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19 April 2024

In this Edition... 

1. NIMBY tactics – straight out of an old CIA playbook?
2. Victorian council borrows affordable housing levy tactic from NSW  to block housing
3. Development Finance 101
4. Urban Taskforce CEO addresses construction and finance symposium
5. WA Council shows the way on housing with EOI to private sector
6. YIMBY Melbourne publishes its own housing targets
7. AHURI Director – time to stop the hating on property developers 
8. Culture shift needed across the NSW planning system
9. DeiCorp - changing lives
10. Queensland to fast-track housing through State-led assessment
11. Federal Environment Minister Tanya Plibersek takes sensible reform option after EPBC review (so far)
12. UTA in the news

13. Members in the news

1. NIMBY tactics – straight out of an old CIA playbook?

Urban Taskforce was recently thumbing through the old declassified Office of Strategic Services (OSS – the precursor to the CIA) handbook from 1944, and we discovered their Simple Sabotage Field Manual. We came across a tactic designed to “thwart, slow down and interfere”:

Source: X (formerly known as Twitter – so it must be accurate!)

Unfortunately, it would appear that numerous NIMBY/Local Progress Associations, some councils and even some State Government bureaucrats have mastered these tactics.

Perhaps blocking essential goods like housing is a mere extension of the tactics deployed to undermine nations or sabotage an enemy’s means of production?

2. Victorian council borrows affordable housing levy tactic from NSW to block housing

Another steal from another playbook – this time a wealthy council in Victoria  - Mornington Peninsula -  has lifted straight from Sydney NIMBY councils’ anti-housing tactics, by proposing a 3.3% affordable housing levy on new homes.

The Mornington Peninsula includes some of the more salubrious parts of the State – suburbs like Sorrento, Portsea and Red Hill are well known and highly valued places in which to reside.

While Victorian media is noting the use of affordable housing levies as a new means of blocking housing, it comes as no surprise north of the Murray – where councils like Woollahra, Willoughby and Randwick have been using affordable housing levies to block housing for some time. 

Besides seeking to destroy the feasibility of new housing, it is grossly unfair as it imposes additional costs on new home purchasers – generally those less well off than many of those presently living in these well located, high amenity parts of the nation.

One voice of reason voted against the proposal. Cr Bissinger was quoted in the AFR:

Sorrento – a nice place to live for some

The proposal will need to be endorsed by the Victorian Government. Let’s hope they see sense and reject an ill-conceived and thinly veiled attempt to stop newcomers through the fig leaf of an affordable housing levy.

To read more on the NIMBY affordable housing levy ruse now spreading to wealthier parts of Victoria, click the following link:

*Please note this article may be paywall protected.

AFR | Developers slam Mornington Peninsula Shire social housing tax

We need to be vigilant to stop that anti-development agenda (dressed up as pro-affordable housing) spreading here in NSW.

3. Development Finance 101

It is hardly surprising that many opponents of market led housing are of the “money grows on trees” school of dim and deluded thinking.

Breaking down the finance of development shows the difficulties faced by the development industry in providing housing.

Assume the raw cost of construction (which has ballooned since COVID) in the current market for a mid-range two bedroom apartment is $635,000. Say it can be sold on the market for $960,000.

When you add other costs, the profit margin is basically eroded away to nothing.

These additional costs include:

• The cost of the land (which will vary from location to location pending demand and amenity)
• The cost of preparing and lodging the DA
• Council or State Government development application fees
• Interest payments on the land purchase while you are waiting for an approval
• Local infrastructure fees
• State transport infrastructure fees
• New Housing and Productivity Contributions (plus Transport infrastructure charges if you are close to a Metro, plus new Biodiversity charges – yet to be determined)
• New State Government water infrastructure charges
• Affordable housing contributions

The construction costs do not change from location to location and we are seeing builders go broke while others simply leave NSW and head for Queensland.

All this before you even contemplate the time, cost and risk associated with complying with the Residential Apartments Building (RAB) Act and the Design and Building Practitioners (DBP) Act which was designed to force out poor players in our industry but has left the remainder with increased costs and time consuming practices which increase building costs.

Developers must be able to convince the banks or financiers that there is a market for the completed product at a price that delivers a return that matches the risk. Increasingly, banks are simply saying no and this is adding to shortages in supply.

4. Urban Taskforce CEO addresses construction and finance symposium

CEO Tom Forrest joined the NSW Building Commissioner and other industry experts as a keynote speaker this week at a Decode/Resilience event “Funding the Future” which unpacked challenges facing the development and construction industry and importantly ways of navigating through these choppy waters.

Tom detailed the housing supply problem and the serious challenges ahead. He noted that planning reforms had been delivered, but they are not enough to overcome construction inflation since COVID.  Both approvals and new dwelling commencements, in NSW and across Australia, have gone backwards every quarter since the Housing Accord was announced.

The forum was an opportunity to bring financiers together with the property development sector and the building commissioner to start a frank conversation about how we move forward.

5. WA Council shows the way on housing with EOI to private sector

AFR, 12 April 2024

This is exactly the pathway that will deliver housing supply success.

A planning organisation that is wanting to follow the money – follow where investors have identified demand and are ready, willing and able to invest.

Last Friday’s AFR contained an advertisement from City of Karratha Council in WA seeking Expressions of Interest from developers, builders and landowners to partner with Council to address housing supply.

This is precisely what Governments (and DPHI) should be doing.

Rather than trying to “pick the market” and plan for every aspect of development, they should be openly talking to the market to see where there is a readiness and a capacity to deliver more housing, and what height or density is needed to enable a feasible development. The closed doors approach of the planning system is changing – but all too slowly.

The Karratha Council approach is what’s needed to see housing supply unlocked.

6. YIMBY Melbourne publishes its own housing targets

YIMBY Melbourne have published an impressive report setting out specific housing targets for what they describe as the “missing middle” suburbs which will deliver 40,000 new homes each year across the inner to middle ring Melbourne suburbs.

Their guiding principle – to build more home where people want to live.

The targets are importantly backed with proposed remedial measures where councils have failed to meet their targets for three years in a row and cannot demonstrate any genuine attempt to rectify this failure:

• Payment of an annual ‘Housing remedy’ fine to the State Government
• Ineligibility for select tranches of state government infrastructure grants
• Planning approval powers removed from elected councillors (already the case in NSW)

Where are the long promised housing targets for each LGA promised by the Minns Government? How can decision makers make sensible decisions on DAs when there are no targets in place?

The YIMBY Melbourne report is a genuine attempt to present realistic targets backed with measures to ensure compliance with those targets.

To read the full report, click the following link:

YIMBY Melbourne | Missing Middle Housing Targets

7. AHURI Director – time to stop the hating on property developers

Tony has consistently advocated for a fair and balanced portrayal of property developers, amidst the challenges faced in the industry.

His commitment to addressing the misconceptions surrounding developers, who strive to alleviate housing shortages, deserves acknowledgement. Tony blames a planning system that sets up barriers to new housing, such as undercooked LEP’s and local housing strategies.

When there is a clear need to go beyond these restrictive planning controls, all hell breaks loose and an army of NIMBYs sets off on the warpath.

Tony Richards’ article is a insightful read that analyses some of the entrenched cultural problems embedded within in the NSW planning system – problems which need to be overcome and addressed by the Minns Government.

To read the article click the following link:

*Please note this article may be paywall protected.

SMH | Hate property developers? It’s high time you stopped

8. Culture shift needed across the NSW planning system

Foreshadowing many of the themes of Tony Richards' article (see story above) , Urban Taskforce CEO Tom Forrest penned an article for industry journal Sourceable, outlining the huge challenge of a cultural change in a planning system still wedded to outmoded conceptions of housing.

Bottom line is a development must be feasible (it must show a profit commensurate with risk) for the banks to lend money for construction. Central to the piece was the notion that an inability or reluctance of many planners to see housing as a social good, even in the midst of the deteriorating housing supply crisis.

This attitudinal bias is one of the drivers of the housing supply crisis.  It starts with planners taking inordinate amounts of time, calling for endless streams of reports, and clawing back on the yield, to deliver DAs that are not feasible to proceed with, then they complain that develops are “land banking”. This is a myth.

Their anti-development philosophy and myths create a self-fulfilling prophecy, which manifests in a housing supply and affordability crisis.

This needs to change.

So too does the planning system’s bias towards existing residents rather than future residents, which has been a critical barrier for younger generations getting a toehold in many established inner suburbs.

Too often the economics of housing supply is ignored. Worse, the consequences of undersupply are also ignored. As the voices of the younger generations grow in volume, the anger with planners who frustrate housing supply will also grow.

Could giving Councils a bigger say in questions around the allocation of infrastructure dollars actually assist better planning outcomes at the local level?

To read Tom’s exploration of the bigger questions holding back the delivery of housing supply, click the following link:

Why is Planning Reform so Slow? – (sourceable.net)

9. DeiCorp - changing lives

Readers may have seen a Chanel 9 news story this week about a father of twin girls who received life changing surgery at Westmead Hospital. Dane Brockman suffered with debilitating epilepsy, with regular temporal seizures. The seizures were so serious, it meant he couldn’t risk holding his daughters.

The surgery to treat Dane’s epilepsy was performed with a new MRI-guided laser that means the surgeon didn’t need to remove the side of his skull to treat the condition. It also meant he was able to go home the next day, and back to work within a week.

Funds for this revolutionary equipment was donated by Deicorp following an event Founder of DeiCorp and Urban Taskforce 2023 Property Person of the Year Fouad Deiri, organised last year. The fundraising luncheon was attended by our loyal supporters and friends, and together, we raised the $500,000 needed to purchase this amazing equipment. 

The NSW Government is now evaluating the laser surgery equipment and is likely to expand the number of hospitals that can access it. And all of this has been made possible by Deicorp and our friends and supporters.

 It’s another example of our industry giving back to the community and making a difference in the lives of those who need help.

Fouad with staff from Westmead Hospital

10. Queensland to fast-track housing through State- led assessment

Further clarification is needed on the criteria for declaring a state facilitated development, which will be outlined in amendments to the Planning Regulation 2017. The devil will be in the detail in relation to the requirements around affordable housing. Too high a requirement around affordable housing may kill off feasibility.

The Bill provides a suite of tools for use across Queensland and supports the implementation of their ShapingSEQ 2023 blueprint for delivering 900,000 new homes needed in Southeast Queensland corner by 2046 to accommodate 2.2 million new residents – almost 41,000 new homes each year for the next 2 decades. Queensland needs to deliver approximately 48,000 new homes over the next 5 years under the National Housing Accord.

The States are getting on with planning reform.

What is needed is for the Albanese Government to come to the party with a massive investment in housing and job enabling infrastructure in next month’s Federal budget.

To read the Qld Planning Minister’s media release, click the following link:

Media Release - Homes for Queenslanders: New legislation to build more homes, faster

To read the Housing Availability and Affordability Bill 2023, click the following link:

Housing Availability and Affordability (Planning and Other Legislation Amendment) Bill 2023

11. Federal Environment Minister Tanya Plibersek takes sensible reform option after EPBC review (so far)

In positive news for housing, the Federal Minister announced that a development proponent will now be able to compensate for all residual significant impacts by delivering a restoration activity, making a restoration contribution, or a combination of both. This is a shift to a focus on outcome, that will hopefully provide more flexibility when it comes to balancing the need for development while delivering overall nature positive results.

A National Environmental Standard for Restoration Actions and Restoration Contributions will make clear the rules and requirements for these compensation mechanisms, the framework for which will be contained in legislation introduced into Parliament sometime this year.

Welcome too was $100 million to speed up approvals and the provision of online data bases (through the establishment of Environment Information Australia) to give proponents quicker access to information.

To read the Federal Minister for Environment’s release, click the following link:

Media Release - Environment and business to benefit from nature positive plan

12.UTA in the News

2SM interviewed CEO Tom Forrest on the ABS’ poor housing commencement data released last week:

The Urban Taskforce’s Development Excellence Awards continues to gain broad recognition across industry, this time cover the Crown Sydney development, which was a worthy winner of the Development of the Year in 2021.

13. Members in the News

*Please note, the links used below may be paywall protected.
 

“… The NSW-based privately held residential developer, Aland, is continuing its march into Western Sydney’s growth areas, filing plans for eight residential towers atop four commercial podiums in the Leppington town centre…" read more...

The Urban Developer, April 16
 

“… Stockland has secured a win from the North Sydney Council, setting the stage for the developer’s 42-storey St Leonards office tower…" read more…

The Urban Developer, April 16
 

“… Industrial property powerhouse the Goodman Group is in talks with global funds manager Barings about selling it an industrial portfolio worth up to $800m…" read more…

The Australian, April 18
 

“… Meriton’s Victini and Destination residential project was the Harbour City’s largest worksite with five cranes commissioned..." read more…

The Australian, April 18
 

"...Developer Coronation Property’s plans for the building were first discussed in 2014 and a decade later, the first occupants of the furnished art deco-inspired block will move into their homes from May 1…" read more…

Parramatta News, April 18