UDIA NSW welcomes Infrastructure Contributions Reform Package to deliver infrastructure to support housing supply

UDIA welcomes today’s provision by the NSW Government of the next stage of detail on the implementation of the Productivity Commissions infrastructure contributions reform package, a key reform in helping to fix housing supply and support a post pandemic recovery.

The current system fails to produce the timely delivery of enabling infrastructure. This holds back the creation of development ready land, exacerbating the housing and affordability crisis and restricting employment opportunities.

This is the first major reform in three decades in NSW and therefore critical to its success is that it enables the timelier delivery of enabling infrastructure, the water, sewer, power and roads needed to deliver new housing and jobs.

We are pleased to see that the Government has listened to the feedback in our submissions, in a number of key areas including:

  • Phase in of the Regional Infrastructure Contributions and reduction in costs in regional areas from $10K to $8K – to reduce impacts on development feasibilities and therefore housing supply in the next few years.
  • The importance of Works in Kind. The Productivity Commissioner did not finalise Works in Kind in his recommendations. However, by speeding up and reducing the costs of infrastructure delivery, these are an essential part of making the planning system work delivering benefits to the State, Developers and the Community. We are pleased to see the NSW Government recognise these benefits by including Works in Kind in the reforms.
  • Measures to encourage Councils to forward fund infrastructure. Historically, ridiculous barriers have been put in the way for Councils trying to deliver local infrastructure. We are pleased to see a couple of these key ones removed including:
    a) the ability to allow councils to recoup interest costs associated with borrowing;
    b) remove an existing pooling provision made redundant by Act amendments that limit pooling between contributions plans, and
    c) allow interest costs associated with borrowing for infrastructure to be recouped through contributions plans.

    However, we believe that more will need to be done to change the culture of many Councils so that they deliver infrastructure in a timely way.

There are a number of areas where we are keen to see the government do more work. In particular:

  1. Delay in the introduction of the revised Essential Works List. The Productivity Commissioner rightly recognised the many inefficiencies in the way that the Essential Works list currently operates and the impact it was having on delivering housing supply. By delaying potential reform until 2024, the negative impact it is having on housing supply will continue at a time when housing costs are at record highs.
  2. How will government provide regional infrastructure for a precinct which is being delivered under the land value contribution process to achieve the coordinated roll-out of State and local infrastructure to support housing supply.  To deliver housing and employment a precinct needs to be provided with both local (provided by Councils) and regional infrastructure (provided by the NSW Government). The failure to integrate the two successfully is a major failing in the existing system. The lack of detail on how this co-ordination will be successfully achieved with this reform is a significant concern.
  1. Governance in RIC – Currently, the SIC system regularly falls down when the priorities of state delivery agencies differ from the priorities for enabling land use, such as housing supply. As a consequence, infrastructure delivery is severely delayed. The revised governance arrangements do not fundamentally change this, allowing state agencies to ‘consider’ whether to put RIC funded infrastructure into their capital program, endangering a significant part of the reform program.

“Overall these proposals align closely with the recommendations of the Productivity Commissioner and are a major step forward for NSW.   While UDIA commends the Minister and the Department on taking forward the reforms and the high-quality engagement with the industry, we believe more thought needs to be made on governance to speed up the delivery of key enabling infrastructure and housing supply.” said Steve Mann, CEO UDIA NSW.

ENDS

Media Enquiries:
Deanna Lane 0416 295 898 or dlane@udiansw.com.au.
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UDIA NSW says Tech Central perfectly positioned as a 30-minute city

UDIA NSW Welcomes today’s announcement by the Minister for Jobs and Investment, Stuart Ayres that Sydney’s Tech Central is on track to become a global technology hub.

Minister Ayers referred to the rezoning of the Western Gateway sub-precinct and the planning controls now in place to transform an underutilised transport hub into something to rival Silicon Valley.

The creation of 25,000 jobs over 24 hectares once fully developed is a significant boost for employment land in the Sydney CBD.

“This will enable more land to be ready for the arrival of new technology organisations, making it perfectly placed for the development of the 30-minute city.” said Steve Mann, CEO UDIA NSW.

Mixed-use development will be the key to holistically developing great place-based outcomes and attracting new economy jobs to Sydney. There is immense opportunity that the revitalisation of the Western Gateway precinct offers, particularly as locations such as Silicon Valley in the US look to retrofit housing and a more integrated mix of uses.

“Rezonings and development controls need to be flexible, to accommodate both housing and commercial space, supporting the Central to Eveleigh corridor and delivering the jobs and housing that Sydney needs to stay globally competitive.

Government should apply the learnings from the recent draft Macquarie Park Place Strategy, where low housing aspirations will see the area fail to meet its potential and leverage the investment in public transportation.” Mr. Mann added.

ENDS

Media Enquiries:
Deanna Lane 0416 295 898 or dlane@udiansw.com.au.
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UDIA NSW supports decision by NSW Govt on IPART rate peg methodology

UDIA NSW has long supported the need to uncap council rates to allow for better funding at the local level, given this is a low rate broad based tax, which will deliver more services and infrastructure for the community. Independent Pricing and Regulatory Tribunal NSW (IPART) review into rate pegging has confirmed this and UDIA welcomes more than $250 million in additional revenue to be delivered to local councils across the state, enabling better quality council services to their communities.

“This is a positive step as some councils, especially those experiencing population growth, have objected to development due to the significant disincentives within the current rating system. The objective to align rating income with population growth to ease growing pains for councils and communities while still protecting residents from dramatic rate rises through the rate pegging system, is a sensible move.” said Steve Mann, CEO, UDIA NSW.

“The recommendations of the NSW Productivity Commissioner into infrastructure contributions were broadly welcomed by UDIA earlier this year, as they have the potential to make a major contribution to fixing the NSW housing and affordability crisis, supporting economic growth and creating jobs.” he added.

The package of reforms include the new rate peg methodology for local infrastructure contributions, regional infrastructure contributions and land value contributions.

The UDIA NSW Council Infrastructure Funding Performance Monitor FY20 identified $3bn from section 7.11 and 7.12 plans or from planning agreements that was held by Councils across the Sydney Megaregion (Illawarra to the Hunter), at the end of FY20. If spent the $3 billion in stored local contributions could be used for capital projects in areas targeted for growth.

“UDIA’S submission recommended that IPART investigate options, through the rate peg amendment, that incentivise councils to use these funds to support infrastructure for place making, which in turn can speed up the delivery of key enabling infrastructure and housing supply “ said Mr. Mann.

ENDS

Media Enquiries:
Deanna Lane 0416 295 898 or dlane@udiansw.com.au.
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UDIA NSW Looks forward to continuing our work with the new Premier

UDIA NSW welcomed today’s announcement of the appointment of Dominic Perrottet as Premier of NSW and Stuart Ayers as his Deputy. Our close working relationship with both members of the NSW leadership team has assisted in enabling our industry to safely reopen.

The new Premier is a firm believer in governments making better use of public assets, overseeing the final stages of NSW Government’s highly successful “Restart NSW” asset recycling program, which generated more than AU$30 billion in proceeds for investment into new productive infrastructure across NSW.

His recent announcement of an additional $3.9 billion in funding, as part of the COVID-19 economic support package, extended the successful JobSaver program and Micro-business Grant and continued rent relief incentives. The $3.9 billion in ongoing support will be vital in helping keep businesses in business and people in jobs.

In tackling Stamp Duty and GST issues, the new Premier has proven himself to be a champion of reform. If NSW is to thrive in the post pandemic world, we need reforms that tackle the housing and affordability crisis. Getting housing built will not only boost the state economy but importantly, create jobs for construction workers and all the allied industries along the supply chain.

“Our greatest concern has been the underemployment figures, which showed that a significant number of construction workers would be struggling to make ends meet before Christmas, potentially losing their incomes entirely.  Our thoughts have always been on those in Western Sydney LGAs which have been the hardest hit with prolonged lockdowns and tight restrictions on their daily lives.

We needed to get tradies back on the job safely in order to move the backlog of work to be done before the long Christmas holiday break and enable our industry to continue our work as a key driver of the recovery of the NSW economy.” said Steve Mann, CEO, UDIA NSW.

“UDIA NSW and our Members look forward to continuing to work closely with the Premier and Minister Ayers as they steer NSW through a safe and sustainable pandemic reopening and a strong bounce back in NSW in 2022.” he added.

ENDS

Media Enquiries:
Deanna Lane 0416 295 898 or dlane@udiansw.com.au.
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Regional Housing Taskforce Report provides the keys for government to improve housing supply

The release today by the Department of Planning Industry & Environment of the Findings Report by the Regional Housing Taskforce, was welcomed by UDIA NSW and marks an important milestone in addressing the housing price escalation, supply and demand issues in the Regions.

Over the last few years the housing supply and affordability crisis has spread from Sydney to the regions, with housing prices growing 48% in key regional areas, while prices have increased 32% in Sydney.

“This regional focus from the NSW Government is crucial to avert the emerging housing crisis in the regions. The Hunter, Central Coast and Illawarra Shoalhaven regions are facing similar housing challenges to Sydney – including low supply, higher prices and complicated planning processes. We are encouraged that the Taskforce has consulted widely and understands the issues. From here, we are looking for a real commitment from government for better planning alignment and coordination across government and more proportional investment in the regions.” said Steve Mann, CEO, UDIA NSW.

The Taskforce consulted with UDIA and more than 500 community, local government and industry stakeholders and we were pleased to see such a thorough report reflecting the issues we raised.

The report also validates our own findings in the UDIA Home Purchaser Sentiment Survey which revealed that 30% of respondents in Sydney were interested in moving outward including to the regions.  This will continue to have a massive impact on supply and affordability in regional areas.

UDIA  lodged a comprehensive submission on behalf of our Members and given the Taskforce has heard our concerns, we are hopeful it will pick up the recommendations we made in the submission, including:

  1. Establish better cross-government coordination to effectively plan for adequate housing supply by enhancing the role of the Urban Development Program (UDP) to ensure new housing areas are supported by funded infrastructure and have appropriately addressed biodiversity issues;
  2. Accelerate housing delivery by creating a $1bn fund (like the Housing Acceleration Fund) to build enabling infrastructure which unlocks a development ready pipeline for housing, with proportional allocation to each region; and
  3. Create a sustainable housing pipeline by accelerating approval of current proposals and encouraging more housing diversity.

UDIA agrees with the report’s statement that the most impactful solutions will be those which are place-based and carefully targeted at untangling the complexities specific to the particular area in which they arise and those that address the systemic issues that impact all communities.

The Taskforce will release its recommendations later this month and we encourage the government to develop a rapid implementation for the recommendations, as we look to a housing led recovery from the delta shutdowns.

ENDS

Media Enquiries:
Deanna Lane 0416 295 898 or dlane@udiansw.com.au.
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