The bad marriage that risks pushing up house prices

Jane Fitzgerald

NSW has a relationship problem and it's not one that is going to resolve itself through therapy, long walks on the beach or candle-lit dinners. It's a relationship problem between our state government and local councils. It's a long-term relationship introduced with the Municipalities Act in 1858 and it has never been a smooth one, but it is one that has deteriorated in recent years.

Local government reform was an important and brave approach from then-premier Mike Baird, but it placed the state government in the dog house with local councils. A reform that was to streamline local planning, create larger more economically stable councils and better services for the community has been held up in court battles and pegged back by an increasingly cautious state government mindful of its popularity with the community.

The ever-present housing affordability problem has also placed additional strain on the relationship with questions of who is to blame and who needs to act. We have seen important work come from the Greater Sydney Commission, but it is political will at a local and state level that is needed to ensure we see action.

Key strategic planning documents, housing targets and the funding of local infrastructure all require a commitment from local councils to meet expectations and willingness from the state government to use incentives or compel councils to meet key outcomes, yet we have seen neither.

The scrapping of the Local Infrastructure Growth Scheme in the state government's Housing Affordability Plan, a scheme where the state government financially supports growth areas for new homes, shows the state government is finished with sharing the cost of local infrastructure funding with councils.

A semblance of cooperation is critical to achieve any of the key reforms outlined in the Government's Housing Affordability Plan and ensure the money dedicated in the state budget is money well spent. This places at risk the objective of more affordable homes.

With local government reform fraying and more responsibility given to councils for housing and infrastructure, we have arrived at a point where additional expectation has been placed on the hodge podge system we have, yet we are expecting different, better results. It's madness.

The state government has been sending some sweeteners the councils' way to try and patch up the relationship. By not locking in mandatory planning panels to approve development across the state and the removal of infrastructure caps for local infrastructure so that councils can increasingly rely on the development industry for funding, they are looking to go from the dog house to the bedroom.

Yet these are not long-term solutions and do not answer the bigger questions: how will we ensure we build enough homes by 2036; how will councils be compelled to meet targets, are infrastructure costs consistent and fair across metropolitan Sydney; do all councils have the capacity to update key planning documents to keep pace with growth?

To meet the demands of our state's growth and achieve lower house prices, the state government must be brave and bold.

We must see true reform to the local government system completed in this state and see incentives introduced, such as new government funding for councils, directly linked to key development and housing targets being met. Initiatives such as mandatory, independent planning panels to oversee development applications must be locked in to take the politics out of local planning.

We must also see consequences for councils failing to meet social and development targets and the community's expectations. These should include the direct intervention of the state government or appropriate agency to write and implement key strategic planning documents should a council fail to do so within the required timeframe. Mandatory timeframes should also be introduced for the spending of council infrastructure funds drawn from development levies so that the community can see a direct link between new development and new local infrastructure. Without reforms such as these, we will continue to see plans and strategies from the state government pile up and a lack of action to meet our state's growth.

It's hard, but good relationships are hard work and in this case, divorce is not an option.