PLEASE AUSTRALIA, BE MORE LIKE HOUSTON – Some staggering figures that go towards explaining housing unaffordability in Australia:

Everybody complains about high housing prices these days. But would you live in a concrete jungle if it meant you could get a much cheaper home?

That’s the question Australia’s Reserve Bank is asking. It put out a report this week on how Australia’s housing market would look in the theoretical world where there were no zoning controls. It finds zoning rules — things like minimum block sizes and height limits — have raised Sydney house prices by 73 per cent.

The price of an average block of land in Sydney is $765,000, which is 36 per cent the true value of that land and 64 per cent the cost of what the RBA calls the Zoning effect.’s Jason Murphy is stretching it when he describes the zoning-free “concrete jungle” as Blade Runner cities. As he himself admits later in the article, Houston, which by his definition should such a dystopian nightmare, isn’t:

There is one city in the world that is most famous for existing without major zoning laws — Houston Texas. It is famous for having enormous urban sprawl and the lack of rules mean very different kinds of buildings can end up next door. They could build an enormous tower just over your back fence…

But Houston, which is an extremely wealthy city, also has very affordable housing. House price to income ratios have been falling since the 1970s, which says housing is getting easier to buy there. (In San Francisco, where zoning rules are incredibly strict and locals fight back against development, median house prices are the highest in the USA.)

Houston has a few higgledy-piggledy moments, as in the picture above, but it still has a lot of single-family homes. Meanwhile, the commercial parts mostly stick to the commercial areas and residences mostly get built in residential areas. The lack of zoning doesn’t end up changing it too much from a normal city, and it has managed to absorb a huge amount of population growth.

Most of the problems with housing affordability can be traced back to interventions by various levels of government with their laws, regulations and taxes. I imagine most people, feeling a lot less laissez-faire than the Texans, like having zoning laws, but we should be honest enough to recognise that the reason so many (particularly younger ones) can’t get into the housing market at all is because those already in the market want to protect their quality of living, including having detached dwellings on large enough plots of land in the parts of our cities which are considered the most attractive to live in by virtue of their distance from the CBD or other geographic aspects (such as water frontage).