Mid-rise buildings could fill the gap in 'missing' medium-density housing

The Housing Essay is a weekly deep dive from a rotating variety of voices into issues impacting the property crisis in Ireland. Are there potential solutions that may be currently overlooked or traditionally ignored by policymakers?  

IF YOU THINK it’s hard to buy a house in Dublin, try Sydney. In Dublin, the median house price is around five times the median household income. In Sydney, it’s 14 times that.

This doesn’t mean that we’ve solved Dublin’s housing shortage, or that housing is affordable here. But it does show that housing shortages, and the high prices that come with them, are unfortunately common in cities across the world.

An upshot of this is that governments in other countries are experimenting with policies to tackle their housing shortages and get prices under control. Today, we’ll look at some of the more interesting international housing policy changes in the last few months.

Missing the mid-rise

Walk around a European city, like Amsterdam or Copenhagen, and you’ll see dozens of mid-rise apartment buildings. Neighbourhoods full of mid-rise apartments are lively. They are dense enough to justify rail links and plenty of local amenities, like cafes and bars.

Mid-rise buildings are also cheaper to construct than high-rises (and the cheaper something is to build, the more of it gets built). Costs rise in a non-linear way as buildings get taller. This is because high-rises need steel frames, multiple elevators, and additional fire safety measures.

But unlike our European counterparts, English-speaking countries have not been so good at building mid-rise apartments. This is despite the fact that many people would like to live in these kinds of homes.

Our regulations have been unfavourable to this type of building. It’s often easier to build single-family homes on the edges of towns than multi-family units in existing areas. This has led to a “missing middle” — a lack of medium-density apartments in towns and cities.

The state of Victoria in Australia recently changed its planning rules to try to fill this gap, by making it faster and easier to build mid-rise apartments.

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The Mid-Rise Code is designed to speed up planning approvals for four to six-storey apartment buildings. The Code includes comprehensive design specs that planning applications for mid-rise apartment buildings must follow. It includes requirements for minimum room and balcony sizes, pedestrian and vehicle access, and sunlight. If a planning application complies with all of these specs, it automatically gets planning approval.

The Mid-Rise Code makes building easier in two ways. First, planning applications for mid-rise buildings no longer have to go through the standard discretionary planning review. Once an application meets the requirements, it can’t be refused on grounds like height or the visual design of the building, as normal applications can. This speeds up planning decisions and creates certainty for developers.

Secondly, applications that meet the code are exempt from appeals by third parties. Previously, appeals could add many months of delay to the planning process.

The Victorian government expects the changes to cut approval times for mid-rise buildings by around five months.

Rules to lower land prices

New Zealand and Ireland, despite being on opposite sides of the world, look very similar to each other. Both have low population densities and lots of open space.

But despite having plenty of open space, both countries struggle to provide enough land to build houses on.

Minister James Browne recently lamented the scarcity of developable land in Ireland, and land scarcity is a live political issue for the Kiwis too. A key part of their big housing policy reform package, Going for Housing Growth, is aimed at freeing up land for homebuilding.

Land becomes scarce when councils don’t zone enough land for housing. When this happens, developers end up bidding against each other on the small amount of land that is available.

This ends up raising the price of land, and that scarcity premium flows through to higher house prices.

To counteract this, the Kiwi government is introducing a new Urban Land Market Officer. The officer will act as an independent watchdog, finding areas where there is too little land zoned for housing, and compelling councils to fix it.

The officer will look at things like the price difference between land zoned for residential use and land zoned for agricultural use within the same area. When the price of residential land gets high compared to agricultural land, it suggests that the scarcity of residential land is driving prices up. As a metric, this is far harder to “game” than existing process-driven mechanisms, like Ireland’s Housing Supply Target methodology.

If a particular market is found to be uncompetitive, the government will compel the council to zone more land for housing.

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Building more homes near train stations

To address its housing shortage, England needs to build 1.5 million new homes by 2029, an average of around 300,000 per year. At their current rate of building, they are far below their target.

The British government just updated their National Planning Policy Framework for the second time in two years to try to boost housing supply.

Under the new rules, developers that apply to build homes within walking distance (800m) of a train station get a “default yes” on their planning application.

To get the “default yes”, developers have to meet a density requirement. To build near stations with a frequent train service, the development must have a density of at least 45 dwellings per hectare (dph), equivalent to terraced housing. In areas with less-frequent trains, the new schemes must have a minimum density of 35 dph, the equivalent of semi-detached housing.

As Sam Dumitriu notes, the new rules mean developers get a “default yes” on their planning application, but not an automatic one. This means that councils still have wiggle room to refuse applications, and therefore may still block developments. But it’s a step in the right direction, and encourages the kinds of homes the British government wants built: medium density schemes near transit.

Speeding up building

Ireland suffers from the same problems as other countries with housing shortages. Planning delays, uncertainty, and a scarcity of developable land are pushing up the cost of housing.

Like other countries, we have been tweaking our rules to lower construction costs and speed up building. Recent changes from other countries point to some interesting new ideas, from creating automatic planning approval pathways to price-based rules to fix land scarcity.

Sarah Scales writes for Progress Ireland, a think tank researching policies and implementation of actions to support improved housing, infrastructure and innovation in Ireland. You can read more work like this on their Substack here.

This is part of a series of writers, academics and economists penning a weekly essay delving into the housing crisis and potential solutions.