Leaders of major city shaping organisations throughout Australia are no longer confident about the ability of their cities to deliver positive outcomes for residents as Australia’s housing affordability crisis continues to deepen.

And there are serious capability gaps in the ability of cities to address significant housing challenges.

Urban planning and economic consultancy Urbis has released the results of the 2024 edition of its bi-annual City Leaders Survey.

The survey involved responses from more than 200 senior executives from the nation’s most influential city-shaping organisations. It provides a barometer of sentiment regarding opportunities and challenges that will shape government and industry priorities in terms of social, economic and environmental considerations across major cities and towns.

The report shows that confidence in the ability of cities to meet challenges has waned.

When the first such survey was conducted in 2022, expectations regarding outcomes over the next two years were broadly positive.

By contrast, the latest survey shows that sentiment has turned vastly negative.

Between the 2022 survey and the latest survey, the portion of respondents who believed that their city’s performance in terms of economic, environmental and social outcomes would improve over the next two years fell from 43 percent, 42 percent and 22 percent to just 21 percent, 20 percent and 14 percent respectively.

Over that same timeframe, the portion of respondents who believed that outcomes will deteriorate in these areas increased from 19 percent, 12 percent and 30 percent to 38 percent, 34 percent and 50 percent.

Overwhelmingly, respondents indicated that housing is the most important challenge.

All up, 90 percent of respondents nominated this as being one of the top three challenges facing their city over the next two years.

Moreover, survey respondents identified serious capability caps in the ability of their cities to effectively respond to challenges in this area.

All up, a net of 52 percent of respondents did not believe that their city will be sufficiently equipped to address housing-related challenges.

Which three of the following are the biggest challenges your city will need to focus on over the next two years?

(source: Urban 2024 City Leaders Survey)

The latest survey comes as housing affordability challenges across Australia continue to grow.

In a report released in July last year, Everybody’s Home indicated that two thirds of all Australian households are in a state of housing stress – where more than 30 percent of their pre-tax income is spent on housing related costs such as mortgage or rental payments.

In the case of renters, this number increased to 82 percent of households.

Since that report was released, things have become worse.

In the year to October, real-estate services firm CoreLogic reports that dwelling prices rose by 6 percent.

In terms of rents, meanwhile, data from Statista indicates that these increased by 6.7 percent over the twelve months to September.

In their responses, city leaders called for action across several areas.

These include:

• elevating housing aspirations in policy frameworks to ensure that these frameworks reflect aspirations for secure housing to be available to all through either home ownership or secure rental arrangements
• implementing a clear and deliberate place-based strategy, including by using memorandum of understanding agreements (MOUs) to clearly define roles and responsibilities in a transparent manner
• promoting vibrant, sustainable and inclusive communities by ensuring that housing is the centrepiece of visions for liveable places and precincts that also align with priorities such as climate resilience, sustainability and Closing the Gap
• adopting greater openness and transparency on housing related data through development of an open-source platform on housing supply, demand, pricing, affordability and other measures
• creation of a national housing innovation lab that will explore new housing models, construction techniques, financing models, development partnerships and planning and regulatory frameworks
• leveraging government funding in social and affordable housing to guide partnerships to unlock investment from institutional investors
• leveraging public private partnerships to deliver additional, social, affordable and specialist market funding which is funded by institutional capital
• mapping and tracking of housing supply and demand to track local council performance against diverse housing needs through means such as publicly available social and affordable housing registries.

Aggregate percentage (%) difference between city leaders top challenges and perceived ability to address

(source: Urban 2024 City Leaders Survey)

Commenting on the results, James Tuma, managing partner at Urbis, said that issues regarding housing extended well beyond supply.

Tuma also noted the broader impact of housing on matters such as social equity and wellbeing.

“Unsurprisingly, every jurisdiction, across not-for-profit to the public and private sector, talked about the housing dilemma our cities and communities face, but the underlying narrative wasn’t just about the well-documented supply, funding, labour market and regulatory barriers that are often cited as the problem.” Tuma said.

“Instead, housing was described as an enabler of success in so many other areas that matter to us – delivering social outcomes, economic participation and productivity, more environmentally sustainable places, and providing a sense of optimism across our communities.

“This decline shows just how interconnected housing is with other societal outcomes and it’s clear that without addressing housing, we can’t hope to improve our cities overall wellbeing.

“Through this lens, housing delivery might well be the vehicle by which Australia arrives at more liveable, globally competitive and economically productive cities for everyone.

Urbis Director Mark Dawson, an urban economist and housing expert, said that the results demonstrate the impacts of prevailing economic, financial and social costs associated with diverse housing demands.

Dawson stressed the need to focus on the overall housing ecosystem.

“By focusing only on pricing and supply, we are missing the bigger picture of how housing fits together across the whole ecosystem,” Dawson said.

“Affordable, well-located housing is not just a social good; it is a powerful economic driver.

“To meet the challenge ahead, Australia’s leaders must explore innovative housing delivery and funding models and collaborate so that tax, funding and planning reforms work better together.

Bringing more diverse views to the table will help prepare cities and precincts for more productive and sustainable outcomes for Australians.”

Outside of housing, survey respondents indicated that other challenges over the next two years including managing population growth and demographic challenges, managing economic growth and competitiveness and tackling climate change and sustainable development.

In addition to housing, respondents identified capability gaps in the ability of their cities to effectively manage population and demographic changes and to reduce inequality.

On the positive side, however, respondents believe that their cities have suitable capability to manage technological disruption, ensure effective governance, maintain economic growth and competitiveness and address climate change and sustainable development.

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