Research Discussion Paper – RDP 2020-04 The Apartment Shortage

Contents

• Introduction
• Relationship to Other Research
• The Effect of Planning Restrictions
• The Effect of Height Restrictions
• Variations in Apartment Shortages
• The Cost of Building Out
• What is the Cost-efficient Height for Apartment Buildings?
• How Far Can Housing Prices be Lowered?
• Directions for Further Research
• Appendix A : Data
• Appendix B : Comparison to Residual Land Valuations
• Appendix C : Equations and Parameters
• Appendix D : Hedonic Regressions
• Appendix E : Sensitivity Analysis
• References
• Copyright and Disclaimer Notice

For helpful comments and suggestions, we thank Brendan Coates, Patrick D'Arcy, Andrew Doualetas, Luci Ellis, Tom Forrest, Ryan Fox, Hugh Hartigan, Ross Kendall, Kirdan Lees, Sean Macken, Phil Manners, Cameron Murray, Jonathan Nolan, Max Oss-Emer, Glenn Otto, Peter Phibbs, Alicia Rambaldi, George Revay, Tom Rosewall, John Simon, Tim Sneesby, Nigel Stapledon, David Tanevski and seminar participants at the Grattan Institute, Productivity Commission, NSW Treasury, Reserve Bank of Australia and University of Sydney. We would like to thank the many builders and developers that guided us through their financial statements. We would especially like to thank Bill Becker and Daniel Rossi for help with data. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Reserve Bank of Australia. The authors are solely responsible for any errors. Our programs and publicly available data are available at <https://www.rba.gov.au/publications/rdp/2020/2020-04/supplementary-information.html>.