Land value capture through inclusionary zoning is a widely used market mechanism to support affordable housing production and social inclusion in land redevelopment processes. Its efficacy and effectiveness in achieving these goals, however, remain debated. In this paper we examine the case of Sydney, Australia, which is almost wholly dependent on a market-driven approach to new supply and urban consolidation. For over two decades, successive state governments have initiated reforms to land use rules and density limits in an effort to encourage increased housing production through urban and suburban densification. But affordability remains a persistent challenge. Analysing over 20 years of planning policy reforms in Sydney, we ask to what extent major changes to land use rules and density limits have coincided with the implementation of inclusionary housing requirements; and the extent to which market and housing supply interests have intersected with affordability goals in shaping inclusionary housing policy design choices. In concluding, we reflect on what this policy history, and more recent practice, means for the inclusivity of densification in Sydney, as well as the extent to which upzoning and value capture alone can compensate for the retreat of the welfare state.
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Gilbert et al. (2026) studied this question.
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