For all their egalitarian posturing, governments are proposing policy measures that will line the pockets of property developers but ultimately rip off the rest of us.
In recent weeks there’s been talk about measures to make housing more affordable. One is the idea of inclusionary rezoning. This is a planning provision that can allow developers to build denser developments if they provide a percentage of affordable housing within the development for low-income prospective buyers.
This may sound good in principle, but such a measure would be reckless. First, it disregards social context. It will encourage people to buy cheap off-the-plan housing with no onus on the developer to contribute to the essential services that these denser housing zones require. The burden of this will shift back to governments and ultimately all taxpayers to provide the infrastructure.
Further, inclusionary rezoning would degrade the quality of new housing developments, which are already notoriously poorly-built. Developers already enjoy the windfalls from weak regulation, and this measure would increase their routine disregard for space and heritage concerns, height limits, infrastructure, parking requirements, sustainable building practices and other land use mix requirements.
Low-income owners attracted to these schemes won’t be in a position to maintain these inferior buildings, yet they — not the developers — will have to bear the ongoing costs of poor building design and construction. This means these developments are set to be our cities’ future slums, and their resale prospects will be slight.
In our view, inclusionary rezoning is a lazy policy response that will channel money from the public purse into developers’ pockets, and this would inevitably have flow-on impacts not just for property investors and owner-occupiers, but for all taxpayers.