Melbourne's urban growth boundary and housing supply
A metropolitan planning authority must decide whether to expand the urban growth boundary (UGB) by 4,000 hectares to release land for 35,000 new dwellings over twenty years. Inside the existing boundary, there are 12,000 hectares of undeveloped land zoned for future residential use, but only 30% has planning approval and infrastructure connections. Median house prices in the city have risen 60% in a decade. The outer fringe has lower land costs but poor public transport; residents there average 45 minutes commuting each way. Infrastructure to service new fringe land is estimated at $2.1 billion, while infill development inside the boundary would cost $1.4 billion in upgrades. Environmental groups note the expansion would remove 1,500 hectares of native grassland and prime agricultural soil.
1. Compare the expansion and infill options using the data, and recommend one with justification.
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Expansion offers 4,000 ha for 35,000 dwellings, roughly 8.75 dwellings per hectare-a low density that will lock in car dependence, given 45-minute commutes and weak public transport. Infill has 12,000 ha already zoned but only 30% approved, so the binding constraint is approvals and infrastructure, not land shortage. Infill servicing at $1.4 billion is cheaper than the $2.1 billion fringe option and uses existing transport and services. Against expansion: loss of 1,500 ha of native grassland and agricultural soil, plus long commutes. Against infill: approval processes are slow, and not all zoned land is suitable or in demand. A defensible recommendation is to prioritise infill by fast-tracking approvals and funding the $1.4 billion upgrade first, treating expansion as a fallback if dwelling targets are not met within a set period. The answer should state the criteria used (cost per dwelling, environmental cost, transport efficiency) rather than assert a preference.
2. Explain why rising house prices alone do not prove that the UGB is causing a housing shortage.
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Prices reflect demand as well as supply. Demand-side factors include population growth, low interest rates, investor activity and tax settings; supply-side factors include approval times, construction capacity and land banking. The data show 12,000 ha of zoned land inside the boundary with only 30% approved-this is a release and approval bottleneck, not necessarily a land scarcity caused by the boundary. If developers hold approved land without building, expanding the boundary may simply extend land banking. A strong answer separates the UGB as one supply constraint from the wider set of constraints, and notes that the 60% price rise over a decade coincides with many changes, so causation cannot be inferred from correlation alone.