Red tape is often blamed for the housing crisis, like at the recent Economic Reform Roundtable, which vowed to reduce regulation in housing construction.
In 2005, the Productivity Commission warned about over-regulating energy efficiency in housing. Two decades on, Australian homes are built to a much lower energy efficiency standard than overseas, despite our more extreme climate.
The new analysis finds that poor regulation leads to poor outcomes, such as forcing families to shiver through winter in poorly insulated homes and pay higher heating bills.
The analysis also suggests the removal of lucrative tax concessions for property investors, which gives them a huge advantage over first-home buyers, and recommends that governments directly build more homes for Australians.
"Regulatory reform is not inherently bad. Regulations are simply laws. They can be good. They can be bad," said Jack Thrower, Senior Economist at The Australia Institute and author of the analysis.
"A well-resourced planning agency, capable of making swift, well-considered decisions, would likely help get things built more speedily.
"But 'cutting red tape' is too often code for watering down laws which keep Australians safe from businesses abusing their power. Indeed, there are parts of the housing industry where the problem is not too much regulation; it's not enough.
"Instead of blaming regulations for the housing crisis, the government could look to tax concessions for property investors, which cost over $10 billion a year, make inequality worse, and help landlords outbid first-home buyers.
"The government could tackle the housing crisis by cracking down on these giveaways and directly building any additional housing Australia might need, all while regulating to make sure properties are energy efficient, safe, and durable."
