Finally, after three years of earnest Ministerial briefings, policy fora and media releases from the Urban Taskforce, there is now a consensus that there is in fact a housing supply crisis.

While some (mostly NSW planners) maintain stubborn denial, the fact is that the drop off in NSW housing approvals has resulted in a commensurate drop off in housing supply and has caused the current pressure on rising rental prices and unaffordable new housing.

So what can be done?

The housing supply crisis was years in the making. 

  • Years of running down approvals because it was politically expedient not to scare local communities with increased housing numbers.
  • Years of apologising for Councils because their focus had been diverted to the mandatory delivery of new Strategic Planning documents so it was, supposedly, acceptable that they stopped doing their day-job, housing assessments and approvals.
  • Years of belligerent (or ignorant) denial of a housing supply crisis from senior planning staff including no less than the former Secretary of DPIE.
  • Years of refusal to use the skills and resources of the NSW Department of Planning to take the lead on the assessment of major high-value, high-yield housing proposals by using the State Significant Development process (until last week).
  • Years of wishful thinking that COVID-19 would ease pressure on the housing market because of the complete collapse in immigration numbers.
  • Years of promises to improve the speed of the planning system, but all within the massive constraints of the NSW EP&A Act.
  • Years of promising the world in Western Sydney and the new Nancy Bird Walton Airport in terms of new homes, high tech jobs, research facilities, logistics support and the new city of Bradfield with the promises not being matched by infrastructure funding or delivery.
  • Years of hoping that affordable housing levies, which were unsupported by increased yield, would deliver solid numbers of more-affordable homes.

So now we have a major problem and it won’t be fixed easily.  But at least we do have the attention now of the nation’s political leadership and the is acknowledgement of the problem.

The Queensland Government hurriedly convened the Queensland Housing Summit in late October, while considering, then abandoning, a rent control regime to assist the victims of the supply crisis.  The housing supply shortages in Queensland have been particularly hard-felt by renters across the state, though it was recognised that the position in each regional market was driven by a range of differing factors.

Housing supply and affordability is a major issue in Tasmania and has certainly captured the attention of the Federal Housing Minster Julie Collins.

Following the introductory comments on Federal Budget night, Jim Chalmers’ first detailed policy initiative was focussed on housing supply and the new Housing Accord.

  • A promise of 1 million new homes across Australia over the next 5 years.
  • Work with Super funds to increase their involvement in affordable housing supply.
  • Recognition that the heavy lifting on housing supply must be done by the private sector.
  • Commitment to a new Housing Supply and Affordability Council.
  • Funding for their election commitments to see an immediate boost to social housing.

The NSW Minister for Planning opened his commentary when announcing that the NSW government would take the lead in the assessment process for 19,000 new homes in southwestern Sydney by stating: “We have a housing supply crisis”.  Importantly, the three large projects will use the State Significant Development assessment pathway – a planning pathway that has been essentially closed to housing applicants since mid-2011.

What can be done to improve the situation?

Some of the building blocks have come into place.  The Commonwealth has stepped in with a pro-active position to promote housing supply.

The Commonwealth Productivity Commission has been assiduous in explaining that housing supply is critical to ensuring that new housing is affordable; that our economy needs to grow to pay for the costs associated with an ageing population; that immigration in critical to achieve this; that we need a major boost in housing supply to house the now increased numbers of permanent migrants (up from 160,000 pre pandemic to 195,000 per year as announced at the Jobs Summit – and that does not include the return of overseas students or temporary visa holders).

Changes in NSW public service and Ministerial leadership in the planning space in NSW have seen a series of slow but steady adjustments in policy imperative such that the leaders at least, are now driving growth in housing supply by actively considering new planning pathways and options to promote growth.

More needs to be done.

There is an urgent need for Government to work with the finance sector and with industry to consider ways to bring forward the funding of infrastructure that is holding up the delivery of new jobs and new communities in Western Sydney. Clearly, post COVID-19, Government coffers are dry but the need for housing supply is dire.  But houses and employment centres can’t be built unless the water supply, sewerage and trunk roads (or Classified Roads) are funded and delivered, not to mention the need for schools, hospitals, childcare centres, parks and playing fields, public transport and community facilities.

The Western Parkland City has drowned in a mass of confetti of media releases promising jobs, new communities, new homes, schools – the lot!  But the infrastructure delivery is lagging behind. There is money for the M12 and the metro, both of which will service the airport – but they won’t help the growth of the employment lands in the surrounding precincts.

Getting the private sector involved in considering ways that these facilities can be delivered earlier, through offering a fast track to housing supply, is one way to solve two problems at the same time (lest anyone consider killing birds with a stone)!

  • Apply a fair distribution of new housing supply to all areas, with a particular focus on those areas with available transport infrastructure capacity.
  • Increase the use of the State Significant Development planning pathway for the assessment of large, complex, high-value high-yield housing projects.
  • Work with the Commonwealth to activate the investment of Superannuation fund balances into Built to Rent or affordable housing projects.
  • Re-prioritise the State infrastructure expenditure budget to ensure that funds are directed to support growth in housing supply.

The Housing supply issue is complex.  In greenfield locations, fulsome consideration needs to be applied to the impacts of natural hazards (floods and bushfires), the cost of all supporting infrastructure, flora and fauna, koala habitat, cultural and built heritage and more.  In built up urban areas, considerations include the impact of high-rise development on over-shadowing of public open spaces, increased traffic generation, the need for green space and supporting community infrastructure and how the development fits with the character of the existing community.

But too often, housing supply, in itself, is not seen as a public good in its own right.  Now we have a widely acknowledged crisis and the planning systems across the nation need to adjust and respond to the new reality.  Housing supply is critical to human dignity as well as supporting growth in our economy.  Without a major boost in housing supply those that can least afford it will suffer most.


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