Developers Asked to Shine Light on What’s Holding Up Housing

Housing delivery is being held back by over-regulation, the Productivity Commission says, and constrained supply is impacting affordability. Commissioner Alison Roberts told The Urban Developer that an inquiry into housing supply regulation was now seeking “more granular detail about where the biggest regulatory pain points are for developers in the approvals process”, with submissions and a survey open until September 30 . An interim report cites examples of supply-side regulatory challenges, including onerous reporting requirements and conflicting advice. One developer was told by a council to plant more native trees, while simultaneously receiving input from the local fire authority to minimise tree canopy. “We understand that there’s a variety of ways in which the approvals process can slow things down, which then we know adds cost and also can impact the feasibility of projects,” Roberts said. A month-long delay to approval can cost $7609 for a greenfield home, $11,166 for a “character zone” townhouse and $3403 for an apartment, according to the Centre for International Economics. Best-practice principles already identified by the Productivity Commission include adopting a “build mindset”, only regulating when necessary, co-ordinating with infrastructure and keeping processes simple. The commission is also investigating specific challenges around restrictive land use controls and speeding up approvals. Examples of successful reform will also be highlighted, with recommendations to governments and regulators to follow. “We certainly see examples where states and territories are moving ahead,” Roberts said. ▲ The Productivity Commission’s recommendations will speak to all levels of government and regulatory bodies. “One of the things that we’ve been asked to do in this inquiry is to assess the state and territories’ progress against these best-practice principles. “To identify where some might be further ahead than others, where good practice exists, and to highlight that, and see how it can be further embedded. “While state-based reforms can have an impact, we don’t want it then being chipped away by local government … by having specific requirements around character or heritage, or particular height limits and other requirements that differ from the state-based approach.” The use of AI in the sector is showing “a lot of potential” and planning teams are finding it “very helpful” in pilot schemes and trials, Roberts said. However, its role will be limited to collating information and procedural assistance, rather than assessment. “Our perspective is that it’s not being viewed as a replacement for planning judgement or the role of planners in terms of determining what is required.” ▲ Regulatory burden is affecting the economy broadly, but is a particular issue in housing supply, Roberts said. While the construction sector has experienced a particularly acute slowdown in productivity , economic torpor is widespread and long-running. According to Export Finance Australia, productivity growth across advanced economies fell from 1.4 per cent in 1995 to just 0.4 per cent after the pandemic. The Productivity Commission has identified regulatory burden as among five broad thematic pillars in the economic malaise, and as a result “the [Commonwealth] government’s adopted … a big regulatory reform agenda, to really try to cut down and look closely at the amount of red tape”. “Additionally, we’ve got on foot [a separate] inquiry looking at business dynamism, that also has a lens to where some of the regulatory burden is,” Roberts said. “Also, looking at where there are inconsistencies between jurisdictions within our Federation as well that create challenges for business.” While the inquiry’s mandate is limited to a specific theme, the broader housing market and development sector have also been considered in other reports and inquiries, including reform of the National Construction Code.

Residential
Patrick Lau
Mon 21 Sep 26

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