While there are many positives in the NSW Government’s affordable housing package there are also a number of concerns and missed opportunities, says the Urban Taskforce.
“Abolishing stamp duty for first home buyers is a good move but covering the loss of revenue through a doubling of the foreign investor surcharge on stamp duty could significantly slow down foreign investment into property and this could actually reduce supply,” says Urban Taskforce CEO, Chris Johnson. “Many large apartment projects rely on a percentage of foreign investment to get sufficient capital to get the project up and running so this impact must be carefully monitored.”
“While there is much rhetoric in the package about increasing housing supply by identifying additional priority precincts and introducing a complying code for terrace houses the reality from developers on the ground is that the Priority Precinct program doesn’t necessarily lead to fast tracking housing approvals. More resources are needed in councils and the Department of Planning and the package alludes to this but more detail is needed.”
“While a code for terrace houses sounds good the reality is that 72% of approvals are currently apartments and it is this building type that needs to be speeded up through the planning system. The package seems to focus on two storey homes and assurances about measures to maintain the local character of communities but to really impact on housing supply and affordability will require greater densities including taller apartment buildings.”
“The allocation of $2.145 billion for state infrastructure to accelerate housing in priority areas is good but there are concerns about removing the cap on contributions by developers as this could add to the cost of housing. The phasing out of the state government’s Local Infrastructure Growth Scheme, which subsidised the cost of local infrastructure, in order to shift the burden of funding local infrastructure entirely on to developers, and ultimately on to home buyers will actually increase the cost of housing.
“The immediate removal of the cap on developer contributions in some areas could negatively impact on housing projects in these areas.”
“The overall package seems to counteract the positives for increasing supply by then adding more costs and constraints on developers. Many councils are also adding extra costs on developers for affordable housing and the cumulative effect of these taxes could be to throttle supply back. As Glenn Stevens says in his comments in the package ‘We need to have the supply side able to respond to demand in a more elastic way.’ Our concern is that the governments package may not be elastic enough.”
“There are some good policies in the package that the Urban Taskforce has been championing. These include removing District Commissioners from the Sydney Planning Panels and presumably replacing them with independent experts, the move to more independent panels for council decision making is also a positive move.”
“There is little in the government’s package to promote more affordable housing. There is a statement about using government owned land to increase housing supply but not for affordable housing. The Urban Taskforce believes that around 30% of housing on state government land should be affordable and this will reduce the land price to the private sector.”
“The Urban Taskforce was hoping that a stronger policy on housing affiordability would be included along the lines of the Affordable Rental Housing SEPP where 20% of a project would be affordable if an uplift of 20% was allowed. On Urban Taskforce estimates this could provide 40,000 new affordable homes over 10 years.”
“The Urban Taskforce is keen to work with the NSW Government to boost housing supply and help with affordability but this needs, as Glenn Stevens says, ‘to have the supply side to respond in a more elastic way’.”