![]() ![]() The gap between the price of housing and the cost of supply represents excess demand for housing. More importantly, targets should also aim to bring the price of housing down to the cost of supply. Uncontroversially, targets should house a growing population. This paper presents targets that partially rectify these problems. These targets are too low, they lack a clear rationale or evidentiary basis, and they lack a clear enforcement mechanism. ![]() New South Wales’ (NSW) Greater Cities Commission (GCC) already sets housing targets for local councils in the Sydney metropolitan area. It argues that appropriately designed housing targets would involve a large increase in apartment construction in the affluent inner and eastern suburbs, where the housing shortage is most severe. These targets specify how much extra housing we need and broadly where it should be built.Īs a case study, this paper discusses the Sydney housing market, the location of much of Australia’s most expensive housing. These two problems can be rectified by setting and enforcing housing targets for local councils. We are not building enough apartments and we are building them in the wrong place. The proposed targets are higher than those recently set by the Greater Cities Commission, placing greater weight upon affordability. These targets respond to recent calls from the Productivity Commission and others to set housing targets on clear principles and on a firmer evidentiary basis. This paper suggests simple housing targets for local councils that partially rectify these problems. Instead, we need to build a lot more apartments in the inner and eastern suburbs, where the shortage of housing is most severe. In Sydney, new construction is concentrated in outer suburbs – but that isn’t where people prefer to live. ![]() ![]()
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