Developers winning the battle with the NIMBYs?

NIMBYism – what is it, and what causes it?

NIMBYism refers to a situation where residents oppose new development because it is too near to them, or due to a perceived negative impact of the local plans construction

It needn’t relate only to residential development, and it can also be targeted against commercial or industrial developments, or to new roads or rail.

NIMBYism often gets the blame for a lack of responsive dwelling supply.

And there’s little doubt that NIMBYism still exists is Sydney, particularly in the leafy garden suburbs, such as on the lower north shore.

It definitely hasn’t gone away, and it probably never will.

Perhaps, though, there is a slightly more widespread acceptance of multi-unit developments today, especially given their prevalence through this market cycle.


It’s worth noting that not all NIMBYism is bad. After all, NIMBYism was originally borne of a desire to protect and maintain the local environment.

And although “NIMBYism” is a pejorative term, it can also be altruistic in nature.

For example, the New South Wales Government proposed a new metro station at Pyrmont which would have required the demolition of some of the suburb’s historic terraces, a move strongly opposed by a well-attended rally, and not only the owners of those homes.

Such common causes can even bond local communities together.

Heritage listings are also designed to prevent Australia from destroying its architectural history – for example by pulling down Victorian terraces to replace them with higher density dwellings.

The invisible hand of self-interest…

That said, NIMBYism does often boil down to a simple self-interested desire to maintain and protect the value – or perceived value – of one’s own dwelling, or to prevent higher density living from damaging the “live-ability” of a locality. architect plan engineer build construction

The phenomenon tends to more eminent in established middle class areas, as evidenced by the community action groups spawned on the lower and upper north shore of Sydney.

For example, in Sydney’s nominated Urban Activation Precincts (UAPs) it’s likely that there will be more opposition to development in the zone around Randwick’s High Street than in, say, Mascot which traditionally has had a more industrial past, being the airport suburb located under the flight path.

Similarly, it’s probable that Anzac Parade (following on from the commencement of the Sydney CBD & SE light rail) and Parramatta Road will find residential development approvals easier to come by due to there being less opposition and less NIMBYism on busier thoroughfares.

Does NIMBYism impact affordability?

The raw statistics suggest that while NIMBYism (and planning or zoning restrictions) may be a factor in limited the supply of new dwellings, it is not the prime determinant.

There was a raft of media articles between 2011 and 2013 squarely blaming NIBMYs for killing dwelling supply in Sydney.

The argument was that NIMBYism kills new supply by blocking proposals and forces new development to the fringes of the city, thus hurting affordability in the established inner- and middle-ring suburbs.

But since that time dwellings approvals and commencements have soared to record highs.


This has been especially true for attached dwellings, in turn implying that most of Sydney’s new development has been infill development.

That is, building up not out.

This suggests that for brownfield sites and infill development, sufficiently high and rising prices are the most important factors in getting developer approvals over the line.

Although Australia has some dense suburbs, such as Pyrmont-Ultimo, Potts Point-Woolloomooloo, Darlinghurst and Surry Hills, in general even our most populous capital cities are not as dense as we tend to think, and there are still plenty of sites which could potentially be developed. 

But when dwelling prices are not rising – which they generally were not in Sydney between 2004 and 2008 – development tends to dry up.

The evidence is clear in the chart above.

When apartment prices increased approvals roared to record highs, NIMBYism notwithstanding.

It’s commonly assumed that infill development should be “easier” to facilitate than that located

on greenfield sites (which may require new sewerage, new water supply, electricity, gas, transport connections, and other infrastructure and amenities) but the fact is that site remediation costs on brownfield sites can also be very high.

The Barangaroo project was a fine case in point, whereby Lend Lease incurred enormous remediation costs before development could even begin.

The major developers have now become more astute and pro-active, and tend to take a more inclusive approach with local communities, discussing potential new facilities or amenities that might be provided for the local area.

Some will hold open days and site visits on larger developments, allowing the local sticky-beaks and nasty NIMBYs to ask any questions that they may have.


Consumer preferences changing

Consumers may now increasingly prefer attached dwellings, in part due to affordability constraints, and in part due to buyers and renters wanting to be located closer to acity-future-living-apartment-skyscraper-book-learn-vision-lesson-plan-property-buy-sell-build-constructionmenities, jobs, and entertainment.

With about 60 per cent of net overseas migration now from Asia, new migrants may also be more comfortable with a higher density style of living.

Sydney’s population is expected to continue to increase by another 1.6 million persons over the next 20 years, and metropolitan strategy targets have had to reflect this huge demand for new housing.

Overall, the figures show that NIMBYism has not been successful in stymying the dwelling supply in Sydney, and nor should be it allowed to do so unduly.

Want more of this type of information?

Pete Wargent


Pete Wargent is a Chartered Accountant, Chartered Secretary and has a Financial Planning Diploma. He’s achieved financial freedom at the age of 33 - as detailed in his book ‘Get a Financial Grip – A Simple Plan for Financial Freedom’. Pete now manages his investment portfolio, travels and works as a consultant in the finance industry from time to time. Visit his blog

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