Well-located homes: how to steer 1.2 million dwellings to the right places

Housing policy certainty, faster infrastructure rollout, and more central coordination of agencies involved in delivery are key to hitting the Government’s target of 1.2 million new well-located homes, new AHURI research has found.

Study lead Professor Rachel Ong ViforJ said while most attention around the National Housing Accord target has been on how many homes have been built, this research aimed to give policymakers the evidence needed to get homes built in the right places.

Researchers found despite compact-city policies and general agreement that ‘well-located’ meant housing close to jobs, education and amenities, much new development still occurred via urban expansion and on city fringes.

“Broadly, housing and planning strategies signal densification and support well-located development but lack dedicated funding and are rarely explicitly incorporated into state statutory schemes, making them unenforceable,” Professor Ong ViforJ said.

Mapping of homebuilding across capital cities and some regional centres revealed significant variation in the proportion of new homes going into high-amenity areas.

Sydney outperformed other capital cities, with about 46% of new housing built in the highest-amenity areas, while Melbourne, Perth and Adelaide skewed more towards middle-amenity areas. Brisbane, Darwin and Canberra sat in between. Geelong and Newcastle had the largest proportion of new housing supply in the lowest-amenity areas.

A longitudinal analysis found people in high-amenity neighbourhoods enjoyed better social functioning and general health; however, dense amenities could also produce negative trade-offs, such as exposure to crime and noise.

The research also highlights the price and rental premium that well-located suburbs command – especially for detached housing. Even with factors supporting developer project feasibility, the research found many low-income renters would still be priced out of well-located areas.
 

Infrastructure delays and council attitudes among key barriers

Interviews with developers, planning consultants and community housing providers revealed key obstacles to delivering affordable well-located medium- and high-density housing.

These included uncertainty around the type, timing and cost burden of infrastructure delivery, build costs exceeding returns outside high-value areas, and council practices that reflected cultural resistance, inconsistency and anti-development attitudes.

A lack of upfront infrastructure locked out smaller developers and favoured larger ones, because only they could afford to build their own infrastructure.

“Schools were a particular issue, with one developer revealing they co-funded private schools in new developments to attract buyers and lift prices, and because public schools could take a decade to open,” Professor Ong ViforJ said.

“The impact of council practices shouldn’t be understated. West Australian and Victorian developers we interviewed named councils they would never work with again, as well as an equally long list of councils they found supportive of development.”
 

Strategies to increase homebuilding in well-located areas

Researchers evaluated each state and territory’s approach based on how explicitly its policies supported building in well-located areas, whether it set specific build targets, and how much accountability applied if targets were missed.

A traffic light system was developed to reflect the effectiveness of jurisdictions’ approaches, which policymakers can use to improve strategies.

Researchers found strategies to deliver well-located housing could be strengthened by reducing the number of organisations involved in implementation, or centralising them, to improve coherence and accountability.

Other recommendations included reducing infrastructure delivery timelines, setting clear expectations for specific areas, focusing more on measurement and policy review, and setting explicit criteria around what ‘well-located’ meant for particular contexts. Neighbourhoods should also be designed to address the higher crime and noise pollution that could come with higher amenity density.

“Government can de-risk development via policy certainty, forward-funding of infrastructure and clearer approvals processes,” Professor Ong ViforJ said.

The research was undertaken for AHURI by researchers from Curtin University and Swinburne University of Technology.