To build better cities, we need to build better YIMBYs

We’re all talking about housing at the moment, and what we should be building better. One thing we need to build is better YIMBYs. YIMBYs? They’re the “Yes In My Backyard” movement that kicked off in the US a few years ago.

Initially political libertarians doing some political “seeding”, in Australia it is largely younger people lining up against those they accuse of being NIMBYs, the “Not In My Backyard”-ers. The YIMBY movement is raucous, energetic, and bold — and also utterly misdirected in its critique, poor in its analysis, serves its ostensible cause badly, but possibly serves some shadowy masters well.

NIMBYs are not getting a good shake in the media, it’s fair to say. They’ve been portrayed as unrealistic blockers of new housing blocks. In Melbourne, a series of lurid articles in The Age have emphasised some of the more particular and peculiar heritage and planning cases around. Articles there, and here, have identified drawn-out planning struggles over height and heritage as the main barrier to an increase in the inner- and middle-ring housing supply. If only these people got out of the way, there’d be apartments for all.

But very little of this fits the facts or the complexities of trying to shape housing availability in a private-supply market. Indeed it’s so misdirected that it seems to have an air of proxy war about it.

For the YIMBYs, the problem is simple, and the answer is simple. There’s a lack of physical housing supply. The cause is the blocking of new build by planning redtape, heritage controls and one-sided resident activism. Remove all these, and the cities will fill with new apartment blocks, whose sheer volume will force the price down. None of this is true.

We need to look at a few facts about the housing crisis, and what’s really causing it. And the first fact is that this is not per se a building issue. It only becomes one when you eliminate every other mechanism for change. That’s the same neoliberal process as eliminating every economic control mechanism except interest rates, and then grimly ratcheting them up until the place is a wasteland called equilibrium.

To achieve this, YIMBYs have focused on one part of the process: planning approvals. They’re held up, they’re choked, overwhelmingly, it is alleged, by heritage concerns and overlays. Our cities have become mausoleums, locking younger generations out of home ownership and a viable rental market. 

Thus YIMBY activist Katie Roberts-Hull objected to the heritage classification of a concrete brutalist multi-storey car park in Carlton in the Melbourne City Council zone. She followed it up with an an attack on Yarra Council’s win in the Victorian Civil and Administrative Tribunal (VCAT) which denied the Royal Hotel in Clifton Hill an application to cease trading as a pub and convert to apartments.

In Brunswick, organiser of Melbourne New Progressives Jonathan O’Brien, campaigning around a rejected proposal by the allegedly community-focused Nightingale group — well on its way to becoming a Kombucha LendLease — complained about the power of overlays, and suggested councils stop trying to preserve “bluestone cottages with drop toilets”. 

In our own pages, the usually perspicacious Benjamin Clark suggested that a cultural attachment to the house and land was holding back apartment development and that we should demolish a suburb of Victorian/Edwardian houses such as Albert Park to build apartments. 

Naive and ignorant

All of this is badly reasoned, and some of it shows a mix of naivete and ignorance of the planning and building process.

First, there’s been no slackening off in building approvals over the past decade or so (save for the past year, which is clearly a result of interest rates rises). Close to 130,000 planning permits were issued in Victoria in 2021, a new high at the time. 

But should there be more? It’s planning approval numbers that YIMBYs focus on, suggesting they will lead to more dwellings. But this is not the case. As Peter Martin in The Conversation has shown, dwelling completion rates are far more sluggish, rising from about 32,000 (across Australia) in 2010 to about 50,000 in 2021. Furthermore, in the past decade the rate of dwellings under construction has soared in relation to completed dwellings. Until 1995 the ratio was about 2.5:1, as it had been since 1960. By the 2000s it was running at 3.5:1, and by 2020 it’s about 6:1.

But, I mean, what about that brutal vacancy rate for rentals? Only 0.8% in Melbourne, right? Well, wrong. That much-quoted vacancy rate is simply the rate of properties on the market, for rent, vacant. The full vacancy rate is significantly larger according to an AFR report, which says it’s about 4% of 1.5 million or so residential properties — as measured by water (non) use in three water supply areas. That’s about 60,000 properties.

Most of those are investment properties. As the AFR notes, the full rate of investment vacancy is a whopping 17%, which accounts for most of the 60,000 vacancies (drawing on a report by Prosper Australia, the old Henry George League. Go Georgists!).

There are multiple reasons. Negative gearing and ever-rising rents give incentives to keep places empty. About 25,000 properties in Melbourne are “whole house” Airbnb’d at any one time. That gets even stickier, because as the report shows, these vacancies are concentrated.

In Melbourne, 25% of properties in Box Hill are vacant and off the market. Now let’s be honest. We all know what that is. Box Hill is now a substantially Chinese-Australian city. Those gleaming towers going up. They’re empty stores of value for overseas cash. And they’ll stay empty. And new ones will be built to be empty. And building them will increase the price and shortage of key materials, and the inability to get skilled builders.

What about heritage as a blocker? Again, largely spurious. The idea that thousands of projects are getting stalled at the gate by approval rejection is a total fiction. Only 4% of planning applications are rejected in Victoria, and only a fraction of those are heritage related.

What about VCAT knocking back a pub conversion to apartments? Is VCAT a secret heritage NIMBY? That suggestion was a cause for rueful laughter among grizzled heritage activists. VCAT was designed to make the planning system pro-development. And it delivers. Four of five Melbourne councils assessed by a consultant lost 70% to 75% of their cases at VCAT to the planning applicant (including VCAT-ordered variations). 

But, but, but, aren’t these courageous developers trying to build our glorious cities against the scheming bureaucrats? Amazingly, no. In a housing system based on speculation, they’re land banking, and making money from not building. 

Once again Prosper has the figures. Ten and more years ago, huge areas were released to private developers on Melbourne’s fringes. Those remain about 60% undeveloped, with the developers pocketing an annual increase of about 6% over inflation. In the Manor Lakes estate north of Wyndham Vale, developed by the Dennis Family developers, each vacant lot has appreciated by a quarter of a million dollars over 15 years. This gives the lie to Clark’s simple suggestion that cultural factors are driving house-and-land dominance.

But there’s not many single-house builds going in within about 15 kilometres of the GPO in Melbourne. The single-house estates in the outer suburbs don’t offer apartments, and the government doesn’t make them. And as veteran urban commentator and activist Adam “Bloodied Wombat” Ford pointed out in a comment on Clark’s piece, people choose house and land because it holds and appreciates in value faster and more securely than apartments. Which is why developers don’t give buyers the option. And why the state government has made no effort to push apartment building round outer suburban hubs. 

It’s capitalism, stupor

Every target the YIMBYs has is wrong. Their movement seems to be as much a political-cultural one, with a bit of intergenerational warfare going on. It is utterly indifferent to the actual process of how things get built and the fact that property-as-asset and speculation will always divert production from real need. Some of them are apolitical knowledge class elites who identify with capitalism in its current form, want to be part of it, and blame the state for the market’s failures. 

Others from the Labor side appear to have adopted the Labor nihilism, a renunciation of actually shaping how we live in favour of being nothing other than a servant of capital. One wonders if some YIMBY activity is a “softening up” tactic for what Victorian Labor is about to do — remove planning powers from local councils altogether. Orienting your politics to simply facilitating capital is the “trickle-down” theory from the left — the desperate idea that if you let them have open slather, accidentally some small proportion of what they build might make it to market. There’s a Sydney YIMBY contingent too, but it’s mostly Honi Soit libertarian-communist burnouts attitudinising. 

The anti-heritage obsession? A total distraction. We’re not going to demolish bluestone cottages to build slab-tilt apartments. And if you find one which still has a drop toilet, then Heritage Victoria will send helicopter gunships to protect it. 

Quoting the occasional gnarly and sometimes embarrassing heritage stoush through the pro-YIMBY faction in The Age — such as the attempt to preserve a power substation in the open, oh dear — is a distortion of the way inner-city development has worked. It should be obvious that the places with the most densification — such as Brunswick — are those with the most heritage. There remain thousands of developable sites without destroying what makes the city worth living in.

Furthermore, if YIMBYs are going to go up against heritage, they are going to end up a bit bloodied themselves. If you’re going to propose that we sweep away swathes of Albert Park — which strikes me as nihilistic and philistine — then you’re going to lose. Five hundred houses in Albert Park, about 10 streets, would be worth, what, a billion bucks? More? They’re filled with people who’ve been fighting heritage battles for decades. Mass demolition is not going to happen. Nor should it. 

So what do we need to do? What we need first off is strong disincentivising taxes on six-month-plus vacancies, holiday houses and two-year-plus non-development. Real punitive hits on such speculation to get properties back on the market by wiping away all gains from vacant appreciation. The punitive vacancy tax — we have a lame version of it already — could be especially targeted at foreign ownership (any and all, no specifics).

I very much suspect YIMBYs won’t be interested in talking about that. That would include an Airbnb tax that Yarra Council’s socialist and independent councillors are proposing and other councils have implemented.

Yes, we need to build. We need to build fast, and good, and genuinely affordable. We need the state to do it or direct strongly as building for living, not for speculation. Without any change it would seem obvious that the ratio of build-to-leave-vacant would climb steadily as a ratio of all build. Whatever limited expansion in supply was achieved would actually embed high rent charges. Negative gearing and other factors will always give a strong incentive for vacant maintenance. 

We need more audacity than the YIMBYs have, not less. As your correspondent noted, in oh look, 2009, we need whole new cities connected to our existing cities. Set up state build-to-buy corporations, build huge well-designed towers, vibrant hubs, entire new possibilities. The Andrews government’s plan is to use the fictional suburban rail loop to override planning in a range of activity centres to put in a few apartment towers on top of a Coles and a JB HiFi. 

But take a look at the map of Melbourne and you’ll see that we can build a whole city 15 minutes from Melbourne in the west. From Brooklyn station, through Altona North to Laverton and Truganina (I wonder if we got permission before naming that piece of dispossession after a dispossessed?) there is a whole chain of vacant and low-use land which, with a real plan, could be the place where a million new people could go into stylish, well-designed, distinctive new urban forms, thus also reducing the inequality of access to centrality. 

That would require something more than the existing proposals. It would require the government to be proactive, and to be a builder. Maybe beyond the short-term changes, that is something the YIMBYs could get behind. To build a better city, we need to build better YIMBYs.