Several states have recently overhauled their planning legislation. This paper discusses flaws in heritage legislation and how they might be rectified. It finds that heritage decisions fail to consider the costs of heritage protections. As a result, too many unremarkable buildings are preserved, restricting housing density and exacerbating the housing crisis. 

Many of the paper's examples are drawn from New South Wales, the state with the worst problems and where there is a substantial review of heritage strategy underway.

Key findings

• Vast areas of inner-city land are locked up by heritage restrictions. 21% of residential land within 10 km of Sydney’s CBD is estimated to be heritage protected. 
• The cost of listing often runs into millions of dollars per site in forgone development value, yet these losses are ignored.
• Community willingness to pay to preserve ordinary buildings is modest, suggesting benefits are frequently dwarfed by costs. 
• Delisting is costly, slow and procedurally onerous, even where circumstances have clearly changed.
• The burden of proof falls unfairly on property owners, even when the original listing was supported by minimal evidence.

The paper recommends rewriting heritage listing legislation, focusing on two central reforms:

1. mandatory cost–benefit analysis for all listing decisions, including explicit consideration of forgone housing supply and effects on affordability
2. compensation for owners of listed properties, as previously recommended by the Productivity Commission, so that communities internalise the true cost of preservation.