While they're at it, why not look at bringing up the standards of home insulation up to modern standards. A little bit here will pay off in the long run in terms of reduced heating/cooling costs.
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Make houses more efficient. Australian houses are among the world’s largest, even though households are shrinking. As the Swedish saying goes: “The cheapest square metre is the square metre you don’t build!”
Make houses more flexible and diverse. Housing could then accommodate different uses, such as home offices or sublettable units, and various family structures and sizes, including extended families.
And more homes with smaller footprints! Row houses and small apartments, rather than houses with large wasteful yards.
The problem with higher density is that our structures governing such properties are awful. Body corporates and stratas are enormous risks for those on the margins because of their potential to become debt traps. Particularly if only a minority of owners are residents rather than investors.
Higher density needs to be looked at certainly, but realistically it also needs to be structured and built very differently with an active exclusion of investor needs. And that also means housing where even the residents don't expect to accumulate a capital gain on.
Yup, a definitely fair problem.
Personally, I actually think the best housing option is row houses, for reasons that I think are very well explained in this recent podcast episode (YouTube link for convenience). And these have the added advantage of not needing a strata.
It can be a little complicated if you build true row houses with a shared wall, but it need not be more than the same kind of thing you get in separated houses with garden fence rules. Alternatively, you can do what I've seen a bit of recently and sacrifice a tiny bit of the advantages of row houses to make them technically separated houses, by putting a tiny (50–100 mm) gap between each house. The density is basically not sacrificed at all, and you remove any possible boundary disputes.
Also for what it's worth, my experience with a small, aging apartment body corporate has been pretty good. A majority of owners are investors, but the body corporate committee and active voters in my experience are much more evenly split, with probably about 3/5ths being owner-occupiers. That may not be the universal experience though, especially in larger buildings. I think there's probably a place for the law to be amended in such a way that tenants get a voice on the committee too, somehow, though that would be politically quite difficult.
Apartments are extremely small already so I'd argue they need to be bigger for people to even consider having families in. 1 bedroom apartments are like 60-70m2 which is terrible for 1 person, and 2 bedroom apartments are like 70-80m2 ish. There's no space for even a dining table and a couch. You have to choose one or the other. Who would pick apartment living as a long term option, rather than just a stepping stone home, in these conditions?
There's a reason I said "homes with smaller footprints" and not just "smaller homes". To use some unrealistic but easy numbers, an apartment building with 100 m^2^ of land area and 10 storeys, each with one apartment on it, means each apartment only takes up a footprint of 10 m^2^, which is tiny. The same principle applies if you use more realistic numbers.
Or you can go for standalone homes in the form of row houses, which might very realistically have a land area of 70 m^2^ and be two storeys, and so have a very comfortable 2-bedroom 140 m^2^ of floor space.
You're absolutely right that a lot of what we currently build is not good quality outside of rentals to uni students. We need more diversity of housing options, including good apartments and row houses.
I mean if you take that to the extreme you're arguing for very high density living, which I'm not opposed to, but councils seem to be against that by default.
If you only look at this aspect, that's true, with an asterisk*. But there are other factors that make medium density really good compared to both low density and high density. Factors I'm happy to get in to and have done many times in the past, though it's a little off topic for this thread.
* the asterisk is that depending on how you build the very tall towers, their density can end up being quite comparable to that of medium density. The so-called "tower in a park" layout, where you have large towers with a good amount of green space (or other open space) surrounding them ends up not too much greater in density than straight-up medium density.