This article is from the Australian Property Journal archive
THE development industry’s peak body has a welcomed the Productivity Commission’s decision to review of the nation’s 40-year old town planning laws.
According to the Urban Taskforce’s CEO Aaron Gadiel attributed the nation’s current undersupply 200,000 housing dwellings to the 1970s highly prescriptive regulation and large development levies.
“There’s a legion of detailed planning controls governing every aspect of urban development, yet in most parts of Australia, even developers who meet all of the express requirements of these rules can still be refused planning approvals.
“Policy makers seem to have forgotten the importance of property rights and secure title in attracting investment. This has led to an undersupply of commercially developable land – both in the inner and middle ring suburbs of major cities, and on the edge of our cities.
“Even when land is theoretically available for development, commercial development can be made impossible by planning rules, delays and levies that rob projects of feasibility,” he added.
Gadiel said that ever-increasing development levies are requiring home-buyers to bear the burden of growth infrastructure at an unaffordable rate.
“In NSW key councils levy between $30,000 to $60,000 on the cost of each new home. In Queensland, key councils impose levies ranging from $20,000 to $40,000. In Victoria a council levy of $15,000 is not surprising.
“State governments are getting in on the act, with an $11,000 home levy in Western Sydney and a $6,000 to $7,000 home levy on the edge of Melbourne,” he continued.
The Productivity Commission will review the operations of the states and territories’ planning and zoning systems and look at business compliance costs as well as overall efficiency and effectiveness of the functioning of cities.
The Commission has been specifically tasked to seek reforms that:
• prevent ‘gaming’ of appeals processes
• put processes in place to maintain adequate supplies of land suitable for a range of activities
• eliminate any unnecessary or unjustifiable protections for existing businesses from new and innovative competitors.
Gadiel said the focus on competition was welcome.
“The undersupply of commercial developable land has given land owners too much bargaining power when negotiating with developers. As a result, prime sites lie idle while land owners hold out for higher prices, safe in the knowledge that they are protected from lower bids by rival property owners and by town planning laws.
“The lack of competition makes housing more expensive than it needs to be and stifles the development of business parks, but its effect are most obvious in relation to retail development,”
Gadiel said that the Urban Taskforce would participate in the Productivity Commission review.
Australian Property Journal