Australia’s housing debate has become fixated on housing targets. Yet delivering more homes without the green infrastructure required to support growing communities risks creating hotter, less liveable and less resilient places.

Governments increasingly rely on green infrastructure to address challenges created by urban growth. Parks, urban tree canopy, waterways and green corridors are expected to cool communities during heatwaves, improve public health, support biodiversity, manage stormwater and provide access to recreation and open space. Unlike roads, drainage and utilities, the funding and governance arrangements needed to support these systems have barely changed.

Western Sydney illustrates the challenge starkly. More than half of Greater Sydney’s new housing will be delivered in the region. Its population is projected to grow from around 2.8 million to more than 4.1 million by 2041. As private garden space declines and tree canopy is lost, communities are becoming more reliant on shared public green infrastructure for cooling, recreation and everyday living. Nevertheless, there is growing concern about who will fund, deliver and steward the green infrastructure these communities increasingly depend upon.

Ensuring green infrastructure keeps pace with housing growth

To explore this challenge, Western Sydney University’s Urban Transformations Research Centre undertook a series of in-depth stakeholder interviews and convened a high-level roundtable involving NSW Treasury, the Office of Local Government, the Department of Planning, Housing and Infrastructure, leading Western Sydney councils, UDIA NSW, Business Western Sydney and other key stakeholders. A consistent message emerged: green infrastructure is no longer an optional ‘nice to have’ amenity – it is increasingly functioning as essential public infrastructure. The funding, governance and stewardship arrangements needed to support that role, however, remain fragmented and underdeveloped.

The consequences are already apparent. Developer contributions can help deliver parks, open space and urban greening in growth areas, but they are not designed to fund long-term stewardship. Grant programs can unlock important projects, yet are often ad hoc, short-term, competitive and politically driven. As one council participant put it, grants can be a “double-edged sword”: they fund capital works, but fiscally constrained councils inherit the ongoing maintenance burden.

Two key priorities

Our research points to two key public policy considerations. First, green infrastructure should be formally recognised as essential public infrastructure within planning, infrastructure and investment frameworks. This means considering green infrastructure alongside transport, water and other infrastructure systems when growth areas are planned, infrastructure priorities are determined and investment decisions are made. Formal recognition through state infrastructure strategies, business case frameworks, investment appraisal processes and funding programs would enable green infrastructure to access established infrastructure investment and long-term funding pathways rather than relying primarily on fragmented grants and ad hoc programs.

For councils, it shifts green infrastructure from reactive project funding towards more predictable infrastructure planning. For state planning agencies, it ensures green infrastructure is considered early and at scale, rather than added later as an afterthought. For the Office of Local Government, it helps clarify ownership, stewardship and long-term responsibilities. For developers, it creates greater certainty around infrastructure expectations and reduces reliance on case-specific negotiations.

Importantly, this proposition is about better alignment rather than major reform. Existing planning and local government legislation already provides many of the necessary tools. The task is to clarify how green infrastructure sits within existing frameworks in the same way other infrastructure classes are already recognised and planned for.

NSW has made important progress in recognising the value of green infrastructure. The NSW Valuing Green Infrastructure Framework has strengthened recognition of the multiple benefits these assets provide. However, recognition alone is not enough.

Recent NSW Budget commitments to public space, parklands and an ongoing funding model for Greater Sydney Parklands acknowledge that assets delivering metropolitan-scale benefits require funding and stewardship arrangements that extend beyond traditional project-based approaches. The challenge now is extending that thinking to all network-scale green infrastructure systems supporting housing growth.

Second, funding and stewardship responsibilities should better reflect the distribution of benefits. If metropolitan-scale benefits are delivered through cooler neighbourhoods, improved health outcomes, biodiversity protection and climate resilience, the costs should not fall disproportionately on individual councils.

Rather than creating new financial instruments, the opportunity lies in making better use of existing ones. One promising pathway is the NSW Sustainability Bond Programme, established in 2018 and managed through NSW Treasury and TCorp. The Programme already finances major public infrastructure projects that deliver environmental and social outcomes. The question is whether network-scale green infrastructure systems should be assessed and prioritised alongside other infrastructure investments within these existing frameworks.

Importantly, councils would not issue bonds, borrow directly from investors or carry bond risk. Treasury would continue to issue and manage the bonds through established governance and reporting arrangements. Councils would instead gain access to more predictable, long-term capital funding aligned with asset life and repayment capacity, rather than relying on short-term grants or taking on significant upfront debt.

This approach would apply only to network-scale systems such as green corridor networks, cooling networks and flood-mitigation landscapes. Local park upgrades, pocket parks and place-making projects would continue to be funded through existing council budgets, grants and developer contributions.

Again, the benefits extend across the system. For councils, it opens access to infrastructure-scale capital currently unavailable to green infrastructure. For NSW Treasury, it creates opportunities to reduce long-term public expenditure through avoided flood damage, reduced stormwater costs, lower heat-related health impacts and reduced pressure on emergency response systems. For investors, it provides a transparent and well-governed investment mechanism linked to measurable environmental and social outcomes. For developers, it increases confidence that the supporting infrastructure required for housing growth can be delivered at scale.

Building on the momentum

Realising this opportunity will require robust business cases, prioritised project pipelines and demonstration projects capable of proving the concept. The objective is not to create new financial instruments or funding systems. It is to determine whether green infrastructure can compete for investment alongside roads, drainage and other infrastructure classes using mechanisms that already exist.

Encouragingly, momentum is beginning to build. Following the roundtable, the Urban Transformations Research Centre is continuing discussions with government and industry stakeholders to explore how green infrastructure can be more effectively recognised, funded and stewarded within existing planning and investment frameworks. The focus is now shifting from understanding the problem to testing practical implementation pathways.

Australia’s housing challenge is not simply about delivering more homes. It is about delivering communities that remain liveable, resilient and sustainable over the long term. Green infrastructure already performs essential infrastructure functions and should be planned and funded accordingly. The time is ripe to ensure the policy, funding and governance systems underpinning it catch up.

Professor Nicky Morrison is Professor of Planning and Co-Director of the Urban Transformations Research Centre at Western Sydney University. Her research focuses on housing, urban governance and sustainable urban development, with particular interests in green infrastructure, innovative funding models and delivering equitable, healthy and climate-resilient cities.

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