Departing productivity chief issues housing warning

November 1, 2026 — 5:00am

Departing NSW Productivity and Equality Commissioner Peter Achterstraat warns governments must address the “unintended consequences” of increased housing supply in the early stages, saying the Minns’ government density push should be paired with upfront infrastructure delivery.

As Sydney embarks on a new chapter of inner-city density, Achterstraat – who, eight years after being appointed the inaugural commissioner, had his final day last Friday – said the government must illustrate how forecast population growth will be supported by the necessary infrastructure.

“If new housing is going to cause unintended consequences, they’ve got to be addressed early. So, if building houses is going to cause congestion on the roads, we’ve got to look at it altogether,” Achterstraat said in an exit interview with The Sun-Herald last week.

Achterstraat’s clarion call comes three years after the commission’s report found developing in parts of the city’s ever-growing fringe cost the economy up to $75,000 more per home than building in inner-city or established suburbs. It underpinned the Minns government’s sweeping planning reforms, including building soaring apartments around metro and heavy rail stations.

Those policies have been accompanied by a recalibration of future housing supply away from the city’s west to suburbs closer to the CBD. Sydney needs to build 800,000 new homes over the next two decades to accommodate population growth, according to the state government’s 20-year plan.

Achterstraat, pressed on previous remarks that the only time “housing should come before infrastructure is in the dictionary”, said retrofitting infrastructure to support new housing afterwards was vastly more expensive than making up-front provisions.

“I was totally frustrated where they build things and then someone turns around and says, ‘Hang on, we should have allowed for a transport corridor. Now we’ve got to buy up all the land’, and they don’t have the money to do that,” said the veteran public servant who was appointed by the Berejiklian government to address overregulation, lower the cost of living and make housing more affordable.

“From an efficiency point of view, it’s better to put the infrastructure in first, or even at the very least provide for it to keep a space where the school is going to be; to keep a space where the road is going to be. But ideally, they should be there before it starts.”

Achterstraat added: “It may not necessarily be built overnight, but it’s in everyone’s interests if the infrastructure is built simultaneously with the housing.”

However, as he conceded the budgetary pressures facing governments meant upgrading schools, roads and hospitals first wasn’t always feasible, Achterstraat argued there should be an “upfront acknowledgement” about the necessity for infrastructure upgrades in areas marked for density.

“Let’s at least keep the provision there so we don’t have to pay exorbitant amounts of money to buy up the land and to retrofit things to put in infrastructure,” the former auditor-general of NSW said.

“There should be an upfront acknowledgement that infrastructure will be needed in those areas, and that acknowledgement should go hand in hand with mapping out what the infrastructure is and where it will be.”

Planning Minister Paul Scully said the government’s approach to housing had been formed in opposition after local MPs saw housing delivered “long before” the infrastructure.

“We didn’t want that community frustration to continue. The Minns Government approach to tackling our housing challenge has been to add density where there is existing infrastructure capacity first,” he said.

“This has been central to guiding our reforms – from the selection of Low and Mid-Rise policy areas to Transport Oriented Development locations.”

Scully paid tribute to Achterstraat’s tenure, saying while he didn’t always agree with his policy prescriptions, he found his insights valuable.

Achterstraat’s comments will likely be seized upon by Liberal and crossbench MPs, who have increasingly framed their criticism of the government’s planning reforms through the prism of inadequate infrastructure commitments.

Liberal MPs have become increasingly vocal in their criticism of Labor’s planning reforms, with one labelling the policies “destructive” and another saying some developments “lack social licence”. Scully has previously accused the Coalition of “crab walking” away from a previous commitment to address the housing crisis.

Asked about the backlash to the government’s planning policies, including the low-and-mid-rise (LMR) reforms, particularly the construction of large-scale apartments a long way from public transport, he said: “I’m much more keen on building very, very close to existing infrastructure.”

“Once we start building a distance from public transport, that’s when the productivity is not as great because it can cause congestion if we’re further from transport.”

With developers increasingly finding the construction of apartments largely unfeasible outside luxury projects in the eastern suburbs and lower north shore, Achterstraat said Landcom played an important role in delivering consistent housing supply during market downturns.

When asked if he saw Landcom taking on more responsibility moving forward, he replied: “In certain areas, yes”.

Achterstraat, however, cautioned that governments must be selective when intervening in market failures and work closely with industry.

Five years after a Productivity Commission white paper recommended replacing stamp duty with a broad-based land tax, arguing the move would improve housing choice and affordability, Achterstraat declined to say whether he still supported the proposal.

The policy, which former Liberal premier Dominic Perrottet took to the 2023 state election, was fiercely opposed by the then Labor opposition, labelling it a “forever tax”.

Nearly three years after warning Sydney risked becoming a city without grandchildren if it didn’t address soaring house prices, Achterstraat said he was considerably more optimistic about the city’s future, largely because of what he believed was greater societal acceptance of the case for denser inner-city suburbs.

As to the advice he would give his successor? Achterstraat lists three areas: preparing for the AI revolution; greater focus on equality, particularly ensuring young people can access education opportunities; and finally, imparting on them that greater cooperation between the state and the federal governments could achieve better outcomes.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.

From our partners