13 September 2024 

In this Edition...

1. Productivity Commissioner takes aim at feasibility factors holding back housing supply

2. ETU dispute - massive setback for housing and jobs

3. HAFF delays are inexplicable and causing angst for those who have applied 

...and much, much more.

4. Urban Taskforce - stop the plod on the TODs 
5.Whoever controls City of Sydney council after the weekend– time to put the “zhoozh” back into the CBD
6.  A tale of two cities – Melbourne CBD outstrips Sydney CBD when it comes to housing supply
7. Capacity on North Shore line is an opportunity for more housing
8. Housing Pattern Book design competition closes – off to the ivory tower to pick winners
9. Good to see a Federal Housing Minister talking up home ownership 
10. Quote of the week
11. Council league tables updated – but when will the Greater Sydney housing supply dashboard be refreshed? 
12. IPART releases discussion paper on NSW Biodiversity Credits Market
13. Guide to SSD Affordable Housing Assessments
14. Spotlight on excellence – Deicorp wins Senior Living Development of the Year
15. Other news
16. Council Watch 
17. Members in the news

1. Productivity Commissioner takes aim at feasibility factors holding back housing supply

After the froth and bubble of the local Government elections this weekend, there is a window of opportunity for the Minns Government to put in place the reforms needed to turn NSW’s housing supply around.

As the housing crisis deepens, the property development sector has been increasingly bemused by the Minns Government’s propensity to “kick the can down the road” on serious planning reforms.

But to be fair, realpolitik dictates that political leaders deal with the realities before them and Council elections this weekend are one of them (notwithstanding the Liberal Party HQ’s forgetfulness).

But there is hope, indeed, a desperate need, for some big changes as soon as these Council elections are done.

And what a great time for the NSW Productivity and Equality Commissioner, Peter Achterstraat, to release his hard-hitting Review of housing supply challenges and policy options for New South Wales.

The Report states that using DPHI figures - only 172,900 homes will be produced over the next 5 years - contrasting significantly with the LGA by LGA targets set by the Minns Government which mandate the delivery of 263,400 homes for Greater Sydney.  That's a shortfall of 90,500.

By our reckoning, based on 2.5 people per household (which is typical in Sydney), that means around 226,250 people who want a home, won't be able to get one by the end of the Housing Accord - July 2029 - leading to ongoing upward pressure of rents and housing prices and all the social misery associated with this. 

This is why we say there is a growing crisis!

Critically, the Productivity and Equality Commissioner has actually sat down with the property sector to find out what the barriers really are.  Unlike the inward facing navel gazing we have seen from the TOD policy authors which have failed to grasp the challenges facing feasibility in the sector, Achterstraat has shown the way.

And the biggest barrier he found? Feasibility.

It is refreshing for a Government Report to acknowledge that any sector not reliant on Government subsidies relies on the turning of a profit in order to continue to operate (OMG!). 

The Report’s Executive summary sets the tone of the Report:

Review of housing supply challenges and policy options for NSW, Executive summary, p. 10

Urban Taskforce CEO Tom Forrest spoke with radio station 2SM and welcomed the Report’s focus on feasibility:

The Commissioner is to be applauded in actually grappling with the micro economics of housing supply.

It is not simply a matter of releasing a raft of reforms. For reform to have traction, it needs to be grounded in reality.

The Report outlines 32 ways in which the NSW Government could boost housing supply. The recommendations reflect what Urban Taskforce has been calling for:

1. Remove barriers to increased density and allow more density in feasible locations (particularly Sydney’s east and north);
2. Relax the design related requirements in the Apartment Design Guide that weigh on feasibility, such as car-parking, solar access, and minimum apartment size requirements;
3. Get on with the job of removing the now defunct Greater Sydney Commission’s ill-considered prohibition of housing and mixed-use development on all industrial land and allow for a merit assessment;
4. Expand the TOD program to include other precincts in Sydney’s east and north;
5. Free up construction workforce capacity and avoid crowding out of private sector residential construction;
6. Allow a fast track for developments with an existing DA to add extra floors to boost project feasibility;
7. Streamline the development process, including relaxing onerous DA conditions, reducing unnecessary Building Commission red tape (in fact – the Report calls for a review to evaluate the impact of recent building reforms on development feasibility) and design competition requirements – all of which the Report says adds to costs and reduces supply;
8. Delay the incidence of feasibility killing developer contributions by pushing the payment back to the occupation certificate stage;
9. Attract skilled immigration to the housing sector and growing the construction workforce; and
10. Ensure that the delivery of diverse housing is backed with incentives for the private sector to deliver such housing (like the Government’s infill affordable housing incentives).

The accompanying Centre of International Economics report should be mandatory reading for all planning bureaucrats.

The CIE report assesses the feasibility challenges of a range of housings - here showing the collapse in feasibility for midrise:

The collapse in feasibility for mid rise apartments, CIE (2024), p.3

And the Report shows the mismatch between where feasibility is greatest and where development is occurring.

This is where the CIE report is so invaluable and should be prominent in the Government’s deliberations over the coming months.

It is what happens when you engage serious economic analysis, and combined with discussions with industry, come up with problems and solutions that you simply can only ponder when you remain in an ivory tower.

2. ETU dispute - massive setback for housing and jobs

Last week we advised members that TransGrid have applied for an Intractable Bargaining Declaration, and Fair Work Australia (FWA) had determined that industrial action shall be suspended to allow for the processes to proceed under the terms of the Act (mediation and in time, arbitration by FWA). 

On Monday – the ETU succeeded in overturning FWA two-month suspension of Transgrid workers’ protected industrial action, which the Fair Work Commission had found was threatening the safety of part of the population.

A full bench of the Fair Work Commission ruled that the Deputy President of Fair Work Australia was wrong to suspend the protected action, as he had wrongly taken into account Transgrid workers’ likely non-compliance with a safety commitment – rather than the strict impact of the actual protected industrial action.

Transgrid is seeking unilateral arbitration of the pay dispute, where the ETU is seeking a 20.5% increase over three years. This dispute has a long way to go and businesses, housing supply, the economy and jobs and all being smashed.

We know that this dispute, involving Endeavour, Essential Energy, Ausgrid and Transgrid is another nail in the coffin of residential and commercial development feasibility – and its time both Anthony Albanese and Chris Minns took a stand.

According to the AFR, the dispute is now affecting some of the Government’s own projects, including Snowy Hydro, Western Sydney Airport and other priority projects.

*Please note, the below link may be paywall protected

How long will the NSW and Federal Governments continue to sit back and accept delays to these projects while companies which are not party to the dispute bear the cost?

Last week the CEPU, the Federal counterpart of the ETU, decided to leave the ACTU. This socialist rump of a union applies no limits to its impact on jobs, homes and the economy.

For now, its new homeowners, employers, developers, investors and indeed tax payers who are now paying a rising price for Labor Governments failing to resolve the matter.

3. HAFF delays are inexplicable and causing angst for those who have applied 

Indeed, the tender documents stated that financial close was to be reached by 30 September 2024.  With bids lodged in March 2024, it is impossible to hold the costs that underpinned those bids all the way through to the end of the year – but that is what appears to be happening.

We are halfway through September, and the winning applications are still to be confirmed.  Urban Taskforce anticipated that financial close this will take at least 3 months – so the crisis worsens.

This HAFF funding Round 1 is the most positive thing the Albanese Government has done for housing supply – SO GET ON WITH IT!

4. Urban Taskforce - stop the plod on the TODs 

The SMH Sydney editor Michael Koziol has obviously been perusing the voluminous and carefully considered Urban Taskforce Submissions webpage this week, where he came across our submission to DPHI on the TOD Tier 1 Pathways for Accelerated Precincts.

The TOD program offers great potential, but is yet to hit its strides.

Whilst ever a bureaucracy seriously considers a 15% tax on housing in a transport oriented development precinct, where cost rises have been so great and feasibility has fallen so low, there will be a yawning gap between what the Government wants and what the market can provide (see story 1).

As Peter Achterstraat details so eloquently, this lack of feasibility will produce no new housing (market or affordable) and the crisis will worsen.

Remove the barriers to existing housing around the TOD’s, embrace height and density with vigour, and add all strategically located transport nodes (all metros, Bondi Junction, Edgecliff and Chatswood station, the entire Parramatta Road corridor between Broadway and Homebush).

The Government should focus on nominating the precincts for growth and call for the private sector to make submissions.  Let the private sector tell the government what works – or put someone who understands economics and project feasibility into DPHI!

*Please note, the below link may be paywall protected 

5. Whoever controls City of Sydney council after the weekend – time to put the “zhoozh” back into the CBD

The CBD has lost its Olympian sheen…

Urban Taskforce CEO Tom Forrest laid forth a list of things to do for whoever takes the reins of the City of Sydney Council after the weekend’s local council elections.

Time to put the “zhoozh” back into the CBD we say!

Our long-standing critique of the “city of villages” farce that keeps winning Clover Moore elections at the cost of the Sydney CBD’s international standing got a run last weekend, with Michael Koziol's article on the long-standing Lord Mayor referring to our Keating-esque disdain for the very concept:

6. A tale of two cities – Melbourne CBD outstrips Sydney CBD when it comes to housing supply

A Core Logic report explains why Melbourne has the third lowest median dwelling price, and the differential between Sydney and Melbourne’s median dwelling values (a staggering 52.1% now) is the largest gap between the two cities since 1999.

And a big part of the explanation lies with the simple fact that Melbourne has produced far more housing over the last decade.

Core Logic Research News, 4 September

Another fact that made markets like Perth, Adelaide and Brisbane more expensive than Melbourne was the fact that those three cities had a greater proportion of detached dwellings, but this does not apply to Sydney.

Core Logic Research News, 4 September

Melbourne CBD already outstrips the Sydney CBD in terms of residential population.

Sydney is well placed to take advantage of CBD housing growth due to its poly centric growth pattern. 

Unlike Melbourne, Sydney has high rise and commercial centres throughout the broader city.  Sydney CBD, North Sydney, Crows Nest, Chatswood, Epping, Parramatta, Blacktown, Castle Hill, Penrith, Bankstown, Penrith, Liverpool, Cronulla, Hurstville, Edgecliffe, Bondi Junction, Hornsby, Campbelltown and Kensington (and one day … St Marys!) – all perfectly placed for allowing high density in centres rights across Sydney, all linked by multi modal transport.

All these CDB locations must allow for mixed use zones – seamlessly blending work, home and recreation - more and more. Bring the students back into the CBD areas and breathe life into our city.

But aside from better functioning cities, this Core Logic report adds to a growing library of evidence which connects the dots between housing prices and supply.

Want cheaper housing? Address supply. And permit more apartments and make them higher! The rest of the world knows this.  It’s time Sydney grew up.

7. Capacity on North Shore line is an opportunity for more housing

The popularity of the new Metro line is impacting businesses who have set up shop around the traditional heavy rail stations along the lower North Shore.

But DPHI insists on mandating non-residential minimum percentages in these very locations.  Businesses going broke.  Commercial demand declining or over-serviced – a housing supply crisis, but DPHI clings to a philosophical objection to high rise residential in these locations.

Besides the impact on small to medium businesses and jobs, there is an obvious corollary between the passenger capacity boost of the metro and the freeing up of capacity along the north shore heavy rail line.

Everyone should win out of this investment in the metro. So far, many businesses have not won out and nor have we seen the much-hyped housing supply realised.

8. Housing Pattern Book design competition closes – off to the ivory tower to pick winners

The contrast between the NSW Productivity and Equality Commission's Report and the process of finalising the Housing Pattern Book design could not be starker.

While Peter Achterstraat sat down with practitioners seeking feedback on what was hold back supply and feasibility, the NSW Government Architect’s office is off finalising winners of the pattern book apparently unsullied by less worthy considerations like the impact of housing designs be grounded on commercial reality or financial feasibility.

The NSW Housing Pattern Book design competition has closed with 212 entries received, including 176 from Australia and 36 from Europe, the United Kingdom, Asia, Africa, the United States and South America.

Now the NSW Government Architect’s office is convening a closed shop of architects to pick winners. It would have been nice to have a quantity surveyor, an economist, a builder, an engineer or, dare we say, a representative of the property development industry as part of the jury!

There is a significant schism in the NSW Government.  Is housing supply and affordability important or not?  If it is, what about including someone with a clue on project delivery on the panel?

Instead, the exclusive closed shop jury is now shortlisting up to 15 professional and 6 student competitors to move through to stage 2 design phase.  The jury who will assess the submissions includes: 

• NSW Government Architect Abbie Galvin as Chair
• Architect, Urban Designer and erstwhile Councillor Philip Thalis 
• AIA NSW Emerging Architect 2024 Jennifer McMaster
• Architect and Indigenous Spatial Expert Michael Mossman 
• International Architect Paul Karakusevic, who is based in the UK.

In a never ending process of processes … the shortlisted candidates will be announced in September with design submissions due by Friday 11 October. The jury will then select the winning designs with winners expected to be announced in November.

This veritable flurry of nothing is not going to solve the housing supply crisis.

9. Good to see a Federal Housing Minister talking up home ownership 

Monday night’s Q+A on the ABC covered the housing supply crisis, with the new Federal Housing Minister pleasingly confirming home ownership as an “article of faith”.

Federal Labor’s housing policy since its election in 2022 has largely focussed on social and affordable housing. This has detracted from the broader goal of increasing market housing – which at the end of the day is around 95% of the new stock to be provided.

While important, social and affordable housing is a relatively small part of the problem and a smaller part of the solution to the housing supply crisis

Minister Claire O’Neil spoke of the importance of home ownership and the need to deliver housing in the facing of increasing demand.

Labor is arguing from a position of strength when it talks about the positive of home ownership. The Opposition has to date been able to land punches on Labor with the view (rightfully or wrongfully), that its focus has been too much on social housing and renters.

Fortunately, the Greens were not on the panel so that debate avoided the cheap populist solutions being shopped around by the likes of Max Chandler Mather and focussed on policy in a grown-up discussion.

It was further pleasing to note that in the 6 weeks she has been Federal Housing Minister, Ms O’Neil has realised that her Government has pulled the wronged levers when it came to skilled migration.

Now that the ALP has broken ties with the CFMEU, its time to substantially change this policy.

After all, it’s now very clear that there is a chronic shortage in all the building trades and even Peter Achterstraat joked about the disastrous focus on yoga instructors over construction tradies and professionals this week. 

*Please note, the below link may require signing up to IVIEW

10. Quote of the week

Good on Sydney YIMBY for taking the fight up to the usual anti housing platitudes uttered by a conga line of NIMBY would be councillors. While not fielding any candidates, they have taken up the cudgels for housing for those that are currently missing out. We couldn’t go past this encapsulation of “empty nostalgia” of NIMBY attitudes to housing:

11. Council league tables updated – but when will the Greater Sydney housing supply dashboard be refreshed? 

The NSW Government has released an update on Council performance on DA assessments.

The slowest Councils for DA assessments in Greater Sydney

While important, we note that the NSW Government is yet to publish up to date figures on the bigger picture of housing supply and activity – which was provided through the Greater Sydney UDP dashboard.

The dashboard provided a wealth of data when it came to approvals, completions and commencements.

The dashboard only contains data up to June 2023.

What are they hiding? (well – we know that it is a chronic shortage in housing approvals …but …)

Why has this dashboard, universally welcomed by industry stakeholders, so out of date?

Screenshot, Greater Sydney UDP Dashboard - last updated June 2023

The success or otherwise of the National Housing Accord depends on 1.2 million completions. Approvals are an important measuring stick, but the community needs the bigger picture. Shining a spotlight on performance is the only way to drive improvement or give cause for a clear out of those causing the problem.

Right now, we must rely on the ABS publishing its quarterly commencement and completions data series, and this does not break the data down into regions or LGAs.

This is why the UDP dashboard data needs to be maintained and updated. As the Government keeps saying, what does not get measured does not get done.

12. IPART releases discussion paper on NSW Biodiversity Credits Market

The NSW Government has asked IPART to monitor the performance of, and competition within, the biodiversity credits market for 3 years from 2022-23. This is the second year that IPART is reviewing the market.

13. Guide to SSD Affordable Housing Assessments

DPHI has updated the Guide to Faster SSD Assessments for Affordable Housing to reflect changes to policy and practice.

The guide outlines how the department will work with SSD applicants to speed up the assessment of affordable housing.

14. Spotlight on excellence – Deicorp wins Senior Living Development of the Year

The Antiochian Orthodox Archdiocese’s St Nicholas Seniors Care Centre in Punchbowl was completed in July 2023 after a COVID-19-affected build.

The facility was officially opened by the NSW Premier and is the first Aged Care facility delivered that fully incorporates the recommendations of the Aged Care Royal Commission.

With a combination of spacious, well-designed single and double rooms, all featuring ensuite bathrooms, quality furnishings and modern accessories, residents are able to enjoy accommodation designed for their needs and preferences.

The centre features a range of resident-focused facilities that provide healthy and enjoyable activities to engage and stimulate residents.

Another great project from Fouad Deiri and the Deicorp team!

15. Other news 

1. Biodiversity in Place webinars

DPHI is offering 2 webinars this month exploring the Government Architect NSW Biodiversity in Place Framework. The framework provides a practical guide to bring nature back into our cities, towns and suburbs. 

The webinar series will provide participants with real-life examples of biodiversity in action and how to apply it to your work.

Architects, landscape architects, developers, built environment professionals, government, Aboriginal communities and NSW Aboriginal Land Councils are invited to attend. 

Webinar 1 – Designing with nature

Thursday 12 September 2024, 12:30pm – 1:30pm

Featuring Showground Metro planting trials, Camden Council’s Green and Blue Grid Vision and Melbourne Pollinator Corridor.

Webinar 2 – Nature in the city 

Monday 23 September 2024, 12:00pm – 1:30pm 

Hosted by the Australian Institute of Landscape Architects, this session highlights the role of collaboration in creating biodiverse public spaces.

16. Council Watch

Council election form guide

In the lead up to this weekend’s election, the SMH have discussed some of the LGA’s to watch.

*Please note, the below link may be paywall protected 

It will be interesting to see the outcome of the Inner West election, where Labor just managed a majority in 2021 – but will the Liberals take any spots? – and if so does Labor reach an agreement with them to keep the Greens out on the sidelines?

Similarly there appears to be weakening of the Clover Moore hegemonic rule over the City of Sydney. Will she need to do a deal to keep the mayoralty and if so with whom. Both the Labor and Liberal candidates are pro housing.

Of course the disaster which was the NSW Liberals failure to nominate candidates in 16 council elections may prove disastrous for efforts to form a sensible centre in many of these LGA’. Ones to watch include Northern Beaches, Lane Cove and Camden.

The results in Liverpool, which almost did not have an election after a local government investigation, will be fascinating. They have a popularly elected Mayor – won in convincing fashion by Ned Mannoun in 2021. Will he prevail and if so, what does the Minns Government do with the Council.

And finally the small but important LGA’s of North Sydney, Woollahra, Mosman, Willoughby and Ku-ring-gai. They are already standing up to the housing proposed by the Labor Government. Dominated by Liberals or Teals running as “community independents”  - the final wash up in these LGA’s will have a bearing on the next steps taken by the Minns Government should a newly formed Council refuse to accept their fair share of housing. Planning administrators anyone?

Rest assured, the Urban Taskforce political assessment division will be pouring over these results in the coming weeks.

For those who haven’t pre polled, may your polling booth have a democracy sausage stand!

17. Members in the news

*Please note these articles may be paywall protected

“…Billbergia is one of Sydney’s largest development players. It will add the site to its existing multibillion-dollar pipeline of projects across Sydney’s suburbs, with the move on the CBD site putting it among the top ranks of developers… read more...

To read more, click here:                         The Australian, 8 September

“…Mulpha Australia will finally be able to overhaul an entire shopping centre in Sydney’s north-west, creating a multi-billion-dollar development in its place… ...

To read more, click here:                         The Urban Developer, 9 September 

“…After months of complex negotiations, developer ALAND has agreed to complete the three towers on Old Castle Hill Road… read more... 

To read more, click here:                     The Daily Telegraph, 12 September