23 October 2023

In this Edition... 

1. Navigating Economic Headwinds – Urban Taskforce policy conference
2. NSW is lagging behind Victoria and Queensland when it comes to big picture planning reform
3. NSW Government imposes yet another impost on the feasibility of new apartment housing supply
4. The data doesn’t lie – NSW faces huge challenge to get anywhere near National Housing Accord targets
5. Inner West NIMBYs - we’ll have the light rail, but not the housing
6. University of Sydney survey – Housing the no.1 issue for Australians
7. Metropolitan Rural Areas planning controls – red tape – throw it out!
8. Liberal MP backs housing over NIMBYs - a welcomed development
9. NSW introduces industrial manslaughter bill
10. Commonwealth funding to drive National Housing Targets needs to increase and be upfront
11. Biodiversity Credits Supply Taskforce - an Urban Taskforce morning tea update
12. Boston Globe editorial equate local planning control with lack of housing supply
13. Federal Greens introduce Bill to reduce supply of rental housing even further
14. Other News
15. UTA in the news
16. Members in the news

1. Navigating Economic Headwinds – Urban Taskforce policy conference

Urban Taskforce hosted the annual policy conference - Navigating the Economic Headwinds on Friday featuring a stunning array of speakers traversing the trials and tribulations facing our industry, as well as opportunities for reform.

The NSW Treasurer, Hon Daniel Mookhey MLC, opened the conference with a broad ranging keynote speech that showed a genuine appreciation of the challenges of delivering new housing in NSW. He shared the context of the position of the budget and demonstrated a keen appreciation for the significance of tour industry; for employment, for taxation revenue, and for housing supply.

The big message from the NSW Treasurer at the conference was directed at his Federal counterparts – namely to reconsider the Housing Accord funding incentives so the infrastructure funding needed to deliver the 1.2 million new homes across the nation, is offered upfront, rather at the end of the five years in 2029. Mr Mookhey was direct, asking the rhetorical question: what is the point of providing funding in 2029? We need funding for infrastructure to support housing supply now!

SMH Sydney Editor, Michael Koziol, covered the Treasurer’s keynote speech at the conference calling on earlier assistance from the Commonwealth in a weekend SMH article. To read the article, click the link below:

*Please note the article may be paywall protected

Sydney Morning Herald | NSW seeks changes to Albanese's flagship housing package

The Treasurer heard a clear message from Tom Mackellar of Lend Lease and Princess Ventura of Urbis that time was the enemy of housing – and the extensive delays associated with the NSW Planning system was a major threat to feasibility of new housing supply.

Princess Ventura, Peter Achterstraat and Tom Mackellar

This was backed up with a setting the scene presentation from Sholto Maconochie from Jeffries, Sameer Chopra from CBRE and Barry Kogan from McGrath Nicol. Sholto explained the tough conditions in the Real Estate Investment Trust sector, while Sameer outlined pressures building on housing through the “triple boost” of rising population, higher employment and rising average incomes.

Barry Kogan’s presentation outlined the pain and vulnerability of the development and construction sector – with insolvencies in on areas able to quickly spread to related parts of the industry. The pump priming under COVID had simply deferred many of the problems facing construction.

Finally, the conference assembled four experts in design and architecture:- the NSW Government Architect, Abbie Galvin; PTW’s Simon Parsons; Turner's Karl May; and Mona Chao from Coronation Property.

Karl May commenced proceeding with a detailed breakdown of construction cost components and presented a range of options for reducing the cost of the delivery of apartments through improved design. Mona Chao worked with Karl to ensure that QS rigour was applied to the options discussed which included:

• Structural engineering – reduce the number of transfers
• Car parking – embrace above ground car parking
• Apartment sizes – allow greater flexibility to maximise GSA
• ADG – enable greater flexibility for ADG non compliance

Karl May

Simon Parsons finished where the developers started – that time was the enemy of housing costs – and a plea to streamline the length of the process needed to get housing approved and built.

Abbie Galvin advised that she has been, and will continue, to work towards improving the design review process and a greater appreciation for the fact the ADG are guidelines, not minimum standards.  Abbie emphasised that Design Excellence is an option available to applicants and comes with bonuses, but it is not compulsory.  Nonetheless, Abbie accepted that the DA process requires streamlining and improvement, particularly at the local level. 

The panel session was hosted by Michael Koziol and was both entertaining and cogent.

The conference was an enormous success with excellent feedback from the 250+ attendees.

Our special thanks once again to Meriton for sponsoring the afternoon’s policy conference.

2. NSW is lagging behind Victoria and Queensland when it comes to big picture planning reform

In the Housing Accord Stakes, NSW doesn't want to be the guy on the left...

The National Cabinet is due to meet sometime in November.

At that meeting, the States are expected to present their packages of planning reforms that will place them in a position to deliver on the 1.2 million new dwellings agreed to under the National Housing Accord.

Despite being the most populous State, despite its non-performance over the past 5 years in term of housing completions, despite the fact that its planning system is widely acknowledged to be the most complex, slow and unwieldy in the nation, NSW is still at the starter’s block when it comes to a cohesive action plan to turn around housing supply.

Clearly the Queensland and Victorian Governments have bold and ambitious plans to reform their planning systems.

The focus will increasingly turn to Minister Scully to similarly deliver a game-changing set of policies.

Pressure is mounting on the NSW Government to formulate a bold plan to streamline the NSW planning system and turnaround the downward trends in housing approvals, commencements and completions.

If this does not occur, there is a real risk that money and labour will head north of the Tweed.

NSW needs send a big signal that it is committed to delivering the 376,000 new houses demanded of it by the National Housing Accord, and more importantly, has the suite of genuine planning reforms, developer incentives and a housing enabling infrastructure strategy, to support our sector.

3.  NSW Government imposes yet another impost on the feasibility of new apartment housing supply

With the housing supply crisis deteriorating and a large majority of voters wanting to see action, the last thing one would have expected is yet another cost.

This time it's the Building Legislation Amendment Bill 2023, which contains a provision to increase the Strata Building Bond from 2% to 3% from February 1, 2024.

This 50% increase will impact the feasibility of bring on new housing supply. An up-front cost would mean developers have to come up with an extra $1 million in bond finance for a $100 million development – up from $2 million to $3 million.

Urban Taskforce has raised this matter with the Minister and has called for the raising of the strata bond to be linked to the expansion of the number of providers of decennial (10 year) defect liability insurance (known as DLI). The Minister has advised that he is willing to hear the concerns of industry and is willing to speak about the implementation timeframes.

The Government has wrapped up the increase in the strata bond levy in a theoretical move to support interest in DLI. If a developer signs up for DLI, they are exempt from the strata bond.  The problem is, so far, there is one relatively small DLI player in the field.  One provider can not be considered a mature market and effort to push developers into purchasing an insurance product from an effective monopoly provider should not be progressed.

On top of new water infrastructure charges, on top of the new Housing and Productivity Contribution, on top of the new BASIX standards (deferred by all other States), on top of some subtle tweaks in duties payable quietly announced in the recent budget – the Government is running the risk of killing the goose that will lay the golden eggs in terms of the new housing supply.

A cautionary tale from Aesop….

A CERTAIN MAN had the good fortune to possess a Goose that laid him a Golden Egg every day. But dissatisfied with so slow an income, and thinking to seize the whole treasure at once, he killed the Goose, and cutting her open, found her - just what any other goose would be!

4. The data doesn't lie – NSW faces huge challenge to get anywhere near National Housing Accord targets

ABS quarterly data on housing commencements and completions released last week show NSW languishing, with figures stuck below 50,000.

To put it in context – the National Housing Accord requires NSW to deliver 75,000 completions every year for five years. The State has never reached this figure – only coming close in the 2018-19 financial year.

To mix some Greek mythology metaphors, a Herculean effort is required, and the Achilles heel is the NSW planning system. This is where the NIMBYs and their institutional support knows the State is at its weakest.

Time is running out to strengthen, streamline and simplify the NSW Planning system. The Premier needs to take a package of Planning reforms to National Cabinet next month.

The first test will be the final shape of the infill affordable housing amendments to the Housing SEPP.

As reported over the past few weeks – Victoria and Queensland Governments have shown the way in terms of new housing generating planning reform.

NSW must follow or the Accord will be doomed from the outset.

To read Urban Taskforce's release on the disturbing ABS data, click the link below:

Urban Taskforce | Media Release: ABS Data on NSW Housing Commencements and Completions – the data does not lie and the news is not good

 5. Inner West NIMBYs - we’ll have the light rail, but not the housing 

Urban Taskforce has been forceful in seeking to assure that Government decisions around the allocation of significant sums of public funding on transport infrastructure delivers on the expected benefits that underpinned the original decision.

A case study of where this goes awry is the area around the Taverners Hill light rail stop at Leichhardt.

The reason – the station was intended to serve hundreds of new apartments as part of the Parramatta Road Corridor Urban Transformation Strategy.

The current state of play – a distinct lack of new housing and an ongoing campaign by local NIMBYs to thwart development.

You get the picture (if not the logic...)

The fact that Inner West Council is the responsible planning authority sitting over this just makes matters worse – enough to prompt former Deputy Secretary of DPE Marcus Ray to send a stern letter to Council that they had not met their housing targets and a suggestion, after years of delay, that they should show a sense of urgency.

NIMBYs want the infrastructure and the increase house values that it brings – but will oppose the other side of the ledger – more well-located housing serviced by transport paid for by the NSW taxpayer.

This is why Councils need to push through this self-interested opposition to new housing– or let the State Government do it for them.

To read the SMHs latest story of the scourge of NIMBYism, click the link below:

*Please note the article may be paywall protected

Sydney Morning Herald | It's not nimbyism phantom light rail station site of latest housing war

6. University of Sydney survey – Housing the no.1 issue for Australians

The latest Transport Opinion Survey from the University of Sydney’s Institute of Transport and Logistics Studies saw 51% of respondents (more than 1,000 completed responses) identify housing as the most pressing in the nation – an increase from 42% in March 2023 and up from 15% in 2020.

It outstrips concerns over the economy and employment.

Source: TOPS, September 2023

If the NSW Government needs any assurances that delivering more housing through planning reform meets its policy as well as political objectives – they should be heeding surveys like this.

To interrogate the survey further, click the link below:

Transport Opinion Survey - The University of Sydney Business School

7. Metropolitan Rural Areas planning controls – red tape – throw it out!

Time to stop worshipping this sacred cow

Urban Taskforce CEO Tom Forrest this week called on the State Government to scrap the Metropolitan Rural Areas planning controls from the new Sydney Region Plan – a draft of which is due to be released soon.

The current provisions simply state that urban development is not consistent with "the values" of MRA.

The MRA protects any and all of rural land, rural villages, first nations cultural heritage, land with environmental significance, view corridors and vistas, and "character" of town villages, the tourism and recreation opportunities in the area.

All this is over and above the provisions in all the relevant State Environment Planning Policies (SEPPs) the Local Environment Plans, the Local Strategic Planning Statements and the District Plans.

These areas need to play a role in the growth of Sydney. They can play a significant role both in terms of meaningful housing supply but also significant housing choice (e.g., larger lot sizes, rural-residential, housing for managerial class to support the growth of employment in Western Sydney).

The sacrosanct nature of MRAs is a legacy of the former GCC – the new Region Plan is an opportunity to scrap the old approach to these lands and establish guidelines that allow for the assessment proposals within these areas of Sydney that responds to immediate government priorities, that is serviced by infrastructure, and may unlock adjoining land for housing purposes or expansion to village centres.

To read the Urban Taskforce release calling on the Government to purge the MRA from the next Region Plan, click the link below:

Urban Taskforce | Media Release - Urban Taskforce calls for overhaul of the MRA planning controls

8. Liberal MP backs housing over NIMBYs - a welcomed development

Labor spoke to this voting block (many of whom were voting in their first State election). The Liberals did not.

Liberal MLC Chris Rath, a millennial and the youngest MP in NSW Parliament, is urging his colleagues to look to the emerging generations, rather than cling to the boomer NIMBYs who no doubt comprise a large majority of local Liberal branches in Sydney’s north and east (a problem on the Labor and Green side of politics as well).

During his speech, Rath also backed the abolition of stamp duty and a move to a broad-based land tax.

Pretty impressive words from this up-and-coming Liberal star.

Mr Rath also drew inspiration from Canadian Opposition Leader, Pierre Poilievre to get Canada building houses again, as recently covered by the Urban Taskforce:

One of the reasons the Liberals lost the last State election was a failure to talk to Millennials on the things that mattered to them. Spooked by the Teals, the Liberal Party when quiet on planning reform and a commitment to deliver the housing needed to solve the housing crisis.

Labor on the other hand spoke more to younger voters and spoke generally about delivering more housing in Sydney’s north and east.

It was a message that resonated – and smart Liberals would do well to recalibrate its thinking on housing and make a more concerted political pitch to these “forgotten people”.

To read Mr Rath's speech to Parliament, click the link below:

Parliament NSW | Housing Supply 

9. NSW introduces industrial manslaughter bill

The Minns Government will introduce an industrial manslaughter offence in NSW through legislation to be introduced in 2024.

The new laws mean the most serious work health and safety breaches carry penalties -

In February 2023, the former government, with other states and territories, agreed to amend model work health and safety laws to allow for jurisdictions to introduce industrial manslaughter.

Industrial manslaughter allows a corporation to be held liable for the death of a person caused by that corporation's employees within the scope of their work.

To read the press release from the Minister for Work Health and Safety, Sophie Cotsis MP, click the link below:

Media Release - Industrial manslaughter law to be introduced in NSW

Once the Bill passes both House of Parliament, only the Commonwealth and Tasmania will be without such laws:

10. Commonwealth funding to drive National Housing Targets needs to increase and be upfront

The Commonwealth's New Home Bonus needs to be bigger and paid upfront

Urban Taskforce’s submission to the National Housing and Homeless Plan centred on the key role the Federal Government should play in solving the housing supply crisis – infrastructure.  While the National Housing Accord has been a great example of national leadership – a lot of the leg work has been left to the States.

The Commonwealth needs to play a great, more proactive role in the funding of the infrastructure needed to support new housing.

It needs to be a new home incentive schemes, not a bonus possibly paid at the end of the process.

In our submission, we called on the Commonwealth to recalibrate its New Home Bonus in three ways:

1. Double the funding available (to $6 billion)
2. Provide funding upfront for States doing the right thing by housing supply
3. Tie the funding to the delivery of new housing rather than untied ex gratia payments

To read the Urban Taskforce's submission, click the link below:

Urban Taskforce National Housing and Homelessness Plan Submission

11. Biodiversity Credits Supply Taskforce  - an Urban Taskforce Morning Tea update

12. Boston Globe editorial equates local planning control with lack of housing supply

 To read the Boston Globe editorial, click the link below:

Boston Globe| Why is the state still letting places like Braintree kill the housing we desperately need?

13. Federal Greens introduce Bill to reduce supply of rental housing even further

The Greens continue on their populist pitch of freezing rents with a private member's bill introduced into the House of Reps seeking to legislate a rent freeze.

It won't be supported by Labor or the Coalition – but that is not the point of a stunt.

Rather than attach a copy of the Bill, we thought we just replicate a classic supply and demand curve showing what a rent freeze would do – less supply and ultimately higher prices.

Here a price ceiling of $400 leads to a shrinking of housing supply from 400 to 200.  

Not good news if you want a roof over your head.

A further shrinkage in supply (caused by a capital strike by property owners as a result of the price ceiling) is the last thing you need in a general housing supply crisis.

14. Other News

1.     Planning Minister writes to councils on terraces and 1–2-unit dwellings 

Urban Taskforce notes the comments from the Planning Minister Paul Scully in a release about “not using our land well and it is costing us.”

Medium density has a role to play – but this is not going to solve the growing housing supply crisis. It is a contribution to success, but not a reason to go slow or soft on reform.

The response to the Minister’s letter calling for Councils to back the plan for more infill development in R2 zoned areas will certainly test the appetite for councils for sensible reform. We await the response from Councils.

To read the Minister’s release, click this link:

Media Release - Minns Government identifies significant gap in approval of density

15. UTA in the News

More metro stations = more housing potential

2GB covered CEO Tom Forrest’s evidence to NSW Parliament’s Transport and Infrastructure Committee’s review into Sydney’s Metro West where he called for more station to provide more opportunities for well-located housing supply

 Abolish duplicative Metropolitan Rural Areas

2SM interview CEO Tom Forrest on Urban Taskforce’s call to abolish Metropolitan Rural Areas – branding it a duplicative strategic planning barrier to housing supply 

 WIN News reported on Urban Taskforce's analysis of ABS completions data

Tom also spoke with ABC Illawarra’s Nick Rheinberger on the precarious state of housing supply:

16. Members in the News

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

“...Mr Linz of Rebel Property Group and Mr Litver of Capitel Group created development history in Sydney’s eastern suburb's with the development of the $450m Pacific Bondi complex a few years ago..."  read more...

The Australian, October 13

“...Hyecorp Property Group is back before the Lane Cove Council as it plots to amalgamate apartments in its 13-storey tower in Sydney's north..."  read more...

The Urban Developer, October 16

“...Stockland chief executive Tarun Gupta said the operational result for the quarter reflected the resilience of the company’s portfolio in an uncertain macroeco'nomic environment, and flagged further shifts in how it does business ..." read more...

The Australian, October 16

“...The Sydney-based Greenfields Development Company is led by Tony Perich with brother Ron—they are working to transform their former dairy farm and motor racing precinct into a huge housing project..." r ead more...

The Urban Developer, October 18