Summary

Given the housing crisis gripping Australia, many commentators call for the widespread release of greenfield land on our cities’ fringes. While there is a first-home buyer preference for detached dwellings in greenfield areas given their relative affordability, and this form of housing can be delivered more profitably than others, policymakers must balance market preferences so that we don’t lock in unsustainable development as our cities grow.

Several studies have shown that higher living costs are imposed on residents who live in greenfield areas. The broader community also suffers and often subsidises greenfield development substantially. These costs come in many forms, including poor access to services and jobs, higher travel burdens, higher infrastructure servicing costs, reduced workforce productivity and participation, and significant environmental and resilience costs.

If policymakers are to focus their efforts on promoting any form of urban development, they should focus on facilitating incremental, medium, and higher-density development in well-targeted infill locations.

Many experts agree that this crisis stems from decades of neglect in social and affordable housing provision, alongside policies favouring homes as wealth-building ‘assets’ rather than as safe and secure places to live. The solutions are complex and will require sustained, multifaceted reforms.

Public debate ignores the sustainability of urban development

Despite the urgency of the crisis, little attention is given to how new housing supply fits within the broader context of sustainable urban development. The development industry is predictably calling for the widespread release of greenfield lands on the edge of our cities, as this is where housing can be delivered relatively quickly, affordably and profitably. In the process, urban planners and planning systems are often unfairly criticised. But if we don’t balance short-term housing supply with long-term development outcomes, what kind of cities will we create for future generations?

The answer to this question is clear. It has been researched internationally and domestically over recent decades—including studies commissioned by the New South Wales, Victorian, and Queensland governments—to inform metropolitan land release and infrastructure coordination in major cities.

Sustainability testing of urban development scenarios

These studies contrast the economic, social and environmental performance of competing urban development scenarios, which project how and where population and employment will be accommodated over the short, medium and long term. These urban development scenarios are informed by:

• Existing development patterns and regulations
• Available land supplies and earmarked land releases
• Transport infrastructure and service development plans
• The likely commercial feasibility of different development products.

Urban development scenarios are often defined by where new housing is built—either in ‘infill’ areas or on ‘greenfield’ sites. Infill development typically consists of medium-to high-density housing, while low-density homes dominate greenfield areas.

These scenarios are often framed with overall development targets. A more compact approach might aim for 70% of new housing in infill areas and 30% in greenfield sites, while a less compact model might pursue a 50/50 split.

Of course, this is a simplified view.

Development locations vary in their attractiveness. Some infill areas are well-connected by multiple transport modes and have consolidated ownership of land parcels, meaning that medium to higher-density development is more likely to be feasibly delivered. In these cases, well-informed and targeted upzoning of infill areas is expected to generate the best results in terms of infill housing supply.

Urban development scenarios are not based on untested assumptions. They are informed by extensive research, including background studies that assess land suitability for urban development based on environmental conditions and natural hazards and background feasibility studies that evaluate the cost-effectiveness of extending transport infrastructure along alternative corridors.

Once the competing urban development scenarios are formulated, cost benefit analysis techniques are used to identify and value the economic, social and environmental impacts generated by the competing scenarios.

Research shows the costs of unchecked greenfield development

Research consistently shows that urban development scenarios focussing on infill development perform better than greenfield development ones. In other words, the costs generated by greenfield development are significantly higher than those of infill development. While greenfield homes may appear more affordable upfront, these costs are not reflected in the purchase price. Over time, buyers bear additional fees, and the broader community faces greater long-term impacts. Let’s not demonise greenfield development or those who live there. However, we must acknowledge that greenfield development places residents on the outskirts of cities. And this has real consequences.

This means that residents live far from essential services and job opportunities, forcing them to spend long periods in their cars. This takes time away from more productive activities like paid or unpaid work, spending time with family and friends, engaging in community activities, or exercising. Additionally, it generates significant out-of-pocket expenses, including increased fuel consumption and vehicle maintenance, as well as less visible costs like higher rates of traffic accidents, air pollution, and increased greenhouse gas emissions.

Greenfield development is expensive to service when utilities such as energy and water and transport and social infrastructure like schools, health clinics and libraries are considered. While property developers make a financial contribution to these costs and some services are delivered on a user pays basis, greenfield development still requires significant subsidies from the broader community.

Previous studies have shown that the cost of servicing infrastructure can be up to three or four times higher in greenfield areas. This is due to the available capacity in infrastructure networks servicing infill areas and the infrastructure augmentation efficiencies often gained when servicing medium and higher-density development.

Coordinating and sequencing infrastructure is also challenging in greenfield areas with multiple growth fronts. SGS’s work with governments across Australia suggests that reaching an agreement on infrastructure needs and priorities can be difficult, as greenfield infrastructure servicing requires investment from state agencies, local governments and private providers. In some cases, promoting competition between greenfield housing locations must be balanced with the ability to service multiple locations simultaneously.

Greenfield development consumes large amounts of land that could be used for alternative, highly productive purposes such as food production, recreational activities, environmental preservation, or cultural heritage conservation. Greenfield areas are also more vulnerable to bushfires, and flood risks can be higher in some cases.

Labour force productivity is another concern. Given the scarcity of childcare services and the long commutes to work, residents in greenfield areas are less likely to participate in the labour force. They are also less likely to match their skills with the best available employment opportunities.

In short, research across Australian cities shows that infill development benefits society overall, while continued reliance on greenfield development creates net costs.

Policy for sustainable growth: Bridging short-term supply and long-term sustainability

While it’s true that greenfield housing can be delivered more quickly, profitably, and initially, more affordably, as many commentators and researchers point out, this short-term gain must be balanced against long-term sustainability.

Navigating the complex path towards more affordable housing has been outlined expertly by the National Housing Supply & Affordability Council. A multifaceted approach is required and must be delivered over multiple years.

Looking beyond immediate needs, we need to think about how our cities will operate in the future. We can’t let greenfield development go unchecked. Governments should focus efforts on facilitating quality infill development in well-targeted locations. This will avoid many of the significant costs generated by greenfield development and, if done well, lift the amenity of existing neighbourhoods.

Urban, transport, and social planners are fundamental in delivering quality infill development that supports liveable neighbourhoods. New dwellings last decades. If they are of poor quality and/ or poorly serviced with supporting infrastructure, what legacy will we pass on to future generations?