Urban Taskforce Chief Executive, Tom Forrest, said today that the new state planning rules for Build to Rent (BTR) showed the way forward for solving the growing Sydney housing supply crisis.
“The announcement today of the publication of Guidelines for Build to Rent (after 7 months of contemplation) represents a modest step towards improving stability in the rental sector, encouraging investment in long term rental accommodation and supporting international fund investment in housing development in Sydney”, Mr Forrest said.
“The number 1 reason why property prices in Sydney are so high is the of a lack of housing supply. The new State Environmental Planning Policy Amendment for Build to Rent housing, gazetted today, combined with modest tax concessions could result in greater investment in housing and more supply.
“The Urban Taskforce has led the industry advocacy for reductions in taxes which deter investment. The real question here is: will this actually produce any Build to Rent apartments? Urban Taskforce is hopeful – but these policy adjustments will make only a marginal change to actual housing supply when we need major reforms.
“The NSW Government has accepted the need for a reduction in taxes and a new planning pathway to remove decision making from Councils and local planning panels through a new State Significant Development (SSD) approval pathway for BTR buildings with a value greater than $100 million.
“These policy changes should be applied to all building construction – residential, commercial or industrial.
“Foreign investment taxation penalties were designed for a pre-COVID-19 era. These must be scrapped – we need investment in jobs and homes.
“Investors prepared to spend more than $100 million on new apartments, new homes, new workplaces, new retail premises or new industrial spaces should be treated equally.
“If you really want to make homes more affordable, policy changes must drive a significant increase in the supply of new homes. That means cutting red tape, reforming the EP&A Act (which now rivals Australian tax law for being the most complicated in the southern hemisphere) and speeding up approvals.
“The new SSD pathway will do that for Build to Rent developments and this is welcome. Urban Taskforce calls on the New South Wales Government to expand this initiative and make it work for housing supply generally.
Mr Forrest explained that ‘build-to-rent’ means that the entire building is owned by one entity. It cannot be split into individual units and sold to buyers through a strata-plan for at least 15 years. The building is designed from the start to the owned and managed for the life of that structure as be available for rental accommodation.
NSW will give a 50 per cent discount on land tax to developers who invest in build-to-rent schemes for the next 20 years.
The Urban Taskforce has been at the forefront of calling for taxation concessions to encourage more investment into Build to Rent – but the problems with housing approvals and housing supply are so great that land prices are sky-rocketing – making greater Sydney unaffordable for new home buyers.
“Housing affordability continues to be a massive issue in NSW. The planning and tax incentives for industry to deliver new Build to Rent developments are a good first step but now is the time for genuine reform to get the economy going”, Mr Forrest.
The Build to Rent Planning policy which commences today includes:
- Specific planning rules that ‘define’ build-to-rent as purpose built housing with more than 50 dwellings that is unable to be subdivided for at least 15 years
- A State Significant planning pathway for large scale build-to-rent projects (over $100 million)
- Greater flexibility in some planning rules to ensure build-to-rent developments can be delivered – with a variety of amenity offerings which are often limited by unnecessary Council prohibitions (the origins of which no-one can recall).