25 January 2024

In this Edition... 

1. Victoria's Minister for Planning clears out 60% of housing approval backlogs  - since September!
2. Western Parkland City – nice metro and M12 - shame about the lack of jobs and housing
3. Risk and financing difficulties another threat to housing supply
4. NIMBYs get the jitters with the Minns’ Government planning reforms
5. 2024 - the year of the YIMBY?
6. Commonwealth Productivity Commission – almost half of renters on rent assistance face housing stress
7. IMF calls on the Commonwealth to embark on tax reform
8. Western Parkland City Authority senior executives can’t take a trick – now Albo is taking tax cuts off them…
9. UTA in the news
10. Council Watch 
11. Members in the news

1. Victoria's Minister for Planning clears out 60% of housing approval backlogs  - since September!

Positive news from Victoria this week that the reforms announced by the Victorian Government in the last days of former Premier Dan Andrews – the Housing Statement – are already beginning to bear fruits.

Last year’s Housing Statement noted that too many applications for new housing were simply sitting gathering dust in council planning departments:

Premier Jacinta Allan and Planning Minister Sonya Kilkenny announced on Thursday that the Government’s reforms to clear backlogs had already seen 60 per cent of the 1,400 planning permit applications for townhouses or apartments cleared.

This represents 2,836 approvals.

Meanwhile NSW languishes in an endless summer with Councils AWOL and ABS data showing housing approvals going backwards.

NSW take note! It demonstrates what can be achieved if the political will is there to succeed and push through local government malaise. Why are we waiting for 2 months to get Council feedback on the proposal changes? If they really cared, they'd be on the job now. 

To read the Victorian Premier’s release, click the link below:

Victoria State Government Media Release

2. Western Parkland City – nice metro and M12 - shame about the lack of jobs and housing

Nice media opportunity – but you need to take care of the bread and butter infrastructure as well…

Urban Taskforce led industry concerns over the fact that there would be a paltry number of jobs and new housing when the new Western Sydney Airport opens in 2026.

Premier Minns and a Ministerial entourage headed out to the Western Suburbs this week to spruik the completion of a viaduct stage of the new metro at Luddenham. Set amongst a scene of bare rolling paddocks replete with grazing cows and even a pelican, the backdrop told the story. 

The WPCA's complete failure to secure or deliver the necessary roads or water infrastructure to turn those paddocks into factories, warehouses, research facilities and other commercial developments has significantly delayed the jobs bonanza that was promised for Western Sydney in the areas surrounding the Nancy Bird Walton airport.

But this problem was long in the making. The former government had a fixation with trite media calls based around ribbon cutting ceremonies for fancy projects like the M12 and the metro.  Their woeful neglect of “bread and butter” infrastructure projects like water and road upgrades for the like of Mamre Road, Badgerys Creek Road and Elizabeth Drive is now coming home to roost.

The decision to build the M12 was costly and wrong.  The M12 does not service the new employment areas.  You can’t turn onto or off a motorway anywhere along its route. The heavy vehicles servicing logistics centres and warehouses need to non-motorway roads upgraded.  The M12 will be needed one day (when the demand for the new airport grows), but right now, an expansion of the trunk non - motorway roads must be the priority.

Elizabeth Drive (which runs east/west from the M7 to the Northern Rd); Mamre Rd (which runs south to north from Elizabeth Drive to Erskine Park and the M4); and Badgerys Creek Road (which runs north south from Elizabeth Drive south to the A9) all need upgrading to allow DA approvals for new employment centres along these roads and in the surrounding areas.

Even with the new metro between St Marys and the Western Sydney airport progressing well – the lack of focus on roads and sewer means that there will be little economic activity occurring when the first planes land in 2026.

While the (also incredibly expensive) new metro will have the capacity to carry 7,700 per hour in each direction, that won’t be needed for well over a decade. In the meantime, it has also diverted resources away from more immediate priorities. The metro will be a catalyst for growth, but you need much more than a metro and a motorway to create a city.

The Minns Government has inherited a situation where the “sexy stuff” – new M12 and metro – is progressing well – but unfortunately road upgrades and wastewater infrastructure are years away and that is putting off investors and clients who are instead look to move to Melbourne or Brisbane.

Chris Minns needs to be careful not to repeat the errors of his predecessors. Infrastructure NSW is better placed to co-ordinate roads, transport and water infrastructure investment than the WPCA.  At least the agencies listen to Infrastructure NSW. The Premier needs to be careful to not be hoodwinked into attending meaningless milestone ceremonies with the media when it is obvious to those attending that the infrastructure needed to build a new city is far from present.

CEO of Urban Taskforce, Tom Forrest, was interviewed by all three Sydney commercial TV news stations on the debacle that is unfolding out at Badgerys Creek and its surrounds. To watch coverage on the issue, which reflects that people are starting to realise the jobs and development promised when the airport was first announced back in 2016 will not happen until well after the airport is opened, click the following links:

• 7 News Sydney: Sydney Metro Network reaches new milestone | 7NEWS
• 10 News First One Kilometre Of Viaduct Complete For New Airport Metro | 10 News First - Facebook
• 9 News Sydney New Sydney Metro line taking shape | 9 News Australia - YouTube

It again shone a light on the mismanagement that has occurred under Western Parkland City Authority, with more senior Executives than the Olympic Co-ordination Authority ever had. If the WPCA had been responsible for coordinating the delivery of the venues for the Sydney Olympics, the opening ceremony would have involved little more than the opening of a visitors’ centre!

The Board of the WPCA should be removed (yes – they actually have a Board – even though they now report to the Secretary of DPHI) and the WPCA should be disbanded.

The fact that we will have a new international airport opened without the jobs that were promised speaks to their performance.

Tom explains to Channel 9 what’s missing out at the Aerotropolis

3. Risk and financing difficulties another threat to housing supply

The end of last year saw some progress on the planning policy front.  But this year will be all about implementation and results.

Even if planning reforms are executed well, and the housing enabling infrastructure is coordinated and delivered, the other big risk is developer finance and the growing perception of risk and uncertainty.

Financiers are either increasingly reluctant to fund projects, or are adding premiums to account for heightened risk.

This is a clear and present threat to housing supply – and something any Government ignores at their peril. The HAFF effectively offers the private sector financial support to deliver social and affordable housing through low interest rate loans and gap payments (to cover the gap between rent received through the market and the yield obtained through social or affordable housing).

Given there is a housing supply crisis, and the fact that the vast majority of new homes are delivered through the private sector, why not loans available the Housing Australia for market housing (at the RBA cash rate rather than the market interest rates), and put pressure on the banks to do more to assist housing supply?

To read Tom’s contribution to Sourceable, click the following link:

Planning and Finance – Two Bottlenecks Holding Back Housing Supply – Sourceable

4. NIMBYs get the jitters with the Minns’ Government planning reforms

Geraldine Brooks is a Pulitzer prize winner for works of fiction. Which gives some context to her recent defence in the SMH of the NIMBY right to be left alone and enjoy their bit of paradise they bought for a song back in the 1980’s – which is now worth a small fortune.

Ms Brooks’ article defiantly ignores a raft of economic studies that show increased supply places downward pressure on prices. What would an economics professor know as opposed to the gut feel of an award winning fiction writer?

Peter Tulip, Submission to Senate Community Affairs Committee – The Rental Crisis, p.4.

To read an economist's view of the links between supply and house prices, click the link below:

The Rental Crisis - Submission to the Senate Community Affairs Committe

What Ms Brooks and her NIMBY cohort seem to ignore is that building more apartments in at least parts of Balmain – particularly those areas close to the White Bay redevelopment and new Metro station, will lead to some fairly expensive product – but it is the knock on effects (referred to by the NSW Productivity Commissioner Peter Achterstraat in a report last year) that then leads to cheaper product going on the market in less salubrious suburbs than Balmain.  Supply everywhere results in lower prices down the line.

To read an unresearched but wildly imaginative article defending the right of inner city NIMBY’s to be left alone with their windfall property gains, click the link below:

*Please note this article may be paywall protected. 

SMH | We bought in Balmain when it was affordable. Rezoning won’t turn back the clock

An opinion piece in the Guardian dispelled many of the NIMBY myths about supply and price:

To read a YIMBY refutation of the NIMBY view of housing economics, click the link below:

The Guardian | Building new units is proven to push rents down - but not for the reasons you may think

5. 2024 - the year of the YIMBY?

With the emergence of an overwhelmingly youthful movement saying yes to development in high amenity, well located Sydney suburbs, the ABC’s The Conversation started to unpack a movement that is not as monolithic as their NIMBY counterparts.

The article refers to a seminal work published in the US in 2022 entitled Yes to the city: Millennials and the Fight for the City.  

The millennial influenced YIMBY movement says yes to a wide range of housing - social through to market based housing. Supply is key.

This runs up against a more ideological strand which remains focussed on delivering particular types of housing – social and affordable - in order to maintain a particular socio-economic feel to the inner-city suburbs.

One can probably see this difference fought on the streets of Newtown and Erskineville – and more particular in the local politics of many inner suburban councils.

2024 is shaping up to be a critical year in the fightback on housing supply. Local Government elections add further complexity to efforts to deliver more housing. Will the YIMBYs and pro YIMBY policies prevail? The success or failure of the National Housing Accord greatly rests on this contest.

To read the article, click the link below:

The Conversation | The YIMBY movement is spreading around the world. What does it mean for Australia’s housing crisis?

In the same week, news.com.au ran a piece on the emerging YIMBY movement, pitting them against the NIMBYs who have dominated planning and local politics to date:

The Minns Government (and younger elements of the Opposition) are talking the language of YIMBYism, seeing a pro-housing stance as an effective way to appeal to the Millennials and new voters. There has certainly been a shift in the voices around the debate around planning and housing over the past year or so. Surprising what a housing supply crisis can do to the politics of planning and housing in Sydney.

To read this take on the rising YIMBY movement in NSW, click the link below:

The rise of the YIMBY – fed-up young Aussies declaring war on NIMBYism | news.com.au

6. Commonwealth Productivity Commission – almost half of renters on rent assistance face housing stress

The report is a call to action to the Albanese Government – more private housing will reduce rental stress, particularly for low-income households. And more housing will not occur without planning reform from the States, and greater financial assistance from the Commonwealth for housing enabling infrastructure.

To read the report, click the link below:

Productivity Commission | Housing and homelessness

7. IMF calls on the Commonwealth to embark on tax reform

Another IMF report, another damning indictment on stamp duty.

The Federal Government needs to use the upcoming Federal budget to embark on long overdue tax reform.

Apart from the former NSW Premier, Dominic Perrottet, the States have largely baulked at meaningful tax reform when it comes to their reliance on stamp duty and payroll taxes - two of the worst taxes in existence.

The Commonwealth needs to incentivise and reward States that drop terrible taxes like stamp duty and payroll tax.

Let's move beyond debate around the Stage 3 tax cuts - broader tax reform is desperately needed in Australia. 

To read the latest IMF report, click the link below:

International Monetary Fund | IMF Executive Board Concludes 2023 Article IV Consultation with Australia

8. Western Parkland City Authority senior executives can’t take a trick – now Albo is taking tax cuts off them…

9. UTA in the News

A metro to nowhere?

The media looked to Urban Taskforce to explain why a new airport, a new motorway and a new metro line weren’t being accompanied by the housing and the job creating opportunities promised to the people of Western Sydney.
 

Housing crisis – years to create, years to fix…

2SM noted CEO Tom Forrest’s comments that the NSW Government admission that it won’t get to 75,000 new homes in the first year of the Accord is a result of a broken planning system which will take time to sort out.

What’s the point of the WPCA Board?

Finally the story that won’t go away (for the Western Parkland City Authority at least!), with 2GB’s Ben Fordham noting Urban Taskforce’s call for the Authority and the Board to be abolished…
 

10. Council Watch 

City of Sydney Council

Amidst some positive developments within City of Sydney - Urban Taskforce has previously voiced concerns with the Council’s “Planning Proposal - Sydney LEP 201 – Dwelling Retention” which was considered by Council in early December.

The proposal contravenes Ministerial Direction 6.1, which is concerned with housing choice. City of Sydney’s proposal will restrict housing choice and prevent the development of larger apartments – a lack of which is even noted in Council’s own planning proposal.

Urban Taskforce has written to the Minister and Secretary of DPHI requesting that the Secretary throw out the Planning Proposal on the grounds of its inconsistency with Ministerial Direction 6.1.

Ever vigilant, the Urban Taskforce will be even more closely scrutinising Council decisions in the lead up to the September elections.

It seems most Councils, with the notable exception of Darcy Byrne who has been a one-man regulator for the disastrous Rozelle Interchange, continue to enjoy a very long summer break, as there has been “crickets” from local government world since early December.

One of the problems with planning reform is DPHI insists on seeking their feedback over the holiday period.  Just get on with it.

11. Members in the News

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

“… Lendlease is delivering this project as part of a Voluntary Planning Agreement with the Department of Planning and Environment as part of their conditions of approval for the Figtree Hill development…” read more…

South West Voice, January 18
 

“Housing Australia last year reported the new fund could aid in the development of 16,000 homes in the next two years. But more importantly, according to Traders in Purple director Charles Daoud, it will close the viability gap and help attract capital investors…” read more...

The Urban Developer, 23 January
 

“Construction is under way on Luxcon’s latest residential project, at Port Melbourne in Victoria….” read more…

The Urban Developer, 24 January