The devastating and far-reaching impact of the 2022 floods in eastern Australia, particularly the very large numbers of people likely to be displaced for long periods of time, and the wider impacts for businesses and schools, draw parallels with the Cyclone Tracy disaster. Just as the lessons from Cyclone Tracy brought about fundamental changes to Australia’s design and construction practices as well as emergency planning, in responding to the 2022 flood disaster it will be crucial to implement deep, system level interventions within the northern rivers region and beyond.
In the sections below we offer overall comments in relation to the role of the higher education sector across research, knowledge sharing, education, and capacity building as well as a series of more specific remarks in response to the Inquiry Terms of Reference. While our comments are broadly applicable to flood risk, recovery, and resilience planning across the state of NSW, we focus many of our remarks on the northern rivers region, recognising that it is in this region that the challenges associated with recovery and reconstruction are particularly acute.
Professor Nicole Gurran, School of Architecture, Design and Planning, The University of Sydney, argued that demand-side initiatives, particularly those targeted at first home buyers, risk increasing house prices. In particular, Professor Gurran argued that the scheme may raise prices in the already competitive lower end of the market:
We know already that there is still intense competition at the bottom, if we can call a $1 million property the botom of the housing market, but we know that there is already high competition at that level. So there is a risk that the scheme may bolster prices at that point.
Hot rental markets generated many popular news headlines during 2022.
Australian news consumers have read that “Renters are getting smashed” in Melbourne, and that the rental market is “extremely challenging” in Sydney, and ever that “Renters
competing 'Hunger Games-style' as number of rental properties dwindles”.1
These headlines are certainly very shocking, and no doubt attract clicks.
As well as rental data, vacancy rates of rental property is a metric that is commonly quoted in media reports to provide insights into the economic processes happening in the rental market. “National vacancy rates hit record low” was an October 2022 headline.2
But like all economic data, reported rental prices and vacancy rates need to be properly interpreted. Understanding what these metrics mean in terms of underlying economics is tricky.
This note explains how several different popular rental price and housing vacancy metrics are created and provides commentary on how they should be interpreted.
A clear explanation of popular rental metrics shows how it can be simultaneously true that the rate of growth of rental prices for new contracts was at record highs in mid-2022, but the average rental price paid across all dwellings was still lower than in 2018.
Often different metrics have similar names but measure different things, and subject to different errors and short-term variation, which means caution is needed to use them to interpret underlying economic processes.
Housing is one of the biggest worries for Australians, especially renters and new buyers. Yet any policy that significantly reduces the market price of housing—rents or prices—will wipe billions in revenue from landlords and trillions in asset value from all homeowners (currently 65% of Australian households).
Australian homeownership rates declined from 2006 to 2016 (though may have risen recently). This headline figure hides a disproportionate decline in homeownership for younger and poorer households. Households headed by a person aged 25-34 saw homeownership decline from 60% in 1981 to 45% in 2016, while for the households aged 35-44, homeownership declined from 71% to 62% over that period. Households aged over 65 had no declines. The bottom 20% of households by income are spending more on housing rents than ever.
Young Australian adults, especially parents, face the uncertainty and rising cost of renting that undermines quality of life. Homeownership early in life provides security and stability, which is why it has traditionally been a public policy goal.
Glaeser and Gyourko (2003) (G&G) famously argued that if the marginal cost of a square metre of housing lot land is less than the average cost, this is evidence of a price effect from “artificial” supply constraints. They call this price gap a “regulatory tax”, but it is also known as a “zoning effect” or “zoning tax”.
Their logic has been relied upon by hundreds of other studies and in numerous replications of their approach, including by economists from the Reserve Bank of Australia, whose results were widely publicised (Kendall and Tulip, 2018). However, the economic assumptions behind G&G’s approach are implausible. Although popular, their method should not be relied upon to infer anything about the nature of housing supply. This note explains why.
In its 2021 budget, the Victorian government announced a new tax on windfall land value gains from rezoning (also known as a betterment tax)
This note explains the economic principles behind such a tax, the benefits of applying such a tax, implementation issues that need to be considered, and lessons from the operation of similar taxes elsewhere.
Property is, conceptually, a finite bundle of rights. Rezoning grants additional property rights to owners of an existing set of property rights. Those new rights could instead be sold at a market price. A tax on the value gain from rezoning at anything less than 100% is equivalent to selling the new property rights from the community to the current property owner at a discount. Just like selling other property rights from the public to the private sector does not add to market prices in property markets, nor does selling rezoning rights.
Housing industry lobbyists in Australia and abroad often claim that property-related taxes comprise a large and growing share of the price of new housing and are hence pushing up the market price of new and existing dwellings.
Land taxes, stamp duties on property transactions, GST on value-added investments, and other fees and charges are generally included in this analysis, as are many inferred price effects that are assumed to be due to regulations.
This note explains four reasons why the claims of this tax summation approach are not valid.
Many of the included costs are not taxes on new housing.
Adding indirect taxes double counts.
Assumed price effects are implausible.
Taxes on property assets reduce market prices, not add to them.
Densification of established suburbs is often a desirable planning outcome, providing benefits in terms of the efficiency of transport networks, land use, and provision of public services. However, planning for density will not entice private landowners to redevelop to higher density unless it is also economically advantageous to do so.
"There are economic limits to density as well as regulatory ones"
This guide is designed to help planners incorporate considerations of the economic limits to, and benefits of, density in the creation of planning instruments to ensure that their objectives align with those that are also economically viable.
We first describe the residual land value model that forms the basis for understanding the economic effects of planning on land values and development feasibility. We then outline the three key economic conditions that exist for development to be viable.
Total market price must exceed total development cost
The marginal cost of additional density equals the market price at the optimal density
Land value at the optimal density use must exceed the value for current uses
These conditions need to be considered in the development of planning policies if they are to achieve their objectives.
This article highlights key research on gender, cities, and planning. Despite some progress, recent research suggests that the ‘gender agenda’ remains incomplete, likely due to failures and inequalities in planning schools themselves.
Feminist researchers have long critiqued failures to consider gender in urban planning and design. Broadly speaking, this work highlights three concerns:
• How the spatial arrangement and design of cities, neighbourhoods and homes reflect and reinforce gender norms, impede women’s mobility, and limit economic opportunities;
• Physical safety / exposure to violence, particularly in public spaces; and
• Under-representation in political and leadership roles and or planning processes.
Although earlier writing focused on gender based differences, more recent work emphasises that gender intersects with other factors – such as race, class, age, ability – to mediate needs and experiences of the city.
The current housing crisis has renewed debates about how to regulate short-term rental platforms such as Airbnb. The international research on the impact of these rentals is clear: when landlords “host” tourists rather than residents, housing supply is depleted, rents rise and neighbourhoods change.
Given Australia’s dire shortage of rental housing, restricting short-term rentals seems like a no-brainer. New research published this week showed the share of rental properties under $400 per week has fallen to 15% in most capital cities – half of what it was a year ago.
We’ve long studied these issues, watching as major cities around the world – from New York to Berlin to Barcelona – have enacted strong laws designed to protect local housing supply and neighbourhoods.
But do they even work? And would controlling short-term rentals solve Australia’s long-term rental crisis?
The federal Labor government has promised to craft a national housing and homelessness plan and to fund new social housing, returning Canberra to a field it all but abandoned for a decade. A new Productivity Commission report is scathing about current arrangements and calls for far-reaching change.
Yet some of the report’s key recommendations rest on faulty assumptions and outdated economic thinking. It relies on a misplaced belief that the market will respond to low-income households’ need for affordable housing. Its faith in deregulation as a cure-all is misguided.
The experience of recent decades and a wealth of research evidence instead point to the need to increase government investment in public and community housing.
From devastating floods to an escalating housing crisis and the ongoing upheavals of the global Pandemic, the need to reshape Australia’s cities and regions for a more resilient future has never seemed more urgent. So, it is with great pride that I introduce this year’s Festival of future Urbanism Review, which brings together key insights from our 2022 events.
Over two stimulating weeks in Sydney, Melbourne, and for the first time, Albury, more than 80 eminent leaders from academia, industry, policy and advocacy communities engaged in debates ranging from disaster resilience planning and zero carbon models of development to ensuring affordable housing for all; ethical leadership; ideas to save the future metropolis and much more.
Once again, it was an honour to direct this year’s Festival in partnership with Professor Carl Grodach along with his team at Monash University, and a great pleasure to return to in-person events after a two-year pandemic hiatus.
A real highlight was the Festival’s first regional event at the wonderful Murray Arts Museum Albury (MAMA). Fifty years after former Prime Minister Gough Whitlam’s short-lived attempts to foster decentralisation, this event, held in Albury, one of his flagship National Growth Centres, re-examined prospects for future growth in regional Australia and priorities for contemporary government intervention.
This year we’ve expanded the range of urban literature explored through our City Road Podcast book club series, curated by Dr Dallas Rogers, to include a special segment on children’s engagement with the city as well as the role of speculative fiction in signposting alternative futures. City Road has also produced a special Festival highlights podcast series drawn from our key live events.
We were particularly delighted to continue our student film competition for a second year, which attracted many creative responses to the Festival theme of ‘future’ urbanism. Our oversubscribed field trip ‘From Plans to Places’, hosted by urban geographer Dr Kurt Iveson and leading urban designer, Diana Griffiths, gave participants a glimpse of the public spaces that central Sydney might have had, but for the twists and turns of the planning and development processes as private and public interests are renegotiated.
I would like to extend a warm thanks to our Festival audiences and the thousands
of participants who have subsequently viewed our ‘on demand’ content online. A special thanks to our speakers and panel chairs, the Festival curatorial committee of Drs Dallas Rogers, Sophia Maalsen, and Jennifer Kent, as well as the expert technical and communications team at the School of Architecture Design and Planning.
The essays and accounts collected in this Review represent just some of the diverse perspectives shared at this year’s Festival of future Urbanism. They all underscore the need for research informed dialogue and policy innovation to bring about better urban and regional futures.
It was a tremendous honour to direct the eighth Festival of Urbanism, in partnership with Professor Carl Grodach.
This year’s festival theme of ‘endangered’ urbanism engaged with the existential threats facing cities and regions in Australia and across the world - from the global pandemic to social division, economic turmoil, and deepening climate risk. But it also highlighted the strategies of resistance and innovation by which communities, policy leaders, practitioners and researchers can and are responding to these dangers
From Indigenous perspectives on country to the future of urbanism; from public health in cities to the flight to the regions; and from infrastructure governance to ethics in urban decisions; the two week Festival featured 22 diverse events and 85 impressive speakers. But in keeping with previous Festivals of Urbanism, this was no academic talk fest.
Rather, researchers from the Universities of Sydney, Monash, Melbourne, Western Australia, NSW, RMIT, Harvard and more were joined by industry leaders, policy makers, politicians and community advocates, debating the spatial logic of Australia’s cities, disrupted by public health concerns, new patterns of working, and the ongoing housing crisis. Festival audiences were invited to experience an extraordinary smoking ceremony filmed on Bundjalung country in Northern NSW before engaging with a rich conversation on the need to transform planning, environmental and cultural heritage processes in ways that genuinely respect and foreground Indigenous knowledge, stewardship and land.
A panel of leading international urbanists, from North America to Australia, discussed
the lessons from the COVID-19 Pandemic for future city planning and urban life. The NSW Minister of Planning and Public Spaces, the Hon. Dr Rob Stokes MP shared his own reflections on the future of Australian cities and the role of planning, informed both by his professional and public roles as well as his research experience most recently at the University of Oxford.
Among the many other Festival highlights, I was delighted this year to establish a student film competition which yielded numerous, creative and thought provoking entries exploring endangered urban environments and communities. We also launched the Festival of Urbanism book club podcast series, curated by Dr Dallas Rogers and featuring a diverse collection of fiction, essays, and non-fiction books by Australian and international authors.
The Festival program attracted more than 5,000 registrations and strong audience participation was a highlight across the events. I would like to thank our Festival audiences for bringing their own insights and perspectives to the discussion. Particular thanks are also due to all our of speakers and panel chairs, the Festival curatorial committee of
Drs Dallas Rogers, Sophia Maalsen and Jennifer Kent, as well as the expert technical and communications team at the School of Architecture Design and Planning.
The papers, accounts, and images collected in this Review represent just a sample of the diverse perspectives shared at this year’s Festival of Urbanism. Together, they highlight the need for ongoing research informed dialogue about the future of the city and the quality of urban policy and debate.