Inner City Housing Supply Incentive

We identified an urgent need to increase housing supply, diversity, affordability and choice within the inner city areas of Hobart.

The Southern Tasmania Land Use Strategy (STRLUS) has identified that the Hobart Central Business District (CBD) and immediate surrounds (including waterfront) should be complemented by infill and consolidation of surrounding residential areas at higher net densities of 25+ dwellings per hectare. The draft STRLUS is currently proposing that a more ambitious target of 50+ dwelling per hectare be adopted for the Hobart CBD. The current residential density within the Hobart CBD is approximately 7.8 dwellings per hectare.

Existing supply and construction trends have been analysed and continuing the current rate of urban expansion is not sustainable, particularly against the capacity of existing residential areas to accommodate additional dwellings. At present approximately 85 per cent of new dwellings in Tasmania are single, detached and located in greenfield subdivisions and at relatively low densities of between 7 to 10 dwelling per hectare (net density). This proportion is higher than any other Australian state or Territory.

Within the Hobart CBD there are many underutilised sites which enable a variety of options, are well-located and close to infrastructure, employment, and natural assets such as parks and the waterfront. There is diversity in lot sizes, with large lots perfect for medium density.

In December 2024, we hosted the Hobart Housing Forum. This was a conversation with the housing sector on affordability and supply in Hobart. The forum identified that financial barriers are a major obstacle to development in Hobart. This included:

• the cost and supply of appropriate sites for development
• the cost of upgrading infrastructure
• construction costs including materials
• labour costs resulting from insufficient access to qualified builders and tradespeople.

The financial impact associated with recovering upfront construction costs when developing new residential housing in central Hobart can be significant and act as a deterrent in delivering new housing to the market. The Hobart Inner City Housing Supply Incentive Policy(PDF, 385KB) outlines our approach to reduce these financial deterrents to facilitate more residential development within central Hobart.