Melbourne Leads Australia in Easing Housing Restrictions, Study Finds

Melbourne stands out as the sole Australian capital city where medium-density housing is permitted on the majority of its residential land, a finding from a recent study analyzing zoning restrictions. This Victorian capital also boasts more affordable housing compared to the other five major cities, positioning it as a clear outlier nearly four years after a national commitment to relax planning rules and address the housing crisis.

A comprehensive 'atlas' of Australian zoning laws, compiled by the 'YIMBY' (Yes In My Backyard) group and made publicly available online, meticulously tracks development regulations for every residential site across the nation's eight capital cities. A site is categorized as 'restricted' if it faces limitations such as a two-storey height cap, heritage protection, detached housing zoning only, or designation as low-density.

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The fact that most of the residential land in our cities is locked up under highly restricted zoning makes sense of why we can't build the homes we need.

Melbourne is significantly less restricted, with 45% of its residential sites allowing for more development. In stark contrast, other capitals face much tighter constraints: Hobart restricts 97% of its land, Adelaide 92%, Darwin 88%, Perth 87%, Brisbane 86%, Sydney 81%, and Canberra 74%. "The fact that most of the residential land in our cities is locked up under highly restricted zoning makes sense of why we can't build the homes we need," stated co-author Jonathan O'Brien. "We've systematically made it illegal to build them."

Australia's federal, state, and territory governments agreed in 2022 and 2023 to a target of 1.2 million new homes over five years, starting mid-2024, acknowledging that restrictive zoning laws are a primary cause of the housing crisis. However, progress has been varied, and the overall target is unlikely to be met, with projections suggesting around one million homes. No single jurisdiction is on track for its individual target, with Victoria, Western Australia, and the ACT nearing their goals, while others lag significantly, some by several years. The zoning atlas represents the first consolidated overview of Australia's complex and overlapping zoning laws.

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We've systematically made it illegal to build them.