Jim Penman says Australia’s housing problem is not mainly caused by immigration. It is caused by zoning restrictions, slow approvals, heavy regulation, and government policies that make it harder to build affordable homes.
In this episode of Conversations with Jim Penman Podcast, Jim Penman, founder of Jim’s Group, explains why he believes zoning is pushing up house prices and rents, why landlords are leaving the rental market, and why politicians without business experience often make rules that hurt ordinary Australians.
How Do Zoning Laws Drive Up Australian House Prices?
Jim Penman says zoning regulations are “killing housing” because they restrict where homes can be built, what type of homes can be built, and how much density is allowed in areas where people actually want to live.
His view is that Australia does not have a simple shortage of land. It has a shortage of permission.
“Well, I have a passion for zoning. The zoning regulations are killing housing. They’re forcing the price of housing up, at least doubling the cost of housing, increasing rents.”
– Jim Penman, founder of Jim’s Group
Penman argues that if more homes could be built near jobs, shops, public transport, and existing infrastructure, house prices and rents would come down. Instead, current zoning rules protect low-density areas and make it harder to create affordable housing where demand is strongest.
That is why he says zoning reform sits at the centre of Australia’s housing debate.
Is Immigration Really Causing Australia’s Housing Crisis?
Jim Penman says immigration is not the main cause of Australia’s housing crisis. His argument is that immigration only becomes a problem when governments bring in more people while also stopping enough homes from being built.
He uses Houston and San Francisco as his comparison. Both are in the United States and operate under the same national immigration policy. But Houston has looser zoning, while San Francisco has tighter zoning and much higher housing costs.
“Look at Houston in Texas, low zoning. Look at San Francisco, high zoning. Same country, same immigration policy.”
– Jim Penman, founder of Jim’s Group
Penman says people are moving into Houston, yet housing is still far cheaper than in San Francisco. In his view, that shows supply restrictions matter more than immigration alone.
He does not argue that migration has no impact. His point is that Australia’s policy settings are contradictory. Governments allow high population growth, then restrict the construction of enough homes to house those people.
The result is predictable: more pressure on rents, more competition for homes, and higher prices.
Why Does Jim Penman Say Australia Has A Housing Supply Problem?
Jim Penman says Australia has a housing supply problem because zoning laws stop land from being used properly.
Many Australian suburbs could hold more homes if rules allowed smaller blocks, townhouses, units, and denser housing near transport and employment. Instead, many areas are locked into low-density use even when demand is high.
He gives his own property as an example. He says he lives on a five-acre property near the station, shops, employment, and the Jim’s Group office. Under current rules, it cannot be subdivided.
“If you took away the zoning regulation, you could have 40 little houses on that, that are affordable. Why not do that?”
– Jim Penman, founder of Jim’s Group
His point is not just about one property. It is about the broader system. If land near jobs and services cannot be used efficiently, families are forced to compete for a limited number of homes. That pushes up both purchase prices and rents.
Penman believes relaxing zoning would create more affordable homes and reduce pressure on renters and buyers.
What Happens When Landlords Pull Homes From The Rental Market?
When landlords pull homes from the rental market, Penman says those homes do not always return as long-term rentals. Some move to Airbnb. Some sit vacant. Some are sold. Some owners simply decide it is no longer worth being a landlord.
He argues that governments often make the wrong assumption. They think making rules harder for landlords will automatically help tenants. Penman says it can do the opposite if it discourages people from offering rental properties at all.
“If you’re a potential landlord and you know that you’re going to be crucified by the government, you don’t want to have permanent tenants.”
– Jim Penman, founder of Jim’s Group
Penman says this matters because rental markets depend on supply. If fewer people are willing to rent out homes, tenants face more competition.
He gives a personal example. His daughter and her partner attended a rental inspection where around 40 people were also looking. Penman even offered to pay a full year of rent in advance, but they still missed out.
That example shows how tight the rental market has become.
Why Are Landlords Leaving The Long-Term Rental Market?
Jim Penman thinks landlords are leaving the long-term rental market because rental rules have become too one-sided and too risky for property owners.
He says landlords need fair rules too. If owners cannot remove bad tenants, recover unpaid rent, or manage their properties properly, some will choose not to rent long-term at all.
That does not help tenants. It reduces supply.
Penman says he personally would not be a domestic landlord under the current system because the risks are too high. His view is that tenants need protection, but landlords also need confidence that they can manage their investment fairly.
He also argues that rental reform alone will not fix the problem. Australia also needs zoning reform, faster approvals, and cheaper construction pathways so more homes can actually be built.
Could Land Tax Replace Stamp Duty In Australia?
Jim Penman says Australia should consider replacing stamp duty with a broader land tax, especially if zoning is relaxed.
His argument is that stamp duty punishes people when they move, while land tax is harder to avoid and can push land towards more productive use. He says a land tax system could be designed progressively, so lower-value homeowners pay little or nothing while owners of very expensive land pay more.
For example, Penman says someone with a $400,000 or $500,000 home could pay no land tax, while someone with a $10 million home could pay much more.
He also says Australia should simplify the tax system overall. He criticises deductions and concessions that mainly help wealthier Australians, including negative gearing, capital gains benefits, and superannuation tax advantages for people with very large balances.
“How much money do you really need for a comfortable retirement? You don’t need $3 million.”
– Jim Penman, founder of Jim’s Group
His broader point is that Australia should reduce taxes that hurt ordinary workers and businesses, while removing special benefits that mostly help the wealthy.
How Do Government Rules Make Life Harder For Small Businesses?
Jim Penman says government rules often make life harder for small businesses because many are written by people who have never run a business, employed staff, or dealt with real operating costs.
He gives working-from-home rules as an example. Penman says some Jim’s Group call centre roles can work from home if the person is doing a good job. But other roles, such as reception or field-based work, need to be done in person.
His view is that businesses should make these decisions based on the job, not a blanket government rule.
“How can you mow lawns working from home?”
– Jim Penman, founder of Jim’s Group
Penman says many Jim’s franchisees work in practical service businesses such as mowing, cleaning, arborist work, and other on-site services. For those operators, rules designed around office workers often make no sense.
That is why he argues decisions should be made closer to the coalface.
Why Does Jim Penman Say Politicians Need Real-World Experience?
Jim Penman says politicians need more real-world experience because many have never had to run a business, manage costs, employ staff, or deal with customers.
He argues that this leads to bad policy. When politicians do not understand how work happens on the ground, they create rules that sound good in theory but cause problems in practice.
Penman says his connection to business owners is one reason he believes he understands these issues. Nearly 6,000 Jim’s Group franchisees have his direct phone number and email address.
“I’m actually in touch on a daily basis with thousands of people who run businesses themselves.”
– Jim Penman, founder of Jim’s Group
He says this direct contact matters because business owners, tenants, landlords, workers, and customers all see the real effects of government decisions.
For Penman, housing policy is not just a technical debate. It affects families trying to rent, workers trying to buy, franchisees trying to grow, and ordinary Australians trying to manage household costs.
What Is Jim Penman’s Solution To Australia’s Housing Crisis?
Jim Penman’s solution to Australia’s housing crisis starts with allowing more homes to be built where people actually want to live.
He believes zoning restrictions are the biggest hidden driver of high house prices and rents. He also believes governments make the rental market worse when they punish landlords without increasing housing supply.
His solution includes:
- Relaxing zoning restrictions
- Allowing more density near jobs and transport
- Making approvals faster
- Replacing stamp duty with fairer land tax settings
- Reducing unnecessary regulation
- Making it more attractive to provide long-term rentals
- Electing more people with real-world business experience
Penman’s argument is simple: if Australia wants cheaper housing, it needs to let more housing be built.
Frequently Asked Questions
Jim Penman says zoning restrictions are the main cause of Australia’s housing problem. He argues that governments restrict where homes can be built and how dense suburbs can become, which limits supply and pushes up prices.
No. Jim Penman says immigration is not the main cause of high house prices. He says the real problem is bringing more people into the country while also restricting the construction of enough homes to house them.
Jim Penman compares Houston and San Francisco. He says both cities are in the same country with the same immigration policy, but Houston has looser zoning and much cheaper housing, while San Francisco has tighter zoning and much higher prices.
Jim Penman says landlords are leaving because rental rules have become too difficult and risky. He argues that if landlords cannot manage bad tenants, unpaid rent, or property risk fairly, some will move to Airbnb, leave homes vacant, or avoid long-term rentals.
Jim Penman supports simpler taxes and fewer deductions. He says land tax could replace stamp duty if designed fairly and paired with zoning reform. He also criticises tax concessions that mainly benefit wealthy Australians.
Jim Penman says working-from-home rules should depend on the role. Some office and call centre jobs may work from home, but field-based jobs such as lawn mowing, cleaning, or arborist work cannot be done remotely.
Jim Penman is the founder of Jim’s Group, one of Australia’s best-known franchise networks. He started with a lawn mowing round and built Jim’s Group into a large service franchise network across many divisions.
Watch The Full Episode And Learn More From Jim Penman
Jim Penman shares his views on business, government, housing, and the Australian economy on the Conversations with Jim Penman Podcast.
In this discussion, his message is clear: if Australia wants cheaper homes and fairer rents, it needs to stop blocking supply and start making it easier to build where people actually want to live.
The full episode is worth watching for anyone interested in housing affordability, zoning reform, small business, rental pressure, birth rates, neuroscience, and how government decisions affect ordinary Australians.
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And for those looking at business ownership, there is another takeaway here, too. Jim’s Group was built around practical service businesses that operate in the real world: mowing, cleaning, pest control, car detailing, building inspections, and more. These are the kinds of businesses affected every day by regulation, household costs, and consumer confidence.
What stands out most in Jim’s argument: zoning restrictions driving up house prices, landlords leaving the rental market, or the need for more real-world experience in politics?
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