Quantifying planning system performance and Australia's housing reform agenda

18 Jul 2012

This Investigative Panel draws on international evidence and experts to understand how planning performance links with housing market efficiency, and how these factors will be affected by the housing reform agenda.

The panel drew on experts from the United States, United Kingdom and New Zealand to benchmark Australian planning systems and housing outcomes against comparable international indicators and practices, enabling policy learning.

Housing as an objective: The panel found that an important objective of land use planning in the UK was appropriate housing for all. Similar land use planning, housing, and affordability objectives are imposed in the three North American states of Washington, California and Massachusetts. In these countries there were also processes for reporting progress against housing targets set at regional and local levels. By contrast, in Australia and New Zealand, planning performance measures have focused on indicators of system efficiency, but these are of a limited nature. Narrow ‘system efficiency’ indicators (which focus on decision speed and rates of approval) are generally not reliable predictors of housing market outcomes, particularly in comparison to analyses of geographical land constraints.

Type of development affects outcomes: The context and type of residential development affects planning permission efficiency, supporting the expectation that more complex sites will require more intensive assessment. Other factors slowing development approval included the presence of higher income earners. Although there is widespread concern about the impact of additional planning requirements on affordable housing, the modeling undertaken by one panelist found a positive relationship between rates of new social housing completions and overall housing supply at the local level.

Policy recommendations: The environment in Australia is beginning to change as national urban policy and COAG performance frameworks for capital city planning systems evolve.

The panel found that there is a need for future policy to:

  • Better integrate urban policy, planning regulation and housing goals, articulating higher order objectives for regional and local interpretation.
  • Adopt deeper approaches to data collection and review: at a minimum, annual local data sets should address dwelling completions (as distinct from land release or dwelling approvals); net dwelling additions; the proportion of new homes affordable to different income groups; the environmental performance of new housing and infrastructure contribution costs.
  • Obtain an informed analysis of the link between the planning system and housing outcomes rather than assuming that poor outcomes are necessarily a result of the planning system.
  • Secure affordable housing in new developments to increase housing supply, potentially through reframing affordable housing targets as a supply lever rather than a regulatory burden.
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