Australia has some of the least-affordable housing in the English-speaking world. But the premier of Victoria has announced that his state’s government will make 90,000 new home sites available for housing by rezoning land in the Melbourne urban area.
Housing in Melbourne.Flickr photo by Mark Larrimore.
As near as I can tell from the stories, he is not proposing to expand Melbourne’s urban-growth boundary, but to immediately reclassify lands in what American planners would call the “urban reserve” for housing. He also promises to streamline the approval process so as to take a full year off the time it takes to get a permit to build. Of course, once the 90,000 home sites are taken up, the government may have to expand the boundary for real if it wants to keep housing affordable.
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Victorian demographers predict that Melbourne will overtake Sydney as Australia’s largest city within two decades. Melbourne is already more affordable than Sydney, so if New South Wales doesn’t make more land available for Sydney’s growth, Melbourne will probably grow even faster.
It will be interesting to see if 90,000 new home sites and a streamlined planning process reduce Melbourne home prices or merely slows the rate of increase. Of course, it might be hard to tell since the deflation of America’s housing bubble is already having an impact on Australia’s housing market.
Credit for this political development should go to Bob Day, an Australian home builder. Day came to one of the Preserving the American Dream conferences and was so impressed by Wendell Cox that he invited Wendell to come to Australia to do research and public speaking on housing there. Together, Day and Cox made Australia’s unaffordable housing a major political issue, and their efforts are paying off for future home buyers.
The government policies I’ve noticed that make housing expensive are those that require minimum lot sizes and set limits on maximum allowable density. From what I can tell, larger lots and larger houses cost more than smaller lots and smaller houses.
Why isn’t the Antiplanner railing against large lots and large houses, and the government policies that foster them…?
People who support large houses on large lots support unaffordable housing.
d4P –> That could be true if all things were equal but…. My parents were able to buy and build a 4200 sq ft on a 5 1/2 acre 15 miles out of downtown St. Paul for less than what a condo 1/2 that size would have cost in downtown St. Paul. As for ongoing costs, they specifically chose the location because it was in a township that quickly filled up and had no desire to be a city. That is, it’s full of 5 acre lots and does not have a pressing need to provide expensive services. It contracts with private companies and the county for what few ones it needs. So their taxes are much lower. The total cost for those 5 1/2 acres was, IIRC, $38,000. Now granted that was 18 years ago but even at that current land prices are lower than the per acre costs in more dense cities around it, let alone St. Paul.
I suppose if all the other costs – time, land, ordinance compliance, dealing with NIMBYism, taxes, building material, et al. – were somehow all the same then in theory it could be less expensive to have more houses sharing the same amount of land. The problem is that the density itself brings costs in terms of services, building higher, etc.
Congratulations to Wendell Cox for a job well done. Now let’s watch this over the next few years and gauge the results. My money is on success.
D4P should understand that even though larger lots with larger houses may be built letting the market decide is not government intervention. Affordability is based mainly upon the initial cost of the lot, get the land prices down and home prices will go down as well. You are not going to get smaller houses on expensive lots. This is a good first step to allowing (not making) more affordable housing.
D4P should understand that even though larger lots with larger houses may be built letting the market decide is not government intervention
Except that government intervention (through such policies as relatively large minimum lot sizes and relatively low maximum densities) make housing unaffordable by making the lots large in the first place.
Governments need to reduce allowable lot sizes to make housing more affordable. I would expect the Antiplanner to jump on this bandwagon any day now.
Recent market pricing shows that small lots and townhome-condo are actually still increasing in value, while the rest of the single-fam market in this country is decreasing in value in almost all markets.
In addition, most demographic studies show that future market demand will be for mostly small-lot SFD or SFA – only about 25% of new demand will be for SFD. So the market is seeking affordability not in SFD, but in other products. Of course, we expect certain ideologies to be trumpeting these developments in affordability any day now. Annnny day.
DS
“Governments need to” is at odds with someone identified as an Antiplanner.
I’ll posit that large-lot policies are a problem of lesser order to those who are not worried about the world running out of buildable land. If some village on the edge wants to command big lots, that’s just not the same level of injustice and foolishness as a regional planning body artificially limiting land supply. One must pick his battles.
“Governments need to†is at odds with someone identified as an Antiplanner.
Not when “loosen regulations” follows “to”.
Demographic studies indicate that people are going to want smaller housing units? Those must be some awesome studies! I also heard that people are going to start demanding much smaller television sets, after all they won’t need large screen TVs in their tiny apartments, and would have no way of transporting big screen TVs in their newly-demanded tiny cars anyway. I know the current trend is away from that, but the study indicates that the trend will be doing a 180 at some indeterminate point in the future.
Some other words from Bob Day.
Would be interesting to know what the existing zoning rules are within city’s UGB.
Mr.Cox like Mr.O’Toole isn’t exactly the most honest person when it comes to this subject. On one hand they say they are “pro-market”, but when you scratch the surface you’ll notice that they really aren’t.
Australia is a nation roughly the size of the lower 48 U.S. states with a population roughly equivalent to that of Texas. Ever been to Australia? The housing stock, nationwide, in terms of lot size is sort of what you’d see in an area like Westwood. Westwood is really nice, and if I ever hit the lottery I may try to buy a three bedroom house there. Large lot zoning is not an issue in Australia, full stop. In their enourmous nation, Australians have managed to scrunch themselves in to tiny housing units and tiny cars, consinging themselves to high housing costs as a direct result of artificial land scarcity and density planning. You may hate large lot lot zoning, but this is not a factor in Australian housing prices, or for that matter a factor affecting Australian housing in any meaningful way at all.
Your “pro-market” statement is just misplaced. If Australia had a mix of density zoning and large lot zoning, and dropped urban growth boundaries there would at least be choice. There would be a choice of zoned areas — c’est la vie — but individuals could choose a lifestyle based on true lot preference. Such is not the case now. Australia is a wonderful country, and it’s too bad that it has a housing policy that crams people into tiny units on such a vast continent.
Demographic studies indicate that people are going to want smaller housing units? Those must be some awesome studies! I also heard that people are going to start demanding much smaller television sets
Such an answer is consistent with cognitive dissonance*.
Sorry that the trends are away from the ideological identity and fundament, but someone has to break it to the adherents. Don’t take the trends personally.
DS
*sounds better than ‘blew a gasket’, dunnit?
Don’t mandate either. Don’t require certain lot sizes, period, large or small. Allow for both. Allow for higher and lower density residential units in local and state law. The market will determine how many of what will be built. Growth boundaries shouldn’t be set in stone, either. If they allowed for market expansion and were used to direct development rather than prohibit development it could potentially have a zero net influence on the housing market. Unfortunately for Randal, it requires planning for infrastructure and tax investment purposes to get the maximum return for the money.
Don’t require certain lot sizes, period, large or small. Allow for both. Allow for higher and lower density residential units in local and state law. The market will determine how many of what will be built.
Although it doesn’t play well in certain areas of the blogosphere where the adherents are few but their output is prodigious, this is basically what Smart Growth is trying to do. The first sentence is it. Trouble is, as in my last place, lots of folk don’t like that. So in concept folks want affordable housing and mixed lot sizes, just not near their house.
DS
I have never been to Australia. Flew over part of it and made a couple of stop-overs at Sydney airport. From the air it looks a deserted continent.
But let’s do a simple macro calculation: Australia, population 21,000,000 assume average household size 2 people, so 10,500,000 households. Let’s assume that every family were to abandon it’s current living conditions and move into, say, ¼ acre (~11,000 sqf = 1050 m2) lots. That would occupy 11,000 square kilometers of residential space for the entire population of Australia. But let’s multiply that by 5 to account for roads, industry, parking lots etc. That would make the total urbanized area 55,000 square kilometers.
Since Australia is 7,750,000 square kilometers that means that a whopping 0.7% of the Australian continent would become urbanized! leaving a mere 99.3% undeveloped. Clearly a sprawl of obscene proportions!
D4P said: “The government policies I’ve noticed that make housing expensive are those that require minimum lot sizes and set limits on maximum allowable density.â€Â
I agree. That type of zoning too, when mandatory, is also problematic.
But the bigger problem, and what affects housing choice and affordability the most (not to mention property rights), is that back to the future urbanists want to zone mandatory high density on just 5% of the county land and mandatory 160 acre minimum lots on the remainder 95% of the county land.
…And yes, indeed. I tend to think that perhaps, most zoning can be addressed by private contract, much like easements, especially when new subdivisions are created. Before subdivision or development, the owner or developer of the larger parcel could put a restriction on all the subdivided lots if such restrictions make the lots more attractive to buyers. These restrictions could pertain to rules for further subdivision as well as building rules etc.
Then market forces, and people’s preferences, as opposed to government mandates, would determine what looks more attractive to buy; a lot that comes with further subdivision restrictions and the guarantee that your neighbors are subject to the same restrictions or a lot with no restrictions (or fewer restrictions) where your neighbors are also free to subdivide etc. Most likely the market would provide both types since there is probably demand and preferences for both.
This is essentially what happens in many subdivisions where the original developer places restrictions even on the possible color choices for the houses that will be built. They put those restrictions voluntarily because they have estimated that there is indeed a market for such uniform housing (no I’m not part of that market, in case you wondered).
But this can be a long topic perhaps another discussion…
back to the future urbanists want to zone mandatory high density on just 5% of the county land and mandatory 160 acre minimum lots on the remainder 95% of the county land.
Evidence plz. Quotes from books, journal articles, periodicals quoting a NU, etc. Figures and percentages from NUs to back your claim.
Thank you in advance.
DS
Ettinger wrote at 16
“But the bigger problem, and what affects housing choice and affordability the most…is that back to the future urbanists want to zone mandatory high density on just 5% of the county land and mandatory 160 acre minimum lots on the remainder 95% of the county land”
Since you’re talking about Jackson County, Oregon, in fairness it should be mentioned that (1) 160-acre min. lot size is not unusual for a farmland zone (whether its purpose is really to preserve working farms is another story), and (2) there are intermediate zones between the the UGB and farmland classes within the County. As for the affordability issue, our host’s book (a updated online) The Vanishing Automobile deals with this issue; a concise article on the subject may be found here. For an interesting contrast, compare the housing cost numbers for Portland and Ft. Worth at City-Data (note pop. numbers for Portland are wrong).
As an aside, I wouldn’t lump (New) Urbanists in with Smart Growthers (although I’ve made that error myself). Bob Day could be considered a New Urbanist. Compare his views as set forth above with this SG plan , which (1) bypasses the legislature, (2) is composed entirely of state-level politicians and administrators,and (3) unless luncheons count, can conduct its business outside the view of the public.