Green shoots appear to have sprung for housing supply but at this stage the promise is not matched by the results we need. To be fair, the problem of a housing supply crisis has taken over a decade to emerge. It will take time to fix.
In the meantime, there has been a dramatic shift in public sentiment away from NIMBY groups in favour of increased housing supply. The voices of young families, of millennials and of those wanting to down-size are increasingly driving the agenda and the planning system is starting to respond.
Many have become sick and tired of organised activist community groups manipulating the planning system to protect their own outdated vision of amenity while in so doing, protecting or increasing their own wealth at the expense of housing affordability.
The public mood has shifted and the media has followed. As night follows day, politicians have heard the message and fresh announcements on affordable housing, more social housing, housing supply and stamp duty relief hit the news-stands, broadcast media and social media pages.
It has taken some time, but the new NSW Government has also sought to rationalise the planning system by folding the Greater Cities Commission and the Western Parkland City Authority under the auspices of the Department of Planning and Environment. Not only will this give DPE an opportunity to reprioritise resources to focus on assessments and new housing approvals, but it will deliver a single line of accountability under the Secretary of DPE.
The data from DPE’s own website shows the size of the task if NSW is to meet its National Housing Accord targets. Put simply, NSW has no chance of delivering 63,000 new dwellings in 2024/25 (and each year thereafter for a total of five years) if the number of completed dwellings does not rapidly rise in Greater Sydney from the 2021/22 miserly performance of 24,641.
And to make things worse, the number of approvals up to May 2022/23 has gone backwards, not forwards, though there has been a modest turn around in the last few months since the State election.
Source of data: NSW DPE Greater Sydney – UDP dashboard
What is clear is that NSW is way, way behind where it needs to be to put any downward pressure on housing prices. And for all the talk of social housing, while critical for dealing with the under supply in the market, this is a hugely expensive drain on taxpayers and is only a small part of the answer.
Those who call for the abandonment of greenfield development are also wrong. Housing choice remains an important objective of the NSW planning system and stand-alone family homes are an important part of the housing mix. We can’t afford to go backwards on greenfield development within the defined metropolitan region of Sydney. We need those homes to be supported by infrastructure and the private property development sector is more than willing to play its part. But if we go backwards in any area of housing supply, this will place enormous pressure for growth in height and density on existing built-up urban areas.
The self-appointed NIMBY spokespeople for Sydney’s inner west, northern beaches, north shore, and eastern suburbs are already horrified that the character of their suburbs might need to change. But if we stop greenfield development, this challenge will only be amplified. Ironically, it is these folk who also complain loudest about urban sprawl. Their hypocrisy is only surpassed by their economic illiteracy.
The public response to the Government’s announcement of a bonus 30% height and density where developers dedicate 15% of the development to affordable housing for 15 years was telling.
While broadly welcomed by young families and media commentators, the NSW Australian Institute of Architects (AIA) and some Councils rushed to condemn the policy change, seemingly in oblivious to the crisis in housing supply and the damage they have caused to renters and those least able to afford the rises that accompany the shortage in supply.
The AIA should stick to matters of urban design, rather than parading their ignorance of developer finance by egregiously insisting that the affordable component be held in perpetuity, which in effect would ensure that hardly any affordable housing would be built as was the case over the last five years while this very policy prevailed.
The usual suspects in Local Government also rushed out wringing their hands over a policy that aimed to ensure key workers like teachers, nurses, police officers and cleaners could live closer to their jobs. The Mayor of Woollahra Council equated the delivery of affordable housing under the policy to “a further denial of democracy“ and a “further step in the systematic dismantling local government.” Really … wow!
Inner West Council has their own twist on the proposal, with the Mayor unhappy that the private sector may be able to deliver more housing, including affordable housing, instead demanding $5 billion from the near-broke Minns government for social housing! Housing Commission everywhere, Mayor Darcy Byrne demanded with not a hit of sarcasm.
For the record, based on the performance of LAHC (albeit under the former Government), that solution would be incredibly expensive, be an ongoing burden on taxpayers for the maintenance of those dwellings, and would not be delivered before the Mayor has already spent two terms in Canberra and the housing supply crisis is over!
The planners all scratched their heads and wondered if these new bonus arrangements would prevail over local Development Control Plans, protection of view corridors, apartment design guidelines, setback prescriptions, and solar access provisions. It was almost as though they were trying to find ways to frustrate the Minns Government’s announcement.
This is the challenge for DPE and for the Government. Our planning system is now governed by two sets of parallel rules. Those set by planners and those set by architects. Planners are skilled and trained to take into account competing interests, including those of architects. They should not have a role in establishing planning policy. Planners and a new industry of design panels often conflict, causing delay, added cost and confusion. It is time to put a broom through this unnecessary area of duplication and expense.
The debate following the promising early announcement on affordable housing height and FSR bonuses exposes the real problem with our planning system and the reason why approval levels are so low. It is just too complex, too risky and too slow.
A/DPE Secretary Kiersten Fishburn has a massive job ahead of her to drive cultural change away from the prevailing utopian vision of “nice to have” policy outcomes towards a “must have” policy to deliver on housing supply to meet demand at an affordable price.
Strategic Planning lies once again with DPE and a new Greater Sydney Region Plan is due to be exhibited later this year. The new Region Plan must be both ambitious and flexible. It must be targeted and clear to avoid unnecessary debate over its meaning. It must not try to be all things to all people. It needs to be more than a marketing tool for politicians. It must be a workable instrument of the strategic planning framework. Mixed use zoning must be encouraged and changes to height and density must be easily accommodated, otherwise the Greater Sydney Region Plan will once again frustrate housing supply and affordability.
The task is vast and further reform must be embraced or we risk the green shoots of housing supply withering under a prolonged winter of regulatory paralysis.
By Tom Forrest, CEO, Urban Taskforce Australia