The NSW government has worked hard to improve housing affordability and supply.
Consequently, housing prices have slowed and, somewhat predictably, property developers are complaining.
They have benefited from a booming property market and from this state government’s intense infrastructure development and release of new greenfield areas. And they will continue to do so for decades.
But they now claim this State government’s planning initiatives are increasing/doubling or tripling the cost of development. Their rubbery figures don’t withstand scrutiny.
What should be scrutinised is how the sector providing four of the top seven Australians on the AFR Rich List will do its bit as NSW continues to grow.
We can’t build new communities and sustain our record housing completions without developers making a fair contribution. The days of building houses in subdivisions without footpaths or building apartment blocks without open spaces and transport links are over.
That’s why we introduced Special Infrastructure Contributions (SICs) for developers in some parts of Sydney.
They are State government levies contributing to the infrastructure needed to support development, including roads, schools, health and emergency services.
SICs are a speedier, transparent policy. They undergo feasibility testing to ensure the rates are reasonable enough to not impact housing supply or affordability. And they ensure developers contribute to communities rather than merely profit from them.
Developers claim rising costs mean it is no longer viable for them to start projects.
That’s fine. Governments also prioritise projects within their means although the consequences on a state budget’s bottom line are more consequential than a property developer’s profits.
And developers claim they’ll simply pass these costs on to home-buyers. Well, if the property sector wants to raise prices to maintain their super profits, buyers will make their choices in this free market.
Let’s be clear. The cost of providing local and state infrastructure has not dramatically increased in the last year.
The state government is phasing out (over three years) a subsidy for developers that had been funded by NSW consolidated revenue.
So, we should. Taxpayers should not be subsidising property developers.
Over time, the cost of local infrastructure delivery has increased, primarily because this state government realised development must be supported by the parks, roads, drainage and services local communities deserve and that developments require.
If that means developers’ profits are marginally less than super, that’s a small price to pay to ensure NSW continues providing healthy, functional communities.