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As Sydney’s housing crisis deepens, potential solutions may lie beyond Australia’s borders, where many global cities are grappling with similar pressures including rising land and construction costs, rapid population growth, and supply failing to keep pace with demand.
Many have adopted bold strategies including large-scale public investment, relaxed zoning rules and faster approval pathways to deliver homes at speed and scale.
Planning experts say these international examples may offer practical lessons for Sydney, where lagging housing supply continues to push the dream of home ownership further out of reach for many.
The urgency is underscored by the latest State of the Housing System report, which warns Australia is on track to fall 220,000 homes short of its 1.2 million target by 2029. NSW is also expected to miss its 376,000-home target, now not forecast to be met until 2031.
UNSW City Futures professor Chris Pettit said meeting targets would require greater ambition and investment, particularly in social and affordable housing.
NSW Planning Minister Paul Scully said 79,300 homes were currently under construction across the state, the highest level in seven years, as reforms begin to lift supply.
Vienna’s social housing dominance
The lesson: Vienna is regarded as a global leader in affordable housing, with about 60 per cent of residents living in subsidised homes. The city owns more than 200,000 apartments and funds construction through mechanisms including a one per cent salary levy. Strong tenant protections provide housing security, while eligibility for social housing extends to middle-income households, supporting socially diverse communities.
Sydney application: Aspects of this approach could be adopted in Sydney to boost housing affordability measures such as scaling up public housing investment in line with population growth and mandating higher levels of affordable housing in new developments – potentially 30 per cent in perpetuity. Anglicare group executive Rob Stokes said greater investment in social and affordable housing could be funded through savings from reforms to negative gearing and capital gains tax concessions.
Tokyo’s flexible zoning
The lesson: Tokyo avoids strict density caps in many areas through flexible zoning laws that allow residential, commercial and light industrial uses to coexist. Its “as-of-right” approval system means that developments that comply with planning laws are automatically approved, reducing delays, uncertainty, and costs for builders.
Sydney application: Sydney could ease restrictive zoning to allow greater density in more established suburban areas, avoiding increased urban sprawl. Urban Development Institute of Australia NSW chief executive Stuart Ayres said flexible zoning laws, faster approval pathways, and reduced government charges could address chronic barriers to housing delivery.
New York’s rail rethink
The lesson: New York shows how airspace above rail lines can be transformed into major housing precincts. Hudson Yards in Manhattan, built on an engineered platform over 30 active rail lines, is a leading example. Once fully completed in the mid-2030s, it is expected to deliver about 4000 apartments, including affordable housing along with public spaces and a school.
Sydney application: Similar opportunities may exist in Sydney along rail corridors south of Central Station and in dense suburban areas such as Burwood, Chatswood, Parramatta and Rhodes. Architect Philip Vivian said the NSW government could unlock supply by releasing development rights for over-rail projects within 400 metres of stations. The City of Sydney has also supported exploring turning rail yards near Macdonaldtown Station into 2500 homes.
Freiburg’s car-free suburb
The lesson: Freiburg’s Vauban district has reduced housing construction costs by removing the need for expensive on-site parking in new developments. Instead, large communal parking garages are located on the suburb’s outskirts where residents park their vehicles before continuing on foot, by bike or via public transport.
Sydney application: Similar models could be adopted in areas with strong public transport links such as Green Square and the planned Bays Precinct. Committee for Sydney chief executive Eamon Waterford said relaxing on-site car parking requirements in new developments could slash construction costs, noting that a single underground car space can cost between $50,000 and $110,000 to build.
Stockholm’s prefab housing
The lesson: Stockholm has embraced prefabricated and modular construction as a mainstream housing model. Flexible zoning rules, fast-tracked planning permits, and dedicated land allocations for modular precincts have enabled entire neighbourhoods built with a high proportion of factory-made homes.
Sydney application: Research from Australia’s Productivity Commission suggests modular housing can cut construction times by 50 per cent and reduce costs by about 20 per cent. Western Sydney University architecture researcher Parisa Ziaesaeidi said faster approvals, reduced zoning restrictions, and stronger collaboration between government and industry were essential to boost supply and overcome regulatory barriers that have slowed uptake in Australia. The NSW government is considering reforms which aim to simplify approval pathways and reduce planning delays.
Singapore’s build big approach
The lesson: Singapore has achieved some of the world’s highest rates of home ownership by using publicly owned land for state-led housing projects that are integrated with transport, schools, parks, and healthcare. The system allows residents to use retirement savings for deposits, helping more people buy earlier.
Sydney application: University of Sydney urban and regional planning professor Nicole Gurran said Australia’s reliance on private developers makes housing supply vulnerable and that a stronger mix of public, private, and non-profit housing could create a steadier pipeline and improve long-term affordability. She said government-backed developers such as Landcom could play a larger role in delivering housing on state-owned land.
Paris’ reversible buildings
The lesson: Paris has introduced reversible building permits allowing offices, hotels and car parks to be converted into housing without lengthy planning delays. The reforms are expected to create about 8000 homes while addressing post-pandemic shifts that have left many commercial buildings underused.
Sydney application: Australian Institute of Architects NSW president Elizabeth Carpenter said planning rules could be relaxed to overcome long-standing barriers that have restricted adaptive reuse housing projects in Sydney. She said this could include streamlined assessment pathways and more flexible zoning requirements.
Vancouver’s family apartments
The lesson: Vancouver requires at least 35 per cent of apartments in new rezoned developments to include a mix of two- and three-bedrooms units, helping create more family-friendly housing in established suburbs and easing pressure on outer suburban growth areas.
Sydney application: Sydney could introduce similar minimum targets for larger apartments in well-connected areas near jobs, schools and transport. UNSW housing researcher Hal Pawson said this would shift housing policy from focusing purely on supply to delivering the types of homes households need and correct an “imbalance” in Sydney’s housing mix, which is dominated by smaller apartments and detached homes. However, Urban Taskforce chief executive Tom Forrest warns that requirements must remain commercially viable to avoid discouraging development.
Jakarta’s rooftop neighbourhoods
The lesson: High-density cities are increasingly using rooftops and airspace above buildings to address land shortages for housing. One example is Cosmo Park in Jakarta, where a purpose-built community with paved roads, double-storey villas and shared facilities was constructed on top of an inner-city shopping centre.
Sydney application: Planning and zoning restrictions in Sydney could be relaxed to allow airspace above public buildings, car parks and retail centres to be used for housing in inner-city areas. Western Sydney University urban researcher Ehsan Noroozinejad Farsangi said greater use of Sydney’s rooftops could unlock housing opportunities, and proposes rooftop audits of government properties, national airspace guidelines, and government-led pilot projects to encourage wider adoption.
Toronto’s fourplexes
The lesson: A $4.4 billion Canadian federal scheme shows how financial incentives for councils that remove planning barriers can boost housing supply through a “carrot” rather than “stick” approach. In Toronto, it triggered reforms including allowing residential lots to be subdivided into four homes (fourplexes), providing grants to accelerate stalled rental housing projects, and digital planning systems to speed approvals.
Sydney application: Instead of setting strict housing targets and penalties, state and federal governments could reward councils that boost housing supply through measures such as rezoning reforms, reduced development charges, and identification of surplus council land for housing projects. Business Western Sydney’s David Borger said this may encourage councils to overhaul overly restrictive planning rules, which remain a major barrier to development.
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If traditional approaches fail, Sydney could explore unconventional housing models to address supply shortages. Hamburg has introduced mandatory building orders to force development on vacant land in high-demand areas, reducing speculative land banking.
In the Netherlands, Oosterwold allows residents to buy cheaper land if they fund infrastructure themselves, lowering reliance on traditional developers and encouraging community-led building. At the more futuristic end, the South Korean city of Busan is developing a floating city for 12,000 residents with self-generated energy, recycled water and onsite food production.
If all else fails, Sydney policymakers could perhaps summons King Charles III for inspiration. He pioneered the purpose-built town of Poundbury in England, featuring mixed-use zoning and about 35 per cent affordable housing, offering a “missing middle” level of density often absent in Sydney’s housing mix.
UNSW’s Pettit said Australia’s high housing targets would likely require bold thinking as population growth continues to outpace supply.
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David Barwell is an urban affairs reporter for The Sydney Morning HeraldConnect via email.From our partners
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