Plan A’s been rejected.

The vote by Australian Turf Club members to reject its Board’s proposal to sell the Rosehill Gardens Racecourse to the Minns Government for the purpose of creating 25,000 new homes in the centre of Sydney was a bitter blow to those locked out of the housing market.

The proposal would have seen the construction of a new Metro station, supporting additional growth at Camellia as well as the rehabilitation of highly contaminated land in the area after decades of exposure to asbestos from the old James Hardie site.

We need more than just a Plan B

Since the vote occurred a few weeks back, there has been a lot of talk about “Plan B”.

The loss of the racecourse at Rosehill is a set-back for the Government – but it should not be looking for a “Rosehill 2.0”. There will be no silver bullet for this housing supply crisis – indeed – even Rosehill was never that.

While big and bold projects are very welcome, they are often complex and must stand the test of waves of objection and protest.  You’re not going to replace 25,000 with just a “Plan B”.

You’re going to need Plan B, C, D, E and F, and all the way through to about Plan W.

There has been a lot of speculation about Glebe Island (sometimes referred to as Bays West or Rozelle Bay). But no-one is saying anything like 25,000 homes are going into Glebe Island. The Minns Government will have to look at a range of different projects and be more open minded to having increased high and densities, particularly where sites are well serviced by infrastructure. It also needs to look at those areas in green-field locations which have always been planned for urban development and should be brought forward.

Nothing should be off the table.  Everyone acknowledged the housing supply crisis is having a massive impact on both renters and first home buyers.  Just this week the Premier lamented NSW’ loss of twice as many young people as we gained – an exodus of our best and brightest.

As well as looking at Glebe Island and Rozelle Bay, we need to be taking another look at:

• Capacity for more housing at Sydney Olympic Park
• Alternative options at Camellia
• Flemington Markets
• Revisit under-utilised government owned land like Callan Park
• Relocate and develop the land around Long Bay Gaol
• Redeveloping the entire Parramatta Road corridor
• Broaden the scope of the low and mid rise planning reforms and make them applicable to every rail, Metro, light rail and bus corridor stop, right across the Sydney basin
• Allow for significant increases in height and density around every new Metro Station.

Mayor of Burwood shows the way

Just last week, the Mayor of Burwood, John Faker, tabled plans for an extra 12,000 in Burwood North (the location of a new Metro station).  This is the city-shaping we need if we are to solve the housing supply crisis.

While other councils dithered and delayed, some (like Northern Beaches Council) openly planning ways to actively frustrate the housing supply intentions of the state government through changes to DCP controls, Burwood Council ha gotten on with the job.  It has completed consultation with the community and is ready to go.  In fact, Mayor Faker has called on the NSW Government to fast-track their proposal.

Housing Supply must deliver choice – or young people will simply leave NSW

We need to stimulate greenfield development and housing production. That seems to have been ignored or forgotten, but this is a lifestyle choice preferred by many and the absence of affordable choice is one of the key drivers of the mass-exodus from our State that the Premier is so concerned about.

The key driver of the high levels of the fees and charges that apply to greenfield development is the cost of delivering water and roads infrastructure (in particular).

Those in established suburbs did not bare the cost of the delivery of trunk infrastructure.  This was provided by the government.  But now, those choosing to establish a family in Sydney’s outskirts are punished with the full cost of the delivery of both local connecting infrastructure as well as the actual trunk or core infrastructure.

Just recently, the Independent Pricing and Regulatory Tribunal’s draft review limited the level of water rate rises to only 65% of that proposed by Sydney Water.  That will mean that over the next 5 years, water infrastructure will be provided to support 120,000 in the Sydney region, despite the Housing Accord target requiring that the very same Sydney region deliver 265,000 new homes.  IPART is effectively limiting the growth of Sydney’s housing supply and in so doing, is condemning the Minns Government to Housing Accord target failure.  Worse, IPART’s draft proposal, if implemented, will exacerbate the rental accommodation shortage and the scarcity will inevitably drive prices ever higher.

IPART (an organisation that is supposed to provide recommendations based on a semblance of economic literacy) appears to have completely misunderstood that while easing the impact on the water rate payers is a benefit, the economic and social cost of failure to deliver rental and new home buyer housing stock is far greater.

Further, the cumulative impact of fees, taxes and charges in Sydney is significantly higher than the same imposts applied in Brisbane and Melbourne. That is a significant factor in the overall cost of the delivery of new housing or new apartments.

State Budget coming soon

With the NSW State Budget coming up on 24 June, there is desperate need for relief from bureaucratic time wasting and excessive fees, taxes and charges, which together make up a feasibility killing 35% of the cost of the construction of a standard 2-bedroom apartment in Sydney. These same imposts amount to a staggering 48% of the cost of construction of a standard greenfields home (all excluding the land price).

The effective government freeze on new greenfield housing supply is driving young families out of NSW, exactly the scenario that the Premier Chirs Minns said we can least afford. Getting a Plan B announced soon will be welcome, but the work must go on until we have locked down and delivered all the way down the list till at least Plan W!

By Tom Forrest, CEO, Urban Taskforce