NIMBY vs YIMBY: Jonathan O'Brien On Progress And Preservation

In this episode, we speak with Jonathan O'Brien, lead organiser of YIMBY Melbourne. We're going to explore the clash between YIMBY, that's yes in my backyard, and NIMBY, not in my backyard, perspectives. Is it fair to label NIMBYism as inherently selfish or does it sometimes serve a legitimate purpose?

We ask if Yimby's are always the good guys or if some of their ideas can be naive or perhaps maybe even damaging in practice. And what about the Yimby's themselves? Are they mostly renters with dreams of ownership or are some already homeowners pushing for change?

Plus, we're going to unpack whether preserving heritage streetscapes is standing in the way of progress or preserving something genuinely valuable. Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about.

I'm Veronica Morgan, real estate agent, buyer's agent and buyer's agent mentor, co-host of Foxtel's Location, Location, Location Australia, author of Auction Ready and co-host of Your First Home Buyer Guide.

Hi, I'm Chris Bates, ex-financial planner and mortgage broker, currently ranked number three in the annual MPA Top 100 Mortgage Broker Awards. Before we get started, everything we talk about today is not personal advice, and we recommend you engage the services of a licensed and experienced professional.

Our guest today is Jonathan O'Brien, lead organizer of YIMBY Melbourne, an urban planning advocate, award-winning writer and publisher, and someone who's committed to effective altruism through giving what we can.

Jonathan brings a sharp mind and deep curiosity to the often polarizing conversation around housing policy and urban development, and particularly the clash between YIMBY and NIMBY. So we're looking forward to this conversation today. Thank you so much for joining us, Jonathan.

Oh, thank you so much for having me. It's going to be a good chat. I mean, we've had Sydney Yimby on here before and a lot's changed in New South Wales over the last few years.

And how's the good fight going in Melbourne and what progress have you made over the last few years?

Yeah, so we started pretty similar time to Sydney Yimby. So it was sort of early 2023. So...

Two and a half years, we've kind of been in the fight. And look, we've seen large amounts of really positive change in terms of the repealing and the overriding of sort of arbitrary restrictive planning controls that have stopped us from building homes in the places where people most want to live.

So, you know, in Melbourne, we recently had a townhouse code passed that sort of makes it very easy to build codified townhouses in the way that you would build a codified single family detached house. You can now do that with townhouses down here. That's sort of been in effect as of May.

In addition to that, we've sort of got a similar to the New South Wales Todd. We've got the activity center program, which is really looking at building more densely around train stations, looking at that sort of six to 12 story sort of density. So there's a lot of change.

A lot of it is still moving targets. The devil's in the details, as you guys know. But we're feeling sort of optimistic that there really is a sea change toward a city that says yes by default rather than no by default to new housing.

I mean, Melbourne in, I would say generally would probably be a little bit more pro than say Sydney.

I'm not sure if that's just my belief, but is there certain pockets in Melbourne and councils that are tackling the problem and making it much easier to sort of build that were inherently before they weren't? So the power is sort of shifting.

What are some of the success stories I think you can see in Melbourne?

Yeah, sure. I mean, Melbourne has a couple of success stories that really differentiate it from Sydney. If we want to sort of take a longer history. Melbourne had a program in the 90s called Postcode 3000. Now, 3000 is Melbourne city postcode.

But the goal of that was for 3000 people to live in the CBD. That was it. That was the aspirational goal. And we're now at the point where in Melbourne, hundreds of thousands of people live in the CBD through sort of mass densification in Docklands, in the CBD, in South Melbourne.

And the Melbourne City Council has really done the bulk of the home building in established areas where, as you guys will know, and as Sydney listeners will know, there's very little residential construction in Sydney's CBD.

And you can sort of look and we need inquiring curious researchers in Australia to do this research. But you can see a sort of bifurcation between Melbourne and Sydney affordability at those kind of key points of the Matthew Guy era in Melbourne's Docklands and the Postcode 3000 program.

So Melbourne CBD has really been pulling a lot of the weight. And then increasingly sort of middle ring councils now sort of under the direction of the state government are sort of pulling their weights. And there's differences. There are more pro-housing councils and less pro-housing councils.

And those are for a variety of reasons.

Sort of interesting though, because I don't know, I'm a Sydneysider, I will confess, but I look at Docklands as an awful place to live. And in fact, a lot of Melbournians I talk to agree, it's an awful place to live.

And in fact, I was speaking to a sales agent a year ago who is sold there for a long time. And I said to him, how's business? And he said, it was fantastic. And I went, oh, great. So people are starting to actually get some price growth in their apartments.

He says, no, he's still losing money, but I'm selling lots of them. It's interesting because I think we have to open up the conversation when we talk about these success stories in terms of building more dwellings, but somebody's got to buy them.

When somebody buys a dwelling, you really do want to have capital growth, particularly if the rest of the market is achieving growth. or if they could put their money anywhere else, they will achieve growth.

And so how does that get reconciled with, you know, if people don't want to live there, they don't necessarily want to, I mean, obviously people live there, but you know, if it's not their first choice, if they live there because it's affordable, if they live there because they can't afford where they really want to be or for whatever the reasons are, if it's not the desirable place to live, is that considered a success?

Yeah, sure. I mean, there's two points there. I think one is the Docklands point. So a lot of people really love living in Docklands, right? The Age, our sort of Sydney Mon Herald equivalent, did a really great set of stories on Docklands. And the reality is that people really like living there, right?

And they live there. The problem with Docklands is actually that we've got a geographic kind of constraint there, which is it's not on the way to anything. To get to Docklands from anywhere else in Melbourne, you have to go through the CBD.

And the reality is that the CBD has all the things that you would want. And maybe you go to Docklands to go to Marvel Stadium, but Marvel Stadium is at the wrong end of Docklands if you wanted to actually go into Docklands.

So I think a lot of people just don't go there.

But for the people who do live there, they really, really like it. That's sort of on the first point. The second point is sort of around this idea of, well, what if it's not people's first choice? No one is living or very few people are living in their very first choice, right?

Every single person's first choice is a mansion in the middle of the CBD. I've got my four bedrooms, whatever. It's beautiful. It's my exact architectural taste. It's the exact 1956 mid-century modern, like whatever. It's in the CBD.

So I walk outside and I go to my job and I go to the library and I go to the bar and it's right there. And then I get a mansion. That's just not the reality we live in, right?

Everyone who is buying a house is making a set of trade-offs and they're trading off, yeah, location, they're trading off amenity, they're trading off size, all these things, right? And so people have made sort of a set of trade-offs to move to Docklands that you or I might not make.

It doesn't, I think, preclude it. I think one of the really exciting things about Yibbyism and one of the exciting things about sort of enabling more homes to be built is that it does let people make choices that you or I would never make.

There's millions of people in our cities and all of them want to make sort of slightly different sets of trade-offs. And I think enabling that is a really, really positive vision of what a city should be.

that it's not really creating more docklands though it's more about this missing middle they're going to be building greenfield estates right like that's just naturally going to happen it's just a melbourne more so than any probably anywhere else in the country right north east west there's a lot of land that there's still even though you think you'd run out that far away from the city there's still a lot more left but it's activating this sort of missing sort of middle ring

But, you know, there is an apprehension for a lot of suburbs that they like the trees, they like the leafiness, they like the bigger blocks. Is that sort of really the goal for Yimbyism?

Not so much, for example, to unlock a lot of high density new docklands or it's to unlock more development in this missing middle, whether it's on the main road and you've got six or eight levels around the train station, but also it's the bigger blocks unlocking, you know, more feasibility to build more townhouses.

Like that's ultimately what you're trying to do.

Is that right? Yeah. That's right. That really recenters us. I bring up Docklands to sort of talk about that difference between councils and between Sydney and Melbourne. But the ultimate goal of Yimbyism really is to unlock, yeah, like you said, this sort of medium density, European style density in our suburbs, right?

If you're amalgamating a couple of lots, you know, we're seeing this in the news more and more, people getting together, amalgamated a lot so you can build more stuff. If you amalgamate, say, the average sort of suburban block has around about 30 homes on it.

If you just amalgamated five of those homes and built to six stories, you've tripled the density on the block around about.

It's very, very easy to sort of, if we're talking about doubling Melbourne and Sydney's populations, and that sort of seems to be where we're looking in terms of demand, then you really are looking at making sure that there's a whole ton of options. to build at this medium density.

And so that one single suburb or one single CBD doesn't have to take all of the weight, right? Because that's what we've seen. And so, you know, either in growth areas or in the Melbourne CBD.

So what we really want to see is exactly what you said, which is we need to fundamentally make it possible and make it legal to build these options that people would like to pick.

I mean, I've got a bit of knowledge on Melbourne. I mean, probably more so in Sydney. We can see some real changes, for example, around North Sydney and sort of Crows Nest, even in places like Rose Bay and Double Bay and Edgecliff.

In areas maybe typically they've sort of been a little bit anti-development in the past. Is there sort of some real pockets in Melbourne where... You're seeing that amalgamation. You're seeing high streets, you know, knock down two levels and building six. And I mean, there was areas like Box Hill before, right?

Towers out there. But is it really starting to come a lot more spread across the city? Is there some success stories or pockets that you can highlight?

Yeah, so Sydney's transit-oriented development program is a little bit further along. So you're seeing more sort of case studies in the news around that. Melbourne's similar to Sydney, though. It's Melbourne's east is where we've seen very little population growth. And we've done some research on this.

We've looked at, for instance, where there has been sort of very little housing development. There's also fewer children in these suburbs. So like Hawthorne, Kew, Toorak. And that's actually leading to, you know, schools becoming unviable.

So schools that have traditionally been like very high quality and whatnot simply do not have enough children in their catchment to actually be viable. So it's these areas now where you really are seeing sort of the initial stages of activity.

And it's no mistake that the government sort of announced those areas early on in the program. That's for a couple of reasons. So there's like a really basic finance reason for why this is a solid idea as well, which is in areas where housing is more expensive, where demand more strongly outstrips supply.

Those are the places where during high construction cost periods, which we know that construction cost growth has been enormous over the past few years since COVID. In these areas, that's where the marginal housing project is going to be viable.

And if we want housing to be delivered now, it is actually the most important time in history for wealthier suburbs to pull their weight on housing growth.

What sort of site would lend itself to having that changeover? Because if you're in a suburb, for example, with lots of very expensive family homes on big blocks of land, like each site is really, really expensive.

And even though, yes, you can greatly increase the amount of dwellings on there, the initial cost can be quite prohibitive in many cases to sort of amalgamate the site. And also, it's not really affordable housing you're creating, really, is it? It's just... expensive apartments in an expensive suburb.

Then obviously there's a lot of resistance too in quite leafy streets where people have enjoyed the fruits of their labor, if you want to call it that, but they've enjoyed the peace and quiet of living in a very residential area.

So are there sort of parts of these suburbs that sort of lend itself more in your view or is it something that you think, well, it should be just open slather?

I think it makes sense as much as possible to kind of lean on what one would call sort of competitive urban land markets, right? So where you actually are allowing a lot more optionality so that the best sites can be picked up, so that not everyone has to sell.

But so that where there is that demand, it can actually be delivered.

So being as broad as possible in terms of upzoning, in terms of sort of liberalizing these controls is actually where you'll then end up with kind of the most efficient market in terms of people being able to find opportunities where you can build more housing.

more resistance from the NIMBYs, right? Because if you make it broad over an entire suburb, then really everyone's going to object because everyone's freaked out about a development next to their house.

Whereas if you zoned it, made it tighter or closer to infrastructural transport or whatever, is it more logical that that would reduce your amount of objection? Am I missing something?

Yeah. So the number of objections to a given development is usually very, very small, right?

Well, that's because you've got individual owners as opposed to if individual house owners, for example, object to a site that's going to go near them, you might have four sets of objectors.

Whereas if you've got an army of people who really want to push for more dwellings on those on a site, then you've got a lot more people fighting for development. Is that fair to say?

Yeah, potentially, right? Potentially. But I think the fact that state governments in New South Wales and Victoria are making these changes probably indicates that they're pretty certain that the political calculus is there. But you've raised a good point about why it has been so hard for local councils to be pro-housing.

And, you know, this is especially the case in Sydney. Melbourne, we have some sort of a bit more heterogeneity in terms of like the quality and the pro-housing nature of our councils.

But it's very, very difficult at the council level to actually incentivize councillors to be in favor of more housing because they're responding to a very small number of voters

And that squeaky wheel, you know, the 10, 15 people who show up to object to something, that actually works out to be not quite a rounding error in their voter base. So they get notably sketchy.

But when you think of things at the state level, where we don't build homes in a given place, that has spillover effects into broader affordability, right?

And broader access to economic opportunity, the ability for people to actually start businesses, get involved in labor markets, live near their jobs, and actually have economic mobility.

Like all of these things in the state's view, way, way, way, way, way outweigh kind of a few people showing up to a community meeting and saying, I don't want more people to live near me. And making these decisions at the state level is super crucial because they're the only apparatus.

Sorry, they're not the only apparatus, the federal government as well. But local governments really are not responsive to people outside of their LGA borders. And the biggest stakeholder in any new housing project are the people who want to live somewhere but can't and therefore will be the primary beneficiary.

And yet they are not involved in the consultation at all.

It's a hard one though, isn't it? Because then you've got the people that do live there that are going to suffer the greatest change. And I do get it.

I do understand what you're talking about in terms of the desirability of certain areas and the fact that you need to have support staff, for argument's sake. You need to have emergency services staff. Teachers need to be able to live close by. All of that stuff. I totally get that as well.

But when you're talking about people coming in and objecting or trying to force change in an area, the people that are going to suffer the most are those that currently live there. So I'm just wondering whether there's any sympathy for NIMBYs within the NIMBY movement.

I mean, yeah, you're right insofar as like when you build new housing, there is some amount of localized cost and socialized benefit, right? But if you don't build housing, then there's a localized benefit and a socialized cost, right?

And a socialized cost goes into more support services, more funding for welfare, etc. All the subsidies we have to do because we have a dysfunctional housing system. So it's a real question about where you balance a social contract.

And the way YIMBYs see it is that we are fundamentally saying that part of the social contract, the modern social contract of living in the city, involves being open and accepting of change, right?

A lot of NIMBY groups, for instance, will tag themselves as, save our inner city village. News for you, there's no such thing as an inner city village. That's not a real thing.

and pretending that you're allowed to kind of have that is sort of a really gross misinterpretation, I think, of one sort of social responsibility and that social contract that I mentioned, but also a misinterpretation also of property rights, right?

The idea that kind of your property rights extend beyond the border of your property is like not super clear. And it's not super clear that like the benefits of

Allowing people a greater say because they happen to be lucky enough to buy a plot of land at a given point in time or inherit it or what have you.

The fact that that allows them a greater say to the detriment of broader society, it doesn't necessarily make sense as a way to sort of run a city that we want to exist for decades and decades time.

With the way that they're approaching New South Wales in terms of applying that in Victoria, they're doing it around transport hubs. They're saying within 400 to 800 meters away from train stations, for example. And it is varied on different locations, et cetera. But a lot of those won't make sense for developers, right?

Because they'll go, well, the cost to buy the land, the cost to build, yeah, I can get zoning and I could build thousands of apartments, but I'm just not going to build there. So developers are going, well, I'm not going to build on those transfer hubs.

But I'm going to go in the more affluent areas. So, for example, in Sydney, it'll be the North Shore, the eastern suburbs, close to the city, you know, and the Northern Train Line. And they have come over the councils, right?

And some are working with the state government now and amending it and saying, well, we know we need to build more density, but we're only going to build it within 200 metres. So how does the Melbourne Yimbies think about the way they're approaching it in New South Wales?

Because the irony is the stuff that they're going to build isn't going to be affordable for first-time buyers. And it's going to be built for downsizes, basically. And there is a benefit to that, right?

So someone leaving a house in an affluent suburb creates that house available someone who's younger to then move up into, then they move out of their house. But the people making those property transactions are going to be more the affluent part of the market.

And people are going to benefit from the new housing stock is going to be the affluent part of the market who are going to buy these apartments. In the current business, the building dynamics, Where do you see this sort of playing out in Melbourne?

Because like if you open up planning controls in Camberwell in Melbourne or Brighton, that's not going to be the YIMBY supporters who are buying those apartments, right? It's going to be more the downsizer market. So where do you see this really playing out in Melbourne?

So two comments there. One, I'm glad you sort of bring up, yeah, filtering like as it works, right? New stuff historically has always been the more expensive stock, right? Same as like car markets, right? Like car markets is the best way to think about it.

During COVID, when there were no new cars, the used car market went up. They just shot up. I know because I was one of the suckers who bought a used car during that period. I'm getting distracted by thinking about how screwed I got on that used car.

But the point is that right where there weren't any new cars, which we know are more expensive, older cars became more expensive as well. The idea that, oh, we shouldn't build something because it's aimed at a more affluent end of the market. There's two things to sort of say that.

One, almost always, maybe barring the penthouse, it's going to be cheaper than the thing that it's replacing. You're buying a $4 million lot and maybe the apartments that go up are 1.5. So they're expensive for apartments, but they're much cheaper than what was there before. So there is still that.

Yes, it's at the upper end of the market. No one's disputing that. But that increased supply combined with the sort of filtering effects, that's really positive, right? Because we know we have a lot of older downsizers who don't have local options. My grandmother was one of them.

just stayed in the one spot because she knew everyone sort of in her neighborhood and there was nothing smaller anywhere nearby so that's hugely important actually and thinking about older people is actually not at all anathema to yimby like yes we definitely have a younger face in terms of who's sort of running the show who's in the media but our membership is 40 over the age of 40 it's also 40 homeowners right a lot of our members are older people who are worried about their

kids. When people join YIMBY Melbourne, they can enter in why you're joining, what's your motivation. And we don't force them to do it, but if they do, they do. And a lot of the messages that we get are, I'm worried about my kids. And there's a sort of level of social responsibility there.

In terms of like, well, people who will be moving in there aren't going to be YIMBY supporters. I'm not super sure about that, to be honest.

I think there is a very large kind of silent minority, the people who aren't showing up to opt-in community consultation, who are maybe more affluent, but who really understand that I actually don't want to live in this four-bedroom house for the rest of my life. I'd actually like another option.

And if that means something gets built near me and I have to trade some things off, but it ultimately means that society works a bit better and is a bit more equitable, people are very willing to make that trade, I think. More so than one might expect.

Well, I think a lot of people are, you know, like you're absolutely right, when they get to a certain point where they want to downsize, that lack of available and appropriately sized apartments in their local area is one of the things that stops people doing so. That's absolutely true.

One of the things, though, that, you know, around in the Middle Ring, for instance, some Middle Ring suburbs, and I'm thinking Sydney, but also Melbourne, got quite a, you know, heritage problem. overlay, they've got a real charm about them.

How do you respond to homeowners who feel that they're protecting community character rather than simply blocking development?

The thing to like remember is a city is sort of like roughly, if you look through all of history. all of history. A city is either growing and changing or it's dying. And the reality is that we have to enable a level of change in areas.

A great example of like really good heritage is heritage pubs, right? Like places that people can come and congregate, have birthday parties, have Yimby drinks, these pubs that are places of communal use. And yeah, a lot of them get sort of stuff built over the top, which is great.

And in my view, and certainly not in the view of every heritage consultant, in my view, that adds to the character, right? So there are really good examples of heritage and it's the heritage that we can share, right?

Things like libraries, the old Kathleen Syme Center in Melbourne is really beautiful and people use it, communities use it. But this idea that we need to protect these streetscapes of empty nesters that are only becoming more expensive because the land prices are only going up.

It's less easy to justify, I think, the idea that these side streets that maybe you'll walk down, maybe you'll drive down, but that there's nothing to actually do on, nothing for society to come together, nothing for people to commune around. The idea that we need to enshrine in law that

these things can never be touched, but then it puts a cost on the rest of society, right? Someone is paying the cost of the inability to build there. And the question is like, are we internalizing that correctly?

Yeah. I mean, do you think that, I think certain parts of Sydney and there's certain parts of Melbourne Like, for example, I mean, you've got Port Melbourne, for example. There are terraces and older homes there, but there's lots of industrial land.

If that's not optimally used for their industrial purposes, then I can certainly say, I can totally see alongside of or close by streets of houses or terraces, redevelop some of that land if it becomes appropriate to do so, right?

But do you think that there's ever a situation outside of a situation like that? I mean, Marrickville is a good example. In Sydney, for example, there's quite a lot of industrial land that's been redeveloped into apartments there.

And then there are lots and lots of streets which have older style homes and there's that character in those streets.

Do you think that there's, you know, heritage protections and urban density can truly coexist or do you think that they're fundamentally always in conflict and at the end of the day we don't have a right or I guess the societal benefit of a pretty street with, you know, period homes in it should be given over to the good of the whole?

I mean, is that fundamentally what you think or do you think that there is a way for them to coexist?

Yeah, I definitely think there are ways for them to coexist. There are a few really good examples. So we at YIMBY Melbourne, we're working on a large scale report on heritage at the moment, sort of a diagnosis of kind of the problems in the sector, but also looking at a progressive way forward.

And there are a couple of like really good ways forward, right? One is to make it a lot more permissive to build on top. of existing structures, like saying, hey, we're going to protect this, but you can build on top of it.

Now, the thing that makes people kind of jump back at that, aside from that heritage lobby who don't want you to do that at all, is that it's really expensive to build heritage compliant. Every tradesman needs a set of insurances and so on.

Oh, heritage though. Like in conservation areas, you don't have those restrictions. You preserve the streetscape, but you don't have heritage overlay on the property. I've used the word heritage, but I wasn't literally meaning heritage.

Yeah. And there's slightly different gradings. I know the grading system in New South Wales, I think, is a bit more complicated than the grading here. But look, there are other options, right?

Other things like community right to buy, you know, the idea that like, well, OK, if we're going to sell this, but the community feels it's valuable, the idea that sort of a council could come together and say, well, actually, no, we do want to preserve this. So we'll preserve it. We'll facilitate it.

We'll maintain the upkeep, etc., There are a lot of really good approaches to keeping these really distinct elements of our history, but also allowing change.

Because I think ultimately, if we don't allow any change on a lot of these Marrickville side streets, they're ultimately either going to decay as sort of share houses, which if you've been inside them, they're pretty moldy. I'm on a personal mission to help more people make better property decisions.

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There was actually a case in Paddington in Sydney very recently where a developer, I think, or a property owner anyways, held a row of terraces or a few terraces. They'd been share houses basically for, or they'd been divided into little apartments for years.

Like manor houses or whatever.

Yeah, there'd been men living there for decades basically. And so they took the council to the Land and Environment Court. And they lost because of the lack of low-cost housing in the area. So they're going to have to redevelop them, I think, as better quality, low-cost housing.

So that's, I guess, an example of the heritage has been retained, but also the low-cost housing has been retained. They haven't been able to turn them into expensive dwellings.

Yeah, I remember that story. So that's a really interesting story that actually kind of illustrates some of the really big problems with sort of planning controls, actually.

It preserves the streetscape, but it doesn't really provide a lot more. I mean, as a site, you can see that, you know, if you were able to knock that down, you could build a lot more low-cost housing, really. So it's sort of...

Both, but not very well. And I think it was ultimately rejected partially on the idea that it would be reducing the total number of dwellings. This is a great example of planning regulation gone awry, is that the built form in that space, on that block,

that is legal and permitted has not really changed very much compared to what is there now.

But what has changed is that planning regulation has brought in a whole bunch of minimum dwelling sizes, whole bunch of minimum setbacks, all these controls that mean that it actually isn't legal to build as many homes there as there are today. So it is literally impossible.

They've been put in this sort of Kafka trap of a complete inability to maintain or fix the housing. And there's a ban or some sort of punishment if you try to reduce the number of dwellings in Sydney.

But in the absence of zoning for more floor space, if you increase the minimum dwelling size, you're always going to get fewer dwellings under the same zoning of something that was built 20, 30 years ago. So you've got this nightmarish situation.

Yeah, well, I wish I knew the exact detail of this, to be honest, now that I've brought this up because I'm sort of speculating here. My understanding is that they really wanted to knock the buildings down and build some luxury accommodation on there. So very high end, very expensive, right? Yes.

Which would have less residents in it than it current. But they don't have to, by maintaining the buildings that are there currently, they're not losing any setbacks or any accommodation because they could maintain what's there, but they're not.

They've been letting it go to ruck and ruin because they basically wanted to go to council and apply to have a knockdown. So I guess it's the way in which the planning rules are applied or interpreted and the way in which some developers Because when they look, it's an expensive site.

The developer wants to maximize their money. And fair enough. It's not their responsibility to provide public housing. As I said, it's just a bad example of both urban planning and conservation and providing for low-cost housing as well. So it doesn't actually achieve anything particularly well, a decision like that.

And there's an additional point there too, that redeveloping things that already have density on it is more complicated, not least because strata rules, et cetera. But the reason this happens is because we have created an artificial scarcity of sites where building densely is legal, right?

So you wouldn't be looking, oh, I have to redevelop this site because it's the only option if it weren't the only

option but it's only the only option because we have a whole bunch of arbitrary planning rules that have drawn lines on maps with no real scientific or analytical basis and have carved up our city into sort of an unaffordable place under sort of the whims of a set of bureaucrats

So let's say we're worried about this missing middle, right? We develop these zoning across it all, which gives developers infinite opportunities. How that works, you know, it's a bit hazy, right?

They're going to go for the best quality land first, and they're probably going to get where the money is, which is more the affluent, and then there's the filtering benefits.

That could come at the cost of heritage, but heritage is like, well, what's the point of having nice streets if kids can't afford to buy homes, right? And our grandkids can't afford to buy. And maybe we keep heritage to a small number of pockets, right?

So it just doesn't need to be 60% of the suburb, right? It might be just this pocket we're going to protect and then this we're not. But where's some of the other challenges? that need to sort of be overcome.

I mean, the Koongai Council in Sydney, for example, there's a lot of greenery, right? There's a lot of trees, a lot of nature, which basically means a lot of development sites are off the table because you've got a lot of established trees.

And then you've also got a real fear around the quality of what people are going to build. I mean, Australians have been pretty relaxed particularly in high-density postcodes, to be able to build whatever you want. Melbourne's flooded with poorly built apartments, just like Sydney is, for example. Where does that play into it?

New South Wales are using, like, patent book designs as a way to sort of get around that. How do you see those issues overcoming, you know, to give people more confidence around new YIMBY moves? Because...

We're for it, but we don't want something built that's not great, and we don't want to take our trees out. That's the reality. So how do you overcome those?

Yeah, sure. So there's two points there. I think one of the things that's really important, I think, for people to internalize heavily is that the construction code in the last 10 years, sort of since the last apartment boom, has come leaps and bounds.

The quality that is required, the minimum standards, et cetera, in the NCC. I think once we are seeing the sort of end points of projects that have been going up over the last three to five years, I think people are going to see that there is a higher quality of product.

delivered compared to then but you know that higher quality also comes at a higher cost so there's trade-offs there at all points but I think that will go a long way in terms of sort of yeah this higher bar that has to be met so that's the one thing there on the sort of leafy suburbs right and established trees I think that's actually a really good argument for why it's

really important to sort of up zone as broadly as possible. So then that if you do have these other controls or these other considerations, like established large plane trees, whatever, in the backyard or what have you, then if that site is cut out,

It's not a big deal because it's one in 10,000 as opposed to like one in a hundred, which is where it kind of then becomes like, oh, well, maybe the tree gets Dutch elm disease. I don't know.

We've ended up in this situation where by virtue of rationing land artificially, when it is already rationed literally insofar as there's only so much of it. And we're not sort of China, we're not building islands in the South China Sea or Sydney Harbor. Not yet, at least.

So we need to really establish that, well, okay, there are going to be some sites that are heterogeneously knocked out for X, Y, Z reason. And we have to accept that we can't actually logically or feasibly go through and handpick every single site. And actually what it's about is about allowing permissibility.

And then if a few sites get knocked out for exactly those reasons, that's fine because there's not this scarcity that we have at the moment.

Yeah, it's interesting because when a suburb goes through a change, you know, where there's rezoning and some sites get amalgamated and sold off to developers, then they sit on them for as long as it takes them to decide it's feasible to build and then they build.

There can be decades, disruption is not really the word, but decades of ugliness, if you want to call it that. Like it's unusual to get an entire suburb suburb or an entire segment of a suburb to be redeveloped within a similar time zone.

There's areas of infill sites, for example, that are rezoned and where you can get a thousand apartments built or there's both of our cities, Sydney and Melbourne have both had this. Even that can take a decade for all the buildings to be completed. So there's quite a long period of disruption.

When you've got a bigger site like that, a bigger infill site, you can certainly see some really good urban planning.

But what concerns me about this sort of broader approach to say, well, you know, the whole suburb, you should be able to upzone the entire suburb, for example, and just let it happen naturally, is that it's very ad hoc then.

Something is built on that corner because for whatever reason, those owners banded together, they don't put too high a price on it. Developer sees reason and starts to build something. But the whole urban planning thing, process becomes a lot more disjointed and less cohesive, if you like.

Do you see that same problem or do you think that that's not an issue?

Yeah. So there's a really fantastic book on urban planning called Order Without Design, written by Alain Batao, who used to be principal planner at the World Bank. It's a fantastic book. And he talks about, let's think about, we can actually do this like really tangibly with the Todd program.

We can think about this. If in the absence of zoning restrictions, right? In absence of like these restrictions that keep us at two stories, what have you, you would have logically seen a clustering of density around the train station, because that is where demand would have been highest, right?

We would have seen that in the absence of the current regulation. The Todd regulation that has come in is saying, okay, you can now do what you would have done anyway, based on land prices.

So this idea that we need to sort of micromanage land in this way to get orderly outcomes is actually not true, right? No urban planner says, well, you have to open a cafe here. Oh, well, you have to open an IGA here, right? Businesses, people, human beings, firms move into places.

No urban planner said, oh, I think all the consultant offices should be near each other. No, those firms like organize themselves because it was rational to do so, right?

So I think that this idea that we need sort of someone to sort of draw lines on a map to make sure that we get orderly outcomes is actually just does not play out because it's fundamentally a response to sort of land prices.

And where urban planning is super important is in terms of managing the public realm. So looking at things like roads, bike paths, connectivity, making sure commute times don't blow out, thinking about how do you make sure that the trains are full but not too full?

All this sort of stuff that's super important, but actually has very little to do with sort of stopping apartments being built in desirable areas.

I haven't read the book, but I mean, is that sort of based on the assumption that if you had a greenfield site, you would, you know, there were natural ways in which we as humans would organize ourselves. So we're not talking about greenfield sites here. We're talking about sites that are...

to undergo a metamorphosis. And then the actual drivers between one part of the site or one part of the area being developed before another have got nothing really to do with what we would do if it was a clean slate. You know what I mean?

So our behavior is going to be very different, being driven by different economics and different benefits effectively. So I wonder about that because it's a small thing.

possibly not even relevant, but I was in Vietnam at the end of last year and I hadn't been there for 20 years. I was actually really shocked to see one particular place that was in the middle, right? And so I'd been to Da Nang many, many years ago before these high-rises were built.

Now, there's apparently no planning controls there. And so when you...

fly in they're dotted everywhere there's no real logic to where they are and a lot of them are not even finished a lot of them have halted mid-construction and never going to be finished and it's a total dog's breakfast it's a mess and it's like there's no water in it at all and i wonder if if that's the sort of thing that could happen if you just gave carte blanche as opposed to you know we've got a retrofit so therefore we do need to put some overlays in place that's my thinking on this anyway but is there anything valid there do you think

Yeah, well, you want to control for sort of, like, real externalities, right? So, like, you know, the whole mountain melee is, like, you pretty standardly, like, you want to say, like, well, we probably don't want, like, smelting factories in the inner city.

But also, like, the reality is that most people aren't going to want to open them there. In terms of kind of the... the kind of the quote unquote disorder, right? It is that you might see, for instance, like the first sites, let's say the Todd has what, 40 stations, give or take.

It might be that you end up with one, initially, one sort of taller building at each station, right? And from the sky, that might look a little bit quote unquote disorder, but what it really is, it's the beginning of an emergent order, right? We're expecting our cities to change.

And where you're seeing these sites pop up, you would expect more to pop up.

Except that there is the transport corridor, which that's a restriction, but we're talking about having a broader opportunity to just be more organic.

So I guess what you're sort of arguing there is what I'm thinking, that you need to put some constraints there so that they will cluster and group around the logical place.

Well, I think people cluster around the logical place based mostly on land prices. So we know this is a good example of this, right? Is that, like you were saying, there's a lot of these sites in the Todd program that are not feasible, right?

And that indicates to us that actually by dent of planning control, we can't magically make an outcome happen. What makes the outcome happen are the underlying fundamentals. And the fluke is that, or not the fluke, but sort of the fluke, is that in Sydney's eastern suburbs,

that's where the financial fundamentals make sense and it's legal to execute on those fundamentals so in a space where it is legal to execute on the fundamentals you are going to see densification around where it's viable but that viability is driven first and foremost by yeah financial fundamentals rather than planning controls and we know that because we're not going to see

density pop up at sites where it's not viable, right? Unless the government sort of comes in and says, well, we'll build everywhere and make it hyper orderly. But I don't see that happening sort of any time, particularly soon.

From what I understand in New South Wales though, it's quite a big distance, right? It's not like 200 meters or a hundred meters within the train station. Like you're talking like 400 to 800 meters. Yeah.

And I think some sites are bigger, right? There's a few that are, they're allowing the distance to be quite bigger. So the challenge is if you're like 450 meters, right?

And you're outside of it and you've got a little house and you're not really enticing to a developer because you're not really in the zone. And you really can only be a single dwelling, for example.

But then across the road, for example, you could see six, eight stories or you're in that six to eight stories. You're in the 400 meters and your little house isn't developable because it's, you know, the heritage or it's just not a great block of land to develop.

And developers have got a choice of other amalgamated blocks. And so the person living in that house is probably pay big prices because they're in an affluent part of the city. They've got a big mortgage, but their land is, is no longer as desirable.

And so they're sort of the one who takes the cost, right? Like they pay the price. They didn't do anything wrong. They were just trying to buy a house near the train station.

They paid a premium for that as well to be 400 meters from the train station, but they can't take advantage of it. And it's kind of like these amalgamated blocks. You can see that someone said yes.

And then that person said no, because they just wanted to put their stick in the, I'm not moving out of this home. I've been here for 30 years, but They're saying no. So how do you sort of deal with that?

Because I think that there are some people who lose out here and I just wonder how we can manage that best. Because maybe it is, maybe they get protected in subsidies that other amalgamated blocks have to sort of contribute. But there are some people who will lose out of these zonings.

Yeah, sure. So there's two points there. I think one is that you're describing how zoning works now anyway, right? There are tons of people who their block neighbors another block where much more permissive development is enabled.

So this is, so long as we have zoning and so long as we're drawing lines on a map to determine what our cities look like, you're describing a reality of that system. In terms of sort of the sort of discontinuities, I guess, where you get fall outside of this range.

Land prices, I do not imagine, are going to go down even as a result of this program or these kind of upzonings.

I think what you'll see is you'll see the land price ultimately reflects, current land price ultimately reflects the price someone is willing to pay to live in a single dwelling in that place. And as a result, I don't think people are necessarily going to lose out.

They might win less if they own that land.

If your land today has gotten complete privacy, and you've got no one overlooking your back fence and you've got no issues, you've got easy to get a park in your street.

And then tomorrow, you know that there's going to be a development that's six stories out the back of your house and you can't develop your land. That person's absolutely going to not be able to sell that property for the same amount they could have yesterday.

Like there's someone who's going to lose money there. because it's just not as desirable. It's not as livable to live in. And it's just, how do we deal with that? I'm not saying it's a bad thing, but they are the one who's got the mortgage, who've got their family there.

So there is a cost there. And yes, they could amalgamate sometimes, but not everyone could amalgamate.

I'd add in another cost, actually, that what it actually does mean in some areas, and I've spoken to a lot of homeowners here, and I get that Yimis don't necessarily have any sympathy for people that own these properties. But their lives are now put on hold.

I've got a client, for example, we bought for them in a suburb that's affected 12 years ago. And now they've got a daughter who's about to go into high school and they've outgrown their home. They literally just got plans approved to extend it. And then the week later...

They were told that the whole area has been up zoned. They're the last site. So they've got a choice. Well, yes, they've got choices, but none of these choices are good at the minute because they could do the renovation because it's what they decided to do.

They love living there and they want to stay. They're going to make their home bigger to accommodate their growing family. But if they don't sell to a developer and bandy up with their neighbours, their neighbours are going to, and they're going to be stuck with a unit block next to them.

But at the moment, there's no obvious sale to be had. They've outgrown their home. And they're completely hamstrung. They can't extend because it probably is ridiculous for them to do that financially.

They can't sell it to anyone because nobody's going to buy a single lot in that area at the moment because everyone knows it's been rezoned for development. The neighbours aren't yet quite ready to bandy together, although they are talking about it.

But even if they do, developers don't necessarily buy them and pay for them in a short timeframe. So their personal life, where they are, they've lost the ability to be flexible and and to basically trade up or trade out or trade sideways or renovate. They've lost all of that flexibility in their property.

So that is one of the downsides. And I get there's just one generation in rezoning like that. It's only one generation of current homeowners who might be affected like that. But I think it's nice to have a bit of compassion for them because when they bought, none of that was on the table.

Yeah, change is certainly hard, right? And there are things that change in our lives and in the city and whatnot that are disruptive and that fundamentally affect people. And it's true. Some people are unlucky and have to make trade-offs that they wouldn't like to make. That is true in every person's life.

And I do have sympathy for that, of course. But it's also, again, goes back to that sort of question of, well, the social contract of the city. If you live in the city, you accept there is going to be some level of change, right?

I don't think a lot of people do run around thinking that they do accept that. You know what I mean? I think a lot of people run around just trying to do the best they can in their lives.

They're not necessarily thinking about when they buy a home that could completely change for them. You know what I mean? They're seeing buying permanency and they're seeing buying security and they're seeing establishing their family.

And they're not necessarily thinking that, look, my debt to society because I can afford this home is that I should potentially face the challenge of being uprooted through a zoning change.

So I think that these are some of the delicate things that Chris was talking about with the type of wire that really has a massively devalued asset, whereas others, their neighbors could have massive windfall.

And I know there's a windfall tax in Victoria, for example, but there's not anywhere else that I'm aware of. So some people really can benefit from this sort of thing and other people can really get stung. I struggle to reconcile that personally.

Yeah, I think one important thing to remember is that people are currently being stung by a system that doesn't allow housing to be built at all. The reality is that the status quo is stinging a lot of people. And tying back to that consistently is super important.

Also, in terms of the very specifics of the kind of neighboring thing, I know that in Melbourne, they've done a good job of making sure there aren't cutoffs at given blocks, for instance. Melbourne's done sort of modeling that takes you to the end of the block, which makes a bit of sense.

Yeah. And I don't think the uplift in these zonings is going to be as big as you expect.

I don't think people are going to make these massive windfalls because the reality is when they amalgamate the site and the developers got lots of choice, they're going to drive a hard bargain and people are going to be stuck to join the amalgamation or not. They can't be like,

oh, I'm just gonna sit on my hands here because I've got all the power. Well, the developer's gonna say, well, no, if you don't get your block, I'll just get your neighbor's block and then you'll have to sell anyway.

There will just be this force to people and some people won't be able to handle that. The 80s, 90 year olds, 70 year olds who can't downsize. You've got people with bigger mortgages that have got devalued assets sometimes.

That's a pimp too. It actually will stop people downsizing for a period of time, you know, like people moving into retirement villages.

While there's this sort of uncertainty around what you can do or when your neighbours are holding out for more money and the developer's going somewhere else where it's a better deal, trying to get lots of neighbours to agree when money's involved is really tough and it can really slow down the whole process as well of building more homes, you know.

Just seeing the way people behave around this is an interesting social experiment, if you want to call it that.

Yeah. I mean, there are frictions in transactions. You guys know this better than almost anyone. But the reality is that we have to enable people to make these decisions, right? Because like, oh, well, the transaction will be slightly slower and there'll be some frictions along the way. That's true.

But the counterfactual of not doing this means that those transactions will never happen at all. So while I agree that there are like imperfections here and whatnot, that is just the reality of market transactions. And I think we need to enable a greater number of those transactions.

Well, if we go back to what we were talking about earlier, I think Chris mentioned Caringa Council in Sydney, where they've sort of gone back to the state government to try and renegotiate and say, well, look, you know, we don't want to just have the overriding planning controls that you've mandated.

We would like to concentrate some there and less there and so on. Is there a case for councils to be able to bring that nuance in so that there is more of that consideration for where the obvious sites might be, where there's more properties that are perhaps in a poorer state, for example?

I mean, do you think that there should be a little bit more leeway for councils to be responsive to the opportunities in their particular areas? Or do you prefer the idea of this broader brushstroke?

All the research sort of indicates that the top-down sort of state-led approach leads to better housing outcomes overall. There's not sort of a huge amount of evidence that sort of deferring to councils willy-nilly actually will lead to better outcomes for people and for housing.

So I broadly say that I think it's smarter if the state government is able to hold the line.

I'm wondering, though, whether that's because in the past it's been left to councils. I'm talking more collaborative approach where the state government's saying, you've got to do it and there ain't no backing out now, but let's come to the table. That's what I'm sort of wondering.

Is there any thought around that in the sort of the union movement?

Yeah, look, you can make sort of any number of concessions at any number of points. And those have happened. We've seen that in Sydney's sort of program. There have been some downscalings and whatnot of the sort of broader planning reform. So these things are happening.

But the reality is that sort of you look through the literature, you look at international examples, you look at how you can govern the way that we manage the land in our cities.

And you ultimately always end up at the same conclusion, which is that having decisions be made higher up the chain does lead to better housing outcomes and more equitable outcomes for the whole city.

Jonathan, can you finish this up with a property Dumbo today?

Yeah, absolutely.

Look, the number one property dumbo that I always think about, there was a group of people who, this is a news story rather than sort of someone I know, but a group of people who sort of had moved into inner city Melbourne, into Fitzroy, and they all got together and got very upset that there was noise coming from the pub nearby.

And I think about that all the time in terms of like, well, why did you move to the area near the pub to then get very upset about it? I think it is deeply, deeply silly.

We've had that happen. My office is in Balmain and I've been selling and buying real estate in Balmain for 25 years. And I've heard that story for many of the pubs, famous for our little pubs in Balmain. And yet nobody likes to live near them.

And if you do, then you move in and complain about it. So I'm with you. I think that's a total dumbo.

Total dumbo. Yeah. Thanks so much, Jonathan. It was a good episode. And yeah, I mean, I have supporters of the YIMBY movement in a lot of sense. I think it's understanding that we need to do something and we need to take control of this.

And we've got lots of other issues from homelessness to social housing, key worker housing, young people not being able to afford a rental crisis.

Part of it is zoning and part of it is a fight back against NIMBYism because we can't have the same city built exactly the same way for the next 20, 30 years because you're going to just amplify the problems tenfold. So I think it's just a bit, I guess it's been a bit...

sympathetic that there are going to be losers in this rather than just blanket going, okay, well, that's all right. They're just there to social collateral. Let's just see if we can come up with ways of protecting people who are going to lose.

Whether it's stamp duty concessions, I think you've got to think through some of their unintended consequences. And yeah, the more that happens, the more comfortable people are going to be to support the YIMBY movement, I feel, is when we can discuss those things.

So thanks so much for coming on and love to hear how the fight goes over the next few years.

No, absolutely. I would love to come back sometime down the line once there's been more change. And yeah, really loved testing the ideas with you two today. Thank you so much.

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