Written by
04/09/2023
The NSW Productivity Commission has released a research paper that provides an analysis of the cost of providing infrastructure for housing in different parts of Sydney.
Sydney will need to build at least 550,000 more homes by 2041 just to keep up with our growing and changing population.
Building in lower-cost places can save nearly $75,000 per home to deliver the roads, train services, water, wastewater, schools and open space we need.
Over recent decades the growth strategy for Sydney has been to disperse both population and economic activity. Providing such a sprawling city with high-quality infrastructure services comes with significant costs.
By choosing locations well-served by existing infrastructure, we can lower the costs of growing Sydney. Elements of this infrastructure strategy have already achieved results in places like Green Square, Chatswood and Macquarie Park.
Estimated per-dwelling infrastructure costs under alternate growth plans, 2011 – 2035, in 2023 dollars, adjusted for producer price index inflation, dollars per dwelling
The biggest gain from this strategy is that we will minimise the extra road congestion from new homes. But costs will also often be substantially lower for water and wastewater connections and schools.
The analysis indicates where infrastructure costs are lowest, including Sydney CBD, Lower North Shore, Eastern Suburbs and the Inner West. This would result in the efficient use of scarce, well-located land. In these areas, the Productivity Commission modelled the costs to be less than $40,000 per dwelling (compared to $70,000 – $110,000 per dwelling in parts of Western Sydney).
In the analysis, road congestion was the largest cost of adding extra housing for most areas. Road congestion reduces productivity and damages health and life quality. It adds to time people spend travelling to their places of work and makes it harder for employers to attract employees. In addition, it is more costly to get to places of education and amenities.
This research paper provides policymakers with insights to reorient Sydney’s planning system and to help that system deliver better value for all of us as NSW residents.
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