b'APRIL 20254.1 Government-imposed Planning, Zoning and Heritage Protection ControlsRegulatory friction limits the dwelling output of newUnfortunately, the point-blank rejection of basic projects, causing a reduction in housing supply,economics prevails among many in the planning higher housing prices that have escalated to acommunity. They convince themselves that they are point where, as Peter Achterstraat said in the 2023the bulwark between civility and chaos.Building more homes where people want to live report, NSW 15best and brightest are leaving thePeter Tulip conclusively asserts that planning state so they can afford to buy a home or rent. Thisrestrictions more generally, are a major reason has been driving the reduction of net domesticwhy housing in Australia is so expensive. Pointedly, migration from NSW. he asserts that they are estimated to raise the price of an average apartment in Sydney by 37% 16 . This contrasts with the estimated impact When NSW sneezes, theof planning regulation on the price of an average Australian economy catchesapartment in Melbourne (19%) and Brisbane (3%).a cold. That is certainly trueAn area of particular frustration is the misuse of heritage controls by many councils in NSW through of the property developmentthe listing of large numbers of local heritage items and construction sector. and worse, the declaration of entire precincts and sometimes even suburbs and Heritage Conservation Areas.Sydneys housing prices are of a highly restrictive zoning system and local planning controls thatThis, when combined with planning administrators restrict development type, size and scale. Whilereluctance to over-ride heritage controls, has this has recently been eased with the NSWbecome a de facto regulatory mechanism for Transport Oriented Development policy reforms,sterilising large areas of Sydneys North Shore, the establishment of the Housing Delivery AuthorityEastern Suburbs and Inner West from increased (see Section 4.2 for details) and the recentlyheight and density, even though the mismatch released low and mid-rise policy reforms, whichbetween supply and demand is greatest in those all seek to make housing supply more feasiblelocations and prices are least affordable.by increasing density, we are yet to see their impact flow through. Sydney is losing its As illustrated in Charts 7 and 8, zoning restrictions30-40-year-olds; if we and local planning controls are a significant contributor to under-supply in NSW. While thedont act, we could become population grows, the zoning and local planningknown as the city with no controls drive prices up by restricting supply.grandchildren.Over a long period, there was a strong resistance to this suggestion among the political and public service leaders of the NSW planning system. One former Secretary of the NSW Planning Department accused the property development sector of sloganeering when, in 2021, they warned of a pending housing supply and affordability crisis. 15 The NSW Productivity Commission (2023) op. cit.16 Tulip, P. (2024), Land Use Restrictions and the Australian Housing Policy Debate, Get Britain Building,Fabian Society15'