Inclusionary zoning may lead to perverse outcomes if implemented poorly: Rolf Fenner

Inclusionary zoning may lead to perverse outcomes if implemented poorly: Rolf Fenner
Inclusionary zoning may lead to perverse outcomes if implemented poorly: Rolf Fenner


Affordable housing supply is a critical issue for governments – but so too is ensuring Australians have good access to meaningful employment, good social services and facilities, and quality environments.

The Planning Institute of Australia endorses in principle the wider use of inclusionary zoning practices that are in the new Australian Housing and Urban Research Institute (AHURI) study on how planning incentives could be used to build more affordable dwellings.

However, governments could not continue to ignore the fact that the housing affordability crisis stemmed in large part from demand-side factors such as capital gains tax exemptions, negative gearing, and strong population growth.

The biggest impact on affordable housing supply comes from the preferential tax treatment accorded home-owners and investors.

Until governments reform these arrangements, low to medium-income earners will struggle to get a foot on the home-ownership ladder.

For many people, including the homeless, the increased use of planning incentives would make little practical difference.

The unemployed, the socially disadvantaged, and those suffering from mental illness or substance abuse disorders usually needed public and/or charitable housing.

inclusionary zoning codes implemented in San Francisco or London might not transplant well to Sydney, Melbourne or our other capital cities.

Wholesale adoption of inclusionary zoning provisions may lead to perverse outcomes if they’re implemented without due regard to local market conditions and specific city-wide, or regional plans.

A surer bet would be affordable housing targets developed in consultation with the community and based on quality urban design and architectural foundations.

As well as boosting supply, housing targets backed by good design standards would improve the quality of our built environments and help alleviate the twin problems of diminished social capital and growing economic inequality.

AHURI conducts valuable research on how we might best tackle the big housing and planning challenges facing our cities, towns, and regions.

The use of planning incentives is an example of a possible mechanism that would, ideally, be on the agenda of a COAG planning and housing ministerial council. 

Unfortunately, the Federal Coalition Government does not have a dedicated housing department, let alone a housing minister. 

Rolf Fenner is chief policy officer of the Planning Institute of Australia (PIA).

Housing Affordability Pia

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