The ACT Government’s target of 30,000 new homes over the next 5 years is the right one.1 It is an ambitious commitment that recognises the scale of the housing crisis in Australia’s fastest growing,2 most dynamic, but highest rent city.3

Over 2016-21, the ACT’s population grew by 14.37%.4 Should this pace of growth continue, we will have more than 65,000 new Canberrans on census night 2026. 30,000 homes is in the right ballpark to house these new Canberrans (although more will be needed to meaningfully increase affordability) even if this Budget otherwise continues the ACT Budget’s long tradition of unrealistically low estimates of population growth.5

The Government’s focus on gentle urbanism and missing middle housing - dual occupancies, duplexes, row houses, terraces, townhouses, villas, and walk-up apartment buildings - is also welcome.6 We know from Canberra’s Housing Choices consultations that these are the kind of housing typologies that Canberrans want more of, and it’s these typologies that Greater Canberra has been advocating for over the past year.

The Budget is an important first step. It sets the right target for the right kind of housing. It also laudably allocates more funding for the ACT Planning and Land Authority to deliver on these goals, and more money for public housing renewal.7

Now, the Government needs to articulate a path to deliver these 30,000 more homes - and that’s where its plan falls short.

The 2022-23 Indicative Land Release Program currently plans for 16,417 new homes over the next five years.8 The 2022-23 Budget promises a doubling of that. To achieve it, the government will need to add 13,583 unplanned homes to the ILRP.

In planning terms, 5 years is the day after tomorrow. The Demonstration Housing Project started in 2018,9 and in 2022 we’ve only just had the first development approval granted.10

If the ACT Government began planning for new greenfield suburbs today, not a single new house would be ready by 2027, or even by 2030. The necessary environmental assessments, planning processes, and infrastructure construction for new suburbs cannot be done in a 5 year period. The Whitlam master plan was completed after years of work in 2018, and new residents only began moving in late last year.

Similarly, it would be extremely difficult to deliver new “brownfield” developments on unused urban land to make up these 13,583 additional homes. Even substantially accelerating existing brownfield developments in train to deliver homes before 2027 would be a herculean challenge. The Kingston Arts Precinct has been in planning since 1997, while the Eastlake project has been planned since 2004. Both are still many years away from being shovel ready.

While the ACT should absolutely commit more resources to accelerate the timeframes for delivery of these projects, it is inconceivable that planning and construction could be completed within 5 years.

Greenfield cannot deliver 30,000 new homes in 5 years. Brownfield cannot deliver 30,000 new homes in 5 years. While increased medium-rise apartment development in town centres might get us part of the way there, this is not certain, and it’s certainly not consistent with the government’s stated desire for missing middle housing.

There is only one path to achieve the Government’s target of 30,000 new homes over the next 5 years. That path is zoning reform to legalise the construction of the types of housing that the government has identified - dual occupancies, duplexes, row houses, terraces, townhouses, villas, and walk-up apartment buildings throughout Canberra.

Currently, these types of housing are illegal to build in Canberra’s RZ1 (Suburban) housing zone that makes up 80% of Canberra’s residential land,11 and strictly limited in RZ2 (Suburban Core) that makes up another 10%.

This means that as thousands of Canberra homes reach the end of their usable lives, houses on large blocks in inner Canberra are being knocked down and rebuilt as McMansions, rather than as medium-density housing that would be affordable to young Canberran families.

We know that when we embrace general, widespread zoning reform, many additional medium-density homes are built quickly. In 2016, Auckland upzoned three quarters of their core suburban area. This resulted in an additional 19,725 building consents through to 2020, doubling the rate of housing construction in that city.12

The Budget papers make clear that the Government knows that suburban upzoning is the only path forward. But it gets the approach wrong:13

The ACT Government is currently undertaking work to develop district strategies, and these will identify potential locations for change, many that will be within the areas identified in the Planning Strategy as well as considering other opportunities.

To be clear, the forthcoming district strategies absolutely should consider sites of potential urban intensification. But this must happen in combination with, and addition to, general upzoning for all RZ1, RZ2 and RZ3 areas in the ACT.

At earliest, the district strategies will be put out for consultation sometime later this year, and then will be finalised mid-2023. Actual zoning changes to the Territory Plan would take longer, and even assuming no delays due to local opposition (highly unlikely), construction on new housing likely couldn’t commence until 2025 or 2026.

Instead, the Government should simply change the zoning rules for all RZ1, RZ2 and RZ3 zoned land in the draft Territory Plan to be released for public consultation in October or November:

  • At a minimum, unit-titled dual occupancies/duplexes should be legalised in all of RZ1. The Government should go further, and examine adopting similar zoning rules as being rolled out in New Zealand via the forthcoming National Policy Statement on Urban Development, such as the alternative medium density residential standards proposed by the Coalition for More Homes.
  • The Government should go further in RZ2 and RZ3, upzoning these areas to legalise medium-density perimeter blocks of non-detached housing.
  • Rules for granny flats should be made more generous and parking minimums eliminated.
  • As recommended by the ACT chapter of the Australian Institute of Architects, low-impact medium-density developments should be exempt development and not require development approval.14 It makes no sense for hulking McMansions to be exempt from the DA process, but low-profile multi-unit development to be subject to onerous DA processes and inevitable ACAT litigation from NIMBY neighbours.
  • The Government should urgently expedite the review of ACT parking minimum requirements, with an eye to reducing the amount of parking that every home is required to have by law, regardless of whether the resident wants or needs it.
  • These revised rules should be as simple and easy to use as possible.

If such general rule changes were included in the draft Territory Plan to be released later this year, they could be in place as soon as late 2023, adding thousands of new homes through to 2027 and beyond.

These simple, general and universal rules would be far more effective, usable and fair than rezoning only select areas and having lengthy arguments about where those areas should be:

  • It will enable vastly more homes to be built than any spot zoning approach, and increase the rate at which they are built.
  • At the same time, construction will be less concentrated in any given area.
  • It will prevent wealthy areas of Canberra pushing development into less well off areas that are not as organised to lobby against it.
  • It will enable every Canberran homeowner to age in place, to redevelop their home as an age-appropriate dual occupancy or multi-unit dwelling, and then sell the other homes to young Canberran families, rather than just a select few.
  • It will introduce competition to large property developers by allowing every Canberran homeowner to add more housing to the market.
  • It will ensure there are simple, clear, universal building rules across Canberra so that builders, homeowners, developers and planners know clearly what is possible on a given site.
  • It will allow young Canberrans who can currently only afford to live in apartments in town centres or on the extreme suburban fringe the ability to buy affordable family homes in established suburbs with family friendly amenities (parks, schools).
  • Doing so would also lead to lower average emissions, more financially sustainable and efficient public transport, and lower cost of services and infrastructure per resident.

The price of not doing this is high. Canberra’s rents are already the highest in the country due to the failure of housing supply to keep pace with population demand. Further failure will increase poverty, make working Canberrans poorer, and stifle our economy. It will mean fewer presents under the Christmas tree, more children in poverty, and Canberran businesses that simply cannot compete with rivals interstate, because a Melburnian rival can pay their workers $14,800 less per year for the same after housing cost income.15

High-income interstate immigrants who come to Canberra to work or study will still come. And they will outbid born-and-bred Canberrans who aren’t as fortunate for the same, limited supply of houses and rentals. Already, many Canberrans are displaced out of our city because living here is so much less affordable than elsewhere in Australia. If we let the situation get worse, thousands more will follow.

That’s the stakes of the housing crisis. That’s the price of failure.

We know what we must do. Urgent general zoning reform is the only path to meet the government’s 30,000 new dwelling target by 2027. Such reform would be politically difficult, but New Zealand’s bipartisan zoning reform shows the way.

Greater Canberra calls on all MLAs to work to liberalise zoning rules to allow Canberra to build the 30,000 homes over the next 5 years that we need to alleviate the housing and cost of living crisis. Together, we can build a better future for our children.

Footnotes

  1. ACT Budget Speech 2022-23 ↩

  2. Australian Bureau of Statistics, Regional Population, 2021, 26 July 2022. ↩

  3. See Australian Capital Cities, Median Rents, Real terms ↩

  4. Gerard Cockburn, Census data reveals ACT leads pack in population growth, The Canberra Times, 28 June 2022. ↩

  5. 2022-23 ACT Budget Outlook, p. 28. Here the Government appears to project a drastic fall in the population growth of Canberra, from 13,800 in 2016-17 to 7,000 in 2023-24. This appears to be a consistent issue with ACT Budget population projections - for example, the 2017-18 ACT Budget Paper 3 (p. 14) claimed that population growth in 2016-2017 was ~5,800, less than half of what the 2022-23 Budget now reckons was the actual population growth in that period. ↩

  6. ACT Budget Speech 2022-23 ↩

  7. ACT Budget 2022-23, Statements E - EPSDD, p. 9. The government is budgeting for an additional 50 FTEs for EPSDD in this budget. ↩

  8. 2022-23 Indicative Land Release Program, pp. 8, 55. ↩

  9. See Lucy Bladen, Expressions of interest open for ACT Demonstration Housing project, Allhomes, 12 April 2018. ↩

  10. Stellulata Cohousing, We are looking for a builder, June 23 2022. ↩

  11. With some exceptions for Mr Fluffy blocks, public and social housing, and some non-standard blocks. You can build a single titled dual occupancy on some larger RZ1 blocks, but as the second unit cannot be unit titled or sold separately, this is largely unviable and may make the property difficult to sell. ↩

  12. Greenaway-McGrevy and Phillips, The Impact of Upzoning on Housing Construction in Auckland, Centre for Applied Research in Economics, October 2021. ↩

  13. 2022-23 ACT Budget Outlook, p. 75-76. ↩

  14. Australian Institute of Architects (ACT Chapter), Submission to the Draft Planning Bill ↩

  15. SQM Research, Canberra Rents and Melbourne Rents, shows a $200 weekly gap between marginal house rents, or ~$10,400 AUD annually. Since rent is an after income tax expense, but wages are not, Canberra employers would need to pay ~$14,800 AUD to make up the rent gap between the two cities for an employees, where that employee’s marginal tax rate is 32.5 cents on the dollar ($45,001 – $120,000) ↩