The report issued by the Independent Pricing and Regulatory Tribunal (IPART) on Blacktown City Council’s request to increase local infrastructure levies indicates that when the $30,000 cap on these levies is removed housing could increase by $50,000 a lot, says the Urban Taskforce.
“IPART has recently released a report reviewing Blacktown City Council’s proposals for infrastructure levies in the Marsden Park area,” says Urban Taskforce CEO, Chris Johnson. “IPART have recommended to the NSW Government that Blacktown’s levies be reduced by 20% as a number of items were excessive or over-priced.”
“The highest proposed levy of $101,538 a lot at Bells Creek will therefore be reduced to around $81,000 which is well above the current government cap of $30,000 a lot. When the state government completely removes the cap on local infrastructure levies in June 2020 it seems that lots in Bells Creek will increase in cost by $50,000.”
“The Urban Taskforce is very concerned that councils will see the elimination of the cap on infrastructure levies as an opportunity to dramatically increase their levies which will increase the cost of housing significantly. While IPART can test proposed levies put forward by councils it can only ensure they are for essential works, are reasonable and are apportioned fairly. Their role does not include monitoring impacts of these levies on the cost of housing to consumers.”
“The NSW government must give IPART a stronger role to take into consideration housing affordability to ensure that average dwelling costs do not escalate dramatically when the cap is removed after three incremental rises. One intervention may need to be in favour of greater density. It is apparent from the Blacktown City Council proposals that the lowest density areas attract the highest costs ($101,538 with 12.5 dwellings to the hectare) while higher density development at 25 dwellings to the hectare only require levies of $60,000 a lot. IPART may also need to encourage earlier intervention on purchasing land.”
“In Blacktown City Council’s list of infrastructure costs of $980,817 almost half ($466,584) is for land. Clearly land purchased when prices are low would save considerable costs that transfer directly to dwelling costs.
“The Urban Taskforce is keen to work with the NSW government in managing how infrastructure is funded. We are very concerned that the government is asking councils to develop an infrastructure list that may be trimmed slightly by IHAP that will have the result of increasing the cost of a dwelling by at least $50,000.”
