In October last year, the Urban Taskforce started to sound the alarm bells over a chronic slow down in the NSW planning processes. Since then, the NSW Productivity Commissioner, Peter Achterstraat, undertook a comprehensive assessment of the functionality of the NSW planning system.
The Mecone Report was a top-secret report commissioned by the NSW Treasury to provide and unbiased analysis to the NSW Productivity Commissioner. The Government tried to keep the report secret, but it was finally obtained by the Sunday Telegraph through a GIPA application (Freedom of Information).
It is little wonder the NSW Government wanted to keep all this a secret.
When it became clear that the recovery in housing prices in Sydney was being driven by a lack of new housing supply (compared to demand driven by population growth), the Premier called on the Planning Minister to bring in immediate reform to improve the planning system. The looming CV19 induced recession makes this reform all the more urgent.
The chronic delays which now pervade the NSW Planning system; the buck-passing between the Department of Planning, the Greater Sydney Commission and Councils across Sydney; and the blind faith shown by strategic planners in Councils to deliver sufficient housing supply for our growing population has resulted in the lowest annual level of new housing approvals since 2013. As night follows day, this will lead to a significant slowdown in new housing completions. This in turn will push new home prices up – far beyond the reach of most young first home buyers.
The conundrum is this. The impact of the bushfires, then the Corona Virus (Covid 19) on the economy, and the cumulative impact of economic growth, has forced the hand of the Reserve Bank and interest rates (the cash rate) was dropped to a new low of only 0.5%. Finance has never been so cheap – but this too has an impact on new home prices. It pushes them up.
The only solution is to direct the planners at the Greater Sydney Commission, DPIE and Councils, as well as all the planning panels and decision makers, to fast track the processing of development applications and ensure that there is a plentiful supply of zoned and serviced land in places where people actually want to live. Political leadership is required to drive economic growth and push down the cost of new homes.
The NSW Government has done an outstanding job in delivering new transport infrastructure. This creates a golden opportunity for increased density to help address the looming housing shortfall crisis. But placatory political decisions to reverse the excellent work undertaken by the Department of Planning and its staff along the Parramatta Road Corridor, the Sydenham to Bankstown Metro line and in the St Leonards precinct (which will be supported by both a Metro line, the existing heavy rail line and a multitude of bus services) means we risk allowing NIMBY Councils (particularly in the context of a forthcoming election) destroying the opportunity to leverage the government’s laudable investment into new transport infrastructure by refusing to plan for the growth of our city.
This must change. The planning system has become the cause of a significant economic problem for the Berejiklian government. It is not too late to fix it – but the clock is ticking. The risk is that NSW sleepwalks into a property market crisis. These things take years to fix and we simply can’t afford that.