Is the townhouse ban starting to bite?

Long-term YIMBYites will remember our 'Can I Be Your Neighbour' campaign, which aimed to stop a proposed amendment to Brisbane's City Plan which would remove townhouses from low density suburbs.

Despite the great response we received, we were unsuccessful; Major Amendment Package H went into effect on 1 May 2020.

For the last two years, there has been a pipeline of townhouse projects approved before the ban in various stages of completion. However, the pipe is starting to run dry, and we are beginning to see the effects.

The Problem

You may be asking, "What does it matter? So some townhouses don't get built. So what?"

Simply put, many people can't afford a detached house, but a townhouse can be a more affordable option; it's basically the same product but at a smaller scale.

There has never been a bigger disparity in price between detached and attached houses than now. In the past year, Brisbane has the highest monthly, quarterly, and annual rate of growth in Australia, and is anticipated to continue this growth pattern. The average house price has reportedly gone up by nearly $160,000 (or $3,000 a week) since January 2021. The proportion of income needed to meet the average loan repayment is now 37% (Housing Affordability Report, Real Estate Institute of Australia), well over the 30% metric which defines housing stress.

Clearly, there's a real need for more affordable housing options for Queenslanders.

Townhouses have only been banned in low density suburbs, but what about other zones where missing middle projects are still theoretically supported. Unfortunately, other planning rules are stopping this from happening.

In Emerging Community zones, for example, allowable densities have significantly reduced from around 40+ dwellings per hectare to between 18–24 dwellings per hectare. For reference, 18 dwellings per hectare is about the same as compact detached house lots. Many developers are reporting that the new density levels are making missing middle projects unfeasible, as the land is worth more as detached house lots.

In higher density residential zones, meanwhile, townhouse product generally cannot compete with higher-rise apartment product.

So, even in zones where Council claim they have retained product diversity, that diversity is being squeezed out of the market anyway due to unfeasible density outcomes.

What ought we to do about this? Well, we have a few ideas.