionary. 

“The danger is that TODs are like putting your finger in the dyke,” Vivian says. “At the next election, someone will go the other way and play on density fears. You need a strong vision.”

As Sydney navigates its housing crisis, the question remains: Can Australia’s largest city strike the right balance between growth and preservation, or will its future be shaped by political and economic uncertainty?

Main image: Envato

Sources: www.ft.com , https://theconversation.com/au , www.abc.net.au