Demonstrator 3: Housing

Co-led by Assoc Prof Mohsen Kalantari, Prof Abbas Rajabifard, Centre for Spatial Data Infrastructure and Land Administration, Dr Jennifer Day and Dr Piyush Tiwari, Faculty of Architecture, Building, and Planning.

Background

Housing affordability, in its simplest form, is determined by income and house prices. There are many factors that can affect house prices or household income or both and have implications for housing affordability, and longer-term benefits of home ownership. This project demonstrates the importance of the governance in land supply and its impact on housing affordability.

The focus of this project is to demonstrate the link between availability of developable land and space and affordable housing development. This requires a rigorous analysis of residential land development potential that is essentially linked to datasets such as land value and capital improved value information (Agunbiade et al 2011). The core analysis is intended to determine Residential Development Potential Index (RDPI) for a cross section of the NW Corridor region. The ability to create a geospatial dataset as such and visualise the spatial patterns for RDP at unit level is imperative. Spatially enabled information provides the needed tool to achieving this (Kalantari 2007). This provides better ways of analysing and communicating, at the government level, the challenges and prospects of discovering developable land for housing production.

Policy-relevant questions

This work explores the links between land supply and housing affordability. The following questions summarise the public-policy issues that will be illuminated by this work:

1. Will effective and efficient integration across the land administration functions (DSE, Land Victoria, DPCD, Local Governments and Referral Authorities in the NW region) improve land delivery for housing production?
2. What are the short-term and long-term relationships between housing affordability and housing land supply, in the North West Melbourne corridor. For example is there capacity to meet the demand in population growth and what are the implications of the Urban Growth Boundary?

Approach

This work will focus on associations between land administration and housing supply, and then between housing supply and housing affordability. For the first part of this syllogism, we examine governance factors that constrain land supply (for example the urban growth boundary and zoning restrictions, planning permits). The choice of location is generally influenced by the house price and the household ability to pay. On the supply side, house prices are a function of land cost plus the improved value (building). It is a common knowledge however that what increases and adds to the equity is the land, so it is logical to argue that lands (space) should be made more readily available. In the short run, the land supply is inelastic and any increase in demand gets translated in an increase in land cost. However, in medium to long run land supply could be increased through increased density in the Greyfield areas. This is necessary to influence the interplay of demand and supply that act as principal determinants of price and the motivation to buy or build in a desirable location.

Currently, the activities of government agencies that perform land administration functions, especially land use are disparate and lack harmonisation (Williamson et al 2010). The current arrangement is narrowly focused on statutory land use planning systems (development assessment) thereby living out a broader national strategic land use planning issues (COAG, 2011, Grattan Institute, 2011) that determines the efficient location of uses and better functioning of cities.

Contact details

Assoc Prof Mohsen Kalantari
Associate Professor
Associate Director

Centre for SDIs and Land Administration
Department of Infrastructure Engineering
Melbourne School of Engineering
The University of Melbourne
Victoria 3010 Australia