Stay connected with the Urban Taskforce! Click right to follow us on Facebook and LinkedIn or visit our website, for the latest news and updates. We look forward to engaging with you!
12 July 2024
In this Edition...
1.Rezoning proposals for first four Tier One Transport Oriented Development precincts released - but will they stack up???
2. Yet the proposed affordable housing tax could kill the feasibility of the entire plan
3. Regional Planning Panels – Macquarie Street: “we have a problem”
...and much, much more.
4. NSW Planning Minister publishes development assessment league tables and establishes performance standards by which councils will be judged
5.Former WestConnex site at Camperdown – only 100 homes on a 1.5 hectare site: a disgraceful under-utilisation of this site and younger Sydneysiders agree
6. Sydney could learn from the great cities of the world when it comes to housing
7.Planning’s own dashboard says the system is crook
8. Watch this space - class action against Victorian stamp duty and land tax foreign surcharges
9. Construction union wage deal to increase project costs by 7%
10. Spotlight on excellence – Coombes Property Group’s One Hurstville Plaza
11. New UK Chancellor of the Exchequer calls out ‘timid’ UK Planning system
12. Development Excellence Awards 2024 - Highlights from the night
13. Council Watch
14. Urban Taskforce in the news
15. Members in the news
1.Rezoning proposals for first four Tier One Transport Oriented Development precincts released - but will they stack up???
The Minister for Planning and Spaces, Paul Scully, this week announced the much anticipated first batch of Tier One Transport Oriented Development – the Accelerated Precincts rezoned and assessed through State Government pathways.
The only good news here is that these plans are a DRAFT and subject to further consultation between now and the 9th of August. Urban Taskforce has made it abundantly clear to government that any affordable housing contribution which is handed over in perpetuity that is above 2% is unaffordable and kills the feasibility of investment in those locations. And it’s not just us saying it. Lord Mayor in the City of Sydney (in perpetuity?) Clover Moore agrees that such contributions (when they are a hand over of the keys forever) should not be more than 2.5%, and has applied this with some success in the City of Sydney (more on this below).
In any case, the Government’s proposals envisage up to 30,000 new homes in the 3 precincts.
The precincts are:
- Kellyville and Bella Vista – 20,700 new homes and 10,000 jobs. Density (Floor Space ratio) of up top 4.9:1 with building heights up to 99.5 metres (30 storeys) – BUT there appears to be some downzoning in the precinct as well
- Hornsby – 5,000 new homes and 3,450 jobs. FSR if up to 8:1 with new building height of up to 144 metres (40 storeys) on the eastern side of Hornsby station
- Macquarie Park – 4,622 new homes and 66,000 jobs, FSR’s up to 5:1 and building height of up to 190 metres – concentrated in one sub precinct.
The state led rezonings proposals for the three precincts is out for public comment until 9 August. Given the proposed rezonings have been carried out in isolation by DPHI, it is critical that industry now provides its input.
SSD pathway for new Tier 1 TOD precincts
Along with specifics on the 3 precincts (given their proximity, Kellyville and Bella Vista precincts have apparently been merged meaning we have only 7 Tier 1 TOD precincts, down from 8) it is accompanied by an Explanation of intended Effects on a range of measure to support the TOD program, including:
- a temporary state significant development (SSD) pathway until November 2027 for residential development applications valued over $60 million. (in an attempt to have proposals in place during the 5 year National Housing Accord.
- height and floor space bonuses and the associated SSD pathway for in-fill affordable housing will be turned off to avoid conflict with planning controls in TOD accelerated precincts. The state rezoning process will seek to maximise housing delivery including setting affordable housing requirements.
- a 5-year exemption from concurrence and referral requirements that are not considered high-risk to speed up assessment timeframes. High-risk concurrence and referrals will be retained to ensure safe and orderly development.
- exemption from some low- and mid-rise housing reforms to reduce duplication and maximise housing potential.
- introducing an alternative design excellence pathway in place of design competitions to streamline the delivery of housing while maintaining high-quality design.
The TOD Accelerated Precincts will be supported by $520 million which will go towards critical road upgrades, active transport links and better open spaces.
The draft EIE is out for public comment until 9 August.
2. Yet the proposed affordable housing tax could kill the feasibility of the entire plan
A central concern identified by the Urban Taskforce is the quantum of affordable housing required to be handed over to CHP, in perpetuity (forever).
The Macquarie Park draft rezoning proposes an affordable housing levy of 10-15% for all residential development, and between 1-3% in perpetuity for BTR development. Ten to fifteen percent!
To meet the financial threshold for this Tier 1 TOD State Significant Development (SSD) assessment planning pathway, the construction value must be greater than $60 million.
A typical two-bedroom, 85 square metre apartment with a single car space, standard fittings and fixtures (ie. nothing fancy), costs well over $600,000 in construction costs alone (let’s call it $600K in construction costs as that makes the maths easy for the purpose of illustration).
This “construction cost” does not include the price of the land, the local infrastructure charges, the State Government’s “Housing and Productivity Contribution” tax, Stamp Duty on the purchase of the land, the State Significant Development Application fees, the volumes of consultant reports associated with any SSD application, and interest payments (typically between 8-11% per annum for development loans) on the cost of the land and construction costs.
So … the smallest project to meet the State Significant Development planning pathway threshold of $60 million is a building with 100 apartments.
10% of 100 = 10 !!!
15% of 100 = 15 !!!
In short, the actual cost of delivering each apartment is more than $1 million (construction costs plus land cost plus fees, taxes and charges, plus interest payments). The sale value of these apartments at Macquarie Park would need to be $1.1 million to meet the bank feasibility requirements for them to lend money for construction.
Therefore … the Macquarie Park tier 1 TOD announcement, effectively adds between $11 million (the sale value of 10 apartments) to $16.5 million (the sale value of 15 apartments) through this proposed new NSW Government Affordable Housing Tax. This will have a massive negative impact on the supply of housing in this precinct.
Further, there are no additional affordable housing incentives (bonus height or FSR) available within any of the accelerated precincts announced on Tuesday.
Hornsby, Bella Vista and Kellyville
The Hornsby precinct proposes an affordable housing tax of between 5-10 % to be handed over in perpetuity.
The Kellyville/Bella Vista precinct will require between 3% to 8% of housing handed over to a Community Housing Provider in perpetuity.
Worse though, while the maximum height of buildings proposed has increased for many sites in the Kellyville and Bella Vista precinct, the proposed FSR (floor space ratio) has been reduced, actually resulting in a lowering of the yield on some sites. A lower yield with a new affordable housing tax applied – that’s not going to work!
The NSW Government keeps falling into the trap of placing a premium on housing supply by adding an affordable housing tax.
This limits supply, placing increased pressure on rents and affordability – the very opposite to the stated intent of the policy. Lucky it’s just a draft!
Ethos Urban’s Matt Thrum has undertaken an initial analysis of the 3 precincts, commenting in relation to the Bella Vista/ Kellyville precinct:
3. Regional Planning Panels – Macquarie Street: “we have a problem”
In the midst of an unprecedented housing supply crisis, there are systemic issues within the NSW planning framework that continue to work against the broader community and political expectations of delivering more housing.
Recently Urban Taskforce highlighted the decision by the Western Sydney Regional Planning Panel to kill off a proposal for 3,000 new dwellings right on Leppington railway station. It appears this is part of a broader problem, with the Daily Telegraph highlight a decision in the Hunter to refuse a housing proposal in Newcastle, despite the backing of Council.
CEO Tom Forrest slammed the decision as yet another example of faceless bureaucrats doing whatever they please when all efforts should be on unclogging the housing supply pipeline:
This is an embarrassment for the NSW Government who need to address this underlying issue with the NSW Planning system. The Minister writing to the Panel politely asking them to “take into account the current housing crisis” is absurd – who’s in charge here?
One relatively minor change would be to remove the need for these regional panels to assess site specific aspects of a rezoning proposal. By their very nature, these regional panels should confine themselves to the strategic. If it passes the strategic merit test – allow it to proceed to a development application stage where site specific matters can be assessed.
We prefer the approach of the NSW Housing Minister Rose Jackson – to quote her challenge to NIMBY councils opposed to housing supply: “get on board or get out of the way!!!”
*Please note, the below link may be paywall protected
4. NSW Planning Minister publishes development assessment league tables and establishes performance standards by which councils will be judged
There’s a lot of detail in the tables, but it needs careful interpretation.
Some good news!
The Minns Government has made-good on its promise to publish league tables on the time taken to approve development applications for new housing.
The first iteration of the table shows Georges River, North Sydney and Sutherland as vying for the wooden spoon.
Importantly the table will measure and publish the performance of state government agencies to which DA’s are referred – quite often these agencies are a major obstacle to speeding up housing. Additionally, Regionally Significant Development Applications referral times to planning panels will be published from August, State Significant Development assessment timeframes for infill affordable housing will be published from September 2024 and TOD accelerated precinct assessment timeframes in 2025.
The inclusion of the performance of panels and the assessment team within DPHI is also a positive move, as we need to ensure all authorities involved in assessment and approvals in NSW are measured and held to account.
An important mater to note on these tables is that you may not be comparing apples with apples – high value, high yield applications generally take longer to assess and this needs to be borne in mind when looking at performance.
The fact that the ten fastest councils in average assessment days are all rural Councils shows that interpretation of the data needs to be undertaken.
Which is why we continue to ask the Government to publish real time data on progress towards the 377,000 new homes required under the National Housing Accord.
Perhaps the most significant aspect of the announcement was the Environment Planning and Assessment (Statement of Expectations) Order 2024 which sets out expectations for councils in relation to their performance of a range of planning and development functions under the Environmental Planning and Assessment Act 1979.
Under the Nelsonesque# "Statement of Expectations" Order, Councils must determine DA’s within an average of 115 days from lodgement, with the timeframe to reduce each subsequent year:
2025-26: 105 days
2026-27: 95 days
From July 1 2027 onwards: 85 days
Critically the order states that:
The order is a welcome development, and will arm the Minister with further options should any council fail to meet these expectations. It is easy to publish something like this in the gazette, another thing to act upon it.
The Battle of Trafalgar by JMW Turner
# Just before the start of the Battle of Trafalgar, Admiral Horatio Nelson instructed his signal officer to semaphore to the rest of the English Fleet “England expects that every man will do his duty.” As an aside, originally Nelson’s intentions were to signal “England confides that every man will do his duty”, but this signal would haver taken a few more flags to signal, and when you are facing the Grande Armee, time is of the essence! Spoiler alert – Nelson won the battle but died.
5. Former WestConnex site at Camperdown – only 100 homes on a 1.5-hectare site: a disgraceful under-utilisation of this site and younger Sydneysiders agree
Why only 100 dwellings here?
Urban Taskforce notes with considerable concern the announcement by the NSW Government that it will deliver a mere 100 dwellings on a strategic site on Parramatta Road in Camperdown.
Our analysis suggested a floor space ratio of approximately 0.67:1 - a lower FSR than that which applies to a typical suburban home.
This sets a dreadful precedence for other WestConnex sites along Parrmatta Road – again in the Inner West and some adjoining the “garden suburb” of Haberfield, renowned for blocking anything near the suburb.
Parramatta Rd is ideally placed to take significant height and density. It is well located – this site being only 2 km from Central station. The new WestConnex has eased traffic congestion. A new metro is being built and the government has undercooked housing supply in the middle of a crisis. WHY?
Sydney YIMBY are also outraged and have launched a petition on the Government’s conservative approach to this inner city site. When the land is owned by the Government, a solid affordable and social housing quota is appropriate (as the land is effectively free).
And you can see their point – the site is within walking distance to Sydney University and Royal Prince Alfred hospital, and a hop skip and a jump to the CBD.
People want to live in suburbs like Camperdown – if it was smart, the Government could deliver a whole lot more market and affordable housing on the site and make a tidy sum along the way if they rezoned and on sold for the private sector to develop.
This week we heard reports of key workers forced to live on the fringes on Sydney. Decisions like the Camperdown dive site show opportunities missed and the ongoing reluctance of the NSW Government to deliver more housing in areas like City of Sydney and Inner West Council.
This decision undermines the Premier’s repeated statements on delivering housing where people want to live, stemming the brain drain of the best and brightest amongst Sydney’s youth, and implementing a fairer share of housing across Sydney.
Oh dear … back to the drawing board!
6. Sydney could learn from the great cities of the world when it comes to housing
CEO Tom Forrest spoke with the Daily Telegraph some of the factors holding Sydney back and leading to exorbitant cost of housing – a rigid planning system which tries to restrict residential development in central business districts:
Yet Sydney persists with mid 20th century conservative planning views on how cities function -meaning that key parts of the City – the Sydney CBD, North Sydney, Chatswood lacked the residential population to secure a 24 hour global city status. It made Sydney “a laughing-stock on the world stage”, leaving the CBD bare.
Which means our CBD’s lack that je ne sais quoi of great cities like New York, London and Paris. Sydney needs living hearts – not bleak and bland “9-5 commercial centres” which struggle to be filled during the day, let alone at night and weekends.
On the positive side, build to rent residential is now permitted in commercial centres, but restrictions common on “build to sell” residential and mixed use apartment buildings in CBD areas remain. It makes no sense!
We say: free up our zoning restrictions and we will have a better chance of matching the vibrancy of the great cities of the world.
*Please note, the below link may be paywall protected
7. Planning’s own dashboard says the system is crook
The DPHI Dashboard that measures planning performance (which will be replaced by the League Tables, has churned out some woeful data in its most recent update:
Source: DPHI
While the above infographic bundles up all development applications, breaking down the housing relevant data in the Planning Portal paints a poor picture of performance shows on most measures the picture is hardly confidence boosting
And on a geographic basis, turnaround times for assessments have deteriorated - for metropolitan developed councils (ie.those not on the fringes). Assessment times increased by 4%, with the FY 2023-24 overall timeframe of 139 days up from 107 days in 2021-22 – a 30% increase on annual performance figures.
While this data can bounce about, the overall result shows a planning system faltering on key performance metrics on the eve of the National Housing Accord.
We are very clearly a very long way off getting 90,000 approvals per year – the amount needed to generate 77,000 new home completions each year and also the NSW target for the National Housing Accord.
Less volume, fewer results and much slower timeframes all point to problems in the housing supply pipeline.
8. Watch this space - class action against Victorian stamp duty and land tax foreign surcharges
With States slugging foreign investment more and more (why? – we need their investment into new housing supply), all eyes will be on the class action launched in Victoria against the Victorian State Government seeking the repayment of up to $500 million in foreign surcharges.
Cash strapped States have increasingly eyed off foreign investment in housing as a means of propping up their fiscal bottom line while pitching a cheap populist line about foreigners taking peoples homes.
NSW will lead the State pack next year by increasing the foreign buyer stamp duty surcharge from 8% to 9% and the land tax surcharge from 4% to 5%.
Memo to the Treasurer and Premier: that works against housing supply.
Short term Treasury myopia overriding our longer-term interests – again!
9. Construction union wage deal to increase housing project costs
According to an article published in the AFR, quantity surveyors Rider Levett Bucknall have calculated the impact of the NSW wages deal of 7% with the CFMEU would lead to a spike in labour costs, and with building costs anticipated to increase by 2.5% - would see projects costs increase by almost 10% over the next year.
These costs will be borne by new home buyers and add to inflationary pressure within the economy.
Industrial disputes, like that between Endeavour Energy and the Electrical Trades Union, are preventing the connection of thousands of completed homes, is also holding back supply. This is a worrying trend.
*The below link may be paywall protected
10. Spotlight on excellence – Coombes Property Group’s One Hurstville Plaza
The first ever premium commercial office space at Hurstville, located within a stone’s throw of the railway station, was the stand out winner of the Urban Taskforce 2024 Mixed Use Development of the Year.
Chief Judge and former NSW Government Architect Chris Johnson commented on the Coombes Property Group's One Hurstville Plaze development:
The St George and Sutherland Shire Leader referred to the significant of the development for Hurstville:
The Coombes Property Group Table at the Urban Taskforce Development Excellence Awards
L-R Troy Uleman (John McAslan + Partners); Pascal Bobillier (CPG); Melissa Collison (Melissa Collison Design); Nellie O’Keeffe (CPG); Dominique Gill (Urban Core); Gary Brightwell (CPG) Dan West and Kieron Walsh (Humphrey’s Hotel)
11. New UK Chancellor of the Exchequer calls out ‘timid’ UK Planning system
The new Starmer Labour Government has ambitious plans for housing in the UK.
In her first major speech this week, the new Chancellor of the Exchequer, Rachel Reeves, promised an overhaul of the UK planning system which she described as “timid”. It is part of the Starmer Government’s aim to deliver 1.5 million new homes over the next five years.
Given this timeframe coincides with the start of the Albanese Government’s 5 year National Housing Accord target of 1.2 million – it looks like we have our own Ashes series to be played out over the next five years between the UK and Australia.
Digital Enhancement, The Urban Taskforce
Of course, with a population triple the size, the Starmer Government’s target is less ambitious than the Australian one.
Nevertheless, UK Councils are to be given targets and the UK Government has not ruled out intervening in the case of local governments either unwilling or unable to deliver the housing required of them.
12. Development Excellence Awards 2024 - Highlights from the night
The Urban Taskforce team has compiled a video highlight package of the awards night, featuring guest speakers, Minister for Planning Paul Scully, Editor of The Daily Telegraph, Ben English as well as all award winners.
13. Council Watch
This week, Councils have gone quiet as their elections approach. But they were all given a bit of a shock when Minister Scully published the planning performance league table. Many will be licking their wounds – while others will be rejoicing in their hopelessness. We will be keeping a very close eye on Council planning and approval performance in the coming months.
14. Urban Taskforce in the news
The Urban Taskforce’s Development Excellence Awards continues to gain media coverage – this week in the St George and Sutherland Leader
St George and Sutherland Leader, July 8
The Mosman Daily ran a story of Falls Estate in Frenchs Forest winning the Urban Taskforce “Innovation Development Awards. Chief Judge Chris Johnson’s words praising the development were picked up by the paper
Mosman Daily, July 11
15. Members in the news
*Please note these articles may be paywall protected
“…leading Australian architecture practice, Scott Carver has rebranded as Studio.SC to embrace a new era of creativity, growth and design excellence… read more read more ...
To read more, click here: Architecture & Design, 8 July
“…Property group Aqualand is planning a unique 40-storey complex in North Sydney that will combine a luxury hotel and build-to-rent apartments with the aim of bringing a touch of New York’s East Village to the area…" read more ...
To read more, click here: The Australian, July 10
“… Immaculately designed by award-winning architects Turner Studio, Infinity Park will comprise 290 luxury apartments across three residential buildings – a 25-storey tower, Marque, along with two five-storey low-rise buildings, Alpha and Omega… " read more…
To read more, click here: Architecture & Design, July 10
“…But our love affair with glass is now giving way to high-performance façades designed for a more sustainable future, points out Architectus Principal Marko Damic, whose analytical approach to design challenges has led to some of our most innovative ‘skins’ on commercial buildings…"read more…
To read more, click here: Architecture & Design, July 11
DISCLAIMER: All representations and information contained in this document are made in good faith. The information may contain material from other sources including media releases, official correspondence and publications. Urban Taskforce Australia Ltd accepts no responsibility for the accuracy of any information contained in this document.