NSW Productivity Commission White Paper includes a brave and honest assessment of the NSW Planning System

Urban Taskforce welcomes the NSW Productivity Commission White Paper and congratulates Peter Achterstraat and his team for what is a brave and honest assessment of the NSW Planning System

To quote the White Paper’s key finding on planning (page 26):

“Supply has failed to keep up with demand. This has led to an under supply of housing, increasing the cost of living for households and making New South Wales a less attractive place to live and work.”

The paper goes on to detail the causes:

  • Regulations on apartments designs and car parking requirements
  • Development applications are taking longer to assess and in some cases take substantially longer than in other jurisdictions
  • Proscriptive land use rules are stifling innovative businesses in an evolving economy
  • Government failure to provide public open green space to support population growth
  • An inefficient and opaque system of infrastructure fees and charges
  • Poor coordination of land use planning and infrastructure delivery
  • Infrastructure bottlenecks being a drag on productivity.

This comprehensive analysis finds that since 2006, NSW Housing supply has not kept pace with demand or with State targets, creating an accumulated underlying shortage of dwellings (page 268).

Urban Taskforce notes that this analysis is already outdated as it measures housing supply against the 2017 GSC dwelling target for Greater Sydney of 37,500 per year while the NSW Government Housing Strategy Housing 2041 finds that Greater Sydney will need 50,000 new dwelling each year for 20 years to meet the 1 million new dwellings needed by 2041, based on the low-end forecast of immigration between now and then.  Even more homes will be needed if higher immigration targets are set – as anticipated in the recent Commonwealth budget.

At present, supply is not matching demand, despite demand being low because of the pause in migration.  Councils are not being held to account.

The White Paper finds (page 276) that between 2016 and 2019 there was a brief boom in housing completions, but this is expected to be largely undone in coming years.  The White Paper finds that beyond 2021, the challenges may become even greater – the clear implication is frustration with the Government’s manifest failure to progress reform the planning system and deliver greater housing supply – particularly in the CBD of Sydney, the inner west, the east and the north shore of Sydney.

The White Paper finds (page 270) that inner Sydney has a very low level of urban residential density compared to the major cites of the world.

The Productivity Commission’s White Paper is a wake-up call for the NSW Government.  It calls for reform to scrap the high inefficient Stamp Duty and implement a broad-based land tax.  It demand reform to speed up our planning system and reduce regulatory impact.  It calls out the draft Design and Place SEPP as a step in the wrong direction when it comes to model regulation.

A full copy of the Productivity Commission’s White Paper can be found here: https://www.productivity.nsw.gov.au/white-paper

Download PDF Version.