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2 August 2024
In this Edition...
1. Housing approvals - down, down, down
2. Planning controls for 5 more Tier 2 Transport Oriented precincts released
3. UK Government’s first priority is planning reform – with real action less than a month after being elected
...and much, much more.
4. Delays on Barangaroo are unacceptable
5. CPI for June 2024 – housing supply crisis continues to keep inflationary pressures high
6. The AMA’s Dr NIMBYs (a close relative of Captain NIMBY) protests against development at St Leonard's – apparently … it blocks their office views!
7. Planning systems entrench power, wealth and poor social outcomes
8. Changing of the guard Part 1 – new Federal Minister for Housing and Homelessness
9. Changing of the Guard Part 2 – new CEO for Housing Australia
10. Penrith Council’s tax of housing and jobs – the straw that breaks the camel’s back
11. Good news: Next stage of Mamre Road gets green light
12. Spotlight on excellence – Medium Density Development – Dasco’s Azure
13. Council Watch
14. Members in the news
1. Housing approvals - down, down, down
No comfort for those wanting a place to call home with the ABS releasing monthly housing approvals for the month of June 2024 – showing approvals down both in NSW and nationally.
June 2024 showed only 3,014 approvals in NSW, down almost 700 since May 2024.
Every month of low approval numbers costs NSW dearly in its attempts to reach the 377,000 housing completions by mid-2029 required under the National Housing Accord.
It is a trend that is alarming and reflects a lack of focus and insight from Governments on ways to start turn the housing supply ship around.
Right now – 'the ship of planning' is beached.
NSW monthly dwelling approvals have fallen to the 2nd lowest monthly result in well over a decade and a meagre 60% of the last decade’s average. And this is a decade which created the housing supply crisis.
But the “planning reforms” come encumbered with new taxes. The intent is sound, but the outcomes speak for themselves. The housing supply crisis will get worse unless there is a significant incentive for capital to invest in this space.
At the moment, it is just too risky. The Residential Apartment Building Act makes investment in this space risky. Labour and skills shortages increase the cost and the risk. Rising construction costs make investment risky. Random decisions by planning panels make the entire area risky.
The application of new taxes like that proposed through the Tier 1 TODs – a massive new tax of up to 15% of the total yield of the building (commercial or residential) must be gifted to a community housing provider for affordable housing in perpetuity – that’s not just a risk – that’s a massive new tax which will kill the benefits of these TODs.
While the NSW Government was conspicuously silent on Tuesday’s figures, the NSW Opposition did what oppositions do and completely ignored the cause of the crisis which evolved entirely under their watch while in Government and sought to sheet home the blame to the government.
After 16 months in Government, Shadow Planning Minister Scott Farlow makes a number of telling points, particularly around the impacts of taxes on housing supply:
Mr Farlow does not tell the whole story, as many of these new fees, taxes and charges were written into former Treasurer Matt Kean’s final mid-year Budget Statement just prior to the 2023 State election, but he makes a very good point about the impact of those taxes. It was, after all, the Minns Government that enacted them.
The following chart outlines the woeful path that housing approvals have taken over the last decade.
This month is the second worst month in the last decade. We have fewer approvals in 2024 than we had in 2014.
Something must change.
2. Planning controls for 5 more Tier 2 Transport Oriented precincts released
The NSW Planning Minister, Paul Scully, has released a further 5 sets of planning controls for Banksia/Rockdale, Dapto, Gosford and Tuggerah Transport oriented precincts.
The extension of some of the boundaries of the TOD’s is a positive move – and should set a precedence for amending TODs down the track. The fact that some TOD Tier 1 boundaries are less ambitious than their Tier 2 counterparts should give planning staff some pause for thought.
Mind the gap – additional land (shaded black) was included in between the Banksia/Rockdale TOD precincts
Comment
The Tier 1 TOD precincts were supposed to involve the rezoning of precincts with a radius of 1.2km of the nominated transport node and involve significant additional uplift in housing supply. While the details of the 5 Tier 2 TOD areas are welcome, Urban Taskforce notes that the housing projections are over the next 15 years. The number of additional houses expected to be delivered over the Accord period – (the next 4 years and 10 months) is miserly and reflects the lack of ambition in the changes to height and density.
This begs the question: has the National Housing Accord become a footnote in NSW planning circles?
The Housing Accord was announced to great acclaim back in late 2022 (yes that long ago!). Has the NSW government and public service simply given up?
The motto of the Olympics is “Citius, altius, fortis” … Higher, stronger and faster.
Right now, the NSW Planning system is at risk of simply missing the main event.
The NSW planning reforms need to imbibe the Olympian spirit. It’s not too late for bold reform and perhaps the passing of the September Council elections will focus the minds of policy makers, but a crisis demands the restoration of a profit incentive if the government wants the private sector, the developers, builders and bankers, to get on board and build more houses.
3. UK Government’s first priority is planning reform – with real action less than a month after being elected
Deputy Prime Minister, Angela Rayner and Prime Minister, Kier Stamer
The UK Labour Government has come off the blocks at a quick pace on housing and planning reform, with Deputy Prime Minister Angela Rayner releasing a draft policy to deliver 1.5 million new homes over the next 5 years.
It comes as 54 Labour MP’s, calling themselves the Labour Growth Group, wrote to the Prime Minister Sir Keir Starmer, demanding that he stare down UK NIMBYs and deliver “revolutionary” reforms to the Planning Act.
Revolutionary Reforms – wow – that’s how you deal with a crisis.
Meanwhile – the NSW Government still tinkering at the edges with the TOD Tier 1 precincts still not complete after a staggering 16 months and proposing a massive new tax on housing supply in the form of Affordable Housing obligations. So poor has the national response been that the Albanese Government has had to bring in a new Housing Minister (Hon Clare O’Neil to improve outcomes and communications on the topic.
Both have a mandate for real change. We say: take a leaf from the UK government and use the power of the mandate for housing supply to solve the problem through bold reform.
The Starmer Government is showing the sort of urgency that is needed when it comes to a housing supply crisis
The plan itself is noteworthy, requiring local authorities (called Boroughs or Councils) to clear the way for more homes or Government could step in. Interestingly, where councils fail to properly do this, the private sector can present their own proposals for development on what they believe is a grey belt area (that is land set aside as green belt but deemed not to be contributing to open space or the environment.
Green belt land is not insignificant in the UK, with the green belt representing almost 17,000 square kilometres – some 12.4% of England.
Also of interest is the proposal to remove an entire paragraph of the current Plan when it comes to “character and density”. Preserving the character of suburbs is a vague buzzword used by NIMBYs to stop development and the UK government has called it out.
The Starmer Government is showing the intent and urgency befitting of a response to a crisis. It is certainly showing up the laggards here in NSW.
4. Delays on Barangaroo are unacceptable
What Housing Crisis??
“Mod 9” for Central Barangaroo, prepared and submitted by Infrastructure NSW, was first put on display back in 2022 under the former Coalition Government. Since then, scale and housing has been whittled back, and now weeks out (we hope) from the opening of the Metro, all we will have in this key Sydney CBD location is a hole in the ground.
What it could be – housing, jobs all on a metro station
Yet it is basically this…
The housing to be located in this area should be massively increased, not whittled away. This is a missed opportunity for housing close to the city, supporting the restaurant and nightlife of Barangaroo, while also generating affordable housing. But even with these dramatically scaled back heights and yields, some in the NSW State Significant Development team seem determined to maintain the history of painful dithering over Central Barangaroo.
CEO of the Urban Taskforce Tom Forrest spoke with the Daily Telegraph and was scathing of the go slow and saw it emblematic of the ills of the planning system in NSW.
We said get on and just build it back in 2022 – if that had been done, housing would be completed soon. Former Minister Roberts gave in to a NIMBY campaign. He refused to sign it off (remember – this was an INSW proposal). It’s time for all those involved to get on with the job.
5. CPI for June 2024 – housing supply crisis continues to keep inflationary pressures high
The Q2 2024 Consumer Price Index was steady at 1 per cent in the three months through June. Over the last 12 months, CPI rose to 3.8 per cent from 3.6 per cent.
Source ABS, Consumer Price Index, June Quarter 2024
It is one thing to be held accountable for the slowness of the planning system and the lack of housing approvals. That upsets YIMBYs, renters and first home buyers. But now the RBA is saying that the lack of housing supply is pushing up inflation, and this could result in higher interest rates. Now that really will make those responsible for planning unpopular!
How this rising inflation feeds into the next RBA decision on interest rates remains to be seen. The fact that the trimmed mean rate of inflation fell slightly to 3.9%, down from 4.0% in the March quarter, may give the RBA sufficient comfort to hold off on any interest rate hike when it meets on the 6th August.
Nevertheless, according to the RBA, housing (rents, construction costs and sale prices) represented a persistent problem feeding into the inflationary pressures across the economy. Annually, rents were up 7.2% and new dwelling prices were up 5.1% over the last 12 months. Rents in Sydney were up 8.1% in the 12 months to June 2024.
A word on APRA
Another factor making life tough for new home buyers is the flagrant conservativism of Australian Prudential Regulation Authority (APRA) and this widely panned insistence on maintaining the euphemistically titled "prudential capital buffer" of 3% when assessing the new home buyer's capacity to pay off a loan.
Does anyone outside of the APRA really think interest rates will go up by 3% any time soon?
This "prudential buffer" is holding back home buyers.
6. The AMA’s Dr NIMBYs (a close relative of Captain NIMBY) protests against development at St Leonards – apparently … it blocks their office views!
The Australian Medical Association (famous for vigorously opposing the introduction of Medicare back in 1984) is now trying to block a Build to Rent Development that will deliver 272 units in a well located area.
Some of these rental properties could be a great stepping stone for those in the medical profession.
But that’s of no interest to those hard-working AMA staff slaving away at their desks on behalf of the doctor’s guild!!!
The AMA appears to be wringing its hands at the prospect of more housing, claiming the development would have “extensive visual, overshadowing and amenity impacts.”
The proposed development – on the Pacific Highway and walking distance to St Leonard's and Crows Nest stations
Hopefully DPHI, who is assessing the BTR development, is unmoved by the bleatings of the AMA.
*Please note the below link may be paywall protected
7. Planning systems entrench power, wealth and poor social outcomes
It’s well worth reading is the contribution of the lead organiser of YIMBY Melbourne Jonathon O’Brien who opens the case against the nature of existing planning systems as doing more harm than good, anti-social, exclusionary and needing reform.
Pretty powerful stuff this, and well supported by evidence that the real focus of the planning system is to micromanage and control where poorer Australians are allowed and able to live.
The basket weavers at Balmain would be choking on their low-carb, low-GI, superfood-rich granola while reading this article!
*Please note the below link may be paywall protected
8. Changing of the guard Part 1 – new Federal Minister for Housing and Homelessness
The Albanese Government’s first reshuffles has brought with it a new Minister for Housing and Homelessness, the Hon Clare O’Neil MP. Ms O’Neil is the member for the Victorian Federal seat of Hotham. Having a Minister for one of the two biggest states which needs to do much of the heavy lifting when it comes to housing supply.
Minister O’Neil was previously the Minister for Home Affairs and Cybersecurity.
The Minister has a strong voice in the National Cabinet room and this reshuffle gives the housing supply commitments of the Albanese Government a real chance of success.
New Federal Minister for Housing, the Hon Clare O’Neil MP
What is needed is a Federal Minister to bring greater balance to the task at hand, stop focussing so exclusively on social housing (a drop in the ocean when it comes to housing supply) and a resolve to work with and support the private sector which will need to deliver around 95% of the 1.2 million new homes required under the National Housing Accord. The focus on social housing, whilst important, is distracting from the bigger issues at play here.
Urban Taskforce looks forward to engaging with the new Minister.
9. Changing of the Guard Part 2 – new CEO for Housing Australia
Accompanying the appointment of a new Federal Housing Minister was the appointment of Scott Langford as the CEO of Housing Australia.
Scott Langford takes on this role at a critical time, in the midst of a national housing supply crisis.
Scott built a sophisticated model of affordable housing property management and development in conjunction with public and private sector partners during his time as CEO of St George Community Housing over the past decade.
Scott Langford – new Housing Australia CEO
Under Scott’s leadership, St George Community Housing became the first CHP to join the Urban Taskforce. This should prove useful when it comes to Housing Australia taking the next step in pivoting from securing the funding and procedural footing of the Housing Australia Future Fund (the HAFF) to the delivery of housing supply.
Urban Taskforce also would like to thank the work of former Housing Australia CEO Nathan dal Bon, who proved a strong advocate for more housing within the oft byzantine layers of Federal bureaucracy. He departs HA having left a strong platform for Scott Langford to build upon.
10. Penrith Council’s tax of housing and jobs – the straw that breaks the camel’s back
“Eye watering” and “the straw that may break the camel’s back” – that’s how the Daily Telegraph has described Penrith City Council’s decision to lump an unprecedented local infrastructure tax of 5.6% of any Aerotropolis projects worth more than $200,000.
Areas classified as “Aerotropolis development levy land”, including the Agribusiness Precinct, Badgerys Creek Precinct and Northern Gateway Precinct.
The mindset of Governments and public servants who still think they can tax their way out of a supply crisis needs to be changed quickly, or investors will leave, and it will be years before they return. It’s already happening.
These taxes are part of the problem when it comes to housing and jobs.
*Please note, the below link may be paywall protected
Fees, taxes and charges – breaking the camel’s back…
11. Good news: Next stage of Mamre Road gets green light
In better news, the Premier of NSW, Chris Minns, announced that the next stage of the upgrade of Mamre Road at Kemps Creek will commence in September - not a moment too soon with the Western Sydney airport due to open in September.
After continual pressure from Urban Taskforce on upgrading critical roads like Mamre Road in readiness for the new airport, both the Federal and NSW Governments included funding for the upgrades in their most recent budgets.
This is the type of investment we need to see in Western Sydney to capitalise on jobs and housing that can be generated from a once in a century project like the Nancy Bird Walton Airport
12. Spotlight on excellence – Medium Density Development – Dasco’s Azure
Azure at Point Frederick on the Central Coast is a prestigious waterfront development completed in December 2023.
The 45 penthouse-style apartments offer unparalleled elegance set in idyllic surrounds, integrating with solar panels, water conservation systems, smart home technology and electric vehicle chargers.
Congratulation again to Dasco Australia for this stunning development on Brisbane Waters. A worthy winner of this years Medium Density Development Award.
Dasco celebrates their win.
L-R Nina Mouawad, Christie Nicolas, Nathan Nicolas, Daniel Nicolas OAM, Sasha Wardan, Serafina Badaoui, Darko Hizar.
13. Council Watch
1. Kiama Council’s half-baked Growth and Housing Strategy needs a rewrite
Land ignored by Kiama Council
Years in the making, Kiama Council has endorsed and now placed on exhibition its Growth and Housing Strategy.
Inexplicably, Springside Hill, to the west of the town, has not been included in the draft Strategy. This is despite significant work going into a planning proposal, ongoing dialogue with Council and the inclusion of social and affordable housing, key workers, local buyers and even first homeowners as part of the plan.
This appears to have been rejected out of hand. Ironically, the draft Strategy calls for more work to be done to determine how to deliver social and affordable housing!
As evidence in the UDP dashboards, Kiama Council’s recent performance in terms of approvals, completions, along with growth scenario, is pitiful.
Kiama Council looks to be going down a Woollahra Council route in not even trying to reach the housing targets expected of them. Ignoring legitimate proposals in West Kiama is nonsensical.
2. First round of L&E Court Action over the report into Liverpool City Council
It appears Liverpool City Council won the day at last Friday’s court hearing seeking to prevent the NSW Government from seeking to suspend Council.
The Court granted a series of injunctions in favour of Liverpool Council:
- The Government’s proposed commissioner to oversee an inquiry into Council, Mr Ross Glover is restrained until the last day of the final hearing from conducting any public inquiry and,
- the Minister is restrained until the last day of the final hearing from suspending council, postponing the election of Council and appointing an administrator.
Win the battle but lose the war? Or egg on the face of the Minister for Local Government, Barrister, and former Mayor of Botany Council, Hon Ron Hoenig? Time will tell.
The hearing has been set to take place on 8 to 9 August 2024.
14. Members in the news
*Please note these articles may be paywall protected
“…Goodman said it expected the mass timber construction to cut the project’s embodied carbon by about 24 per cent, compared to conventional steel structures, while still retaining structural integrity… read more...
To read more, click here: The Urban Developer, 29 July
“…Meriton is building 5850 apartments on the eastern seaboard this year and hopes to complete at least 1500 units by December, principally in Sydney and on Queensland’s Gold Coast … read more...
To read more, click here: The Australian, July 31
“…Deicorp's active role in addressing Sydney's housing challenges is underscored by its recent acquisitions and large-scale projects…read more...
To read more, click here: Urban.com, July 31
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