22 September 2023

In this Edition... 

1. NSW Budget wrap up - Housing supply critical for NSW budget projections
2. Queensland delays NCC changes for energy efficiency until May 1, 2024 – NSW should follow suit
3. Victoria’s Housing Statement – leading the way
4. Sydney YIMBY/Building Beautifully pitching housing diversity to the younger crowd
5. Build the metros and the housing should come – Councillors push back on Minns Government first foray into transit-oriented development
6. Killing feasibility of Housing Supply - A Willoughby Council specialty
7. War of words - Mosman Council hit back at Minister’s comments over slack North Shore councils
8. Urban Taskforce morning tea – DPE provides update on Housing and Productivity Contribution
9. Immigration critical to productivity
10. PAYCE Foundation sign three-year deal with Sydney Street Choir
11. Economics 101 – housing supply puts downward pressure on prices and rents …
12. Development Excellence Award winner - High Rise Residential – Aland’s The Hoxton
13. Other news
14. UTA in the News
15. Members in the news

1. NSW Budget wrap up - Housing supply critical for NSW budget projections

The budget surplus forecast in the NSW Budget is predicated on strong growth in the property development and construction sector. The budget clearly acknowledges the need for housing supply as well as the economic significance of our industry.

Indeed, much of the optimism baked into the Minns Government’s first budget (including a return to surplus in 2024-25) rests on the economic stimulus of housing supply delivered by the private sector.

Section 4-7 of Budget Statement No.1 shows that more than 41% of the revenue generated by the NSW Government (i.e. excluding Federal grants and the GST) comes from property taxes and transfer duties. Over the next four years, the Government expects stamp duty and land tax to deliver an additional $13.3 billion into the state coffers (compared to the former Government’s February 2023 update).

A tidy sum indeed.

If the property sector is struggling, then the NSW budget, and the essential services needed in a modern economy, will falter.  Worse, the housing supply crisis will deepen.

The property sector engine is spluttering and the planning system is the blockage so all eyes are now on the Government to be bold on planning reform.

A suite of planning reforms is needed to engender renewed confidence in the private sector. This will help turn around pitiful approval figures and set out a more certain path to housing completions.

The biggest lick of planning money was the $2.2 billion Housing and Infrastructure Fund, however, 70% of this new funding will be generated from the new Housing and Productivity Contribution – effectively a tax on new homes and a dampener on supply.

Commitments to direct funding away from the Greater Cities Commission and the Western Parkland City Authority towards resources for housing approvals is welcome, and is an early indicator of a concerted effort on the significant resource requirement that will be needed in the assessment field to deliver the 75,000 + houses needed each year for 5 years under the National Housing Accord.

The Minns Government’s commitment to social and affordable housing is welcome in tackling the most acute aspect of the housing supply crisis, but there is still much detail absent from the Government’s strategy to tackle the broader housing supply crisis.

But 96% of the new housing needed will be delivered by the private sector.

All eyes now turn to the Minister for Planning on the planning reforms needed to kickstart housing and underpin what the Government sees as a budget heading back into the black.

To read the media release from the Premier and the Minister for Planning, click the link below:

NSW Government | NSW Budget 2023-24

To read Urban Taskforce’s media release on the budget, click the link below:

Urban Taskforce | Media Release: Budget results dependent on planning reform

Urban Taskforce holds Governments to account on the detail of their announcements. News.com.au ran comments from CEO Tom Forrest on the absence of any incentives for the private sector to deliver the housing upon which the budget surplus was built on:

To read News.com.au coverage of Urban Taskforce’s take on the NSW Budget, click the link below:

News.com.au | Increasing housing infrastructure and removing red tape: Inside NSW’s $2.2bn plan to meet 75,000 housing target

Channel 10’s Lachlan Kennedy also interviewed Tom on the budget – Urban Taskforce’s clear message was there were insufficient incentives in this budget for the private sector to deliver the lion’s share of the housing needed to solve the housing supply crisis.

Tom has a post budget chat with Ten’s Lachlan Kennedy

To watch the Channel 10 news story on the NSW budget when it comes to housing, click the link below:

10 News First | NSW Budget 2023

Later in the week, the NSW Opposition Leader, Mark Speakman’s Address in Reply to the budget honed in on housing as a key theme, describing the Minns Government budget as one of “lost opportunities”.

Mr Speakman highlighted the $14 billion in additional tax revenue received by NSW from property taxes with little in return. He has a point.

Instead, the Coalition offered up a $2 billion fund to incentivise and reward local communities which achieved their housing targets.  Funny how their attitude has changed since losing office in March.  An election loss does wonders for perspective.

It was pleasing to see a commitment from the opposition to remove the disincentives for empty nesters to downsize and free up larger housing stock for families while boost demand for more suitable housing like apartments. This all makes a lot of sense, but Urban Taskforce trusts the Opposition's new found bold plans for housing extends to the planning reforms that are soon to be announced by the Government.

An outbreak of bipartisanship over planning reforms would be very welcome indeed!

2. Queensland delays NCC changes for energy efficiency until May 1, 2024 – NSW should follow suit

Not so national now – only NSW and ACT pressing ahead with NCC energy efficiency standards on 1 October

NSW is the only state (along with the ACT) still proceeding with the new energy efficiency standards on October 1, 2024.

Every other state has listened to and acknowledged the concerns of the property and construction sector.

The last to defer the new rules was the Queensland Government. 

There is still time for the NSW Government to follow the lead of the other States and defer the implementation of the higher standards to apartments.

The Minister for Planning has already pushed back the introduction of standards to detached housing until June 2024 if a contract has been signed before October 1, 2023.

The cumulative impacts of the NSW Government’s charges on housing will impact the production of the 376,000 new dwellings needed under the National Housing Accord.

It doesn’t make sense to push ahead on yet another charge on the construction of new dwellings, particularly those at the most affordable end of the market. 

To read Queensland Minister for Energy’s release acknowledging the need to give the industry more time and deferring the energy efficiency requirements of the new National Construction Code click the link below: 

Queensland Government | Queensland's better building standards

To read Urban Taskforce’s press release calling on the Minns Government to extend the deferral of energy efficiency standards to apartments, click the link below:

Urban Taskforce | Media Release: Queensland’s decision to delay new building standards should be followed by NSW

3. Victoria’s Housing Statement – leading the way

Victorian Premier, Dan Andrews, this week launched his government’s plan to deliver 800,000 homes over the decade 2024-2034.

Big and bold, the upfront messaging of the Plan – direct from the Premier - is strong and positive, recognising the key role to be played by the private sector:

Victoria, with 25% of the national population (and growing) needs to deliver just over 300,000 of the new dwellings promised under the National Housing Accord – about 60,000 each year. So the 800,000 new homes over a decade encompasses the Accord then some more. The plan is definitely not a shrinking violet.

The critical part of the Plan is the first chapter – planning reform.

Importantly it puts the Minister in the decision-making seat when it comes to high value high yield projects – slashing approval timeframes from 12 months to 4.

Titled “Good decisions, made faster”, the plan will:

• Clear the backlog of 1400 DAs sitting with Councils;
• Make the Planning Minister the decision maker and streamline the planning process for medium to high density residential developments that meet the set criteria: construction costs worth at least $50 million in Melbourne or $15 million in regional Victoria, and delivering at least 10 per cent affordable housing – speeding up the delivery of 13,200 new dwellings with application timeframes for these types of projects cut from more than 12 months down to 4;
• Deliver 60,000 new homes in 10 “activity centres”;
• No planning approval for small second homes less than 60 square metres on the same lot;
• Streamlined assessment for a range of “Deemed to Comply” residential standards;
• Identify 10-12,000 apartment in disused commercial buildings in the CBD;
• Quicker water connections;
• Employ 90 new planners in the Department of Transport and Planning;
• Review and rewrite the Planning and Environment Act 1987 to build a modern, fit-for-purpose planning system.

The plan also foreshadows priority precincts for 150,000 new homes close to transport, surplus government land for housing and a $400 million package for local infrastructure.

The package is comprehensive and a big leap forward when it comes to delivering on the expectations of the Housing Accord. There will be devil in the detail – but this is the sort of package needed to deliver the housing needed to address the supply crisis.

To read the media release from the Victorian Premier on his Government’s Housing Statement, click the link below:

Victoria State Government | Media Release: Affordability Partnership to Build 800,000 Victorian Homes

To read Victoria’s Housing Statement, click the link below:

Victorian Government | Victoria’s Housing Statement

To read Urban Taskforce’s release welcoming the bold reforms, click the link below:

Urban Taskforce | Media Release: Victoria’s Housing Statement delivers genuine planning reform needed to meet National Housing Accord targets

SMH’s Max Maddison spoke with Tom Forrest on the need for planning reform in NSW, where Tom noted NSW could take a leaf out of Victoria’s plan for planning reform. Dan Andrews wants to streamline the time it takes to approve major housing projects from 12 months to 4 months – here in NSW we can only dream of such a rate:

As stated earlier (and for a while now), all eyes are now on the NSW Planning Minister, Paul Scully, on the suite of planning reforms anticipated to drive the housing completions needed to achieve the National Housing Accord targets.

4. Sydney YIMBY/Building Beautifully pitching housing diversity to the younger crowd

Sam Austin explaining the need for Housing Diversity message through chip preferences

Building Beautifully is a YouTube based platform that argues for planning and housing reform that will benefit younger people who have been the biggest victims of the housing supply crisis.

Its latest production teams up with Sydney YIMBY (including PIA Young Planner of the Year for NSW Sam Austin) discussing housing diversity, starting out with the analogy of varying personal preference for chips (or crisps as some like to call them).

These grass roots movements are starting to push for real change to the planning system that generally excludes their voice. 10,000 views in 24 hours demonstrates that they are having an impact.

To watch Building Beautifully/Sydney YIMBY’s take on the need and benefits of housing diversity, click the link below:

YouTube | We Need Housing Diversity! (ft. Sydney YIMBY)

5. Build the metros and the housing should come – Mayor pushes back on Minns Government first foray into transit-oriented development

Planning Minister Paul Scully’s announced late last week that an additional 4,500 new homes for Castle Hill’s Showground Station precinct would be delivered. An amendment to The Hills LEP lifts the housing “cap” above the 5,000 imposed in 2017 has elicited a response from the local Mayor.

With the completion of the Northwest Sydney Metro, it was appropriate to lift the housing cap – this is what massive public investment in transport infrastructure needs to deliver amongst other things.

The Mayor’s language reflects the changes and possible cognitive dissonance in some communities on the implications of receiving billions of dollars of taxpayer funded transport infrastructure.

Let’s hope the Mayor did not hold a press conference outside one of the seven new metro stations in his LGA!

Interestingly - a worker at a local retail business interviewed by the Herald was all for more housing – a boost for local small business is a boost for jobs. This needs to remain a focus for the Government as the voices opposed to NIMBYism grow in number and volume.

To read the Minister for Planning’s press release on his plans for additional housing around the Showground Metro station, click the link below:

NSW Government | Media Release: 4,500 new homes to confront the housing crisis

To read the SMH’s coverage of the local reaction, click the link below:

Please note this article may be paywall protected.

SMH | Sydney housing: Housing density doubles in Hills Showground Metro station precinct

The Minns Government push for transit-oriented development is desperately needed to provide well located housing close to jobs and transport. But expect a lot more talk from NIMBYs about “the preservation of local character of our suburbs” as a thinly disguised cover for their opposition to change.

6. Killing feasibility of housing supply - a Willoughby Council specialty

Just when you thought Willoughby council is the worst, this week they've made it even harder.

Willoughby Council has placed on exhibition a proposed amendment to their Affordable Housing Policy which proposes, generally, the removal of the option for monetary contributions for affordable housing and mandates that most contributions are provided as floor space in perpetuity.

This is a Council that is in the process of lifting parts of its affordable housing contribution from 4% to 10% by 2026.

To put it in context, the changes could mean a new development of around 20,000 square metres of net residential floor space - 2,000 square metres of this would need to be given to Council in perpetuity. With no FSR and height bonus, this is a feasibility killer.

Feedback is being sought up until 9 October 2023 through the link below:

Draft Affordable Housing Policy Amendment

Submissions are due by 5pm, Monday 9^th October, and Urban Taskforce will be preparing its own submission.

Willoughby seem to pride themselves on the fact that their current affordable housing tax has contributed 37 affordable homes over the past 25 years – around 1.5 dwellings a year. Appalling given the embarrassment of riches in this part of Sydney (which includes Chatswood, St Leonards and Willoughby) when it comes to amenity and new transport infrastructure.

A cynic might suggest that Council has been quite deliberate in the design of its “affordable housing tax regime”.

Perhaps the real reason behind the unfeasible affordable housing taxes is to ensure little to no affordable housing is delivered? Perhaps this is a means of preserving the character of their communities, despite being the beneficiaries of billions of dollars of tax payer funds into new transport infrastructure?  Perhaps they just don’t want to contribute to housing supply, economic growth, homes for millennials or key workers?  Perhaps they don’t want any new homes at all?

When you want evidence on how inclusionary zoning kills off housing, look no further than Willoughby Council.

How to (not) do affordable housing

7. War of words - Mosman Council hits back at Minister’s comments over slack North Shore council

A scene on a balcony in Mosman

Given the messaging of the Minns Government for a fairer share of housing to be built in the high amenity suburbs of Sydney’s lower north and eastern suburbs, it is clear that these areas need to get a move on.

When you deliver 2 new dwellings in the month of July, compared with the hundreds being delivered in Sydney’s west, the criticism is justified.

A key reason why Mosman Council believes that it should not have higher targets is that they do not have any greenfield sites. This nonsense would justify no new housing within a 20km radius from the Sydney CBD – which is of course what they want ultimately – pushing new housing and new residents to the fringes of Sydney.

Anywhere else but here!

The public statement issued by Council is interesting in the context of the new Sydney Region Plan and potential higher targets for the likes of Mosman:

In other words – no change for Mosman please.

The current housing target for Mosman Council, approved by former Minister Stokes and the former GCC is a mere 300 new homes over five years. 

And they are struggling with that – just 17 completions in the 12 months to March 2023:

Source: Great Sydney UDP Dashboard

Appealing to past decisions by former Minister for Planning and the old GCC in order to defend the status quo perhaps is not the best way forward under a new Government committed to delivering housing close to transport, with good transport infrastructure and high amenity (i.e., LGAs like Mosman).

As Stephen Fenn in the office of the Urban Taskforce mused this week, Mosman Council may well reflect on the old Latin maxim: Tempora mutantur, nos et mutamur in illis (Times are changed, we also are changed with them”) – yes – this actually pre-dates Dylan (just).

Please note the article may be paywall protected.

Daily Telegraph |NSW Government sparks ire in Mosman over push for increased density, housing approval

8. Urban Taskforce morning tea – DPE provides update on Housing and Productivity Contribution

Urban Taskforce core member Allens hosted a well attended morning tea where DPE’s Jonathan Schipp and Kate Speare presented an update on the HPC and fielded an array of questions from over 60 members.

The release of the final Ministerial Order is expected any day and it is hoped feedback from the Urban Taskforce helps some improvements to the draft.

It would appear that some details will still be unresolved by October 1, and DPE advised they were trying to build as much flexibility as possible to case manage the transition and the particulars.

One take out from the presentation was the importance of the oversight committee aspect of the new framework around the HPC, and it is pleasing that it will be led by the DPE but crucially involve industry input with infrastructure spending tightly aligned to new housing supply.

Urban Taskforce will be closely following the infrastructure spend of the Government over the next few years. The Housing and Productivity Contribution Scheme must boost the overall housing enabling infrastructure spend by the NSW Government. It must not be used to plug holes created by cuts to infrastructure agencies.

Another key message for DPE was the importance of ensuring there is no double dipping by local Government, who are to receive $1 billion of HPC funding in local grants over the next decade.

Thanks once again to Allens for hosting an informative and interactive morning tea, as well as DPE for being as frank as they could be given the timing around the new charge.

9. Immigration critical to productivity

 Could not have expressed it better ourselves. To read the full article, click the link below:

Please note this article may be paywall protected.

SMH | Australia housing crisis amplified by policy failure, not immigration

10. PAYCE Foundation sign three-year deal with Sydney Street Choir

The PAYCE Foundation has extended its long-running support of the Sydney Street Choir, signing a $100,000, three-year deal to help the homeless and isolated.

The Sydney Street Choir is a supportive musical group that aims to inspire and empower those who have experienced homelessness or disadvantage in the community.

The Choir, which was formed in 2001, provides members with a unique bridge to social services for those most in need.

The Choir has toured around Australia and has been joined by some of Australia’s best choirs at the annual Corporate Challenge in Martin Place.

11. Economics 101 – housing supply puts downward pressure on prices and rents …

A great contribution from the Chief Data reporter for the Financial Times on the debate over housing supply. By drawing on a number of international examples, the article drives a stake through the heart of the “supply sceptics” who continue to maintain somehow that supply will lead to higher rents and prices:

The article points to recent studies in Finland, Sweden and the US which found that even when new market housing went to higher earners, the chain of moves that this creates frees up homes for lower income earners. A chain reaction is put in place that permeates across markets and income brackets.

But the bottom line is that any new housing ultimately benefits a wide cross spectrum in society:

A US Study found that building 100 new market rate dwellings led to up to 70 people moving out of below median income neighbourhoods, and up to 40 people moving out of the poorest 20% neighbourhoods.

This backs up research undertaken by the Greater London Authority where building relatively high cost new homes in one area can lead to increased availability of lower cost host in another area.

To read the article on how supply, even if it goes to higher incomes initially, leads to reduce housing costs for the broader community, click the link below:

Please note this article may be paywall protected.

Financial Times | Repeat after me: building any new homes reduces housing costs for all

12. Development Excellence Award winner - High Rise Residential – Aland’s The Hoxton

Valued Urban Taskforce member Aland took out this year’s award for best High Rise Residential Development - Metro for The Hoxton.

The Hoxton is a key gateway site in Liverpool -located at the corner of the Hume Highway and Hoxton Park Road.

It sets the urban framework for future surrounding developments.

The building form complements the surrounding streetscape, while the landscaped gardens and outdoor spaces provide a peaceful communal oasis beyond the street edge.

The development includes 303 residential apartments and three commercial suites over three buildings. The 32-storey tower sits at just under 100 metres high, making it one of the tallest buildings in Liverpool CBD, providing a total of 27,000sqm GFA.

The Hoxton’s strategic location near public transport, employment and education hubs, shopping, entertainment, and parks and recreation areas, improves accessibility and convenience for the broader local community. It will also help to reduce car usage, ease traffic congestion, and improve air quality in the local area.

A worthy winner of this year’s award.

Aland’s Andrew Hrsto receives award from the Minister for best high rise residential development

13. Other News

Clause 4.6 reforms

DPE have advised that Clause 4.6 of the Standard Instrument LEP will be simplified to provide more certainty about when and how development standards can be varied.

The existing test that applicants must meet in order to seek to vary development standards will not change. 

Details of all clause 4.6 variation requests will be available on the NSW Planning Portal, providing increased transparency for the community and monitoring by the department.

DPE will be publishing updated guidelines to give councils and applicants more clarity on applying for and assessing variations. They will also provide more guidance on councils’ reporting obligations.

These changes will only apply to development applications lodged after commencement of the new clause.

The reforms will come into effect on 1 November 2023 to give councils and applicants time to prepare.

Find out more about the Clause 4.6 reforms on DPE’s webpage. If you have any further questions, please email variationsreview@planning.nsw.gov.au.

EP&A Regulation Amendment (Estimated Development Cost) 2023

Urban Taskforce is a regular reviewer of the Government Gazette. We noticed an unannounced change to the EP& A Regulation 2021, the Environmental Planning and Assessment Amendment (Estimated Development Cost) 2023.

Enquiries were made to DPE, where we were advised that:

It is a consolidation of the two existing definitions to reduce confusion and to clear up a few things that were previously uncertain (i.e., whether operational costs were actually excluded). The intent is that if a project was costed at $500m CIV before the changes, and the QS did the costing properly, it will still cost $500m under the new EDC definition and will pay the same fees.

We also have further guidance and governance measures for QSs planned to be implemented/released prior to the commencement of these changes in March next year. These changes are intended to make cost estimates more consistent and less prone to manipulation, which responds to ICAC’s Operation Dasha recommendations.

Urban Taskforce encourages members to monitor the implementation of these changes to ensure there are no unintended consequences.

To read the regulation, click the link below:

Environmental Planning and Assessment Amendment (Estimated Development Cost) Regulation 2023

14. UTA in the News

2SM  talks to Urban Taskforce on the NSW budget

Beside print media  and TV, Urban Taskforce was approached by 2SM and on its take on the  NSW Budget. CEO Tom Forrest noted the reliance on the budget on property taxes and that a surplus could not eventualise without a lift in housing supply:

.. And on the introduction of the new BASIX standards

2SM spoke with Tom on Urban Taskforce’s call for the Minns Government to follow the lead of all other Australian states and defer the implementation of the new BASIX standards until June 30, 2024.

15. Members in the News

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

It appears Sydney investors and first homebuyers have been the quickest to snap up apartments in the sought-after Archibald by ALAND development…" read more…

The Daily Telegraph, September 19

“… Sydney developer Sammut Group has announced the appointment of multi-award-winning, iCIRT-rated construction firm Decode to deliver VUE, their mixed-use project in the heart of Cronulla…" read more…

Urban.com.au, September 19

“… Architects DKO would design the project, which would result in two residential blocks with 60 units over four and six storeys…" read more…

Parramatta News, September 21

“…In one of the latest plays, Lendlease’s Australian Prime Property Fund Industrial has just expanded its empire with the purchase of a complex in Sydney’s industrial heartland, paying Arrow Capital about $47.05m for a Smithfield asset…”

“… Big companies including Stockland, Charter Hall and Goodman are also pursuing multi-level warehousing, which big customers are chasing…" read more…”

The Australian, September 20

Finally, we noted that the Premier, Minister for Planning, Minister for Building and the Minister for Housing chose Urban Property Group's development at Bexley as the backdrop of their first day of selling their budget. A vote of confidence in Patrick Elias and his team. To watch the news story click the link below:

10 News First | NSW Budget 2023