Australia could have built an extra 1.3 million homes over the past 20 years, but costly zoning, planning and building red tape imposed by local councils is chiefly to blame for a huge housing undersupply, according to analysis by former Reserve Bank of Australia economist Tony Richards.

In new research published today by The Australian Financial Review to kickstart a series on housing supply, Dr Richards said building more medium-density homes may require taking powers off local councils to stop caving in to “NIMBY” (Not in My Backyard) agitators.