Political Alert – Planning delivery unit must deliver (NSW)

Wednesday 01 July 2020 (Sydney, Australia) – UDIA NSW Chief Executive, Steve Mann, welcomed todays announced Planning Delivery Unit.

The development sector is essential to the recovery post COVID-19 as it contributes one quarter of the jobs in NSW. Mr Mann said resolving planning delays is critical for the sector to restock a pipeline of projects, homes, and jobs.

“Many precincts have been long delayed in delivery and this One-Stop-Shop must unlock these major projects”

“The initial focus on Parramatta Road will finally unlock a precinct that has been quagmire since the finalisation of the Parramatta Road Urban Transformation Strategy in 2016.

“The St Leonards Crows Nest Precinct is a vital city shaping opportunity and rezoning now will leverage the transit-oriented development opportunity the metro provides.

“In our greenfield growth areas Marsden Park North and West Schofields are vital precincts to continue the growth in the North West.

“These are all big projects and it is critical that they are resolved to help restock the housing pipeline. However, they must not distract from the urgent need for the Planning Delivery Unit to help development assessment and unclog concurrence and referrals.

“Over the past four years approval times have blown out 100 days for DAs over $20 million to 357 Days. Despite the number of development approvals falling to 33,936 in the year to April, a 44% drop since the peak in 2016.

“The UDIA will be seeking to work closely with the Planning Delivery Unit Chief Kiersten Fishburn and her team to ensure that the development pipeline is restocked and approvals flow.

“The critical test for the team will be to get early results, and a necessary step to making planning work in NSW.

 

– ENDS –

Media Contact: Sam Stone 0401 213 899 media@udiansw.com.au

A Critical Win for Housing Development In Sydney

23 June 2020 (Sydney, Australia) – UDIA NSW Chief Executive, Steve Mann, welcomed today’s announcement that the s7.11 contribution cap in the Hills and Blacktown will be extended to 31 December 2020 at an increased rate of $50,000.

“The cost certainty for developers will enable the industry to continue to deliver housing supply in the North West,” said CEO Steve Mann.

Infrastructure contributions, better known as s7.11 contributions, or the former s94 contributions, are currently capped at $45,000 until next week on 1 July 2020. This announcement means the NSW Government has a set a new cap on contribution rates at $50,000 in Blacktown and The Hills council areas until the end of 2020, which could have doubled to over $100,000 per lot in some areas.

“This extension means the industry has avoided a doubling of developer contributions in North Western Sydney during one of the largest economic challenges of our time,” said Mr Mann.

UDIA NSW identified the opportunity to repurpose the AIF to deliver a double dividend and has worked with the Department of Planning to achieve:

  1. Funding local infrastructure to create jobs on the ground, and
  2. Support an extension of the cap on development contributions to deliver more jobs and housing supply.

To take advantage of the extension, developers will be required to commence construction by the 30 June 2021. UDIA believes this may need to be extended to achieve the sustained housing-led recovery we all want to see beyond COVID-19.

Even with contributions capped at $50,000, taxes and charges represent a growing percentage of the costs of new housing, now up to 30% of the total price of a new home in Western Sydney.

“We estimate this measure will support the delivery of between 1,600 and 2,500 residential lots across Blacktown and the Hills creating between 4,800-7,500 jobs,” said Mr Mann.

Earlier this year, the Productivity Commissioner announced a review into infrastructure contributions will be completed by the end of 2020.

“We keenly await the outcomes of the Achterstraat Review, and will call on the government to implement appropriate reform quickly, and before the end of the AIF to prevent further loss of jobs from our industry due to a dwindling supply pipeline,” said Mr Mann.

The NSW Government also announced an additional $75 million in Accelerated Infrastructure Funding to unlock nearly $70 million in developer contributions to put local community infrastructure on the ground. UDIA NSW has previously reported there is over $2.65 billion in developer contributions sitting with Local Councils across Greater Sydney, the Illawarra and the Hunter Region.

– ENDS –

Media Contact: Mia Kwok media@udiansw.com.au 0435 361 697

Op Ed: Sitting on a $2.65 billion ‘pot of gold’, while infrastructure delivery flounders

Opinion, 21 March 2020

Written by Steve Mann, Chief Executive, Urban Development Institute of Australia NSW


We most often think about infrastructure as the big, splashy projects: the Sydney Metro, the new stadiums or the WestConnex tunnel. But there is a type of infrastructure that desperately needs to be built in our cities and suburbs. It’s the infrastructure that keeps our roads safe by installing lighting, footpaths and bike paths. It’s the infrastructure in our local parks that gives the kids local sporting fields to play on. These projects are funded by local communities, local home-owners and firstly through property developers, to be delivered by Councils. Unfortunately, Councils are not delivering them on time, and our communities are missing out on amenities they have paid for.

UDIA NSW data released today, shows that Councils are sitting on $2.6 billion in unspent local infrastructure contributions across the Sydney megaregion. In this area, which stretches to Newcastle in the north, Wollongong in the South and the Aerotropolis in Western Sydney, Councils have collectively spent only 63% of their funds collected in the past three years. What makes this infrastructure different to big projects is that many of the projects could start tomorrow providing jobs and infrastructure during the COVID-19 crisis. There is $2.6 billion that we have paid for, now sitting idle.

The new home buyer is the one who hurts most in this system. Not only do the infrastructure contributions add to the cost of their new home, but they also must live without the promised infrastructure projects. In the Liverpool Local Government Area, there are temporary drainage basins in Austral which are scattered throughout the suburb and are dangerous to live next to. In the Maitland LGA, 500 new homes would benefit from a new lighted sports field, clubhouse and playground if the section 7.11 funds could be unlocked. But because of the way the system is structured, the infrastructure can’t be delivered anytime soon.

Developers pay these infrastructure contributions up front, under section 7.11 of the Environmental Planning and Assessment Act 1979. Since 2010, the NSW Government has capped these infrastructure contributions, so that any requests for additional funds from developers need to be assessed by IPART, and if found to be essential to the area, the Government will supplement the missing cost. At the time this policy began it provided a big boost to productivity and supply for housing the next generation of Australians.

But on 1 July 2020 in 80 days, the local infrastructure contributions are set to be uncapped. If this happens, the section 7.11 levy in Western Sydney can be up to $90,000 per home, but they are currently capped at $45,000 in greenfield areas in Sydney. This means higher infrastructure contributions will be required in an already broken system and it will reduce supply and make housing even less affordable and putting much needed jobs at risk. This is a critical opportunity to get shovel-ready projects on the ground and create essential employment opportunities.

The system is broken and there has to be a better way. Some councils are working hard to deliver infrastructure, but are blocked by a convoluted planning system that can slow delivery. Councils often find they are better off banking this money, leading to some sitting on pots of gold, while others are forced to come up with complicated planning measures to deliver infrastructure on the ground.

While the Government has promised to fix the broken system, they need to maintain the s7.11 cap in Western Sydney and regional markets to keep housing affordable. In the interim, there is up to $2.6 billion in economic stimulus that could be unlocked with state support either through coordination, prioritisation, or additional loans to unlock larger projects within an LGA. This stimulus would provide jobs now, faster recovery, and new infrastructure after the crisis.

-ENDS-

Media contact:
Mia Kwok – 0435 361 697
Email: media@udiansw.com.au

 

Download the Infrastructure Funding Performance Monitor here. 

“Missing Middle” housing typologies are well overdue

Media Release: 16 March 2020 – The Urban Development Institute of Australia (UDIA) NSW today commends NSW Planning Minister Rob Stokes’ clear message to get on with the job and let the industry build for the “missing middle”. Minister Stokes has committed to 1 July deadline for any deferred planning proposals.

“Apartment approvals have fallen drastically and the ‘missing middle’ typologies are needed immediately to cater to both young families and our ageing population,” said chief executive Steve Mann.

The Sydney-based apartment stock will imminently dive off a supply cliff with apartment approvals down over 50 per cent from the peak.


Source: ABS; UDIA NSW 2019

“With an ageing population, low rise-medium density provides a greater opportunity to age in place, and provides an affordable option for those who moved into the ‘garden suburbs’ to remain near friends and neighbours,” said Mr Mann.

“The ‘missing middle’ also opens up more options for those seeking to start families using older stock in established suburbs, as well as renewal opportunities, which might provide homes for first homebuyers,” he said.

Councils have had five years to prepare for the ‘missing middle’ and yet 24 Councils have not pursued planning proposals, or they have pursued planning proposals to disallow low-rise housing.
“The medium-density code is a great piece of public policy to cater to the changing demographics of our society. Councils were given generous deadline by the Department, but now is time for decisive action,” said Mr Mann.

Around the country, other jurisdictions have allowed for a range of innovative housing typologies, including ‘micro housing’ in WA and the Gold Coast.

– ENDS –

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Media contact: Mia Kwok 0435 361 697 media@udiansw.com.au

We need a revolution, not an evolution – President’s Speech

Presented by President Michael Sheargold, UDIA NSW at the UDIA NSW February Luncheon, 20 February 2020.

Welcome everyone to the first UDIA NSW event for the year.

We start the year with the expectation that 2020 will be a watershed year for planning in NSW.

All cycles turn, homebuyers are back, and there is now clear evidence of a market recovery in NSW. UDIA NSW expects that demand will grow for new housing and we need to use this momentum to stimulate the broader economy.

Our state’s economic performance has been less upbeat. The RBA’s forecasts have been downgraded and we are faced with an unprecedent intersection of external forces that are battering confidence across the economy: extreme weather conditions, from droughts to floods to a horrific bushfire season; and the coronavirus, which has disrupted some supply chains and inhibited potential overseas investment.

There must be a galvanising drive for our governments to deliver more fiscal stimulus. NSW needs to see strong economic growth, more jobs and improvements to affordability.

The NSW Premier and Minister for Planning have recognised the need for change with the announcement in November of the need for major planning reform. We are greatly encouraged by the reform agenda to deliver ‘the simplest and most effective planning system in Australia’.

We are at a crossroads, where continuing with the status quo in planning will lead to lower supply and more housing affordability challenges. We need to see real change to a system which is struggling.

It currently takes 7-10 years to build a home because we have the most complex planning system in Australia.

It is critical that these timeframes are reduced, and our system is clear and simple to navigate:

    • We need to know that we can work within the strategic framework to secure a merit-based rezoning.
    • We need predictability in our developer charges because as a society we cannot choose to make development uneconomic or unaffordable.
    • We need transparency in our system, so we can submit Development Applications, and everyone can be accountable to timeframes. The number of DAs being submitted is dropping and the time it takes to process a DA is even longer – the average DA determination time has increased by 95 days since 2015 for DAs over $20 million in value taking an average of 357 days.

With continued lack of predictability, there are significant flow on effects to our economy. UDIA has recently completed research with EY, which shows the economic contribution of the NSW Residential Development sector contracted by $14.4 billion in 2018/19 and had an imputed loss of over 32,715 jobs. The planning system has become a key barrier to jobs and growth, and this is harming the State’s economy.

The Urban Development Institute of Australia (UDIA) NSW is the state’s leading development industry body, representing more than 500 member companies and agencies across the public and private sector.

Planning reform is economic reform. Government has a choice to invest in the industry, or continue to watch the downward trend in approvals and completions, which will lock a generation out of the housing market. With the NSW Government’s focus to “Kickstarting Productivity”, what better industry than the development sector which represents 7.2% of the NSW economy to deliver jobs growth and productivity gains.

There is now a large hole in NSW’s housing supply pipeline, which has fallen by 36% since the peak. It is led by the contraction in Sydney’s apartment supply pipeline, with approvals now down 57% and completions forecast to be only 15,000 dwellings in 2020 – half the number achieved in 2018.

And from a greenfield perspective, the Department of Planning’s Greenfield Development Monitor shows there are currently only 10,800 zoned lots remaining in the North West and South West Growth Centre. And this supply of zoned land is not getting restocked, there are currently 23,500 potential dwellings that have been released, but not yet rezoned.

Given this hole in the supply pipeline, there is one imminent deadline which is inhibiting growth in our industry. Currently, infrastructure contributions are due to be uncapped in 132 days on 1 July 2020. The uncapping has caused considerable angst in the industry, and we are pleased that the Premier has announced that she will fix the infrastructure funding system, but the extension of the contributions cap is needed now.

In Western Sydney, cumulative infrastructure charges will exceed $120,000 if we continue down the path of uncapped section 7.11 and the SIC charges. This increase would see section 7.11 moving from $30,000 to exceeding $90,000 in parts of Western Sydney in a period of 3 years, a 200% increase. The slide shows the work we did with SMEC to run the numbers for a subdivision in each state and an uncapped s7.11 in Western Sydney would be double the developer charges for the highest of the other states.

Even our regions are not exempt from exorbitant charges. The Western Corridor in Newcastle is facing a doubling of infrastructure charges with Council seeking to bypass the IPART process, and West Dapto, in the Illawarra is facing contributions of $52,950 per lot, a 150% increase from when the $30,000 cap applied.

There are only three possible outcomes from a hike in developer charges:

1. Residual Land Value decreases – but it’s unlikely wholesale land vendors will want to sell at a close to 40% discount, so supply will slow.

2. Developer margin decreases – in my experience this has already occurred to a certain extent but the is a floor on this as financing is conditional on hurdle rates, If the bank or financier does not see an adequate allowance for profit and risk then the money won’t flow and supply will not occur.

3. Or lastly and most likely – housing price increases and we continue with another generation locked out of the housing market.

Extending the contributions cap provides security and certainty. It will allow the market to properly adjust over the medium term to enable continued supply onto the market. As taxes and charges approach 35% of the price of a new home, we are seeking certainty in charges, with a cap of $60,000 for greenfield areas that includes section 7.11 and SIC for three years. With emerging and growing regional challenges, we also need a solution that will enable our key regions near Sydney in the Hunter, Central Coast, Illawarra, and Shoalhaven to continue to grow.
The Urban Development Institute of Australia (UDIA) NSW is the state’s leading development industry body, representing more than 500 member companies and agencies across the public and private sector.

We know recapping is not a long or a medium-term solution, however it is required to ensure affordable housing supply in the short term. And for the medium and long term my own personal view is that we require a revolution rather than an evolution of the current taxation, rating and infrastructure funding framework which is letting down the development industry as well as the broader community.

We have the opportunity to work with the government on their reform agenda and improve our system. And to that end we are campaigning to “Make Planning Work” this year, with a focus to:

    • Make Planning Responsive
    • Make Planning Fast
    • Make Planning Simple
    • Make Planning Predictable.

We contribute $101 billion in economic output for the State and over 246,000 jobs. We want to continue to grow the economy, to draw people back into the state who we have lost through interstate migration. Our planning system has been holding us back – UDIA is providing clear, well-researched policy to government and have been campaigning at the highest levels to deliver change.

It is a lofty goal, the government has outlined, to deliver ‘the simplest and most effective planning system in Australia’ and it is a goal that we applaud, and as the old saying goes if we shoot for the stars and miss, we may end up on the moon.

Well as long as the moon is zoned, serviced and has a bureaucracy with a can-do attitude that can turn around any DA in 60 days, then you can count me in.

– ENDS –


Image: UDIA NSW President Michael Sheargold at the February Luncheon.

NSW Planning Minister promises design guide review

Media Release 20 February 2020 (Sydney, Australia) – Today, Minister Stokes announced that he will be working with the NSW Government Chief Architect Abbie Galvin to improve design guidelines for urban development.

Minister Stokes told the audience at the UDIA NSW February Luncheon today he wants to create an integrated design approach bringing together the Apartment Design Guide (ADG), Better Placed, Basix and SEPP 65.

He stated that the aim of the review is to make the design framework:
1. Integrated,
2. Simple and Clear,
3. Economically responsible, and
4. Durable.

The Apartment Design Guide (ADG) has been problematic due to the prescriptive way in which local government implements the guide.

“We are pleased the Minister emphasised the ADG is intended to be a guide, and not a rule book,” said chief executive UDIA NSW Steve Mann.

“There has been a lot of frustration about homogeneity in development, which has emerged from strict adherence to the guides.”

“We don’t want developments to end up looking boring, inside and out, because Councils’ fear of breaching these guidelines prevent creativity and innovation.”

UDIA NSW has always been supportive of improving good design; however, with over a thousand pages of guidance released by the Government Architect’s Office in the past two years, the mounting complexity has inhibited good design rather than fostering it.

UDIA NSW’s recent submission to the Productivity Commissioner emphasised the need for a more holistic approach to environment and social context to achieve good design.

The Minister said he aims to have an integrated product for guiding design by the end of the year. The last review of the design guide was conducted in 2015.

The Urban Development Institute of Australia (UDIA) NSW is the state’s leading development industry body, representing more than 500 member companies and agencies across the public and private sector.

Minister Stokes today also acknowledged the industry’s anxiety around the impending infrastructure contributions deadline (1 July 2020), and promised that more information would be released by NSW government in coming weeks.

-ENDS-

Media contact:
Mia Kwok – 0435 361 697
Email: media@udiansw.com.au

Streamlined IPC indicative of the future planning system

Media Release 03 February 2020 (Sydney, Australia) – The Urban Development Institute of Australia (UDIA) NSW welcomed Minister Rob Stokes’ changes to the Independent Planning Commission (IPC) at the weekend, as an integral part of a reformed NSW Planning system.

“These are the first steps towards the planning reform promised by the Premier last year,” said Mr Steve Mann, chief executive, UDIA NSW.

“The new planning system will be more transparent, more predictable and have a renewed focus on collaboration. These reforms will be the cornerstone of building better cities across NSW.”

The announced changes will begin the move towards a more strategic planning system — one which is more responsive and more collaborative, particularly between local strategic planning and state government vision for growing cities. UDIA NSW commends Minister Stokes for accepting the Productivity Commission’s recommendations.

“We must remain focused on the big picture. We need to secure the jobs of more than 246,000 people making development happen in NSW. We can’t forget the pressures of a growing population and impending housing supply cliff.”

“Reducing bureaucracy and streamlining the planning system will not only boost productivity, but will also have long-term positive impacts on housing affordability.”

UDIA NSW supports a transparent, independent and well-resourced IPC with KPIs for its determinations. UDIA NSW’s ‘Housing the Next Generation’ Policy Agenda has been focused on working with government to create a more effective and transparent planning system.

– ENDS –

Media Contact: media@udiansw.com.au

Five-year housing forecasts announced in unfavourable conditions

Friday 24 January 2020 (Sydney, Australia) – The newly released Department of Planning, Industry and Environment (DPIE) five-year housing forecasts for Greater Sydney were announced amid the lowest development approvals rates since 2013.

The new housing projections are forecasting an 8 per cent increase in dwellings over the next five years to 2023/24, bringing the total number of new dwellings to 191,050. In a period of falling completions and plummeting approval rates, the industry will struggle to continue the trajectory of the previous five years.

“Historically strong supply can’t be sustained in an environment of declining housing approvals,” said chief executive of the Urban Development Institute of Australia (UDIA) NSW, Steve Mann.

“There are considerable hurdles restricting our ability to meet these forecasts, including increased levies and charges, and stalling investment. It makes the likelihood of meeting the Department’s 2023 commitments very challenging.”

Approvals in the year to November 2019 were down 41 per cent off the peak, to 34,765 dwellings in Greater Sydney. The industry will require significant support from government to meet these forecasts.

“There needs to be serious policy changes in order to meet these targets. The uncertainty around infrastructure contributions will be a huge barrier throughout 2020 if it is not resolved.”

The contributions required under s7.11 (formerly s.94), were capped for ten years in order to provide economic stimulation across the industry after the last downturn. The impending removal of this cap on 1 July 2020 is making industry wary about future forecasts.

UDIA NSW is also concerned that these forecasts fall short of the Greater Sydney Commission (GSC) targets for the South District and Western City.

“If the 2019-2024 rates of housing supply were to continue to 2036, the South District would be 6,160 under the GSC dwellings target and the Western City will fall 3,000 dwellings short of the GSC target,” said Mr Mann.

“Western Sydney is our future, but it won’t grow overnight. We need to put better measures in place now to accommodate our future population growth.”

– ENDS –

Media Contact: Mia Kwok 0435 361 697
Email: media@udiansw.com.au

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 ‘Simplest and most effective’ planning system benchmark

27 November 2019 (Sydney, Australia) — The Urban Development Institute of Australia NSW (UDIA NSW) welcomes NSW Premier Gladys Berejiklian and Planning Minister Rob Stokes’ announcement today for major reform to the NSW planning system.

UDIA NSW has been calling for the NSW Government, through its ‘Housing the Next Generation’ Policy Agenda, to overhaul the NSW planning system in an effort to deliver NSW the planning system it deserves that is rational, transparent and certain.

We commend the NSW Government for striving to set the “simplest and most effective” benchmark for planning in Australia through reducing red tape in government bureaucracies, and increasing transparency and certainty around developer contributions.

UDIA NSW has consistently called for the extension to capped infrastructure contributions. The timing of the announcement is apt given the imminent removal of capped infrastructure contributions, which could lead to levies tripling over three years.

We look forward to working with government through the consultation process for these reforms and providing a voice for the industry and home buyers.

Quotes from UDIA NSW, chief executive, Steve Mann:

“The UDIA’s ‘Housing the Next Generation’ policy agenda has been calling for reform of this nature over the past two years.”

“Developers need to have more confidence that planning process will not thwart project timelines and add unnecessary costs, especially when it comes to unlocking new supply in our regions.

“The reforms promise to reduce red tape is sorely needed to build the pipeline of housing supply to meet targets for our growing population.”

“We look forward to these reforms increasing productivity and restoring confidence to the sector in 2020.”

 

Media contact: media@udiansw.com.au

 

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Connectivity in the Western city critical to Sydney’s jobs growth

Media Release (Sydney, Australia) – The Urban Development Institute of Australia (UDIA) NSW chief executive Steve Mann is calling for certainty around the metro station in Camellia-Rydalmere to ensure Parramatta’s growth stays on track. UDIA NSW is calling for a show of commitment to creating Sydney’s second CBD and extending the metro line to the Western Sydney Airport.

“Today’s announcement on the Western Sydney Metro is welcome news, but it needs to do more to build connectivity within the West,” said Mr Mann.

“We want to avoid seeing a talent exodus from the West, or Parramatta will miss the mark on becoming Sydney’s second CBD.”

An additional metro station would complete the inner circle of Parramatta, ensuring that the ‘30-minute city’ model can operate for Sydney’s second CBD. This plays a critical role for jobs growth and liveability in the greater Parramatta area.

“We need the right infrastructure in place if we want to create vibrant and connected communities circling the Parramatta city centre,” he said.

“Without this we will see more pressure on housing affordability, more pressure on congestion, and a missed opportunity to tap into the talent pool in the West.”

The Greater Sydney Commission’s vision for a Central River City estimates the need for nearly 200,000 additional dwellings and 70,000 jobs by 2036. NSW has been presented with a unique opportunity for urban renewal along the Western Sydney metro line.

For Sydney to be able to compete with other polycentric, global cities, the Western Sydney Metro is only the first step in linking the central and eastern CBDs to the Western Sydney Airport.

– ENDS –

 

Media contact: media@udiansw.com.au