Praise, Concern Greet NSW Housing Target Rethink

New South Wales Premier Chris Minns’ new housing targets and scheme announcement has garnered praise and concern from the property industry.

The premier announced the revised targets for the Greater Sydney, Illawarra, Hunter and Central Coast and regional NSW as well as an incentive scheme to help councils meet the new targets. 

The targets have been set for 43 councils in those regions while the remainder of the State has been allocated a collective target of 55,000 homes to be built by 2029.

Revealed was the first stage of the Faster Assessments Council Incentives and Grants program, which will hold in reserve $200 million in grants for councils.

That money will fund more green space and sporting facilities, and street maintenance for councils.

It will be in addition to $1 billion that the NSW government expects to receive from reforms to development contributions that will be used for new schools, hospitals and roads to support growing populations.

A further $1 billion from these reforms will also be put towards other housing-enabling infrastructure for councils. 

The NSW Government is concerned that Sydney will keep experiencing more people aged between 30 to 40 leaving the city due to the lack of affordable housing to rent or buy. 

“We’re losing too many young people, people who make the city vibrant, essential workers and young families because they can’t afford a place to live in NSW,” Minns said.

“This has to change.”

▲ NSW premier Chris Minns is concerned that housing supply and costs are driving more 30-40-year-olds out of Sydney.

The new targets will ensure that new housing is not focused on Western Sydney alone without the necessary infrastructure to support it and that more housing is built around existing infrastructure where transport networks, schools and hospitals are already in place. 

Minns wants 82 per cent of the housing targets to come from infill areas with 18 per cent from greenfield areas over the next five years, similar to the long-held but not yet attained 70-30 split in Victoria.

The targets have been created with consideration of housing already in the pipeline and the homes expected from new planning reforms and environmental considerations. 

NSW had 48,393 new homes last year with the record at 74,683 in the 2018-2019 financial year. 

“We all need to be accountable. For too long, housing has been delivered without a plan,” NSW planning and public space minister Paul Scully said.

“The good news is that nearly two thirds of homes are either planned, under assessment or under construction.

“The State has already reformed the planning laws to improve efficiency and speed approvals.”

▲ NSW planning minister Paul Scully wants accountability with the housing targets that have been set for councils.

Urban Taskforce chief executive Tom Forrest welcomed the targets.

“The announcement is a significant and welcome shift, spreading the load across Greater Sydney more fairly while rewarding those LGAs that get with the housing supply agenda,” Forrest said.

“The release of targets gives greater context to councils on what is needed for them to help meet the National Housing Accord ambitions.”

Forrest also wanted to see accountability addressed further. 

“What are the consequences for not meeting the targets?” Forrest said.

“The NSW Government needs to spell out the consequences and outline how it will deal with councils that refuse to address the housing targets required of them.

“Direct assistance from DPHI may be required when a council is genuinely experiencing difficulty in meeting their targets.

“But where they are actively frustrating the process, their planning powers should be removed with a planning administrator appointed.

“Either way, the NSW Government needs to hold councils to account against their targets.”

Forrest also raised issues with councils being too involved in the process to the point of diluting policy statements. 

“The biggest problem the NSW Government faces is every time the Premier and Planning Minister make a bold announcement on housing supply, the Department of Planning spend six months or more consulting with councils, and in the meantime, they wind back the intent of the announcement with changes designed to appease councils,” Forrest said. 

“Every wind back on policy threatens the feasibility and viability of housing.” 

▲ The NSW Government’s rethink on housing targets has had a mixed response.

Local Government NSW president Darriea Turley said that the housing target announcement was welcome but that councils should have been more involved in their design.

The group represents 128 councils across the NSW.

“Councils have an important role in addressing the housing crisis but they do not build houses,” Cr Turley said. 

“It makes no sense for councils to be marked against whether new homes are completed when this is beyond the control of local government.

“We welcome the financial incentives for councils with the establishment of the Faster Assessments Council Incentives and Grants Program as this move recognises the significant financial impost that increased density and population numbers will have on our communities.”

However, buyers’ agent Michelle May is concerned that the scheme will push through substandard housing.

“Until the government also has a plan to rectify problem buildings it should not be throwing money at councils to build more,” May said.

“Housing quality is just as important as quantity and should therefore never be rushed.

“In NSW alone, four in 10 new apartment buildings have serious defects, costing an average $331,829 per building to fix. 

“Waterproofing, structural issues, fire safety issues and defects in the roof and facade are some of the problems that commonly crop up in new buildings.” 

The LGNSW also referenced a KPMG report that shows homes being approved but not completed due to increasing costs of material, labour shortages and high interest rates with 80 per cent of the stalled projects falling into the high density housing category.