HIA
NEW independent Australian research has added weight to calls for planning reform, with evidence suggesting smaller minimum lot sizes could significantly increase housing supply and improve housing affordability.
The Housing Industry Association (HIA) says the findings reinforce concerns that outdated planning rules are preventing the delivery of more homes at a time of growing housing demand.
The research paper, What Local Land Use Reform Does, and Doesn’t Do, by the e61 Institute and the Centre for International Economics examined planning reforms in Adelaide’s City of Campbelltown.
It found reducing minimum lot size requirements increased housing approvals by 67 per cent, with most of the additional homes delivered as townhouses and row housing.
HIA Executive Director of Planning and Development Sam Heckel said many planning controls were introduced to address challenges from a different era and were now limiting both housing supply and consumer choice.
“At a time when governments are struggling to meet ambitious housing targets, many planning schemes continue to impose minimum lot size requirements that limit housing supply and housing choice,” Mr Heckel said.
“The impact is not just fewer homes. Restrictive lot size controls often prevent the delivery of smaller and more affordable housing options that can provide an entry point into established suburbs for first home buyers, downsizers and key workers.”
The findings also support HIA’s recent Increasing Gentle Density: Unlocking Subdivision report, which identified minimum lot size controls as a significant barrier to increasing housing supply. The association estimates that reducing minimum lot sizes could lower the cost of a new home by more than $200,000 through reduced land costs alone.
Mr Heckel said the latest research demonstrated that when planning barriers were removed, the housing industry responded.
“The issue is often not a lack of industry capacity, but the planning controls that limit what can be built,” he said.
With Australia already forecast to fall short of the National Housing Accord target of 1.2 million new homes, Mr Heckel said governments needed to move beyond reviews and policy discussions and implement planning reforms that encouraged more efficient use of residential land.
“If governments are serious about improving affordability and increasing supply, they must be prepared to reform outdated planning controls.”
