Australia is currently in the grip of a severe housing supply crisis and this has resulted in housing affordability (the cost of housing as a proportion of average household income) to be at it lowest point since records began.
In this context and with a new Government in NSW, the Greater Cities Commission will soon publish a fresh set of strategic planning documents with the release of the draft of the new Region Plan for Greater Sydney. Region Plans have a life of 5 years, though it is hoped that the coming iteration has much greater flexibility embedded within it than the last, which was set in concrete. District plans (or City Plans) for Greater Sydney’s five Districts are to be prepared, exhibited and approved in support of the Region Plan. Plans for Illawarra, Central Coast and Newcastle expected at a later date.
The National Housing Accord’s 1.2 million new homes across Australia in 5 years from July 2024 coincides with the timeframe of the New Region Plan, so it is incredibly important that this new suite of strategic plans focus on lifting housing supply and support delivery against the National Housing Accord commitments. But we cannot afford to wait.
The former GCC (formerly known as the GSC) leadership and their 2018 Region Plan (A Metropolis of Three Cities) sought to empower local government and devolved decision making to the local level. They spent countless hours and days consulting local councils to build “social licence”. In so doing, they promised too much to too many. This mode of operation, while popular with council stakeholders, was a key contributor to the housing supply crisis. We cannot afford for this to happen again and the signs are, the new GCC team are listening.
The new Region Plan must lay the groundwork for fundamental reform of the NSW planning system. The Plan should foreshadow the need for some short-term measures to enable the planning system to get ahead and deliver some short-term high value, high yield approvals, quickly.
The timeframe associated with the publication of the new Region Plan will not deliver the change needed to drive approvals up fast enough to meet the housing completion targets required by the National Housing Accord. In the short term, a State government-led approach will be needed to take the lead on assessing major projects, doing so quickly, with a focus on the delivery of housing as the key imperative.
The National Housing Accord target for NSW means 375,000 new completed dwellings over 5 years, starting on July 1, 2024 (or 75,000 new homes completed each year). NSW only saw 47,000 new homes completed in the last 12 months so this challenge is massive.
To illustrate how difficult it will be to gear up the planning system a start delivering on the National Housing Accord target, the following outlines a timeline for infill development following the publication of new housing targets in the new Greater Sydney Region Plan.
After a development application is granted consent, it takes between 6-12 months to meet all the conditions required to enable a Principal Certifying Authority (PCA) to issue a construction certificate. It then takes a minimum of 2-3 years to complete the construction of any apartment or mixed-use building of size or scale. While a complete revamp of the Region Plan will greatly assist housing supply in future, it is not going to do much to help in the near term (and the early period of the Housing Accord).
Therefore, the key decision makers within NSW planning system (the Minister for Planning, DPE, GCC, Councils, Local and Regional Planning Panels, the Independent Planning Commission and the Land and Environment Court) cannot afford to wait for the completion of the Region Plan, the City Plans, the LSPS’s, the LGA Housing Strategies and the broader cultural change needed to drive housing supply.
The State Government must step in with short term (perhaps time limited) measures to take control and deliver assessments and approvals for large projects in areas with infrastructure capacity as a matter of urgency, while the new Region Plan targets are washing through the strategic planning system.
We have already seen some signs of this with the NSW Government announcing in June a State Significant Development planning assessment pathway for projects with a construction value greater than $75 million and including 15% affordable housing made available through a CHP for 15 years. This amendment to the Housing SEPP is to be accompanied with an uplift of up to a maximum of 30% FSR and height, but will be subject to other statutory planning controls. The new policy is expected to be implemented before the end of the year.
The 2018 Region and District plans have left a dreadful legacy on housing and also through its incapacity to have any influence over the delivery of critical infrastructure supporting either jobs growth or housing supply. The housing targets were too conservative and did not correspond to where there was existing and future capacity in terms of infrastructure, amenity or demand. There was no consideration given to implementation of the plan – how the strategic would flow down into the specific Local Strategic Planning Statement (LSPS). The was no process established in the GCC for monitoring or enforcement.
An early decision of the Minns government was to have the GCC re-embedded within the Department of Planning. This should, at least, stop the duckshoving of responsibility which plagued the first Region Plan
The habit of the GCC (or the GSC under former management) was to publish plans, but have no role at all in managing their implementation. Having a clear hierarchy of plans with a line of sight from the top (the Region Plan) to the bottom (the Local Strategic Planning Statements and Housing Strategies) is essential and the document at the top of the tree must clearly establish binding principles.
The Region Plan and District (or City) Plans should not defer to local plans for interpretation.
To overcome the housing supply shortage, consideration needs to be given to increasing housing supply in the areas which have seen the greatest increases in housing prices and rents. This is a direct result of supply not meeting demand and is a factor that was not considered in the previous Region Plan. By using market signals to assign local housing growth targets, the new Region Plan can facilitate the energy of the private sector to deliver housing supply where demand is strongest.
The media commentary has shifted and now it is common to see NIMBYs portrayed across the spectrum of mainstream media as selfish and myopic. Millennials have banded together to form a growing YIMBY movement (Yes In My Back Yard).
The new Region Plan must reflect the appetite for change and free up the constraints which were embedded in the 2018 Metropolis of Three Cities document, giving us a chance of driving housing supply upward and improve housing affordability.