Time for radical surgery

NSW is recognised as having the worst planning system in Australia. And for nearly 40-years, successive state governments have talked up their “reform program”. Unfortunately, the politics almost always gets in the way of new policy settings that would benefit home-buyers. That means changes to the planning system have been limited to the fringes and the speed of change has been glacial.

When the supply of new dwellings cannot keep pace with the demands of a growing population, housing prices soar. That’s bad for the economy, but it’s diabolical for people wanting to enter the housing market.

With research showing a continued failure to meet demand will leave the Hunter 30,000 homes short by 2024, now is the time for radical surgery. Instead, NSW Planning Minister Rob Stokes has recently announced a new range of band-aids.

A shaky consensus exists among property professionals and investors that the proposed changes are a sign from the Baird Government that they remain fair dinkum about a future overhaul of the planning system. But the dominant sentiment among industry circles is that the Minister has not gone far enough.

Mere amendments to existing legislation are grist-to-the-mill for any government, but they do not represent the hard-edged accountability, performance and implementation measures needed to resolve the Hunter’s chronic housing shortage and help alleviate the growing affordability crisis. The only glimmer of hope for the Hunter’s aspiring home-owners came late last year with the release of a new 20-year regional plan.

In what the Property Council of Australia described as “a smart piece of business by government”, Hunter Development Corporation will have responsibility for the plan’s implementation and will be required to produce new levels of transparent reporting on progress against housing targets. Along with a concise regional vision and a real commitment to removing bureaucratic hurdles, the plan could herald a new culture of responsibility for delivering new housing.

Another key plank of the Minister’s package relates to infrastructure funding and delivery. The Hunter’s current scheme is broken and makes investors reluctant to tackle the urban fringes. Developing the right model over the next few months has the potential to deliver a new and powerful economic lever to government. And whatever the detail of the final plan, it will most certainly determine land economics across the Hunter to 2036.

Here again, we could find ourselves ahead of the curve state-wide, with consultation underway on a draft regional plan for developer contributions to fund infrastructure. Already, a smarter approach is under consideration which includes a schedule of infrastructure projects that sets in place line-of-sight land use planning. And speculation is rife among industry circles that the Hunter will be used to blaze a new trail in this policy space, with the final plan rolled-out as the template for Sydney’s six district plans.

The greatest risk to the Hunter’s current economic trajectory remains the supply and affordability of new housing. Working hard and making bold decisions to eliminate that risk remains one of the most serious tasks of the Baird Government.