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Housing Affordability and Planning in Australia: The Challenge of Policy Under Neo-liberalism

Andrew Beer a; Bridget Kearins a; Hans Pieters a a School of Geography, Population and Environmental Management, Flinders University, Adelaide, Australia Online Publication Date: 01 January 2007 To cite this Article: Beer, Andrew, Kearins, Bridget and Pieters, Hans (2007) 'Housing Affordability and Planning in Australia: The Challenge of Policy Under Neo-liberalism', Housing Studies, 22:1, 11 - 24 To link to this article: DOI: 10.1080/02673030601024572 URL: http://dx.doi.org/10.1080/02673030601024572

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Hill. especially a shortage of land in the capital cities and skill shortages within the housing industry.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 Housing Studies. but such strategies have a limited capacity to improve housing affordability. Australia Introduction Housing affordability is a policy concern in Australia today. Yates. Australia. January 2007 Housing Affordability and Planning in Australia: The Challenge of Policy Under Neo-liberalism ANDREW BEER. GPO Box 2100. 1989). 1991). Flinders University. 22. a circumstance made possible through access to cheap and plentiful land for urban development (Stretton. 1986). House prices have risen in response to booming demand and constraints on the supply of dwellings. and there is growing evidence that young people are either delaying entry into homeownership or not entering homeownership at all (Badcock & Beer. School of Geography. Adelaide. This is a significant trend given that throughout the post-war period 90 per cent of Australian adults passed through homeownership (Neutze & Kendig. Email: Andrew. Population and Environmental Management.edu.Beer@flinders. planning. Tel: 61 8 8201 3522. neo-liberalism. owner occupation rates have remained relatively static in Australia since 1966. 1959) and significant tax subsidies for owner occupation (Flood & Yates. Population and Environmental Management. the evolution of a specialist housing finance sector (Beer. BRIDGET KEARINS & HANS PIETERS School of Geography. South Australia. It examines the role of neo-liberalism in shaping policy responses to housing affordability problems and assesses the argument that affordability goals can be achieved through manipulation of the planning system. However.1080/02673030601024572 . Adelaide. revised July 2006) ABSTRACT Housing affordability has once again appeared on the policy agenda of Australian governments. Australia (Received February 2005.au ISSN 0267-3037 Print/1466-1810 Online/07/010011–14 q 2007 Taylor & Francis DOI: 10. 1992. KEY WORDS : Housing affordability. 5001. Australian governments need to adopt more effective housing policies if they are to meet the needs of the 700 000 to 1 million households who live in unaffordable housing. 1. 2000). Since 1945 Australians have enjoyed high rates of homeownership and relatively low housing costs. No. 11–24. 2000. Baxter & McDonald. 2004. Many young and low-income households have experienced great difficulty in gaining access to homeownership and in being able to afford private rental housing. Fax: 61 8 8201 3521. This paper briefly considers the characteristics of public debate around housing affordability in Australia. It contends that neo-liberal philosophies of government direct policy action to the planning system. At the same Correspondence Address: Andrew Beer. Vol. Flinders University.

Previously. p. The paper concludes with a discussion of the policy directions that need to be adopted in order to enhance housing affordability in Australia. The paper argues that planning approaches per se offer relatively little prospect for improving housing affordability in Australia. 2001). private rental housing was a tenure of transition for young households saving to enter home purchase (Kendig. Neo-liberalism and the Social Construction of Housing Affordability Debates in Australia Neo-liberalism and Housing Policy in Australia Australia has been profoundly influenced by the philosophies and practices of neoliberalism (McGuirk. or establishing affordability targets (for a summary. Beer et al. if not more. The paper argues that housing affordability has taken on a particular meaning in contemporary academic and policy discourses in Australia and that this meaning reflects. 2005. and that the dominant ideologies in planning may exacerbate affordability problems.. This paper has four goals: first. Research by Wulff & Maher (1998) has shown that fully 40 per cent of private tenants rent for a period of 10 years or more and this represents a significant shift. the Australian Government commissioning the Productivity Commission to undertake an Inquiry into First Home Ownership (2003. Finally. it seeks to outline the tensions that arise in attempting to use planning mechanisms to achieve affordability goals when other paradigms of development. 1991) with government services either reduced or restructured to meet the needs of a market-oriented economy. Third. O’Neill & Moore.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 12 A. it seeks to understand how neo-liberalism affects housing policy in Australia. such as Ecologically Sustainable Development (ESD). 2004). time there is clear evidence of affordability problems within the private rental sector. the historical development of the Australian welfare state and the ascendancy of neo-liberalism. 2005. influential. which accommodates just below 20 per cent of all Australian households. Peck & Tickell (2002. 2004) and individual state governments developing their own affordability strategies. Housing affordability has attracted community and policy attention in Australia over the last five years. Significant markers of this interest have included the formation of the Affordable Housing National Research Consortium (AHNRC. it attempts to document and understand the current policy emphasis on planning instruments as a tool for enhancing housing affordability. Policy engagement with housing affordability debates has also been shaped by the federal system of government and the position of planning within that structure. the government has committed itself to halving the level of housing stress in the state by 2008 (Government of South Australia. in large measure. Peck (2001) has argued that this model is international and characterized by the purging of obstacles to the functioning of free . 2004). Pusey. it sets out to assess the potential impact of small and medium-scale planning interventions such as planning bonuses and inclusionary zoning on the capacity to achieve societal wide aspirations with respect to housing affordability. There is a higher rate of affordability problems within the private rental sector and households within this tenure are now more likely to remain in rental for a longer period. see Kearins et al. for example. In South Australia. 1981). 380) argue that it is possible to identify a general model of neoliberalism based on free market economic theory and enacted through the processes of globalization and contemporary state reform. are seen to be as. Second.

Our understanding of the debates around housing affordability and planning in Australia needs to be situated within the context of neo-liberalism and its ‘roll out’. . economic and environmental management. 1992) to the challenges of social. researchers writing in this area note that neo-liberalism is not uniform and that its expression at the national. but has instead used a range of direct and indirect subsidies to support private investment in housing for both homeownership and private rental (Castles. 2005). 1996. it seeks to ‘steer’ not ‘row’. Jessop’s second key shift is the subordination of social policy to economic policy. Unlike many European nations. 445).. Flood & Yates. 5). 2003). and while his ideas have been developed with reference to regional development. 2002). . 2005). Jessop (1990. Governance is characterized by the devolution of responsibility to cross-sectoral partnerships and networks with business leaders and civil organizations integrated into decision making and implementation of the activities of the state (Beer et al. Paris. as governments have sought new ‘institutional fixes’ (Peck & Tickell. away from the pre-eminence of the nation state in economic management. Beer & Paris. 2005) and government assistance programs attempting to keep vulnerable households within the private rental housing market (Slatter & Beer. In short. with the social housing sector further residualized (Orchard & Arthurson. or it directs rather than directly implements (Beer et al. The final tendency relates to the internationalization of policy development and this trend is evident in the increasing tendency for policy solutions to be borrowed and adapted across national boundaries. 2002) has argued that it is possible to identify four tendency shifts in the functioning of the state. This rescaling of policy in conjunction with the horizontal shift of powers to nongovernment institutions is sometimes said to have led to a ‘hollowing out’ of the nation state (Beer et al.. Kemeny. Jessop argues that the state has retained its influence through its ability to set the rules of the game. and downwards to local governance bodies. Rather than the state directly involved in many areas of policy. 2005). 2004) or as O’Neill & Argent (2005) have argued: “ . A third tendency (Jessop. on the market’s terms” (p. 1993). The first of the tendencies identified by Jessop is the move away from hierarchical forms of government to more porous forms of governance. However. metagovernance. that is. However. 1997) concerns the ‘vertical’ reworking of policy powers. regional or local level is contingent upon historical. 1986. both upwards to bodies such as the World Trade Organization.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 Housing Affordability and Planning in Australia 13 markets. the weakening of social transfer payments and the “‘inclusion’ of the poor and marginalized into the labour market. Housing policy in Australia over the last two decades has been profoundly influenced by neo-liberalism (see. 1997. political and geographical circumstances (Peck. neoliberalism presents an agenda of possibilities for those with the power to enact change. The implementation of policies relating to housing affordability in Australia must be examined with reference to the impact of neo-liberalism. but it is important to recognize that neoliberal tendencies have been added to a housing system already dominated by the market. restraint in public expenditure. the history of housing policy and the . it increasingly sets out to determine the regulatory and policy frameworks for others. an outcome all too apparent in many dimensions of society (Jessop. 1983. responsibilities and resources reallocated vertically.. Neo-liberalism has found expression in a further emphasis on market-based solutions to questions of public policy. 2005). there is sufficient resonance across the housing and regional fields to justify the application of his concepts here. Neo-liberalism has brought with it new challenges for public policy. for example. Australia did not develop a substantial social housing sector after 1945. This has seen power. including housing. But this agenda must be devised and played out in historical and geographical circumstances” (p.

NHS. 2006). 2003. Rossiter & Vipond. 2005). articulated the view that planning failures were largely responsible for escalating house prices and diminishing access to homeownership. Importantly. Beer et al. planning policies do not carry significant costs for central government and. seen to be acceptable ‘middle-class welfare’ as opposed to ‘welfare handouts’ to low-income groups. In Australia planning responsibilities sit with local government rather than the state or federal governments. an intervention in the market. Second. Households are seen . questions about planning and its impact on housing affordability have been prominent in debates around access to homeownership. while assistance with entry into. In this instance. in many respects. 1985) and the provision of affordable housing for the most vulnerable groups in society. 2004. home purchase is perceived to be an entitlement within a property owning democracy. programs of social housing provision and assistance for low-income private tenants have become an acknowledged. the former has been associated with the notion of housing stress and is championed by welfare groups. 2005). It is. industry and the nongovernment sector. making it possible to vertically reassign responsibilities away from central government. feature of the welfare state (Australian Institute of Health & Welfare. Australian Government officials (National Housing Strategy (NHS). 2004). This dualism is blind to the operations of the housing market with measures aimed at assisting low-income tenants affecting home purchasers and vice versa. and maintenance of. there have been a series of debates and policy interventions around ‘housing stress’ (Kearins et al. for example. By contrast. A First Home Owners Grant was introduced by the Hawke Labor Government in the mid-1980s and then again in the year 2000 by the Howard Coalition Government.. The Social Construction of Housing Affordability Debates Research and writing into housing affordability in Australia has been a major endeavour amongst academics (see. there has been a general concern with the cost of housing and the ability of younger Australians to gain access to homeownership. (2006) have reminded us that the discourse around housing affordability is typical of many areas of public policy in reflecting the interests of particular industries or groups. At one level. The dual nature of policy engagement with housing affordability has generated tensions in the delivery and promotion of housing assistance policies.. Housing Stress Housing stress is an important concept within affordability debates in Australia because it is the lens through which policy makers view the need for assistance. for example. state governments (Government of South Australia. Orchard & Arthurson. and the relationship between the three tiers of government. 2003. but have been absent from discussions and policies focused on meeting the housing needs of the most vulnerable. of necessity. although contested.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 14 A. Productivity Commission. The 1989 Special Premier’s Conference on Housing. Planning clearly represents a rich field of opportunity for the development of housing affordability policies that are informed by neo-liberalism as planning is. welfare state in Australia. Gabriel et al. the house building industry has served as a vocal advocate for reducing the cost of home purchase and has been an effective lobbyist for new and on-going subsidies for first-home buyers. First. academics and those providing services to low-income households. planning policies can be used to transfer costs to the private sector. Gabriel et al. indeed. 1991. Concerns around housing affordability in Australia have manifested themselves in two ways. 1991.

1997). 2006). That is. Burgess (2003). Gabriel et al. for example. with ‘mortgage belt’ suburbs seen as being critical to electoral success. 1985) but by the 1990s public policy documents proposed a 30 per cent benchmark (National Housing Strategy. and often political complexion. including: escalating property prices in Australia over the last five years (Berry & Dalton. There has been a great deal of research interest in housing affordability in Australia and the research and policy community is aware that housing stress is more likely to occur in the private rental sector. The incidence of housing stress in Australia has been fuelled by a number of processes. 2004). Research by Yates (2006) demonstrates that over the last decade there has not been a period in which housing stress has not been a problem for a substantial number of Australian households. NHS.. Aboriginality.. 2006). demonstrated that the Rent Assistance provided by the Australian Government to low-income tenants was too low to have an appreciable impact on the incidence of housing stress. the concept of housing stress is income contingent. Importantly.1 million households are confronted by this phenomenon (AHNRC. housing stress is often perceived to be a problem of cycles within the housing market. The Government of South Australia. 2001. and the capacity to seamlessly redefine housing stress by recalibrating the percentage of income devoted to housing costs viewed as problematic. Cass. Housing stress emerged as a policy concern in the mid-1980s. Australian Government policy on the provision of housing support for private tenants (Burgess. of the agency or author (see. only the poorest households are seen to be challenged by housing affordability as wealthier households spending a significant percentage of their income on housing are seen to have ‘chosen’ that outcome. and increasingly public debates further emphasize the targeting of housing assistance to those with multiple and complex housing needs because of disability. assistance with access to homeownership is treated as a question of politics. 25 or 30 per cent of their income on housing (National Housing Strategy. some commentators have foreshadowed the need to focus policy interventions on those experiencing ‘extreme housing stress’. In the 1980s low-income households spending more than 25 per cent of their income on accommodation were considered to be in housing stress (Cass. housing stress is not short term or an outcome of cycles within the housing market. Yates. 1991). the political sensitivities around housing costs.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 Housing Affordability and Planning in Australia 15 to be in housing stress if they are within the bottom 40 per cent of the income distribution and paying more than 20. calculates that 28 000 renting and 10 000 home purchasing households experienced housing stress in 2001 (Government of South Australia. 2003. By contrast. 1991) and the precise level at which housing stress is seen to occur is influenced by the values. Estimates suggest between 700 000 and 1. 2004). 2006. and that a fundamental shift would need to occur in the conceptualization and calculation of housing stress if government policies were to be seen to be effective. Chapman. homelessness or age (Baker et al. Significantly. and. for example. but not necessarily affordability. for example. 1991). Critically. 2006). The concept of housing stress has been relatively long lived within Australian public policy because of the highly targeted nature of intervention that it implies. 1991. the late . 1991. Rossiter & Vipond. the small and declining role of the social housing sector in Australia. not policy.. The Australian welfare state is seen to have a responsibility and mandate for dealing with housing stress. defined as low-income households spending more than 50 per cent of income on housing (Baker et al. More recently. 2003. Burgess. with buoyant property market conditions contributing to a wider incidence of housing stress within the community.

The Kennett Government in Victoria. 2004). inconsistencies. they are also attractive to governments who need to be seen to be responding to housing affordability problems. unnecessary delays and a lack of transparency. 2005). There is some evidence that constraints on land supply at the urban fringe have added to price pressures.. One of the common themes .Downloaded By: [University of Sydney] At: 11:16 24 October 2007 16 A. . although it is important to note that substantial numbers of households remain in housing stress at all stages of the housing market cycle (Chapman. More generally. planning reflects the tensions evident in many areas of policy affected by neo-liberalism with the ‘roll back’ of established planning policies and practices followed by the ‘roll out’ of new policies and strategies. 2002). The Queensland Government. for example. effectively dismantled its planning processes in the name of enhancing efficiency in development approval processes. for example. for example. endorsed its Affordable Housing in Sustainable Communities Strategic Action Plan in June 2001 (Queensland Department of Housing. Consolidation practices that introduce constraints on fringe development. 1980s and again after 2000. are likely to have added to the scarcity value of land. planning is seen to restrict the supply of land for residential development and impose additional costs on developers. On the one hand. 2001) while the Australian Capital Territory (ACT) Government released its Ministerial Taskforce on Affordable Housing ‘Strategies for Action’ in December 2002 (ACT Department of Housing & Community Services. However. which concluded that: . 2000b). planning bonuses and similar tools are considered potentially valuable in meeting the housing needs of low-income households (see. 2006) Housing Affordability and Planning The Relationship Between Housing Affordability and Planning Planning as a form of regulation has been seen to occupy an equivocal position with respect to housing affordability debates in Australia. 2000a. particularly in Sydney. Government of South Australia. . including through urban growth boundaries. The ambiguous status of planning within Australian policy frameworks is perhaps best reflected in the findings of the Productivity Commission (2003). On the other hand. despite these criticisms the Productivity Commission (2004) concluded that planning processes had not contributed in any significant way to the housing affordability problems in Australia’s cities. Beer et al. The antagonism of the Productivity Commission (2004) to planning is indicative of a broader attack on planning by neo-liberal governments in Australia since the late 1980s (Gleeson & Low. . Many of Australia’s states and territories have established housing affordability strategies that incorporate an explicit planning dimension. extend ‘as of right’ provisions for housing developments and speed up appeal processes. duplication. Other states and territories have either released similar initiatives or have them in train (see Kearins et al. There is a need to streamline permit processes. While the regulatory impacts of planning polices are often decried by the champions of market forces. Planning approval processes are likely to involve excessive ‘red tape’.

Urban growth boundaries represent a significant challenge for housing affordability within an urban system characterized by sprawling cities and the concentration of affordable housing in the outer-most parts of the urban area. Appropriate planning provisions are seen to be a critical component of government actions for affordable housing but other policy instruments—such as direct provision. Over the last five years both South Australia (Adelaide) and Victoria (Melbourne) have introduced urban growth boundaries. Perth. Recent Developments in Metropolitan Planning: Urban Consolidation and Growth Boundaries The recent focus on housing affordability has coincided with a new wave of metropolitan planning within Australian cities (Gleeson & Low. The strategies include the following policies: . Integration of public transport provision with land-use planning. The Victorian Government has gone further than most other states in articulating what it sees to be the relationship between housing affordability and urban containment.. also arrived at a shared view that a ‘whole of government’ approach is needed to ensure adequate and affordable housing for lowincome households. 48) reviewed five capital city metropolitan planning strategies and argued that: There is a consensus across the five metropolitan strategies on the need to address the car dependent. introduced a new planning . Gleeson et al. In their background paper for the Sydney metropolitan planning strategy development process. through the Department of Sustainability and Environment. Australian developments here mirror the findings of the Low Cost Home Ownership Task Force (2003) in the UK. sprawling morphology of capital cities. 2000a). Melbourne.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 Housing Affordability and Planning in Australia 17 across these policy reviews has been recognition that planning alone cannot solve housing affordability problems. extended and new railway spine corridors. In 2003 the Victorian Government. the ACT Government concluded that existing planning policies aimed at improving affordability had negligible impact. Indeed. South East Queensland (SEQ). retail and recreation). . A conference organized by the Department of Infrastructure and Planning in Western Australia in 2003 saw 70 per cent of the 1100 delegates vote for an urban growth boundary around metropolitan Perth (Kearins et al. through separate mechanisms. and . The Adelaide. The directing of urban growth along existing. These new plans are significant for this discussion because housing is not the only policy driver shaping these strategies and these other imperatives may limit the capacity of the planning system to deliver low cost housing. employment. A review of the various housing affordability initiatives put forward by state and territory governments suggests that they have. . . subsidies. 2004). financial instruments and the reduction of development standards— are considered equally important. p. and Sydney plans all advocate urban containment and reduced car dependence in pursuit of sustainability. Increasing densities both at the fringe and around transport hubs/centres in the context of falling household size. The need to ensure a supply of affordable housing and use of urban renewal programs to address the spatial effects of disadvantage. (2003. A centres policy that integrates transport hubs with mixed intense land uses (high density housing.

Pro-active Planning Strategies for Housing Affordability In his book Economics. amenity and transport in areas of more affordable housing and to maintain affordable stock in areas targeted for improvement. A key tenet of ‘Melbourne 2030’ is that planning should not exacerbate housing affordability problems and the plan is designed to improve access to jobs. planners from the Department of Sustainability and the Environment and social housing officials. Other implementation tools will include an Urban Development Program. provision of quasi-public goods and problems of disequilibrium. Beer et al. Michael Oxley reviews planning-based approaches to affordable housing and argues that it is important when attempting to assess the role of planning-based approaches to housing policy to consider the purposes. instruments and consequences of planning policy (Oxley. the South Australian Government’s social housing provider. the Victorian Government’s land agency. and the establishment of Committees for Smart Growth. Not all commentators or institutions share the Victorian Government’s positive assessment of urban consolidation policies and its capacity to deliver affordable housing. nine Transit Cities and an Urban Growth Boundary and was designed to ‘manage not limit’ growth at the rate of 1 million extra people over the next 30 years or 620 000 new households for the Melbourne metropolitan area. strategy ‘Melbourne 2030—Planning for Sustainable Growth’ (Victorian Department of Sustainability & Environment. This strategy incorporated five Growth Areas. guidelines for Higher Density Design. facilities and amenity in areas of the city where affordable housing is available. Planning is a reaction to market failures. the use of relatively expensive and less efficient techniques such as zero lot-line courtyard housing to save on land costs. The plan is also underpinned by recognition of the need for a greater understanding of existing and emerging affordability issues. In reviewing its own practice of urban consolidation. the Transit Cities program is designed to improve access. (2003) both conceptualize planning as an activity of governments that is broader than . 2004). 1992). the inherently higher construction costs for medium density housing. the need to explore the potential use of surplus government land. as well as making better use of joint ventures between the private sector and VicUrban. Planning and Housing. noted that there are significant cost increases associated with higher densities and medium density housing due to: strong developer interest in this type of development forcing up land costs. the South Australian Housing Trust (South Australian Housing Trust (SAHT). Markets cannot guarantee efficiency nor can they be relied upon to make judgements about fairness and equity. The implementation of ‘Melbourne 2030’ is to take place through Regional Housing Working Groups comprised of local government officials.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 18 A. for example. the need to provide for the restructuring of public housing stock. Oxley (2004) and Gleeson et al. and land-use planning is therefore also part of the process of moderating property rights. The Productivity Commission (2003) explicitly cautioned against the uncritical acceptance of urban consolidation and warned that in the long term it must inevitably result in higher housing prices. Trading in dwellings and land is fundamentally about trading in property rights that are endorsed by the state. Housing affordability is addressed at a number of levels. and. He examines planning practice from the perspective that planning systems are called upon to deliver what markets cannot. It also emphasizes the need for mixed housing forms. 2003). particularly in relation to externalities (costs and benefits).

Dwellings varied in size from two to four bedrooms on lots from 220 m2 to 750 m2. This includes: betterment taxes to capture the unearned increment arising out of the transfer of land from rural to urban purposes. should subsidize the housing of low-income earners (Productivity Commission. and.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 Housing Affordability and Planning in Australia 19 simple development control and one that is part of the wider regulation of political and economic structure. deed of agreement and second mortgage (nominal dollar) which together act as a control package”. Blacktown. rather than the community as a whole. the use of ‘planning bonuses’ which provide development firms with the right to build at higher densities in return for the provision of affordable housing. They were allocated via a balloting process and were sold with restrictions on re-sale: “a restrictive covenant. The development was located on three hectares and comprised 63 detached homes. Demonstration projects such as Parklea offer important insights into the limits and potential of ‘planning bonus’ approaches to housing affordability. Inclusionary zoning and betterment taxes are both perceived to be forms of taxation that add to the cost of providing housing to the broader community of home purchasers. which challenged developers to create a development that provided housing for people with varying needs and modest incomes (Landcom. 2006). Moderateincome homes were sold for between $156 000 to $220 000 and prices for the balance of the homes ranged from $270 000 to $415 000. 2004a. These dwellings were distributed throughout the site and were not identifiably different from the broader stock of dwellings. In the year 2000 Landcom sponsored the Smart Housing Project competition in Parklea. Landcom (2004a) reported that both they and the developers secured a surplus from the project. 2004b). 1989). The local government granted the project some flexibility on design rules (on the condition that affordable homes be provided and maintained) and this together with innovative design. inclusionary zoning that requires the private sector to provide a percentage of affordable housing as part of every new development. 2004). Very few dwellings for moderate-income households were produced at Parklea and the high rate of . Of the 63 homes.. such that the ‘Melbourne 2030’ planning strategy considered and rejected inclusionary zoning schedules because of the evident failures of such approaches in other Australian states (Kearins et al. From their perspective a range of interventions in the development process are both justified and indicated in order to achieve affordable housing. recent Australian experience suggests that such strategies have a limited capacity to deliver affordable housing in any significant volume. 2005). 2003. construction and waste minimization. However. Pro-active planning strategies such as planning bonuses. while the former is seen to result in relatively few opportunities for affordable housing (Beer et al. Landcom is the affordable housing body of the New South Wales Government and its Moderate Income Housing Strategy provides a practical illustration of these approaches. provided the scope to build a greater number of dwellings at reduced cost than would have been possible otherwise. 2000. The problems of implementing such strategies are recognized as significant. Stretton. 20 per cent (13 dwellings) were targeted to moderate income homes. the South Australian Government embraced inclusionary zoning in its 2005 State Housing Plan (Government of South Australia. 2004). Planning bonuses and public sector-private sector partnerships represent a second type of pro-active planning strategy for affordable housing. inclusionary zoning and betterment taxes have had a chequered history in Australia (Hamnett & Freestone.. In large measure the latter two approaches have failed because of private sector opposition. Advocates of such strategies have had difficulty justifying why new home buyers. Interestingly.

or choose. resulting in the production of approximately 113 units considered affordable for moderate-income earners. The Australian geographer Greg Heys is quoted as saying that “neo-liberalism lurks” (O’Neill & Argent. Third. Australian governments have adopted neo-liberal policies and institutional structures that display many of the features Jessop (1998.5 per cent of the total number of land and/or housing products it produces each year. 5. are seen to be as. Governments are forced. governments have been fully aware of the limitations of planning policies in pursuing their affordability objectives. It can be concluded that neo-liberalism has clearly both influenced the direction of housing affordability debates in Australia and played a determining part in the ‘roll out’ of planning policies as a mechanism for boosting the supply of affordable housing. This level of supply has to be understood with reference to the 700 000 lowincome households in metropolitan Sydney who meet the income criteria for assistance from Landcom. over-subscription by the target group suggests that the capacity of this style of initiative to deliver significant quantities of affordable housing is limited. to turn to planning strategies because the philosophies of neo-liberalism effectively rule out the actions and programs—such as the expansion of social housing—that would be more likely to deliver affordable housing. such policy interventions have a negligible impact on the provision of affordable housing. original emphasis) and it is argued that it is the unseen hand of neo-liberalism that is guiding governments to adopt ‘technical’ planning solutions to affordability problems.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 20 A. it sought to outline the tensions that arise in attempting to use planning mechanisms to achieve affordability goals when other paradigms of development. 2005. It is worth reflecting on the fact that as a consequence of the work of the Affordable Housing National Research Consortium (2001) and other initiatives. the creation of governance bodies such as Landcom to deal with the challenges of affordable housing. Landcom’s affordable housing target (where commercially feasible) is set at between 5 and 7. the sub-ordination of the social policy objective of providing affordable housing for all to the objective of higher rates of . it sought to document and understand the current policy emphasis on planning instruments as a tool for enhancing housing affordability. such as Ecologically Sustainable Development (ESD). Nevertheless. This low impact also applies to other projects that require a proportion of the unit yield to be sold as affordable homes. p. In the first instance it set out to understand how neo-liberalism has affected housing policy in Australia. Conclusion This paper set out to address four goals. Clearly. influential. Total unit production has been estimated at 1500 dwellings. despite their demonstrated lack of success. they have continued to rely upon these policies. Finally. often using them as the primary policy instrument.1 Therefore. Second. planning solutions are seen to be the low cost ‘technical fix’ to the challenge of providing affordable housing in high cost metropolitan housing markets where the capacity to significantly increase the supply of land on the fringe is limited and where governments are reluctant to release large volumes of land for urban development because of the detrimental impact on ESD. it has aimed to assess the potential impact of small and medium-scale planning interventions such as planning bonuses and inclusionary zoning on the ability to achieve societal wide aspirations with respect to housing affordability. In many ways. Beer et al. 2002) has discussed: the transfer of responsibilities vertically to local governments and the private sector. if not more.

2006) showing that the supply of affordable housing is low and falling. Wulff et al. and especially low-income earners.Downloaded By: [University of Sydney] At: 11:16 24 October 2007 Housing Affordability and Planning in Australia 21 economic growth. For example. First. that planning bonuses and similar schemes do not deliver the low cost ‘technical fix’ to the challenge of providing affordable housing that Australian governments have been seeking. Housing affordability remains a problem of housing policies and governments that seek to sidestep the problem by directing attention to planning responses will not generate the policies needed to ensure that all households. . (2001) methodology suggest that in 2001 only 18 per cent of new private rental tenancies in South Australia and 34 per cent in 2005 could be considered affordable for low-income households. Clearly. Moreover. these initiatives are small scale. Estimates based on the Wulff et al. however. such as the South Australian Government. it is argued that in Australia governments and planners alike must return to conventional housing policies if they are to meet the wider social aspirations for affordable housing. This argument holds particularly strongly for governments. the international search for planning models that can deliver affordable housing. Yates & Wulff. It is argued that the outcomes of the Barker Review (2003. For more than two decades affordable home purchase in the UK has been supported by the on-going sale of council housing that commenced under the Thatcher Governments in the 1970s. 2003. Yates et al. This paper has shown that there are very real tensions in contemporary planning strategies for Australia’s metropolitan cities between the desire to achieve Ecologically Sustainable Development on the one hand. This paper has demonstrated. and it is likely the percentage would have been lower in the more expensive housing markets of Melbourne and Sydney. 2004) reflect a shift to the market-based policy instruments that have long been the primary policy levers in Australia. that establish ambitious housing affordability targets. It is important to reflect upon the ability of small and medium-scale planning instruments and policies to deliver significant volumes of affordable housing units. and the objective of boosting the supply of affordable housing on the other. There is a clear need for effective policy interventions with a range of studies (Chapman. Therefore. The paper concludes with two observations. some studies suggest that Australian housing markets are significantly unaffordable by international standards with urban consolidation and ‘smart growth’ policies held accountable (Wendell Cox. the South Australian Government announced a policy in 2005 requiring all new urban development of 20 properties or more to include 15 per cent affordable housing of which 5 per cent is to be ‘high needs’ accommodation (Government of South Australia. 2006. at a macro level. As the Parklea example illustrated. The tensions and frustrations evident in housing affordability policies in Australia may also emerge in the UK.. would be expensive to administer and may require covenants and other legal structures to maintain the dwelling as an ‘affordable’ property in the long term. and. The end of the large-scale sale of that housing will inevitably result in new challenges for UK governments seeking to provide affordable home purchase or rental. can afford adequate and appropriate accommodation. Urban containment policies must necessarily restrict the supply of affordable housing by raising land prices. 2005). 2001. such a strategy mirrors the inclusionary zoning policies of the UK and Ireland discussed elsewhere in this special issue. planning strategies as a mechanism for delivering affordable housing have been compromised by this competing policy objective. 2000. an important component in the overall cost of housing (Productivity Commission. that there are lessons for other nations such as the UK in Australia’s experience. Second. 2004). 2005)..

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