After decades of relatively tight development controls and delays in approving new building developments in New South Wales, especially mid to high-density residential housing, the shackles are now off. Major problems are already arising with community anger on the rise.
The state government, through a set of new planning instruments (most notably Low and Mid Rise Housing Policy SEPP) opened up low and mid rise development in 171 locations across Sydney and other regional centres.
The policy is directed to increasing housing stock, including affordable housing in areas close to transport.
This is a response to urban sprawl and the so-called ‘housing crisis’.
Like many policies, the intent is laudable, but the execution is proving hugely problematic. Before discussing some of the issues with this development frenzy, two things should be acknowledged: first, there have been some bottlenecks in development approvals that needed addressing; second, the need for new housing stock is driven to a significant extent by unreasonably high levels of immigration which is producing population pressures, social cohesion issues and a range of other issues. To this extent, the housing shortage is in part a product of an unpopular government immigration policy implemented with no electoral mandate and which is looming as a critical election issue.
We are building houses for people who are yet to live in Australia…
A big problem arises from the application of the labyrinthine planning laws and instruments made more complex by recent policies.
Planning and development controls are governed by primary legislation being the Environmental Planning and Assessment Act. The EPA Act is then augmented by a raft of regulations and subordinate instruments including the aforesaid LMR SEPP.
There are also local government plans (LEPs) and development control plans (DCPs).
Private certification is now available to allow renovators and developers to bypass the local consent authorities and the Councils have their own new assessment processes, including the use of ‘independent planning panels’.
On top of this, certain significant developments are approved by the state government directly.
Lastly, the Land and Environment Court has jurisdiction to review development approvals and refusals.
This multi-layered approach produces inconsistencies, huge cost and risk of error. It is also a system that can be gamed by sophisticated players with deep pockets, most notably developers. Because of the number of consultants, bureaucrats and decision makers involved there is great scope for graft and soft and hard corruption.
Huge inconsistencies in approach arise from the complex system and the state government is pressuring consent authorities to give effect to their policy at the expense of local environmental and planning concerns and against community backlash. The cost of this overlapping regulation is ultimately borne by home buyers and results in neighbourhoods being permanently stuffed through poor planning decisions.
The new system is also characterised by the so- called affordable housing incentive which allows developers to obtain a density uplift and other concessions if they devote a certain proportion of new apartments for ‘affordable housing’. This aspect needs an article itself. Suffice to say it’s prone to land banking and widespread rorting and the idea that affordable housing will be made available in Mosman, Woollahra, or Edgecliff needs careful scrutiny.
In some local government areas, communities are up in arms about the deluge of development applications pouring in to take advantage of the LMR policy. Mosman, Woollahra, and Ku-ring-gai being notable examples. It’s beguilingly easy to dismiss these concerns as the self- entitled rantings of the privileged few who live in these locations. However, a more open- minded consideration reveals some serious issues.
In Rose Bay and Double Bay, where land values are the highest in Australia, single dwellings are being amalgamated by developers and applications are lodged at a great rate for massive multi-story dwellings.
The playbook involves a group of neighbours, often empty nesters or over 55-year-olds, selling their homes in a line to a developer. Usually, a premium is offered over the value that would be obtained in a typical single sale. The sales are not completed unless until the developer has approval for the development. Often, there are significant delays and the sales fall over if the approval hits a snag. This ties the sellers up for ages.
Those who are able to cash out are cheering if the deal completes.
The neighbours not in on the deal are left contemplating the huge erosion of the value of their homes as a massive building is erected next door, creating noise, obstructing views and creating traffic and other problems. Neighbours are becoming increasingly hostile to each other.
Most of these apartments will be sold to the same empty nesters who sold their homes to the developer or to wealthy foreign buyers and will be left empty or at best will be leased out at usurious rents to recoup the astronomical purchase price. The apartments in the Eastern suburbs won’t be filled with teachers, nurses, and hospitality workers.
Huge tensions arise from this dynamic and the impacts on the community haven’t been properly thought through or costed.
The council typically refuses these developments at first instance as they face hundreds of objections and huge community backlash to overpowering towers being built in hitherto quiet streets. These developments typically offend local planning controls and have heritage impacts. The developer then escalates to a planning panel and ultimately the Land and Environment Court.
This process has only just started in many postcodes and is heating up.
If it was just about views, overshadowing and preservation of the character of a neighbourhood, the cost might be justified on balance if it created more stock, however there are also more serious planning concerns at stake.
Recent development applications have been lodged in areas designated as flood zones or where the ground water table is only one meter underground. Excavation for parking basements results in dewatering and a shift in the surrounding ground. This creates settlement and resettlement and can and has caused significant damage to surrounding properties.
Geotechnical and engineering reports obtained by Councils and concerned locals highlight huge risk.
Recently, a development site was shut down as adjoining buildings were about to collapse. Another council is facing huge community anger over recent applications to erect eight and nine storey buildings in known flood areas with a high water table.
Neighbours are left gobsmacked wondering why their applications to put a swimming pool in their backyards a couple of years ago were refused on the basis that excavation might present too high a risk of subsidence, are now having to fight the council to stop six-meter-deep basements next door.
Lawyers, engineers, councillors and council staff believe there will inevitably be class action litigation resulting from building in high-risk zones and the cost and angst will be significant. The state government seems very disinterested in these issues, but it will need to pick up the tab in the future.
The other huge problem is the lack of infrastructure. There is no capacity in the current road, power, water and sewerage infrastructure to accommodate the expected pace of development and no way of readily expanding it without sending the state broke. There are too few public schools or car parks in the Eastern Suburbs or lower North Shore and diminishing green space.
A sensible planning response would have been to develop the infrastructure in advance of promoting a building frenzy, so it was ready for the higher density. Building new roads, transport hubs and power and water infrastructure is cheaper and easier with lower density. The developers should also be required to contribute to the cost of required infrastructure, but the development conditions are ridiculously soft having regard to the super profits available.
A 20 or 30 per cent increase in density in areas which are already choked in peak hour traffic and coping with inadequate infrastructure is a recipe for disaster.
Simply kicking this can down the road is negligent. State governments across the country have amply demonstrated that they can’t be trusted to properly assess future risks and calibrate policies accordingly. They make massive mistakes every day. If they don’t listen to the communities they serve, they will make more mistakes.
The answer to these problems is not to halt all development but nor is it to allow development at all costs and whatever the risk and impact on the community.
The state government needs to take a breath and get out of the thrall of developers and its religious zeal for development. Identification of suitable zones for higher density needs further coordination with the local councils and residents.
The federal government also needs to implement a sensible and sustainable population and immigration policy to mitigate the housing shortage.
At the local government planning level, developments need to be better planned and costed for externalities such as social cohesion and quality of life and the pendulum has swung too far and needs to swing back to more sustainable development.
What’s the point of building thousands of new homes if everyone living in them is miserable because our quality of life and access and amenity is destroyed in the process?
Andrew Christopher is a lawyer and writer
