Housing challenge exposes critical capability gaps

An Urbis survey of Australian city leaders exposes critical capability gaps in the way the country is managing the current housing dilemma with leaders calling for a more cooperative approach to tackle complex urban challenges. 

The biennial Urbis 2024 City Leaders Survey analysed insights from over 200 senior executives from the nation’s most influential city-shaping organisations to understand the opportunities and challenges that will shape government and industry priorities over the coming years. 

Leaders' Outlook

Results from the survey uncovered sentiments from city leaders who expressed a pessimistic near-term outlook (Graph 1) and highlighted concerns about the ability to address the systemic conditions that create and maintain vulnerabilities in our cities. 

Critical capability gaps in our ability to address the housing dilemma were recorded by more than half of city leaders who perceive their city lacks the necessary resources and capacity to resolve outstanding housing challenges (-52 per cent) (Graph 2).

Urbis managing partner James Tuma said the results can be attributed to the pervasiveness of the housing challenge and its impact on our cities broader performance with nine in 10 city leaders identifying housing affordability and access as the biggest challenge for cities to address (Graph 3).

“Unsurprisingly, every jurisdiction, across not-for-profit to the public and private sector, talked about the housing dilemma our cities and communities face, but the underlying narrative wasn’t just about the well-documented supply, funding, labour market and regulatory barriers that are often cited as the problem.

“Instead, housing was described as an enabler of success in so many other areas that matter to us – delivering social outcomes, economic participation and productivity, more environmentally sustainable places, and providing a sense of optimism across our communities. 

“This decline shows just how interconnected housing is with other societal outcomes and it’s clear that without addressing housing, we can’t hope to improve our cities overall wellbeing. 

“Through this lens, housing delivery might well be the vehicle by which Australia arrives at more liveable, globally competitive and economically productive cities for everyone,” James said. 

Heightened by pervasive concerns about decreasing housing affordability, rising cost-of-living and sluggish economic growth, city leaders are calling for industry to develop an integrated response that addresses the many facets of the housing system.

Urbis director Mark Dawson, an urban economist and housing expert said the results demonstrate the impacts of prevailing economic, financial and social costs associated with diverse housing demands.

“By focusing only on pricing and supply, we are missing the bigger picture of how housing fits together across the whole ecosystem. Affordable, well-located housing is not just a social good; it is a powerful economic driver.

“To meet the challenge ahead, Australia’s leaders must explore innovative housing delivery and funding models and collaborate so that tax, funding and planning reforms work better together. Bringing more diverse views to the table will help prepare cities and precincts for more productive and sustainable outcomes for Australians,” Mark said.

City leaders are advocating for a more cooperative approach to tackle complex urban challenges, with a strong emphasis on public-private partnerships (PPPs) to deliver social, affordable, and specialist market housing.

Urbis director Nathan Stribley, strategic urban advisor and project lead said governments also need to stimulate private sector housing delivery as this is how the bulk of housing stock is delivered.

“It’s great to see the increased government focus on changing policy settings to try to promote housing development but the balance between regulatory and economic settings haven’t quite overcome the current market failures.

“The Federal Government’s role is seen as crucial to incentivise policies and investments that are aligned with the national interest and pressing needs of our cities.

“Now’s the time for city leaders to lean into these challenges collectively, to look beyond the short term and take decisive action to create the places and conditions that drive sustainable growth.

“Applying a holistic view of interconnected elements—such as infrastructure, community needs, and sustainability addresses the linkages between these domains and fosters integrated solutions that balance growth with environmental stewardship and social equity,” Nathan said.

Positively, the survey found that perceived capability gaps in our ability to address climate change and meet future skills demands that were present two years ago are no longer evident (Graph 2). More commitments at the national policy level around the transition to a net zero economy has given state and local governments and industry more confidence to act and build the necessary capacity. 

“Our cities are resilient and full of potential. They are the urban centers and primary drivers of economic activity, innovation and employment and they remain where people want to live and where future opportunity lies.

“Through enhanced collaboration and bolder ambitions, we can create vibrant, inclusive cities that are the envy of the world.

“The commitment of city leaders, businesses, and communities gives us confidence that we can build
a prosperous future for all,” James said.

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