Sydney's housing crisis demands bold action, officials and planners warn at planning summit

Senior planners and housing officials gathered in Darling Harbour this week to confront an uncomfortable truth: Sydney's residential market has become structurally unaffordable for most workers, and current policy responses are falling short.

The sentiment emerged across a day-long forum hosted by the Urban Development Institute of Australia, where speakers from the Department of Planning, local councils, and development firms debated competing strategies to unlock new housing supply across the sprawling metropolis.

"We need to move faster on medium-density housing in established suburbs," said a senior planner addressing delegates, pointing to suburbs like Strathfield, Marrickville and Epping where planning restrictions have historically capped development. Recent data shows median house prices in these once-working-class areas now exceed $1.1 million, pricing out younger buyers entirely.

The state government's planning reforms, which opened certain corridors to taller buildings, were described as a necessary but incomplete step. One development economist noted that sites along key transport nodes—including the Parramatta Road corridor and areas within walking distance of Penrith Station—remain underutilised despite planning changes introduced over the past two years.

However, council representatives struck a more cautious tone. Several local government speakers raised concerns about infrastructure capacity, particularly in outer suburbs where water, sewerage and transport systems struggle to accommodate rapid growth. A planning director from a western Sydney council warned that rezoning without concurrent investment in schools, roads and public transport risked creating new bottlenecks.

Experts acknowledged the tension between density and livability. One housing researcher presented findings suggesting that while apartment approvals have surged—particularly in inner-city precincts like Waterloo and Alexandria—affordability has not improved proportionally, with many units captured by investment portfolios rather than first-time buyers.

The forum highlighted fragmented policy delivery across NSW. While the state government pushes density targets, individual councils retain significant discretion over development assessment. This creates patchwork outcomes: Bayside councils approve fewer multi-unit projects than inner-west authorities, despite similar transit access.

Several speakers called for clearer mechanisms linking new housing supply to funding commitments for local services. One urban planner suggested that mandatory inclusionary zoning—requiring developers to include affordable units in new projects—deserved renewed consideration, despite past industry resistance.

The conference concludes Wednesday. The consensus, fragile as it is, suggests Sydney's next wave of policy will focus on accelerating approvals in middle-ring suburbs while negotiating harder on public benefits from development.

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