‘Upzoning’ Melbourne needed to fix housing crisis, big business says

Victoria should introduce consistent zoning laws across the state to boost housing stock and stabilise property prices, the Business Council of Australia says.

The nation’s big business lobby group will on Thursday release a housing report that will also recommend extensive rezoning across Melbourne and major regional towns to encourage more medium- and high-density housing to be built near infrastructure and services.

Camberwell is one suburb to have housing developments fast-tracked.Credit: Wayne Taylor

The state government’s housing statement, released last year, set out reforms to boost stock including rezoning surplus government land, fast-tracking housing developments that include affordable housing and clearing a backlog of building applications.

As part of its broader aim to add 800,000 dwellings across Victoria over the next decade, the state government recently announced plans to seize planning controls in 10 established suburbs – including Preston, Niddrie, Broadmeadows, Camberwell, Chadstone, Epping, Ringwood, Moorabbin, and Frankston – to boost density in so-called “activity centres”. This masthead revealed last month that the Allan government has plans for as many as 10 more such zones.

But the BCA says Victoria should go further and follow in the footsteps of New Zealand’s largest city, Auckland, which radically rezoned about three-quarters of its residential land in 2016.

A recent report into the “upzoning experiment” by Auckland Council found that the reforms had driven the construction of up to 43,000 new dwellings.

The boost in stock also spared the city from the country’s huge increase in the cost of housing – Auckland rents climbed by 10 to 20 per cent since 2016, compared with about 40 per cent in Wellington. House prices across the city have also grown more gradually, compared with jumps of up to 70 per cent outside of Auckland.

Business Council chief executive Bran Black said rezoning was a national problem.

While NSW and Victoria had started addressing the issue, Australia would still miss its 1.2 million new dwelling target over the next five years unless more was done, he said.

“These changes need to allow for greater density and height near good transport services, while at the same time protecting the quality of life, green space and heritage of an area,” Black said.

“Put simply, we need to build enough homes where people want to live, so until we fix that problem, it will be very hard to hit our housing targets.

“Building a home in the right place is as important as building it at all.”

The Allan government, which was briefed on the report before its release, said Victoria continued to build and approve thousands more homes when compared to other states.

“Areas with good transport connections shouldn’t be locked up, they should be opened up – that’s exactly why we’ve introduced draft housing targets for council areas and have announced ten activity centres,” a spokesperson said.

“We’re not going to slow down and over the coming weeks, we’re going to outline new key policy changes to build even more homes.”

The Business Council also highlighted reforms in South Australia, where the state government consolidated dozens of planning rules into one single code. Black said that had made a “big difference” when it came to home builders getting projects off the ground.

But Dr Stephen Glackin, a senior research fellow at Swinburne University’s Centre for Urban Transitions, warned against simple zoning changes to drive up density, saying suburbs also need mixed-use functions to be more liveable.

“The 10 activity centres already have a high a level of amenity as they are set up well for high density living,” Glackin said.

“Rezoning other areas to increase density is great in terms of housing outcomes, but you will need to make these areas more liveable.

“If there is going to be re-zoning more broadly it will need to include mixed use, so there are shops and services available within walking distance.”

In recent weeks, the state opposition has held a series of meetings with residents living near activity centres, vowing to oppose any attempt to remove third-party rights in the planning process and any attempt by Labor to remove heritage protections.

The report comes days after the business lobby called on the state government to strip planning powers from councils that fall behind on approving planning permits.

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