Productivity Commission says planning rules are blocking Australian homes

Australia's Productivity Commission has said poorly designed and overlapping planning and development rules are blocking new homes where people want to live, adding pressure on governments trying to meet a national housing target and improve affordability, according to an ABC News report by economics reporter Tom Crowley.

The interim report, commissioned by Treasurer Jim Chalmers, called for a top-down rethink of state and local regulation and said a restrictive system should be replaced with a permissive "build mindset". It did not make formal recommendations, but flagged support for allowing at least three storeys on most residential land and for softening or removing rules on minimum floor space, window and balcony size, car parking and subjective factors such as "neighbourhood character".

Productivity Commission chair Danielle Wood said: "Regulation is important, but too much or poorly designed regulation can stop new homes being built, make projects slower and more expensive, and reduce the types of housing available to us." The report said there was a "strong causal link" between building more housing and lower prices and rents, but warned affordability efforts would fail without a review of the existing regulatory "thicket".

Federal, state and territory governments have agreed to target 1.2 million new homes between mid-2024 and mid-2029, a goal the article said is just over 200,000 homes behind track. The commission said upzoning was the highest priority for state and local governments, but that height limits, setbacks, floor-space ratios, heritage controls and duplicated approvals could still make many projects unfeasible. Its final report is due next March.