New research by the University of Sydney titled: ‘Urban regulation and diverse housing supply’ and commissioned by the Australian Housing and Urban Research Institute (AHURIA) was led by research author Dr Catherine Gilbert from the Sydney School of Architecture, Design and Planning identified the challenges to developing diverse housing types in Australian cities, as well as potential solutions.
The report found that land-use zoning laws can have a significant impact on whether diverse housing types, such as medium-density housing are permitted in residential areas, or whether they are financially viable to develop. But they are not the only factors challenging the delivery of diverse housing supply.
“Our research found that the barriers to diverse housing are more complex than land use planning constraints and that housing diversity doesn’t simply mean high-rise housing”, says Gilbert.
“For example, where zoning laws do allow for apartment buildings, land prices are typically higher, meaning that medium-density housing forms, including townhouses, are not financially viable which prevents the development of much needed diverse housing.”
The report also finds that it can be difficult for housing developers to obtain finance for projects that are perceived as riskier or lower profit, such as those that deliver unique housing products, use deliberative and community-led development models and/or provide housing for lower and moderate income earners.
The high cost of land, particularly in accessible locations that are well suited to medium and higher-density buildings and non-speculative and affordable housing projects, presents as a significant challenge for site acquisition.
“Land vendor expectations typically reflect the highest and best economic use value of land,” she says.
“This means that the projects that are best able to compete for sites are those that maximise density allowances and deliver housing for sale at market rates.”
Lack of government subsidies or support for affordable developments is a challenge for providing housing for low-income groups on a significant scale.
“Our research shows there are a number of key areas where government needs to show leadership in helping the housing industry build different and diverse housing,” says Gilbert.
“These include establishing targets and strategic directions for increasing the diversity of housing supply; providing long-term sources of funding to support not-for-profit housing developers to deliver new affordable housing supply; requiring a mix of housing types and tenures, including lower cost or affordable housing, as part of significant new residential development projects; and supporting projects that can demonstrate an affordability outcome or address an identified unmet housing need to progress through the planning system.”