Economy

Mar 9, 2018

Reserve Bank puts a price tag on NIMBYism

Reserve Bank research shows just how much zoning decisions can add to the cost of housing -- to the benefit of NIMBY residents who enjoy huge property price gains as a result.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Reserve Bank economic growth

RBA president Philip Lowe

After the Grattan Institute this week shined a light on how NIMBYism has punished low-income earners and young people by locking them out of established suburbs, the Reserve Bank has produced some startling figures on just how much zoning decisions increase the cost of housing.

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16 comments

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16 thoughts on “Reserve Bank puts a price tag on NIMBYism

  1. Nudiefish

    Is it NIMBYism to have a few islands of original character housing left standing? In Queensland “Queenslander” houses are disappearing to the point that few remain as a suburb identity. I was in Sydney recently and rejoiced at the sight of original terrace houses. Where we had them in my hometown they are now all gone.

    I am not arguing for locking people away in the outer suburbs, but of all the answers to address the housing crisis this seems pretty low fruit. Get negative gearing sorted first then you can talk about demolishing old suburbs for box apartment living.

  2. AR

    Fing is, even if Crikey had a sub editor, they would still have to be literate, else they’d happily allowed through something like “shined a light” as they drived a coach & fore threw.

  3. York City

    EWINism more likely the problem…….
    Eye Watering Immigration Numbers.
    Maybe build a few more cities?
    Or maybe we should quit the federation to regain control?
    No it’s easier to glare with envy at others.

  4. old greybearded one

    There are bloody towers popping up everywhere. What bullshit is the RBA talking? If you look at the map, it is the inner city and the posh Liberal suburbs in the north shore and Turnbull land where the problem lies. (Where the likes of RAB board members live too to be sure). There is no zoning impediment in the way of much of Sydney, but there are a bunch of structural impediments, such as crap public transport and no decent green space, horrendously ugly towers and, what neither Bernard nor the RBA admits, massive apartment complexes on old public housing sites, but the apartments are very costly and very poorly built. Then there is the RBA’s interest policy and the negative gearing. Tosh I think.

    1. Arky

      I can’t speak for Sydney. I can speak for Melbourne and what Bernard says resonates with me. Even among ALP voters there ends up being a split between the older property owners who rail against those bloody property developers and talk passionately about “local character”, and the younger crowd who quite understandably don’t give a fig about local character when it is used to maintain property values and ensure that only someone with rich parents can buy a property closer to the city that Caroline Springs. Hell, Caroline Springs was the edge of Melbourne when I was a student- it’s probably pretty posh by current 20-something standards, I need to update my references.

      I do own a property in a nice suburb, and so I know firsthand how expensive it was and how fast the property values have grown even since I managed to get a hand on the ladder. I do not EVER oppose medium density housing in my area, being frozen in the past and refusing to accomodate the future is a conservative trait.

      What used to particularly irritate me when I lived in the Melbourne CBD was people objecting to towers IN THE CBD, as if rundown piles of crap in the north and west of the CBD had “character” and “heritage”. Pure NIMBYism.

  5. Teddy

    I live in the inner west of Sydney, where the median for a house like mine is $2.3m. 42% of that (the RB figure for the cost of Nimbyism) is a cool $1m.

    Last time BK raised this issue, many Crikey readers took him to task. Many, like me, most likely live in the Greens voting inner suburbs of Sydney and Melbourne. We are all massive beneficiaries of our council’s and local politicians (mine is Greens MP Jamie Parker) efforts in keeping those medians rising ever upwards by zoning for scarcity. But I shouldn’t zero in on the Greens (although they are the Nimby champs, and are way more active in keeping outsiders out than Labor or Lib); all local politicians know that this is the only game in town. If they fail to vigorously oppose development, they will be voted out.

    Those who claim their objections to increasing housing supply are about “amenity” or “local character” are talking in code. In their hearts they KNOW it’s about that cool $1m they are pocketing. Oddly enough, many of them will also have stickers on their cars and properties that claim, “Refugees welcome here.” Errrr…. no, they don’t mean that. Just watch all hell break loose if someone dares to propose an “affordable housing” project in their hood!

    1. Woopwoop

      Rubbish. Anyone who is pleased that their house is worth $1 million is economically illiterate.
      If they sell, they’ll have to buy another house – at the same high price.

      1. Arky

        Plenty of economic illiterates.

  6. JMNO

    After reading and commenting on Bernard’s last diatribe on nimbyism, I started looking around my inner eastern suburb of Melbourne and the more inner suburbs of Richmond, Collingwood, Footscray and Fitzroy. My suburb has always had quite a few flats and villa units, and 4-8 storey blocks of flats are sprouting daily – where the Council wants them, in the shopping precincts, the old industrial areas and along the railway line. In the inner suburbs there is much urban renewal happening with many, many blocks of apartments going up.
    And even in stodgy conservative suburbs with beautiful old homes which it would be a travesty to knock down, there are groups of 5-6 townhouses going up or already built on large blocks in place of old houses. Over our back fence a decaying house was replaced by two well-designed townhouses.

    So it is not true to say that nimbyism is preventing new housing being built. However most will be beyond the means of first home buyers and only a reduction in demand and doing something about negative gearing will change this.

    But of course the Federal Government won’t do either of these things – 1. reduce immigration because they might have to come up with a proper job-creating economic policy that doesn’t depend on building infrastructure for our ever-increasing population or 2. reduce the investment value of the houses that the supposed supporters of the government have bought.

    And, according to an article in The Age on Wednesday, the City of Melbourne is being loved to death by the development of super-dense towers of apartments, Since 2002, 54,254 apartments have been built in the Melbourne City Council area.

  7. Alex

    More simplistic drivel from Bernard. Has it occurred to him that most older citizens, “corruptly” living in more expensive suburbs, probably bought their first house in what was at the time a cheaper outer suburb and it was most likely an old dump that would not be good enough for many kids these days because everything was old, it had second-hand everything, and was miles from nowhere; they probably ‘did it up’ so they could afford something better. Their current nicer home was not their first home – some worked a lifetime to be able to afford that. Furthermore – local government does not exist in the Australian constitution, it is a creation of State Governments. Local government town plans have to be approved by the relevant State Gov. During the preparation of a new town plan residents, and others, can make submissions to the local government body. After many years of involvement in local resident groups, I have rarely seen local residents’ wishes cause changes to the intended planning schemes favoured by local councils and developers. Basically, what Bernard is saying is that one lot of ‘corrupt’ people should move out so that other people can move in.

    1. Arky

      No, Bernard is not saying they should move out. He’s saying that they shouldn’t object to other people building higher-density housing next door.

  8. thinker

    It puzzles me that we keep making our cities larger. Why can’t we diversify. We need smaller cities throughout our country. Mega cities are rarely the first choice for raising families. If we provided decent infrastructure ie schools (including secondary and even universities), full service health care and branches of government including public access to their services more people would want and be able to live there without the madness of the cost of housing in inner Sydney or Melbourne.

  9. Norm

    Bernard, why don’t you concentrate on the main game. That the majority of Australian taxpayers are forced to generously subsidise the property investments and capital gains of the wealthy minority who can invest in more than one residential property. And in being forced to do so it becomes both harder for the majority to save a deposit and to afford the house values inflated by such non-productive investment. We are the only advanced nation with such a cockeyed notion; the rest generally try to advantage first home buyers, not feather nest investors. And they even have decent rules in place to protect renters who cannot afford home ownership.

    1. Arky

      I’m pretty sure Keane is solidly with us on negative gearing, no fear.

  10. Innocent Bystander

    The same considerations apply to major transport infrastructure projects. An example is the current level crossing removal program in Melbourne where sections of railway are being elevated. This has attracted considerable opposition from some adjacent residents who have launched considerable protests, actively supported by the Herald-Sun. Whilst there are some locations where geotechnical issues prohibit below ground works, in many other areas the so called ‘Skyrail’ could have been constructed that way, but the State Government has elected to go upwards on cost grounds.
    The LNP has cleverly assisted the no Skyrail campaign on the basis of loss of amenity and visual intrusion, but has so far been silent on which other worthy transport projects would have to have been postponed or cut back in scope to fund underground tunnels. The majority of the Skyrail works are situated in quite expensive real estate locations, and everybody using local roads will benefit from the removal of level crossings. It seems this is a case (to quote Spock) that the needs of the many outweigh the wishes of the few.

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