22 July 2024 

In this Edition...

1. Government announces more detail on three more Tier One TODs – but questions remain

2. ABS housing data – NSW commencements falling off a cliff

3. NSW Government responds to independent review of Biodiversity Act 2016

...and much, much more.

4. Regional Housing still a great challenge - AHURI

5. DPHI Gateway Assessment team are heading in the wrong direction

6. Liverpool City Council to be suspended?

7. UK Government promises to be builders, not blockers

8. Dexus and Lendlease lodge initial plans for 300m+ buildings in Sydney CBD

9. Survey – overwhelmingly support for YES in my back yard development

10. More fees as Government adopts section 7.12 maximum charges for Aerotropolis

11. BTR faltering as Canberra in gridlock over tax changes

12. Spotlight on excellence – Industrial Development of the Year – M80 Connect

13. Other News

14. Council Watch

15. Urban Taskforce in the news 

16. Members in the news

1. Government announces more detail on three more Tier One TODs – but questions remain

The Minister for Planning Paul Scully released a further 3 rezoning proposals this week, including proposed heights and FSR’s for Tier One TOD precincts at Crows Nest, Homebush and Bankstown.

The proposals are out for public comment, with submissions closing 16 August 2024.

The devil is in the detail and again the quantum of the affordable housing levies are cause for considerable concern:

Urban Taskforce welcomes the new focus on affordable and social housing.  But the economic feasibility of property development is tough enough with construction costs on an inexorable rise, the CFMEU demanding further massive new wage rises year on year, changes to the National Construction Codes pushing up prices and shortages in land supply driving up land prices. 

Our industry simply can’t sustain the proposed new Affordable Housing Tax, even with the uplift proposed in these new precincts.

Like the precincts release last week (Bella Vista and Kellyville precinct; Crows Nest precinct; and Bankstown precinct), these additional imposts on new housing could kill off the feasibility of any housing proposal.

Other questions remain …

1. If you are in a new TOD precinct but do not intend to go with the uplift proposed or SSD pathway, do you still get hit with the affordable housing levy?
2. If council are doing the assessment (because you don’t meet the SSD threshold), which affordable housing levy applies?
3. In Crows Nest, is the projection of 3,255 new homes over and above the 2036 strategy?
4. Does the affordable housing levy only apply to those sites with uplift or all sites in the precinct?

Urban Taskforce going through the rezoning proposals this week…

The Government first spoke of TOD precincts in the middle of 2023 and announced the TOD reforms late in December 2023. In the middle of a housing supply crisis, we are only getting some of the detail now, 12 months later and with the National Housing Accord now underway.

Surely greater clarity could have gone into the draft reforms when released?

The accelerated precincts, with the state led rezoning and assessment pathways, should be where the lion’s share of the housing comes from over the next 5 years and beyond.

Yet aspects remain underdone.

The mere 3,000 new homes for Crows Nest is underplaying a strong hand to put it mildly, given its location and the new metro station  - all this only minutes from the Sydney CBD.

The Crows Nest accelerated precinct seems to be a narrow isthmus of development along the Pacific Highway. Surely a bit of boldness would not have gone astray, especially when you are proposing to deliver 377,000 new homes over the next five years and are starting from so far behind?

With new housing starts collapsing in NSW over the last 12 months to only 43,136 (see story 2) the Minns Government needs to be bold in exploiting the opportunity for housing supply created by the massive investment in the new Metro rail system.

In fact- it gets worse for some.  There are areas in Crows Nest, St Leonards, Macquarie Park, Kellyville and Bella Vista  that have already been brought to our attention where these TOD announcements have seen no uplift in realisable yield (and in some cases, they have gone backwards) but they appear to have been lumped with the proposed new affordable housing tax of on housing supply.

Urban Taskforce has made urgent representations to DPHI.

This pattern of hesitancy, and the reading down of reforms (the winding back of the announcements made by the Premier), is a massive concern. The crisis requires bold action now.

Will this change when the local Government elections are out of the way?

As the feasibility of residential property development declines, as the big reforms are linked to new taxes, many in the sector are starting to question the bona fides of the NSW Government with respect to planning reform and solving the housing supply crisis.

This is no longer simply an inexperienced rookie Government feeling its way on big issues like housing supply. It is becoming apparent there are forces either within the Government or the public service that are working against housing supply.

Neville Wran, Nick Greiner, Bob Carr and Morris Iemma would have pushed through this noise. That is now the challenge for Chris Minns.

To interrogate the details of the three precincts released this week:

To view the state led rezonings proposals for the three precincts announced last week, with feedback closing on August 9, click on the following links:

2. ABS housing data – NSW commencements falling off a cliff

The ABS released its quarterly data set on housing completions and commencements.

The data does not lie and it paints a poor picture of the last 12 months of building activity.

In NSW, commencements had literally fallen of a cliff.  The quarterly ABS data released today shows that in the 12 months to March 2024 – housing commencements in NSW had collapsed to 43,136 – down from 49,206 commencements in the previous 12 months to March 2023.

To put this into perspective - in the 12 months to March 2019 - NSW achieved 67,208 new dwelling commencements – and that was only 5 years ago showing that with strong will from Government, it is more than possible to achieve these numbers.

While the rhetoric coming out of the Minns Government has been strong, there is mounting evidence that the rhetoric is not being matched by reality on the ground.

A flat line performance when it comes to new housing supply approvals is a symptom of the NSW Planning system’s failure to convert the planning reform agenda of the NSW Premier and Planning Minister into a feasible set of projects.

The national portrait was similarly deflating, perhaps reflecting the old political adage, where goes NSW, so goes the nation.

A failure to lift supply will only lead to higher prices, lengthening rental queues and further pressure on inflation. With a federal election due to be called within 12 months or so, the Albanese Government needs to be able to point to some runs on the board when it comes to new housing supply.  Things are looking grim on this policy front.

A bit of social housing here and there simply won’t do.

3. NSW Government responds to independent review of Biodiversity Act 2016

The NSW Government claims to be committed to “supporting transparent, rigorous offsetting and a functioning biodiversity credit market. This will be needed to support clear government priorities for housing, renewable energy and critical infrastructure”.

The NSW Government proposes to do this by

•  ‘Front loading’ nature and biodiversity considerations into regional planning
•  Improve the bio-certification process
•  Improve biodiversity outcomes from the Biodiversity Offsets Scheme
•  Support a functioning biodiversity credit market
•  Increase efficiency and transparency of the Biodiversity Offsets Scheme
• Better balance the application of the Biodiversity Offsets Scheme with biodiversity risks

Of course, the devil will be in the detail, and Urban Taskforce is seeking a briefing for members from the Department of Climate Change, Energy, the Environment and Water on the impact of these changes (the catchy acronym – DCCEEW).

The Government’s response is more of a plan for a plan, and there’ll be a lot more consultation before detail is finalised.

The real test will be how the Government balances their nature positive objectives with the stated priority of housing supply (see story below as an example)

Urban Taskforce is particularly concerned that any proposed legislative changes underpinning “reforms”, could easily be abominated on the floor of Parliament, with significant impacts for industry.

4. Regional Housing still a great challenge - AHURI

While most of the attention has been on planning reforms impacts Greater Sydney, Central Coast, Newcastle and the Illawarra, AHURI have released a timely report calling on greater Government action to unlock supply in rural and regional housing markets.  

It’s a vicious cycle – a situation with there is insufficient housing to accommodate the workers to build the additional housing!

In the context of the review of the NSW Biodiversity legislation, the particularly needs of rural and regional communities to have access to appropriate land for housing needs to be kept uppermost in mind.

There are a number of rural Mayors already ringing alarm bells over the proposed changes. In the meantime, this AHURI research makes an important contribution to this debate.

5. DPHI Gateway Assessment team are heading in the wrong direction

Despite achieving Council approval in July 2021 for the development which would yield 91 new apartments (up from none) on less than 20% of the site; and 1,882 new jobs (up from 816), the faceless appointees of the “Local Planning Panel” delayed progress to Gateway Review for over two years.

DPHI has sat on its hands and failed to update the long out of date District Plans to deliver a strategic framework for development which reflects the planning imperatives of the Minns Government and the manifestation of the Housing Supply crisis. This is important because the Gateway Assessment team sited inconsistency with the District Plan as a key reason for their rejection.

Worse, DPHI is reading down the District Plan (which itself is highly ambiguous and contradictory) and is taking a manifestly conservative anti-housing approach to its assessment.  The Hills Shire Council has a long history of protecting employment land, but they saw merit in this proposal. 

Put simply – Council is backing more jobs and housing close to them in an area which is serviced by a Metro station. No-one but the DPHI planning assessment team opposes this.

With housing supply struggling so badly, and DPHI increasingly seen as holding supply back, their Gateway Assessment team needs to be brought up to speed with the changing world around them.

Let’s hope the Gateway review sees sense.

6. Liverpool City Council to be suspended?

NSW Government will hold a public inquiry into Liverpool City Council after an interim report  found a number of areas of concern with regard to recruitment and staffing practices, procurement irregularities, allegations of inappropriate record keeping and widespread evidence of a toxic work environment.

The Minister for Local Government, Hon Ron Hoenig MP, has written to the Mayor of Liverpool advising of his intention to suspend the Council and postpone the elections due in September while the inquiry is being conducted. The Council has been given seven days to respond.

7. UK Government promises to be builders, not blockers

After 14 years of Opposition, the Starmer Labour Government has wind in its sails and is pushing ahead with significant planning  reform to ease the housing crisis in the nation.

With the typical pomp and circumstance of any English ceremony#, the opening of UK parliament centres on the King’s speech written by the Government and setting out their priorities. 

Planning reform is a centrepiece of the Starmer Government’s reform path, with the Labour Government planning  to liberalise the planning system with a bill designed to reimpose mandatory housing targets on local authorities. The former Government relaxed those targets last year after pressure from nervous Tory backbenchers, allowing councils to ignore them if they were deemed to “undermine the character of an area” (sound familiar????)

The Starmer government also wants local authorities to work together to identify regional infrastructure needs in an attempt to stop individual authorities blocking plans.

The fortunate thing for the UK is that the national Government hold many aces in their sleeve when it comes to housing and planning. Their progress will be keenly observed in the antipodes.

8. Dexus and Lendlease lodge initial plans for 300m+ buildings in Sydney CBD

News of two proposed commercial towers in the heart of the Sydney CBD created a bit of a buzz in the media this week.

Source: Ethos Urban

With initial plans lodged, the buildings could become two of the nation’s tallest buildings.

Dexus and Lendlease’s proposals will reshape the skyline and is a shot of confidence into the CBD, helping to ensure it maintains its status as the gateway to Australia.

CEO Tom Forrest spoke to The Australia welcoming the proposals as a vote of confidence in the future of the Sydney CBD

And while City of Sydney is out there slaying old conventions – more mixed use and injecting more residential development into the CBD won’t go astray either!

*The below link may be paywall protected

Channel 7 interviewed Tom on the proposals, with Tom showing that these types of developments were critical if the CBD was to retain its status as the jewel in the crown of Australian CBD’s.

Tom spoke of the positive impact these potential developments would bring to a CBD with new metros and light rail but still lacking pizzazz and drive post-COVID:

Tom speaks with 7 News Sydney on what the Sydney CBD needs

Former NSW Government Architect and former CEO of Urban Taskforce, Chris Johnson, spoke with ABC radio on the proposed commercial towers, where Chris reflected on the fact that Urban Taskforce has been pushing for bolder heights and densities in the CBD for decades:

And finally, proving that Sydney is still a small town, Tom was vox popped by the Daily Telegraph’s Matt Benns on the matter of déjà vu.

Keeping on topic, Tom linked the proposed 300m towers on Pitt St and O’Connell St to other development bursts in the CBD – like the 1990s development of Governor Macquarie and Phillip Towers, the Chifley Tower and Aurora Place, along with the Barangaroo and Quay Quarter developments in more recent years. These two new proposed buildings fill in the centre of our city’s north and take advantage of the new Metro station developments.

Tom speaks with Matthews Benns from the Daily Telegraph

9. Survey – overwhelmingly support for YES in my back yard development

Ch 7’s The Nightly published a survey undertaken in June 2024 on attitudes to the property market and related factors.

There is an emerging sense of gloom around matters like rents, inflation, interest rates and the prospects of ever own a home.

The survey detected a significant decline in NIMBYISM, with 54% in favour of more housing in their suburbs, with 25% still undecided. A mere 21% were opposed to such development.

*The below link may be paywall protected.

10. More fees as Government adopts section 7.12 maximum charges for Aerotropolis

Late last week the NSW Government approved maximum  levy rates for Aerotropolis land located in Liverpool and Penrith City Council areas:

Typically, s.7.12 charges have been set at 1% of the cost of development. The former Government increased the maximum to 3%.  But this is over the top.

Slugging developers, which is invariable passed on to purchasers/leases is a poor way to go about things. These local infrastructure charges will be in addition to the Government’s recently introduced Housing and Productivity contribution (housing supply tax).

The Aerotropolis and the new Western Sydney Airport is of state and national significance with positive benefits for economies of NSW and Australia. The cost of supporting infrastructure is most appropriately met by State and Federal budget allocations.

Pushing the full cost of local infrastructure for this new city onto the providers of new jobs and housing in Western Sydney is ludicrous.

Worse, the new levies represent another slug on development and will threaten the feasibility of development.

11. BTR faltering as Canberra in gridlock over tax changes

The housing supply contagion is spreading to BTR

According to Oxford Economics Australia, the construction of BTR projects fell across the nation by 19% over the 2023-24 financial year.

Build to rent commencements fell from 6,543 in FY 2022-23 to 5,290 in FY 2023-24.

What has been seen as a potential saviour of housing supply has caught the general contagion that is the housing supply crisis.

Adding to its woes is the general uncertainty over the proposed changes by the Albanese Government to encourage more foreign investment in BTR projects by halving the 30% withholding tax on MIT’s which are generally the vehicle through which foreign investors invest in BTR.

With the Greens and the Coalition playing populist politics, the uncertainty of whether the legislation underpinning the proposed tax changes will pass Federal Parliament simply adds to the difficulties being experienced.

Oxford Economics notes if these matters, together with interest rates cuts in 2025 occur, BTR could surge again – although NSW is still a small  player in the national market

The below link may be paywall protected.

12. Spotlight on excellence – Industrial Development of the Year – M80 Connect

A clear winner on the night for Industrial Development of the Year was Centuria’s $116 million logistics estate – M80 Connect in Melbourne’s North.

In the words of Chief Judge Chris Johnson:

13. Other News

Draft Bush Fire Prone Land Package on exhibition

DPHI, in partnership with the NSW Rural Fire Service and the NSW Reconstruction Authority, has developed a draft Bush Fire Prone Land Package which includes the draft NSW Bush Fire Policy for Land Use Planning. The draft policy aims to ensure that bush fire risk will be considered upfront in the planning system. This will make sure that bush fire risk is considered in strategic land use planning for larger areas rather than just individual sites.

The draft Bush Fire Prone Land package, including the draft policy, updated local planning direction and planning system circular is now on exhibition for public feedback until Tuesday, 30 July 2024.

14. Council Watch

Canada Bay Council undercooks densities near metro – but what is the Minns government going to do about it?

One of the best serviced areas in Sydney from a transport infrastructure perspective

Canada Bay Council, fresh from rejecting more housing adjoining the Five Dock metro, has now proposed conservative heights and densities as part of the Parramatta Road Corridor Urban Transformation Strategy (PRCUTS) Stage 2.

The modelling shows how conservative the approach is from Canada Bay Council. Whereas Stage 1 contained some ambitious heights and densities (notably before the metro was even locked in), Stage 2 has heights and densities of between 12-24 metres with maximum FSR’s of 3.2:1

Exhibit A : Kings Bay

Source: Canada Bay Council , Attachment 4, p.34

Exhibit B: Burwood/Concord precincts

Source, Canada Bay Council, Attachment 3, p. 34

These are sites either immediately adjoining or within easy walking distance to the Burwood North and Five Dock Metro stations.

It is a complete underbaking of the potential of these sites and another pressing case for the State Government to declare all metro sites Tier One TODS.

The proposal will need to gain gateway approval before going on exhibition later in the year. One to keep an eye on!

To analysis the Council’s complete planning proposal for land at Kings Bay and Burwood/Concord precincts within the Canada Bay LGA in accordance with the Parramatta, click the button below:

Ku-ring-gai- request for interim heritage order over TOD sites

As predicted, Ku-ring-gai Council has written to the Minister for Heritage, Penny Sharpe, requesting she make an interim heritage order for the land of 23 heritage conservation areas subject to the TOD SEPP within the Ku-ring-gai LGA. Interesting was the rationale behind the request – not just built heritage in itself but the layout of streets:

Responding to the blanket TOD precincts has elicited a blanket response from Council in terms of proposed heritage order. It also seems the preservation of old subdivision patterns outweighs the need for housing in these well-located areas.  This is, of course, rubbish!

The motion was passed 9-1. Commendation to Councillor Cedric Spencer for voting against the motion.

Inner West Council - principles for planning in the Inner West

Inner West council is seeking feedback on some baseline principles for planning in the Inner West. No time like the present amidst a housing supply crisis to head off on a vox pop on how planning should proceed in the Inner West LGA.

Some loaded questions in the survey, which closes on 5 August 2024.

15. Urban Taskforce in the news

CEO Tom Forrest spoke with 2SM welcoming the release of league tables for Councils’ planning performance:

On the other hand …

Urban Taskforce has raised serious concerns regarding DPHIs failure to update their own performance dashboard since June 2023.  Bad news should not be buried.

Last updated June 2023

16. Members in the news

*Please note these articles may be paywall protected

“… Prolific Sydney-based developer Deicorp has filed plans for a $300-million apartment precinct for its site in Sydney’s inner south … read more…… 

To read more, click here:                                   The Urban Developer, 15 July

“… Developers Billbergia, the NSW Land and Housing Corporation, Evolve Housing and Plus Architecture delivered the Church St project, which was created to deliver a “mix of critically-needed social, affordable and market housing” near the train station… read more … 

To read more, click here:                                    The Daily Telegraph, 16 July

“… The Dexus scheme is aimed at companies in green finance, energy, infrastructure, development, tech and professional services… 

“…Lendlease...are proposing a 309.2m building with 72 storeys on a block on O’Connell St..read more… 

To read more, click here:                                   The Australian, 17 July

“…Sydney architecture and design practice TURNER was selected as the winner of a design excellence competition to design a new inner-city village featuring an outdoor plaza, public marketplace and village green for Deicorp’s proposed mixed-use development in Sydney’s Five Dock…read more … 

To read more, click here:                                   Architecture and Design, 18 July