A leading housing industry lobby group has called for use of private certification to be applied to planning approval processes in order to speed up delivery of new homes.

In the leadup to the Australian Government’s three-day Economic Reform Roundtable beginning on Tuesday, the Housing Industry Association (HIA) has called for measures to speed up development assessment processes for new housing projects.

In particular, HIA has called for use of private certification to be applied on planning approval processes.

Introduced in the 1990s, private certification enables property owners to select their own certifier or building surveyor to assess their application for a building approval. This represents an alternative to relying on surveyors or certifiers who are employed by the local council.

As things stand, private certification is available for the building approval process. This process focuses on the structural integrity and safety of proposed buildings and whether or not designs comply with the National Construction Code.

Going forward, HIA is calling for private certification to also be applied to planning approval processes. As opposed to building approvals, assessment for planning approvals focuses on the overall use of land and ensures that the proposed development is consistent with state and local planning schemes.

In a statement, HIA pointed to a recent national survey of its members.

That survey revealed that on average, planning approvals were adding an additional $14,000 to the cost of a new home across Australia and were taking an average of more than five months (5.4 months) to obtain.

When asked how processes could be sped up, many respondents suggested that private certification to be applied to the planning approval decisions.

HIA Senior Economist Tom Devit said that a move toward private certification for planning applications which is based around clear rules would help to speed up new housing approval and development.

Devitt also suggested that private certification would address a current conflict of interest which can arise in cases where local councils are assessing planning applications.

This may arise as councils feel pressure from residents (by whom councillors are elected) to oppose or restrict developments which may be unpopular.

This may be the case even where such developments would create additional housing supply and provide opportunities for future residents.

Extending private certification to planning approvals would also free up local councils to focus on the larger picture of town planning, Devitt added.

“Survey respondents identified a number of ways in which planning processes could be improved, including private certification,” Devitt said, pointing to the aforementioned survey.

“Rules based private certification would overcome the subjective interpretations, reversed decisions and numerous unnecessary and often duplicated requests for information from different town planners relative to what should be objective town plans.

“When private certification was implemented for building approvals, it sped up the process from months to weeks, with no measurable decline in quality.”

“Extending private certification to planning approvals will speed up this process, contributing positively to recent policymaker efforts to improve productivity in the home building industry.

“It would also help address the conflicts of interest that often exist at the local level.

“Councils have disincentives towards approving more housing supply. Councils are beholden to their existing residents, not potential future residents. In many instances, their incentive is to refuse or curtail any development to which their local residents may object, and which may jeopardise their chances at re-election.

“Private certification would bypass these conflicts. It would also ease the burden on councils, addressing skills shortages and allowing town planners to do what they do best – and better than anyone else – write town plans, design cities, not be distracted by the administrative task of assessing compliance with them.”

Devitt’s comments come as the Australian Government prepares to convene the three-day Economic Reform Roundtable in Canberra beginning on Tuesday.

The roundtable aims to bring together leaders from business, unions, civil society, government, academia and other experts.

Its objectives will be to make the economy more productive, build resilience in the face of global uncertainty and strengthen the position of the national budget.

Devitt says that streamlining planning approvals should be part of the discussion.

He points to the effect of relatively simple planning processes in South Australia as opposed to complex processes in Victoria.

“Obtaining a planning approval for a new home build adds thousands of dollars and months of delay to the home building process,” Devitt said.

“On average across the country, planning approvals add over $14,000 to the cost of a new home build and take over five months to obtain. In Victoria, this blows out to almost $20,000 and more than seven months.

“Moreover, these are just averages. There were a significant number of medium density home builders in New South Wales reporting average delays of 7.5 months, and detached home builders in both New South Wales and Queensland reporting costs in excess of $20,000.

“There are even horror stories across the country of planning processes taking years and costing builders hundreds of thousands of dollars in delays, costs and rework.

“The result is that many builders are simply no longer attempting to build certain dwellings or develop particular parcels of land. For some types of multi-units and land development, both builders and customers are concluding that the subdivision process is too hard, delays are too long, and holding costs are too high.

“This means that beyond the explicit costs of the planning process, there are homes that never get started, further constraining overall home building volumes and making all other housing more expensive.

“The Australian government has organised a national Economic Reform Roundtable aimed at boosting productivity in housing and getting more homes built. Improvements to the planning system must be part of the discussion.

“Builders continue to face significant delays and uncertainty due to complex planning systems, inconsistent implementation of the National Construction Code and burdensome environmental approval processes.

“South Australia provides a good example of how to improve this process, including through the use of an online portal that triages planning applications into those that can be fast-tracked and those that need further assessment.

“The Victorian process, on the other hand, is still bogged down in costs and delays, including required drawings, consultants and experts, reports and permits, heritage and flood overlays, environmental regulations and restrictions, third-party notification and appeal rights, and Council fees, modifications and delays. It can often take weeks to get a simple response from Council.

The Australian Local Government Association was invited to comment but did not provide a response.

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