Defining “well-located” homes: how the Housing Accord can deliver on its promise

It’s been more than a year since the Federal Government’s Housing Accord was announced, and while the housing crisis worsens, we are none the wiser on what a “well-located home”, as set out in the accord, actually is. 

The accord’s principal goal is to encourage the building of 1.2 million “well-located” homes over five years. It was signed in 2022 by a broad coalition of states, local governments, investors and community-housing providers.

While much has been said about our capacity to build 1.2 million homes, less has been said about whether we can build 1.2 million “well-located” homes.

Using “well-located” as a qualifier is a small acknowledgement that previous Federal Government policies haven’t always worked as intended. Most have sought to increase home ownership through first-homeowner subsidies. 

These subsidies typically encourage first homeowners to buy in greenfield developments on the urban fringe of our cities. Greenfield developments are built on previously undeveloped land – usually agricultural – that has been rezoned to residential. 

It is often cheaper for developers to build on undeveloped land than existing sites in the city, and this has partly led to Australians living in the largest average homes in the world. Australian cities also have some of the lowest population densities in the world. Australia’s largest city, Melbourne, has 56 per cent fewer people than London, but a 65 per cent larger urban footprint.

While developing on our cities fringes is profitable for developers, urban sprawl comes with a range of other societal costs, such as: congested roads due to entrenched car use; new infrastructure like schools and hospitals, and an associated increase in taxes to pay for these services (with cost estimates of $39,000 more per house in Sydney, and $59,000 in Melbourne); a greater impact on the environment; and less job accessibility.

The alternative to sprawl is to live more compactly in highly valuable or “well-located” areas. This qualifier is why the accord has such broad support, but there is currently no published definition, which means we can’t know what the Federal Government really means by “well-located”.

Opposition to higher density living remains strong in many communities despite the urgent need to build more homes. There will need to be coordination between Federal, State and local governments about where new homes will be located. 

Definitions or criteria for well-located homes should be made public, to ensure transparency for communities, and the Federal government should publish data on its progress against the Accord targets. 

This will set community expectations early and allow for better coordination of infrastructure, services and new businesses. It would also keep states and local governments accountable. 

A good start would be to define “well-located” areas as being where: 

• Housing is within walking distance to public transport, shops and services, meaning less dependence on cars to get around. This makes journeys safer, sustainable and cheaper;
• There is existing access to services such as schools and hospitals, which means cities can better use what they have, rather than building new infrastructure. This reduces the amount governments needs to spend to provide these services; and 
• Housing that has access to parks and green spaces, which can help with social and community connection.

While distance and access to services are good measures, we already have a good indication of how people value living in certain places – the price they are willing to pay for land.  

Many people want to live within “well-located” areas, this is what makes them inherently valuable. Opening these areas to more housing affords more people the opportunity to live in them.

But homeowners in well-located areas are especially motivated to oppose developments if they perceive it will decrease the value of their homes or their amenity. Recent polling suggests the main concerns with higher densities are increased traffic, crime, noise and changing the character of the neighbourhood.

Quality and standards a key concern

Additionally, quality urban design is shown to be the most important aspect to the community when considering how to densify. While most states have design standards, evidence suggests a significant portion of developments don’t meet these standards. Fixing this could go some way to achieving community buy-in on more density.

We also need more choice. Evidence from Melbourne has shown that while three-bedroom homes are the most preferred housing type, they are actually supplied the least. 

All these challenges make the lofty task of building 1.2 million “well-located” homes far more ambitious. But clearly and publicly defining “well-located” housing will be a key step to help us achieve this goal. Doing so should help make us happier, healthier and more productive. We might even get some cheaper housing as well.