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A SIC Joke

  • September 15, 2017

Nearly six years ago, the former Labor State Government released a Draft Special Infrastructure Contribution (SIC) Scheme to cover 4,291 square kilometers’ of the Lower Hunter. The Property Council’s Hunter Director, Andrew Fletcher, said that industry had been ringing alarm bells ever since.

“At the time, we warned the Government the SIC was a poorly designed and extremely blunt instrument that would strangle new housing supply”.

“Latest research proves those predictions were spot-on. Since its introduction, housing supply has been in decline and the Hunter now faces a shortfall of 30,000 homes within a decade.”

Mr. Fletcher said the scheme had been wildly inconsistent across the region, stripping the market of certainty and making investors reluctant to tackle new residential developments on the urban fringes. He said it was another example of how planning in NSW had “gone mad”.

“We had one instance of a young couple in Nulkaba wanting to sell half their rural residential lot to fund construction of a new home and being slugged with a $32,000 SIC bill by the NSW Government.”

 Responding to industry pressure and a deepening housing affordability crisis, the NSW Planning Minister has now released a Discussion Paper to create a more transparent and consistent scheme.

 “This is a crucial policy setting for the Hunter because it will determine the economics of land development for the next decade or more.”

 “It will directly influence how many houses get built, where they get built and how affordable they are.”

He said the development industry accepted the need to contribute towards infrastructure funding, but said three things were non-negotiable in the Hunter.

“The charge itself must not scare away investors, the funds raised must be allocated to infrastructure which supports new housing development and control of the scheme must be handed to Hunter Development Corporation.”

“Unfortunately, the current Hunter SIC Discussion Paper reads like a $510 million shopping list from various state government agencies and contains none of those safeguards for home owners.”

Mr. Fletcher said he expected the Hunter SIC to be a hot topic of conversation when the NSW Chief Planner delivers the keynote address at today’s Hunter Lunch.

 
Media contact:  Andrew Fletcher| M 0407410017 | E [email protected]

A SIC jokeOver four years ago, the former Labor Government placed on exhibition a Draft Special Infrastructure Contribution (SIC) Scheme to cover 69 urban release areas of various sizes across 4,291 square kilometres of the Lower Hunter. It was proposed for lands rezoned to residential and industrial purposes.Despite remaining in “draft” form ever since, the SIC is being applied as if it were official NSW Government policy.As if it was achieving the aim of replacing the piece-meal Voluntary Planning Agreements that were fraught with difficulties for larger projects.Instead, the acronyms SIC and VPA have become interchangeable.At the time, the Property Council warned the SIC was a poorly designed and extremely blunt instrument that would strangle greenfield residential developments.And in the four years since its introduction, housing supply has been in decline, the affordability crisis has deepened and the Hunter now faces a shortfall of 30,000 homes within a decade.The development industry understands the need to provide particular types of social and economic infrastructure through sensible contributions schemes. But when the current scheme puts a harsh and inequitable financial burden upon a young couple wishing to do a simple subdivision, the system is clearly broken.The situation faced by Jack and Diane (not their real names) highlight how the SIC provides another fundamental blockage to land supply which impacts housing affordability.Jack and Diane are not land developers. Their land is zoned Rural RU5 Village, in Nulkaba, a locality 3km north of Cessnock, surrounded by state forest and vineyards.Their proposal is to create two rural residential lots of 2,000sqm each. Jack and Diane are most certainly not proposing urban lots for residential purposes.They simply wish to sell half their lot and use those funds to help finance the construction of their new home on the remaining land.Sound simple?Not for Jack and Diane. They have been slugged with a $32,000 bill from the NSW Government in the form of a Special Infrastructure Contribution.According to the Department of Planning’s website, the SIC will be used to “fund a wide range of road, education, emergency services, health and regional open space infrastructure.””In Nulkaba?” is the question being posed by Jack & Diane. Their land is still zoned Rural RU5 Village, there is no proposal to rezone the land as residential and it doesn’t even adjoin residential land.The response from Bridge Street planners is baffling.Because the site was mapped within the “Lower Hunter Special Contributions Area”, the SIC applies. Never mind that it’s not zoned as residential land.And because the site was subsequently mapped as one of 69 urban release areas in the Lower Hunter under the Cessnock LEP, the SIC applies. Never mind that the Director-General could advise Council that in this instance, the SIC is unwarranted.The current state of play? Stalemate.Jack and Diane can’t consider the ridiculous cost impost.The bureaucratic intransigence won’t consider common sense.Land remains locked. Local construction jobs go begging.