A major new report by the Grattan Institute has called for governments to allow three-storey townhouses and apartments on all residential land across Australia’s suburbs in an effort to tackle the nation’s worsening housing crisis.
The report argues that restrictive planning laws have made housing scarce and unaffordable in areas where people most want to live. It recommends that all suburban blocks should permit buildings up to three storeys, while developments of six storeys or more should be built near public transport hubs and commercial centres.
Lead author Brendan Coates said the current system “says no to new housing by default and yes only by exception,” blaming state planning controls for driving up prices by hundreds of thousands of dollars. He described the situation as “a housing affordability crisis dividing families and robbing young Australians of opportunity.”
The report estimates that freeing up residential land could boost housing construction by 67,000 homes a year, cut rents by 12 per cent within a decade, and reduce the cost of a median home by more than $100,000.
It follows the Victorian government’s planning overhaul, which removes most residents’ rights to object to new housing developments and forces councils to decide applications within ten days.
Currently, about 87 per cent of residential land within 30 kilometres of Melbourne’s CBD is restricted to low-rise housing. The report says these limits have made Australian cities among the least dense in the developed world.
Coates said population growth, particularly in Melbourne, which is expected to reach 8.5 million by 2055, demands a “housing policy revolution.”
“The equation is simple,” he said. “If we build more homes where people want to live, housing will be cheaper, and our cities will be wealthier, healthier, and more vibrant.”
