Affordability plan provides a good framework
The NSW Government’s affordable housing plan, released earlier this month, provides a good framework for enacting key reforms to boost housing supply. However, reforms to infrastructure funding do run the risk of instilling uncertainty – and potentially an additional $0 million plus in costs – into the development process and action on key reforms will be critical in the months ahead.
Overall it is a good plan – it balances supply and demand initiatives and shows the Government has listened to the industry and the people of NSW. The crucial aspect that will define its success will be increasing housing supply. Initiatives that increase demand, such as grants and tax incentives, must be matched by initiatives that boost supply and it appears the Government has heeded this advice.
“We simply must build more homes and increasing the number of Priority Precincts to 15 is a good move and will mean that transport and infrastructure investment can be integrated with land use and decision making can be streamlined, NSW Deputy Executive Director Cheryl Thomas said of the Plan.
“More housing supply must not be restricted by misleading preconceptions of what increased density is – solutions can be found that provide great liveability options for the community that include services, green space and transport.
“Smaller lot sizes and incorporating codes for faster housing approvals in the priority precincts is a move that will enable diverse housing to be built more quickly – good news for those seeking a home.
“The introduction of planning panels is a decisive move and will depoliticise the development assessment process and should be mandatory across all councils. Representatives on the panel must have specialised expertise so that we do not end up with unfair outcomes for proponents and appeals.
“The fact that councils can be incentivised to meet housing targets and update Local Environment Plans is important. There must be a carrot and stick approach to ensure there is strong strategic planning at a local level and the Greater Sydney Commission is empowered to enforce their strategic outlook.”
The tax changes included in the plan are a mixed bag and the changes to infrastructure caps signify a wider softening of the Government’s approach towards local government performance and reform. Although unlikely to result in large, initial spikes in levies, the change in approach demonstrates that the Government is no longer willing to fund infrastructure in some circumstances and has well and truly lobbed the ball into the property industry’s court to negotiate and provide downward pressure on the cost of infrastructure provision.
This attitude was confirmed in the budget with expected revenue from the expanded State Infrastructure Scheme and new levies on the industry to reach $0 million.
Providing the option of low interest loans to local councils is an alternative funding option for infrastructure that is also outlined in the affordability plan, yet this option must be incentivised to ensure Council’s choose a loan, rather than simply increasing their cap and trying their luck with an IPART review. The design of the essential works list, used to determine whether a contributions plan will be approved or not by IPART, will be integral to ensure that the type of infrastructure proposed, or the extent of that infrastructure, is in fact essential or whether alternative options should be established.
The Property Council will continue to work closely with both the Department of Planning and the Minister’s office on this policy change.