Does housing supply impact on inequality?

The supply and price of new housing affects affordability and is implicated in growing inequality. Debate about planning issues like city centre towers needs to take account of this wider context

Dwellings approved, metro Sydney and metro Melbourne, Jan 2010-April 2014 (source data: Minister for Planning, Vic, media release)

Victoria's Planning Minister, Mathew Guy, announced this week he's approved another three new apartment towers in the centre of Melbourne, this time ranging in height from 185 metres to 319 metres.

If they're built, they'll collectively accommodate 4,000 residents. The tallest one, Australia 108, will be "the first 100-storey building in the Southern Hemisphere" and will have 1,105 one, two and three bedroom apartments.

New residential skyscraper approvals are becoming almost routine in Melbourne. Mr Guy's copped plenty of criticism, including the common charge he's turning Melbourne into "Hong Kong by the Yarra".

If you read The Age regularly you'll know there's concern in some quarters that most or all of these new towers are too tall, too skinny, too close, or too ugly; that they dominate the skyline; generate strong winds; cast shadows; and ignore good urban design guidelines.

There're also plenty of complaints that the new apartments are too small, poorly designed and will inevitably be "the slums of the future". And some worry there're too many absent owners; too many young singles; too few families; too little attention given to urban design; too many greedy investors; too many foreign investors; and too big a bubble that will inevitably burst.

In its report on Mr Guy's announcement, The Age said the three new approvals "have led the state opposition to question the speed with which Mr Guy is approving high-rise towers for central Melbourne" (Matthew Guy approves thousands more apartments for Melbourne CBD). Opposition planning spokesman, Brian Tee, is quoted:

Tall towers belong in the city, but there is no regard to what impact these towers are going to have on anything else…Every CBD site isn't an opportunity to put a tall tower on it. I have an old fashioned view that we should plan these things …so we don't end up with wind tunnels and we maintain a vibrant city.

These are all important issues and get a pretty fair and frequent airing in The Age. But both the paper and Mr Tee missed the really big story in the Minister's announcement.

Mr Guy included some astonishing ABS statistics on new dwelling approvals in his media release. They show that more dwellings – both detached and medium/high density – were approved in metropolitan Melbourne between January 2010 and April 2014 than in metropolitan Sydney. According to Mr Guy: