25 November 2013
The recent IPART report on benchmark costs for local infrastructure is a welcome move to set agreed rates for a number of infrastructure types. However, the IPART report does not deal with the most important matter of the extent of infrastructure costs that an individual development is expected to contribute, says the Urban Taskforce.
“We support the work of IPART in developing benchmark costs for local roads, open space, drainage and community facilities so that there is an agreed acceptable unit cost for these infrastructure types,” says Urban Taskforce CEO, Chris Johnson. “The more significant issue is how much open space or new road construction should an individual development contribute.”
“There seems to be an implication in the IPART report that developers are an unlimited cash cow to pay for any infrastructure that may be nearby to a new housing development. These infrastructure costs will be added to the sales price of each block of land and to each new house or apartment. Without some reasonable control on the extent of infrastructure (i.e. the length of a new road) then even if the rate is reasonable the costs may make a project unfeasible or push house prices above affordable levels.”
“Clearly all parties need to work together to minimise infrastructure costs that can make new development unaffordable. The Federal Governments initiative to get the Productivity Commission to review how infrastructure is procured in Australia is also a welcome move.”
