Everyone is talking about the housing supply and affordability crisis.

Every month, the ABS releases new data showing that, while things are improving, we are a long way off achieving the National Housing Accord targets.

In response, every state government has adopted planning reforms, but still the numbers lag.  So, why are we in this position and what must be done to fix it?

In the years leading up to 2016, housing supply had been strong.  While NIMBY groups were ever present during elections, other than in 2011, they had not really cut through.  Nonetheless, a coalition of left leaning Liberals and NIMBY activists had been established. Some would say it was a coalition of convenience, but it was the genesis of the housing supply crisis in this state.

That started to change in NSW when they became a critical part of the election of the O’Farrell Government, through a shared opposition to the centralised planning assessment and determination pathway know as Part 3A of the Environmental Planning and Assessment Act 1979.

In 2015, Mike Baird achieved what many former premiers and opposition leaders failed to do:  win an election promising the sale of electricity poles and wires.  The funds raised from the sale of these electricity assets were used to invest in the WestConnex Motorway expansion and the North-West Metro projects.

Planning approvals were booming, in part from this influx of infrastructure, and in part because the legacy Part 3A applications for larger scale development approvals were still flowing through the pipeline, well after the tap had been turned off for new applications.

When Baird suddenly left NSW politics, following the catastrophic captain’s call on banning greyhound dogs (along with grief caused by the failed local government amalgamation process), Gladys Berejiklian took control.

Early on, the signs were promising, with the new Premier declaring that housing affordability was her top priority.  Former Reserve Bank Governor, Glenn Stevens was commissioned to examine the causes of high prices and to make recommendations on how to fix them.

To any economist, the findings were obvious.  Stevens found that there needed to be much more supply.  Zoning barriers were preventing supply and pushing up prices.  Pretty clear, pretty simple.

But Berejiklian didn’t like the recommendations at all.  Other than a quirt perfunctory release, the report was soon removed from government web pages and was never again to see the light of day. Luckily, we saved a downloaded copy!

The result?  Planners came to see themselves as representatives of everything “worthy and good”.  And “development” was a very dirty word.

Housing supply took a back seat to climate change.  Walkable communities and active transport became more important than serviceable infrastructure.  Heritage, biodiversity conservation, white rooves and preserving local character, became more important than people having somewhere to live.  The planners loved it.

The Greater Sydney Commission was brought directly under the leadership of the Premier and the results were a disaster.  Planning approvals hit lows not seen since the GFC as councils struggled to deliver a suite a strategic plans and strategies.  All the focus was on growth in Sydney’s west.  Government policy became the embodiment of NIMBYism.

The handbrake was applied to new housing approvals.  No objection was unreasonable.

Then economic reality hit, but many planners, led by the former Secretary of the Department, refused to acknowledge the problem, let alone deal with it.  The planning system and those within it had become a protected species.

There was no need to change, even though the entire world had transformed with the onset of the global pandemic in February 2020.

There was no need to reconsider the zoning restrictions that forced the preservation of commercial buildings even though there was (and remains) a massive over supply and rents have plummeted.

There was no need to even consider reform of the NSW Planning Act, which had been around for over 40 years, becoming more and more unwieldly.

Then the spectre of Opal Tower and Mascot Tower loomed, inspiring a media frenzy that reinforced Berejiklian’s conservative anti-housing supply agenda.

The establishment of the NSW Building Commission was a good response to the perceived crisis, but over-reach by Fair Trading and the poorly drafted Residential Apartments Building Act 2020 added massive costs to residential builders.

Many of the better contractors simply left the market and haven’t come back.

Of course, the planners, or at least all of those in the special place of local-government-land, loved it.  The NIMBYs had taken control.

The consequences of such a chronic under supply of housing – and the promulgation of anti-development sentiment – was a massive shortage in supply and a resultant increase in both housing and rental prices.

But the wheel has now turned.

In 2023, Anthony Albanese called a meeting of the Premiers to establish the National Housing Accord with an initial 5-year target of 1 million new homes.  He was somewhat embarrassed to be advised that this was actually lower than the number completed in the prior 5 years – which had led to the crisis.  So, after the election of Chris Minns in NSW, that target was revised to 1.2 million new homes over five years commencing on July 1, 2024.

The policy was not welcomed by NIMBYs, seeking to protect their own suburbs from changes in character. They loudly and selfishly protested possible increases in density within their councils.

But they met their match in disenfranchised younger generations, the victims of the housing crisis.  These self-described YIMBYs had the drive, and the skills, to beat NIMBYs at their own game.

They hit social media.  They organised.  They turned up en-masse to council meetings.  And they increasingly won the debate.

In that they were supported by a growing cohort of journalists, many of whom were themselves feeling the pinch of rising new home prices and rents.  The media turned on the NIMBYs.

Chris Minns, sensing the shift in attitudes, clearly guided some of his hitherto sceptical MPs into supporting the housing supply agenda.

Finally, the aforementioned Glen Stevens’ report was being considered and acted upon.

It is no coincidence that the change of State Government in 2023, and the election of the younger Chris Minns, heralded in a change in attitude.  So, too, changed attitudes in the Opposition, which now started to embrace the need for housing supply.

Change took some time to flow through the planning system. The NIMBYs were nervous and were called out for their selfishness.

Over the last year we saw what had previously been considered unthinkable:

• The introduction of the Housing Delivery Authority saw the re-introduction of a centralised planning assessment and determination process.
• A significant suite of planning reforms was passed with bi-partisan support.
• State-led rezonings which have made NIMBY councils nothing but annoying anti-housing supply lobbyists.
• Infill affordable housing bonuses which gave incentives to developers to deliver affordable housing have been successful, with more affordable housing arising from this policy in 24 months than the planning conservatives had managed to deliver over the prior 20 years.
• Transport Oriented Development precincts and areas were created.
• New low and medium density housing reforms implemented.

The irony here is all this was foreseeable.  We had interest rates at record lows but no planning approvals.  We had COVID under control, but still, no planning approvals.  We had a chance to rack and stack approvals for growth in anticipation of the inevitable return of the migrants who had left our shores, but still planners would not be moved.

Then we had leadership.  Leadership from the YIMBYs who started attacking Council officer reports that opposed housing supply.  Leadership from both the Prime Minister and the NSW Premier cut through.  Leadership from the newspapers and media commentators, which saw housing dominate the 2025 Federal Election, where the Greens were vanquished and the Opposition Leader (who had joined with the Greens to oppose the Housing Australia Future Fund), found himself joining them in retirement from politics as well.

Unfortunately, however, the planners are still there in council land, philosophically opposed to the private property market, notwithstanding the misery the have caused so many.  They remain a large part of the problem.

They simply don’t appreciate that, by humouring NIMBY objectors, or by insisting on maintaining land use zoning inflexibility, or by opposing over shadowing of public open space (even if it is unused), or by dropping (in knee-jerk fashion) proposed building heights that were developed with financiers to ensure project feasibility, they simply add to the problem of housing supply.

We are now seeing strong growth in approvals, thanks to pressure from the National Housing Accord, but are these projects feasible to develop?

Often, the answer is no.  Once you have been through the compulsory haircut known as the planning system (improving, but still requiring work), and applied multiple different affordable housing levies, local and state government infrastructure charges, then paid land tax while waiting an age for your project to be approved, then had to deal with the rising cost of labour, skills shortages and the CFMEU, things can be quite tough.

Although the new Building Commissioner in NSW has re-focussed his efforts and that of his organisation away from social media posts, the RAB Act, as it is known, remains a barrier for class 2 builders returning to the NSW market.

Even with taxes as high as they are, some planners still seek to undermine feasibility through the pursuit of fictitious virtue, making unrealistic assessments about what constitutes a viable project.

And we have an Act which requires a world beating 10-year defect liability, but there are still no insurance products in place to service this requirement, though there is now some movement on this front … time will tell.

Is it any wonder that there are more bankruptcies in the property construction sector than any other area of Australian business?

Is it any wonder that we have a housing supply crisis?  Planners are not the only cause of this crisis – but they played a big part and deserve a good share of the blame. They were all too keen to implement the NIMBY agenda, and all to slow to change when the housing supply crisis began to manifest.

Bit by bit, the reforms are flowing through, but construction feasibility remains a problem.  Should planners be blamed – probably not. Should they be held to account – absolutely. Planners have come up with affordable housing contributions in an anti-economic pursuit of equity. That has contributed to the affordability crisis. Planners hate the infill affordable housing bonus scheme and are annoyed by its success. That must change.

There is more work to be done, starting with planners recognising the project feasibility challenges faced by the development sector and increasing greater flexibility in the zoning system.

If they can address these factors and start to approve appropriate, feasible housing applications that meet community needs, housing supply will be assured.

Tom Forrest is CEO of Urban Taskforce Australia

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