Clover’s right: Unlocking government land offers an exit ramp from the housing crisis

April 1, 2026 — 5:00am

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Using public land to tackle Australia’s housing affordability crisis is an obvious move – but it isn’t new. Fifty years ago, the NSW Land Commission was created in response to land shortages and surging house prices in the early 1970s.

Its mandate was clear: moderate the market by acquiring and releasing a steady pipeline of land – supporting the development industry while making home ownership more affordable. Backed by low-cost Commonwealth loans, the Commission supplied up to 40 per cent of residential land in NSW across the 1970s and 1980s.

What followed shows what public land can do when used ambitiously. From the urban fringe, the commission – later Landcom – shifted by the 1990s to higher-density development on underutilised and former industrial land. Projects such as Pyrmont-Ultimo, Victoria Park and Green Square were design-led, anchored by affordable housing and high-quality public space. They helped prove that inner-city apartment living could match, and even surpass, the suburbs.

The City of Sydney’s proposal to repurpose more than 30 state-owned sites for housing revives that ambition. By its estimate, 32 sites could deliver around 14,300 new homes, from harbourside land leased to hotel operators to underused transport corridors and ageing social housing estates.

But realising this vision requires a fundamental reset: public land cannot continue to be sold to the highest bidder. Also, Landcom must return to its original mission to moderate the residential land market, delivering and enabling high-quality and affordable housing developments at scale. Its current projects – which include affordable build-to-rent examples and showcase sustainable design in greenfield and renewal sites in Sydney and regional NSW – demonstrate the potential for a rebooted government land agency to deliver genuinely affordable housing.

The original Land Commission sold land at the “lowest practicable price” – a principle lost when it became a state-owned corporation expected to generate commercial returns. Yet the true value of public land lies elsewhere: in enabling housing delivery when the private market stalls.

Countercyclical development – building when private projects don’t stack up – is essential to stabilising the construction industry and ensuring supply keeps pace with population growth, rather than rising and falling with the property cycle.

Right now, that cycle is broken. Rising interest rates, labour shortages and construction costs mean many projects simply aren’t viable. Instead, we’re seeing increasingly extreme proposals to upscale developments, some that already had planning approval.

It is also why Australia is unlikely to meet the National Housing Accord target of 1.2 million new homes by 2028.

Unlocking government land offers a genuine exit ramp from the crisis, but only if strong affordability guardrails are in place. Internationally, this is standard practice.

In the UK, housing on public land is central to supply strategy. Combined with firm planning requirements, it helps explain why more than 30 per cent of England’s new dwellings in 2024–25 was affordable. In the Netherlands, public-led land development underpins housing supply, delivering both social and affordable homes alongside high-quality design. And Singapore’s Housing Development Board demonstrates what sustained public commitment can achieve, providing affordable housing across the population.

For Sydney, making this work requires clear parameters.

First, recognise traditional owners in planning the future use and management of public land, and make Aboriginal housing a standard component of new developments.

Second, set strong, enforceable affordability targets. In much of London, planning rules require 30 to 50 per cent of homes on major sites to be affordable. On public land, this should include social housing in perpetuity, alongside shared equity and lower-cost home ownership models. Where social housing is redeveloped, existing residents must not be displaced, and total supply must increase.

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Third, use public land to support new models such as Community Land Trusts, which can lock in permanent affordability.

Finally, public development should lead on design and sustainability. The government has the capacity to correct market failures, delivering universally accessible housing, net zero construction and high-performance buildings at scale.

Australia has done this before. The lesson from history is clear: when governments use public land with purpose, they don’t just build more housing, they build a fairer housing system.

Nicole Gurran is a professor of urban and regional planning at the University of Sydney and director of the Henry Halloran Urban & Regional Research Initiative.

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© The Sydney Morning Herald