Housing equality – a better future for all Australians
2 August 2021 at 5:23 pm
Mark Steinert, the recently retired managing director of Australia’s largest residential developer Stockland, shares his thoughts on the role the private sector has to play in achieving housing equality and why the key to improving affordability is density done well.
This is the last article in a 12-part series from Housing All Australians exploring the role that housing can and should play within Australian society and why it is important to our economy that we house all Australians, rich or poor.
Australia, “The Lucky Country”, continues to offer great opportunities to the majority of its residents having experienced moderate COVID impacts and economic growth consistently above the OECD average. Australia is home to just 0.3 per cent of the world’s population, but accounts for 1.6 per cent of the global economy. However, 116,000 Australians are homeless (Census 2016) and represent the most socially and economically disadvantaged. They do not feel lucky. This number is expected to have grown as COVID has created an even greater disparity between the haves and have nots, particularly for single women over 50 and Indigenous Australians. Housing affordability more broadly remains a significant social and economic issue, affecting social cohesion, wellbeing and inter generational mobility.
This is not a new problem and it is not unique to Australia. House prices have increased by 60 per cent more than goods and services on average across OECD countries over the past two decades. How we use our land and the cost of serviced land are primary drivers impacting the supply response in areas where demand is strong, which is particularly the case in job-abundant urban areas like Sydney and Melbourne. Land values have risen materially faster than construction costs with Australian house prices growing 6.8 per cent pa for the last 25 years while construction costs per square metre have tracked closer to inflation.
The reasons for rapid land price inflation are many, with the most important being an undersupply of zoned, serviced land which largely reflects strong demand growth; complex, inefficient planning policies which mean rezoning can take up to 10 years; and lagging infrastructure provision. Government charges have also grown relentlessly, for example the Housing Industry Association of Australia (HIA) estimates that direct and indirect costs associated with the planning process represent 25 per cent to 35 per cent of the price of new housing. Two of these issues can be solved by introducing more flexible, efficient land use zoning controls coupled with much greater approval certainty at all stages of development and reducing government charges where the derived benefits are greater than the tax revenue foregone.
It is important to remember that government policy will normally reflect the actual or perceived views of the community, with the vocal minority quite often having a disproportionate impact. Nimbyism (Not in my back yard) contributes to slow planning processes and a reactive rather than proactive approach to land use. Importantly things are changing with most Australian cities now having an aligned land use planning and infrastructure vision. However, the practical outcomes on the ground are still desperately inefficient.
Circular, sustainable economic and social principles applied to land use, construction and place making can create lower costs of production and maintenance, while creating more desirable community outcomes. Major enabling rail infrastructure and master planning of associated near station land use is a great example that produces significant direct and indirect economic and social benefits. Importantly all of these benefits must be counted to ensure the right decisions are made in allocating scarce resources.
Significant economic and social benefits are clearly observable from the new metropolitan rail infrastructure developed in Sydney, Melbourne and Brisbane in the last five years. This is the first significant heavy rail development in these cities in 50 years and combined with the master planning of near station land use has helped address affordability, inequality and economic growth. A new home in the west of Melbourne or Sydney is typically now only 35 to 45 minutes from the CBD and other key employment nodes by train and costs less than half an equivalent home in the middle ring. The new stations offer significant park and ride facilities but are future-proofed with large drop off areas, bike and scooter parking, improved pedestrian paths, security and big data analytics. In the best examples, adjoining convenience stores, super markets and services are blended with diverse housing solutions to create vibrant town centres. Childcare, schools, medical and wellbeing centres, government service centres, flexible work spaces, community gardens, community centres, landscaping and public art combine to create a real sense of place.
The time is now, with supportive social and affordable housing policy in focus with a bi partisan government view that housing or shelter – part of the base of Maslow’s hierarchy of human needs – is a common need for societal wellbeing. Proof of this includes the 2020-21 federal budget estimates which forecast a 37 per cent increase in housing related expenditure to $3.7 billion.
However, current policy will still leave thousands homeless over the next decade and without community, private sector and government support for high quality development this crisis will continue. This is where the private sector has a significant role to play. Trust must be built through high quality development, placemaking and social and enabling infrastructure delivery. A more deterministic and efficient planning and approval process needs to not only deliver housing at scale but high quality parks and open space, digitally enabled STEAM (science, technology, engineering, arts and maths) lifelong learning hubs, health and wellbeing centres, job creation, walking and riding trails, vibrant town centres and public/private transport connections.
Density done well is the key to improving affordability and livability, enabling younger generations to buy or rent a home and older generations to downsize in suburbs where they live. Connecting public infrastructure is essential and importantly innovation like electric autonomous vehicles, electric shared scooters and bikes, solar lit walking and riding paths and digital safety monitoring offer practical, non intrusive, green solutions to getting people to central train and bus stations. Billions are lost each year in planning and building approval uncertainty and inefficient transport solutions. These can be the source of funding for social and affordable housing and integrated placemaking through fair value capture. Done right social and affordable housing issues could be solved within a decade.
However, this better future requires a new approach from all stakeholders to put the needs of our whole community first, enabling the use of scalable master planning to develop better communities. This must not be at the mercy of the political cycle or the NIMBY trends that are so prevalent. YIMBY is the future, yes in my backyard, because I trust that sustainable, planned development that balances social and economic needs will be good for me and my community.
This article is the last in a 12-part series from Housing All Australians, which intended to draw on a range of perspectives centred around housing and homelessness. It featured a range of views from business, the not-for-profit sector and government, as to why they believe housing is an important social and economic building block for Australia’s future prosperity.