YIMBY Grattan Institute Spins Housing Supply Fantasies

Why It Matters

An extra million homes would ease NSW’s housing shortage, curb price pressure, and cut costly planning delays.

Key Takeaways

• NSW could unlock 1 million new homes.
• Victoria's "deemed to comply" streamlines low‑rise infill.
• Council veto power would be eliminated under new rules.
• Objective standards set height, setbacks, and site coverage.
• Policy aims to improve affordability and curb housing shortage.

Pulse Analysis

New South Wales faces a persistent housing deficit that has driven median prices above affordability thresholds for years. Demographic growth, limited land release, and a fragmented planning system have combined to create a bottleneck where council approvals often add months—and millions of dollars—to development timelines. Analysts attribute a sizable portion of the supply gap to these procedural delays, prompting think tanks and policymakers to explore reforms that can unlock dormant capacity without compromising urban design standards.

Victoria’s “deemed to comply” approach, introduced in the early 2020s, offers a pragmatic template. Under this regime, any terrace, townhouse or three‑storey apartment that satisfies clear, objective criteria—such as maximum height, setback distances, and site‑coverage ratios—is approved automatically, bypassing discretionary council veto. Early evaluations show a 30‑40% rise in low‑rise infill approvals and a measurable increase in housing density within established suburbs, all while maintaining design consistency. The model demonstrates that predictable, rule‑based planning can stimulate construction activity without the need for extensive case‑by‑case negotiations.

The Grattan Institute’s recommendation to replicate Victoria’s framework in NSW seeks to replicate those gains on a larger scale. By removing council veto power for compliant projects, the state could accelerate the delivery of up to one million additional homes, directly targeting the affordability crisis and reducing reliance on costly land‑banking strategies. However, implementation will require state‑level legislative changes, robust monitoring of design outcomes, and stakeholder buy‑in from local governments wary of losing planning discretion. If managed effectively, the reform could reshape NSW’s urban landscape, delivering faster, more affordable housing while preserving the character of existing neighborhoods.