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14 June 2024
In this Edition...
1. 2800 homes adjacent to Leppington train station refused. Planning Panel votes to keep cow paddocks. What planet are we on?
2. Enhanced role for State's Infrastructure Coordinator General a potential game changer for housing and jobs
3. Sydney makes cover page of international housing report for all the wrong reasons
...and much, much more.
4. ABS data shows depth and severity of housing supply emergency
5. For some crossbench MPs - NSW Government reforms not good enough so let’s try to make it harder to deliver housing
6. Three cost effective ideas for the State Budget next week
7. Quote of the week
8. Urban Taskforce tries to drag traffic modelling into the 21st century
9. Design and Building Practitioners Amendment Regulation
10. Federal Government holds roundtable on modular construction
11. More fee free TAFE places for apprentices and trainees
12. SA Government abolishes stamp duty for first home purchasers of new homes
13. Grattan Institute - Federal Opposition’s opportunism over immigration short sighted
14. Biodiversity in urban areas – NSW Government Architect framework
15. Ai Group research - trades workers in high demand and difficult to find
16. Members in the news
1. 2800 homes adjacent to Leppington train station refused. Planning Panel votes to keep cow paddocks. What planet are we on?
A scene next door to Leppington train station
In the midst of a housing supply crisis, two weeks away from the start of the National Housing Accord, and still the NSW Planning system sits back and rejects a planning proposal to deliver 2,800 new homes right next to a train station.
A new chapter was written this week in the planning debacle that is Leppington station, with the Regional Planning Panel, while endorsing the strategic merits of the proposal, rejected it on grounds of site specific merit.
If you want to see an example of all that is wrong with the NSW planning system, the cow paddocks around Leppington station is a shocking example.
The NSW Planning Minister Paul Scully needs to have a close look at current regulatory framework where planning proposals need to address strategic and site-specific merit.
The Urban Taskforce has been arguing for the simplification of the rezoning review process so that if a proposal has strategic merit, it should be rezoned and site specific merit can be assessed at the DA stage.
2. Enhanced role for State's Infrastructure Coordinator General a potential game changer for housing and jobs
Ever since its election in March 2023, Urban Taskforce has been urging the Minns Government to appraise the role of infrastructure delivery and coordination.
A vacuum had been created where there was no central authoritative voice charting a course for where and when housing and job enabling infrastructure should be delivered.
Infrastructure planned for, paid for and coordinated in terms of where and when it will be delivered is the key that can unlock more housing and more jobs.
A coordinated voice on infrastructure delivery – good for housing, good for jobs
Building on the announcement by the NSW Premier last week of a sub-committee of Cabinet on Infrastructure, the establishment of an Infrastructure Coordinator General places decisions around infrastructure at the heart of Government.
Tom Gellibrand now has the Premier’s imprimatur to knock departmental heads together and work out a coordinated infrastructure plan to underpin housing and jobs. The step-in powers issued to the Coordinator General will ruffle feathers but are critical if limited infrastructure dollars are to achieve best bang for buck.
The three immediate priorities are:
- Infrastructure to support employment priorities: focus on freight logistics and employment-related development in Western Sydney and the Aerotropolis.
- Infrastructure to support housing priorities: supporting housing development as per NSW housing targets and housing reforms, as well as the National Housing Accord.
- Support the Electricity Infrastructure Roadmap: coordination of enabling and complementary infrastructure essential for delivery of energy and transmission while supporting thriving local communities across NSW.
Acting CEO of the Urban Taskforce Stephen Fenn welcoming the NSW Premier’s announcement of the Infrastructure Coordinator General.
While welcomed, more detail is required.
The new Coordinator General of Infrastructure role needs to have real step in and concurrence consent powers across all agencies with the blessing of the sub-committee of Cabinet and importantly Treasury to make infrastructure decisions fast. Otherwise, it could well be a great idea doomed to failure.
Welcomed too was the Government's refocussing of the Western Parkland City Authority as the Bradfield Development Authority. This allows the new BDA under the new CEO Ken Morrison to focus on the work of attracting investment into Bradfield town centre and the Aerotropolis.
All in all, along with the infrastructure funding announcements from the Federal and State Government in recent weeks, some positive signs are emerging around capturing the opportunities of the new Western Sydney airport in time for its opening in 2016.
3. Sydney makes cover page of international housing report for all the wrong reasons
Demographia, a US based international research organisation on Urban Economics, ranked Sydney as the second least affordable city in the world.
Demographia International Housing Affordability Report for 2024 concluded that housing prices in Sydney were "impossibly unaffordable".
Sydney ranked second in the unaffordability stakes, with a medium multiple of 13.8. The median multiple is calculated by a city's median house price divided by its median household income. Anything over 9 is seen as "impossibly unaffordable".
This was up from 13.3 in last year's report. It has ranked as the worst three cities in terms of affordability in 15 of the last 16 Demographia reports.
Source: Demographia
The deterioration over recent times in terms of house price to income ratios was alarming when compared with other nations:
Source: Demographia 2024
Some of the conclusions drawn in the report are startling, including a chapter on the existential threat to the middle-class and deterioration of opportunity for lower income households by the “planning orthodoxy”. The NSW Premier needs to add these considerations to his concerns of a brain drain of the best and brightest amongst our younger generations.
The report concludes by quoting London School of Economics academics on what should be the priority of planning systems:
4. ABS data shows depth and severity of housing supply emergency
Housing supply continues to deteriorate
ABS population date released this week for 2023, when marched up with housing completions date, showed that housing completions fell short by almost 30,000 in a single year.
The ABS data showed that Australian population grew 2.5% to almost 27 million people in 2023.
NSW’s population grew 2.2% - a further 185,500 to 8.43 million people.
Source: ABS: National, State and Territory Population, June 13
Assuming 2.5 people per household – NSW would have needed to deliver74,200 new dwellings in 2023 to meet demand. Yet the ABS showed 46,706 new dwelling completed in 2023 (ABS, Building Activity, April 10) – a gap of almost 30,000.
This is on top of deficits in previous years – NSW continues to fall behind.
While the Premier is asking the private sector to “build, build, build” - the rhetoric is increasingly divorced from the reality. It’s a bit like telling a caged bird to fly!
We are still waiting on the handful of Tier One Priority precincts to be finalised (around the end of the year we are told), and the Tier 2 TOD reforms, along with the low to mid rise reforms, are being weakened in the face of the resistance of councils.
Meanwhile labour supply is tight, construction costs are up 40% since COVID, and interest rates and financing costs remaining stubbornly high.
There is too much risk and uncertainty baked into the system
If the private sector is to “build, build, build”, it needs the full backing of Governments. Urban Taskforce this week pointed to five areas where Governments could further support the private sector:
Declare all new and proposed Sydney metro sites as state led rezoning and assessment (Tier One TODs)
Fast track planning pathways for all private housing developments with a capital investment value of more than $50 million
Recalibrate the Federal $3 billion “New Home Bonus” as an upfront payment to incentivise more housing in well located areas
Waive the payment of the NSW Housing and Productivity Contribution for homes completed in the next 5 years
Support the building industry by NSW Government underwriting a 10-year defect liability insurance scheme
5. For some crossbench MPs - NSW Government reforms not good enough so let’s try to make it harder to deliver housing
It is frustrating to read the views of some cross benchers in NSW Parliament on the NSW Opposition’s Bill which would allow Parliament to block key legislation underpinning the Minns Government’s Housing and Planning reforms.
To say in one breath that the reforms do not go far enough in terms of delivering housing so they may have to support the Opposition’s Bill, which will make housing supply deteriorate even further, is breathtaking.
Unsurprisingly the Greens Party display a lack of understanding of some of the fundamental principles of housing economics, such as failing to recognise the principle of 'filtering' in which more housing in high demand locations can improve affordability elsewhere.
NSW Productivity Commission Papers –mandatory reading for all MPs
We respectively suggest they read the NSW Productivity Commisions Report - Building more homes where people wnat to live, particularly Chapter 3.3 where it unpacks the concept of filtering.
Instead, we get the shallow view that building homes in well located areas simply delivers more expensive homes, ignoring that more supply has a knock-on effect across the city.
But filtering is a strong economic argument against the NIMBY agenda to block housing in their affluent suburbs - which is why they ignore it.
The lingering concern however is the substance of the Opposition’s Bill to allow Parliament to be able to disallow the TOD SEPP. These are complex instruments which have historically been outside the remit of Parliamentarians to block or amend.
Make no mistake, a shift like this will be a Pandora’s box when it comes to housing and sensible planning in NSW.
The risk in the development sector is great enough without the threat of either House of Parliament being able to change complex environmental planning instruments. It sets an awful precedence which should be opposed by any right-thinking MP.
If you want a way to destroy confidence in the private housing sector – this is the way to do it.
The fact that the Liberal Party of NSW is sponsoring such nonsense is mindboggling!
When the Greens agree with the principle of your Bill, you know there are problems!!
6. Three cost effective ideas for the State Budget next week
Acting CEO of Urban Taskforce, Stephen Fenn, had the opportunity to pen an article for the industry publication Sourceable, looking at three focus areas for the Minns Government in the lead up to the NSW Budget next week.
The first issue was the array of fees, taxes and charges that were being piled on new development, which ultimately were paid for by the buyers of new homes – a significant proportion of which were first home buyers.
One charge that could be tweaked was the new Housing and Productivity Contribution – representing a $12,000 and $10,000 impost of detached homes and apartments in Sydney respectively. The Treasurer could shift the incidence of the charge from the construction certificate stage (when cash flow is generally at its tightest) to the occupation certificate stage (where the project is reaching its conclusion and cash flow is more accommodative.
The Government still gets its money at the end of the day – it just supports developers to get projects underway and home built.
The other area which could energise housing supply was faster state led decision making. This requires capacity in the DPHI that will require budgetary enhancement – which is why Urban Taskforce has urged the Government to provide more funding for more planners in the Development Assessment arm of DPHI. This also takes pressure off cash strapped local councils, leaving the State to deal with the high value, high yield, more complex development proposals.
Finally, planning and infrastructure delivery in NSW needs to be more savvy and in alignment with the market. The appointment of the Infrastructure Coordinator General is a good move – but the Government needs to be continually engaged with the private sector to see where the appetite of the market is for housing and jobs – pointing to where and when the Government must focus its infrastructure efforts. Again, Treasury must facilitate this market sensitive approach, not impede it.
7. Quote of the week
With the Liberals introducing a Bill into NSW Parliament to stifle housing supply, Liberal Senator Andrew Bragg, Shadow Assistant Minister for Home Ownership, should have a chat with his colleagues in the NSW Liberal Party....
Senator Andrew Bragg, Sky News, June 12
8. Urban Taskforce tries to drag traffic modelling into the 21st century
Last week, Urban Taskforce Australia responded to Transport for NSW’s Review of the Draft Traffic Assessment Impact Guide with a weighty submission. This new guide replaces the 2002 Guide to Traffic Generation Developments (yes more than 20 years old!!) and marks a welcome update to a document that is responsible for controlling the extent of design aspects for residential and shopping-centre projects.
Urban Taskforce took the opportunity to drag Traffic Assessment into 2024, with the context of contemporary development, modern transport practices and the introduction of TODs and Low and Medium Density Reforms.
Sixteen recommendations argued for flexibility to allow developers to let market demand decide their parking provision, the removal of over-zealous buffering on traffic impact, reasonable footpath widths, reducing the burden of development application and that the draft guide shift its fundamental perspective for better sollutions to the housing supply and affordability crisis.
One recommendation worth quoting is number thirteen - ‘A guide is never just a guide’:
The feedback to the Draft Guide to Transport Impact Assessment is now under review and Urban Taskforce expects a response in the following months.
9. Design and Building Practitioners Amendment Regulation
After months of negotiation, the Urban Taskforce was pleased to see the publication of the Design and Building Practitioners Amendment (Miscellaneous) Regulation 2024 (NSW).
Urban Taskforce was concerned over the potential inclusion of hotels within the expanded powers of the NSW Building Commissioner.
These subcategories of Class 3 are single ownership buildings, and a strong case was made that the provisions of the RAB and DBP Acts need not apply and in fact could jeopardise the feasibility of a range of Class 3 projects.
Single ownership buildings held by institutional and other private entities like hotels do not create circumstances where individual consumers are impacted.
It is pleasing to see the NSW Building Commission take on board some of our concerns and make these amendments to the Regulation.
It demonstrates a willingness of the Commission and the Minister for Building, Anoulack Chanthivong MP to listen to argument and ensure regulation is not implemented for regulation’s sake.
The Amendment Regulation refines the application of the Design and Building Practitioners Act 2020 and the Design and Building Practitioners Regulation 2021 to ensure that work captured by the DBP scheme is proportionate to the risks associated with that work. The principle of regulation commensurate with risk should be the golden ruile guiding upcoiming reviews of the two Acts.
The Amendment Regulation also extends the existing insurance exemption available for building practitioners.
The Amendment Regulation commences on 1 July 2024, other than the deferral of the class 3 and 9c expansion which commences on publication.
The Regulation also includes:
- An extension of the insurance exemption available to building practitioners for a further 12 months, until 30th June 2025. This means that building practitioners will be exempt from obtaining ‘adequate insurance’ under the DBP Act until 30th June 2025. This extension recognises that there are no appropriate products available for building practitioners to meet their obligations under the DBP Act.
- A 12-month deferral of the application of the DBP Act to repair, alteration and renovation work on Class 3 and 9c buildings until 1st July 2025. This means that remedial work on existing buildings will be exempt from the DBP Act for an additional 12 months. Class 2 buildings with a mixed-use part will continue to be subject to the Act.
We are advised that further information on the above amendments will be published on the Building Commission NSW website in the coming weeks.
10. Federal Government holds roundtable on modular construction
It was pleasing to see the Federal Minister for Industry, Ed Husic, convene a roundtable on modular construction this week.
With 1.2 million new homes needed in the next 5 years – all options need to be on the table.
There is a lot of movement in this space. Urban Taskforce members were briefed last week by the Director of Building Policy at the Building Commission, Angus Abadee, on the regulatory thinking and groundwork currently underway in relation to modular construction.
The Federal Minister wants to see where barriers lie. The big barrier in Sydney is the historic ban on land lease development in the Sydney basin. Sydney needs to deliver more than 260,000 of the 377,000 homes need in NSW under the National Housing Accord.
This obstacle to land lease developments and more modular housing in Sydney needs to be removed.
11. More fee free TAFE places for apprentices and trainees
Another positive in the pre-budget announcements was the announcement by the NSW Minister for Skills, TAFE and Tertiary Education, Steve Whan MP, that next week’s budget would continue to provide fee-free training for all apprentices and trainees in NSW.
Recent reports showed labour supply as an ongoing issue in the development and construction sector. The $16.3 million commitment from the Minns Government is an investment in the skills and trades needed to build homes in the coming years and decades.
12. SA Government abolishes stamp duty for first home purchasers of new homes
The South Australian Government has completely scrapped the payment of stamp duty for all eligible first home buyers who build or buy a new home, regardless of the property’s purchase price.
The stamp duty exemption will be available to all eligible first home buyers who buy a new home, an off-the-plan apartment, a house and land package or vacant land to build a new home.
A positive move by SA – something that should be matched in the NSW Budget next week.
It seems the Queensland LNP Opposition took note, with Opposition Leader David Crisafulli announcing as part of his reply to the Queensland budget that the Liberal National Party would also abolish stamp duty tax for first home buyers purchasing a new home, if elected in October.
13. Grattan Institute - Federal Opposition’s opportunism over immigration short sighted
Opposition Leader Peter Dutton’s poll driven decision to reduce migration in order to reduce demand for housing has been torn to shreds by a Grattan Institute report, which shows that his plan would only have a minor impact on rents and house prices.
Yet longer term the report concludes that migration cuts would stop around 135,00 fewer skilled migrants working in Australia - representing a $34 billion hit to the Federal budget over the lifetimes of those lost skilled workers.
Without meaningful tax reform, immigration remains one lever that the Commonwealth still has to boost productivity.
The long term, big picture view here must be to support the private sector to build more housing to accommodate the skilled migrant workers our economy needs.
Short term politics should never out trump the longer term interests of the nation.
14. Biodiversity in urban areas – NSW Government Architect framework
The NSW Government Architect launched the Biodiversity in Place framework to provide a practical guide to protect, restore and create biodiversity in urban areas.
The framework encourages more ecology rich environments in our urban areas.
Through the introduction of 6 key principles, the framework advocates for more nature positive approaches through diverse understory planting to verges, backyards, balconies, public spaces, rooftops and critical infrastructure such as roads, railways and creek corridors.
The framework will provide industry, community groups and government with a roadmap to design for biodiversity in new and existing developments.
15. Ai Group research – trades workers in high demand and difficult to find
Another survey this week, this time from the Australian Industry Group (Ai Group), which found that almost 8 out of 10 business have found difficulty recruiting and/or training staff to meet the skills required by the business. It makes the interim conclusions of Jobs and Skills Australia, which placed yoga instructors and dog handlers above a range of building industry skills and trades, all the more perplexing.
16. Members in the News
*Please note, the links used below may be paywall protected.
“…Sekisui House Australia’s vision to transform Melrose Park from a former industrial precinct into a vibrant master-planned community has entered the sixth stage with plans lodged for 468 new apartments… read more...
Architecture and Design, June 7
“…Landmark Group’s next set of plans for its Macquarie Park supersite have hit the City of Ryde portals as the developer adds desperately needed stock to the Sydney housing market...read more...
The Urban Developer, June 10
“… Sydney developer Holdmark Property Group’s latest six-tower apartment project is moving ahead after receiving gateway approval...read more…”
The Urban Developer, June 11
“…Holdmark Property Group is filing a state-significant development application for more than 1300 apartments on the banks of the Parramatta River in Sydney’s west…read more…
The Urban Developer, June 14
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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.