BCC should consider economic consequences of townhouse ban

Yesterday, Brisbane City Council closed its consultation process for its proposed ban of townhouses and multi-unit developments in areas zoned low-density residential, such as Chapel Hill and Mount Gravatt (e.g. see map below). The YIMBY QLD group, led by Natalie Rayment, has prepared an excellent submission on BCC’s proposed restriction on townhouses, and I lent my support to it in a brief submission I made yesterday, which is reproduced below (with a few minor edits). I am concerned about the ban’s economic consequences. BCC already prevents a lot of development occurring through its heritage protection regulations, a point well made a few years ago by Brad Rogers in his post Old Queenslanders in a New City. Let’s not impose another constraint on development.

Submission on BCC’s proposal to ban new townhouses in low-density residential areas

I would advise against proceeding with the proposed major amendment to the Brisbane City Plan to restrict townhouses from low-density single home areas at this stage. It is unclear to me that Brisbane City Council has undertaken an analysis of the economic impacts of this proposal. In my view, the economic impacts would very likely be negative.

Townhouse developments in low-density residential areas in Brisbane would increase supply in these areas and possibly improve housing affordability. The proposed zoning restriction would benefit current property owners in these areas through higher property prices than may otherwise occur, but would disadvantage prospective buyers of properties in those areas.

BCC appears to favour a city divided into low-density suburbs and high-density inner city areas full of apartment towers. The logic underlying this preference is unclear to me. I suspect many people, particularly young families, would be reluctant to live in apartment towers in high-density inner city areas, and may be more willing to live in affordable townhouses in Brisbane’s suburbs. If this option is precluded, these families may need to consider living in a house in an outer-lying area such as Ripley or Yarrabilba. That is, BCC may be contributing to urban sprawl by disallowing townhouse developments in its low-density residential areas, increasing demands for infrastructure to service people living further from the city centre.

The proposed restriction may have adverse impacts on the building industry. By limiting the range of new dwellings which builders can construct and buyers can purchase, BCC is potentially reducing the magnitude of dwelling investment.

The relative magnitudes of these different economic impacts are difficult to assess without undertaking the necessary research. Given BCC is considering a zoning restriction that could affect many millions of dollars of investment, in my view it should conduct a comprehensive analysis of the potential economic impacts of the restriction.

I encourage BCC to seriously consider the thoughtful submission from YIMBY:

https://yimbyqld.com.au/wp-content/uploads/2019/08/210819-Brisbane-City-Plan-Major-Amendment-H-Submission_YIMBYQld-lodged.pdf

In conclusion, as an economist, it concerns me that no analysis of the economic impacts of this proposal appears to have been conducted.

Zoning_map

Low density residential areas from which townhouses are proposed to be banned are in light pink. 

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