Capital city mayors have the power to make housing more affordable

03 April 2009

Capital city mayors have the power to make housing in the inner suburbs more affordable, according to the Urban Taskforce.

The Urban Taskforces comments were a response to a statement released by the lord mayors of Australias capital cities at their meeting with the Federal Governments Major Cities Unit today.


The Taskforces chief executive, Aaron Gadiel, said that developers have been trying to get more affordable housing into inner suburban areas for years.


There are four simple things councils can do, he said.


Mr Gadiel said the first thing the councils should do is allow more affordable housing to be built on a commercial basis.


Capital cities should not be prohibiting the development of compact, high amenity, pedestrian friendly urban communities, he said.


For example, the City of Sydneys recently released draft affordable housing strategy expressly excludes studio apartments from its definition of affordable housing.


The City of Sydney also restricts the ability of developers to build apartments with three or more bedrooms denying families the opportunity of more affordable living close to the central business district.


There are many home buyers eager to establish themselves in secure homes close to work and services.


There are developers willing to build these homes for them at an affordable price.


Mr Gadiel said the second thing councils should do is make available council-owned land for the development of subsidised housing.


Councils are large land-owners. They have the power to help make a difference by putting their money and their land – where their mouth is.


Mr Gadiel said the third thing councils could do is abandon any plans to impose new or increased levies on development. Mr Gadiel said the City of Sydneys plan for a levy on newly-built homes would unfairly burden owner-occupiers.


The Citys draft affordable housing strategy argues for an extra 8,000 new properties to be built over the next 20 years. Rents will be capped and regulated by the government. Of these, 2,000 properties are to be paid for by a levy on newly-built homes.


Home buyers will end up paying a massive amount in levies to subsidise the Councils rent control scheme Mr Gadiel said.


As much as $900 million may need to be raised by this new tax.


The plan taxes young families struggling to buy a home of their own to subsidise those who are renting.


Mr Gadiel said the fourth thing councils can do is reduce the cost of building new homes. Last year an Australian Building Codes Board study revealed that council planning regulations increase the cost of building homes by up to 14 per cent, adding tens of thousands of dollars to the price of new houses and apartments.


The board, a federal-state government agency, examined the additional requirements imposed by local councils, such as increased ceiling heights, room sizes and noise controls. The consultants found the local government regulations led to construction cost rises from 1.5 to 14 per cent.


Most local council requirements examined, increased costs by between 4 and 6 per cent compared with the cost of complying with the national code. The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.



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