Up and out – that seems to be the way out of the housing crisis. The property industry is urging planners to reduce restrictions on tall buildings in central locations and to zone more land for development on the edge of cities to both provide much needed units and to ease the affordability crisis.

The taller the building you can build on a site, the more that site is worth. Construction costs, however, rise with the height of the building. All of this is despite advances made in construction technology. A doubling of a residential block yields approximately a 30% increase in the site value. This is mainly down to material costs due to extra exterior walls and complex facades and the loss of usable floor space.  

Restrictive zoning and planning policies have a big impact on house prices as it is a constraint on supply which is why zoning more land on the edges of our cities can help ease affordability and the short supply of houses. How does zoning work? The purpose of zoning land for residential use must fit in with the local authorities existing development plan and/or local area plan and especially relating to densities. It must not conflict with other uses within particular areas and this will be a matter for the planning authority to decide.  Development plans run in six-year cycles with a public participation process being one of the central facets to the structure to the formation of the plan. It remains at the discretion of the local authority to re-zone land when preparing its development plans. Other options include an application for material contravention which involves an application which may not comply with the objectives of a development plan but it may still be in line with the proper planning and development of the area. Following a public consultation process on this point, the local authority may decide to permit a material contravention of its plan. Any such decision requires a 75% majority of the elected members of the local authority to proceed.

One of the critical points when considering zoning is that land is zoned for appropriate uses in appropriate places. This was one of the failings that fed the last property bubble and that cannot happen again. It is a lesson to be learned, not something to shy away from provided careful consideration is given to the matter.