Forget smashed avocado and low interest rates: millennials can look closer to home for their scant access to housing in leafy neighbourhoods.

New data presented to the Melbourne Economic Forum last month, detailed in The Australian Financial Review, confirms what many already suspected: The culprits are their Baby Boomer old folks wielding their “We will oppose inappropriate development” signs.

The middle ring of suburbs located from 5 kilometres to 20 kilometres from the city centre has seen “almost no change” in population density in 30 years, especially in Melbourne but also in Sydney, Grattan Institute chief executive John Daley told the forum.

By contrast, the inner 5 kilometres of Melbourne, Sydney and Brisbane have seen dramatic increases in density, as apartments go up and students, hipsters and downsizers move in.

Peter Seamer, chief executive of the Victorian Planning Authority, a state government agency, worries that projected growth in Melbourne’s CBD will produce densities “much more significant than London or Manhattan”.

Even the suburbs located in the 20 kilometres to 30 kilometres belt have absorbed more new residents relative to their area than the middle ring of Melbourne, the data compiled by University of South Australia geographer Neil Coffee and colleagues shows.

Thirty years war

This means Save our Suburbs – the powerful Nimby pressure group – has won the “30 years war” of the suburbs in Melbourne and, to a lesser extent, in Sydney.

This has all happened in defiance of government policy which has consistently tried to drive jobs out of the city and increase population densities in the middle suburbs, Daley says.

Population density has barely increased in middle suburbs in 30 years. Photo: Grattan Institute, Neil Coffee, University of SA

Productivity Commissioner Stephen King says the logical thing for millennials to do would be to buy cheaper housing in the western suburbs.

That’s already happening. Even so, despite the emerging hipsterdom in Melbourne’s inner west – following Sydney – there’s still a strong east-west differential in housing.

The Victorian Planning Authority’s Peter Seamer says huge efforts are going into designing denser housing and mixed-use developments, but it is easier to do in de-industrialising western and northern suburbs like Tottenham, Braybrook and Broadmeadows.

‘Oh not here’

“We can put density in there which we can’t put in the leafy streets of Glen Iris [an eastern suburb] because of the political situation”, Seamer told the forum.

Kate Roffey, head of economy, innovation and liveability at Wyndham City Council, lives in the inner west. “I am not a Melburnian … for me there was no east-west, leafy green suburb versus dump, out there in the west.”

Roffey says a generational change is happening but lucky people in “beautiful big houses” in established suburbs with 100 years of public investment in transport available to them “are saying, Not In My Back Yard. I don’t want to densify here. Go somewhere else”.

“I spoke to the Brighton Rotary Club and talked about densification and they said ‘yeah, yeah’. And I said, ‘Well, that means high rise along the beach’, and they said, ‘Oh not here, do it in Glen Eira’.”

Lucy Turnbull, chief commissioner for Greater Sydney, says Sydney is also facing a serious growth problem but its geography means virtually all the growth is in the west. Ms Turnbull and her fellow commissioners have divided the city into eastern, central and western cities.

They want to extend the urban ambience of the inner west – where gentrification is much more advanced than in Melbourne – into the “missing middle” stretching out to Blacktown, with low rise and terrace housing rather than high rise, and add the coffee shops and amenity that go with that.

Enablers

The Nimbies’ enablers are weak policymakers, Daley says. “This is politically very difficult to change, but there is no question that the reason it doesn’t change is essentially that government policy makes it impossible to change it.”

The consequences for young Australians trying to buy houses near their families are profound. Median dwelling prices are 8.4 times household incomes in Sydney and 7.2 in Melbourne, both record levels, and the share of home loans to first home buyers is just 13.4 per cent, the lowest since 2004. Treasurer Scott Morrison has vowed to tackle the problem, but past efforts have made it worse.

Jobs ad population have grown in different places. Photo: Grattan Institute

Shortages of affordable housing mean young couples can’t live where the jobs are, and have to travel long distances by road or public transport, eroding their quality of life.

As manufacturing jobs disappear in the western suburbs, new jobs in the services are being created in the CBD and inner north and east, but the most rapid population growth is in the western or outer southeast suburbs.

And the west hasn’t just lost manufacturing, construction and transport jobs at an accelerating rate in the past five years.

Bruce Rassmussen, director of Victoria Institute of Strategic Economic Studies, told the forum the west has also started to lose the professional and technical services jobs that it gained in the five years until 2011.

Lopsided development

Meanwhile, services jobs have boomed in the CBD, inner east and inner north. This lopsided development increases congestion and costs the community much more for transport infrastructure, because people are using it for longer each day.

Commuters who travel radially into the city each day cost the most to service, because new freeway lanes and train lines have to be built for them, Seamer said.

Those who travel in rings around the centre cost less, and those who travel radially out from the centre against the traffic, or less than a kilometre from their homes, cost virtually nothing because they use empty trains and roads or barely burden the system at all.

Roffey says she is a “mouse on the wheel in Wyndham”, where 70 babies are being born each week and there is so much growth they don’t know what to do about it.

Point Cook and Tarneit, two densely settled new suburbs in the city, were not even on the map 13 years ago. Residents have to travel into the city or further afield to their jobs, yet you can hardly get in and out at peak hour.

“We have people leaving Point Cook and Tarneit and driving back over the Westgate Bridge to jobs because we do not have job capacity in our municipality,” Roffey says.

The most fervent public transport advocates live within 5 kilometres of the CBD and have great access, she said. But at Williams Landing – the nearest rail station to Point Cook and Tarneit – there isn’t nearly enough parking.

“When people start to go to the train station and realise they can’t park there, they stay in their car and keep driving to the city,” Roffey says.

The fix

You’d want to fix this lopsided development if you could. Locking up middle suburbs and allowing residents to capitalise their economic advantages in house prices exacerbates inequality and geographic divides.

This even gets reflected in political outcomes: People in the outer suburbs are voting for minor parties, such as like One Nation, much more than they did even 10 years ago, says Daley.

He is sceptical about the power of planning policies that try to move jobs to people. The shift to the centre has happened in defiance of official decentralisation policies. Governments are a long way down the list of determinants about where companies invest and industry “clusters” take off, he says. He sees more promise in policies aimed at moving people to jobs via densification.

“It’s really hard to move jobs to people. It’s relatively easy for government to move people to jobs, or at least change the planning rules so that it’s easy to build extra residences.”

Others say this writes off planning too easily.

Turnbull says Sydney has no choice but to try to move jobs west, where the population is. Rod Maddock, Victoria University economics professor, says government departments such as Transport and Corrections should be relocated. Roffey says industries, not just government departments, are needed.

Seamer says the popularity of Melbourne’s centre and eastern suburbs shows the value of past planning and 100 years of investment in extensive transport networks and cultural facilities.

But it takes time. Melbourne planners have been at it for 30 years and the first urban renewal suburb is only just emerging from its industrial chrysalis, with more in the pipeline, he says.

“Government investment is significant. To quote Obama, ‘Yes we can’.”

The Melbourne Economic Forum is a partnership of Melbourne and Victoria universities sponsored by The Australian Financial Review.

This story was originally published in The Australian Financial Review.