21 April 2010
The decision by the Council of Australian Governments late yesterday to take action on the poor state of Australia’s housing supply has been welcomed by the Urban Taskforce.
The minutes of this month’s Reserve Bank board meeting, released yesterday, confirmed that one reason for the recent interest increases was that “the supply of new housing was not expanding sufficiently, partly because of the land usage policies of local and state governments and also because of the tightness of finance for developers”.
“We welcome this decision by the Prime Minister and state premiers to begin a serious process of microeconomic reform around town planning law,” Mr Gadiel said.
“They’ve hit the nail on the head by acknowledging the need to decrease the time it takes to bring housing to the market and reform government policies that act as barriers to supply.
“This is the highest level of acknowledgement we’ve seen, that planning regulation and levies are hindering the ability of new supply to respond to the demands of the housing market.
“We welcome their suggestion that there should be more consideration of private holdings of large parcels of land to assess the scope for increasing competition and bringing land quickly to market.
“We note that they are seeking ‘national principles for residential development infrastructure charging’.
“Any principles should be directed to cutting the cost of levies – state and council development levies have reached unaffordable heights.”
COAG has tasked a “Housing Supply and Affordability Reform Working Party” to report back on:
- the potential to reform land aggregation, zoning and planning processes (by mid-2010);
- nationally consistent principles for housing development infrastructure charges (by mid-2010);
- the merits of measures to ensure greater consistency across jurisdictions, including local governments planning approval processes, in the application of building regulations (by mid-2010);
- the impacts of titling systems (such as residential strata title arrangements) on the housing supply market (by end-2010);
- the efficiency and effectiveness of housing supply/land release targets (by end-2010);
- whether strategic planning requirements for cities should be extended to other high growth/large population regions across the country (mid-2011);
- extending the land audit work to examine ˜underutilised land and to examine private holdings of large parcels of land (by mid-2010);
- the impact of both Commonwealth and State energy efficiency regulations and environmental acts on house prices (by end-2010); and
- the impact of both supply and demand side affordable housing initiatives (such as rent control arrangements, dwelling mix and distribution of lot sizes) on the housing market (by mid-2011).
“This is a very clear road map for reform,” Mr Gadiel said.
“The timelines set out here are appropriate and should spur on officials to get on with this urgent work.
“With our national shortfall in the supply of housing reaching 200,000 there is no time for delay.”
Mr Gadiel said the new action plan was superior to, and appears to replace, previous COAG reform plans.
Earlier this year the Council of Australian Governments published a report of its Reform Council which found there was an apparent lack of progress on development issues with a poor history of national efforts to harmonise development assessment processes.
The report said that COAG has requested that the Local Government and Planning Ministers Council expedite development assessment reform on several occasions since 2006. … COAG had yet to receive any tangible proposals from the ministerial council on reform proposals to be implemented nationally aimed at greater harmonisation of systems across Australia.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy. The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.
