Grab a home-ground ad­van­tage

Mercury (Hobart) - - TALKING POINT - It’s time to take a dif­fer­ent ap­proach to reg­u­lat­ing the hous­ing in­dus­try in Tas­ma­nia, writes Hank Petrusma

THE tax bur­den on new hous­ing in Tas­ma­nia is mas­sive. As much as 40 per cent can be added to the cost of a new build by di­rect, in­di­rect, hid­den and am­bigu­ous taxes.

Add to this the cost, frus­tra­tion and de­lays caused by con­sti­pated bu­reau­cratic pro­cesses and red tape that ties de­vel­op­ers in knots, and it is lit­tle won­der we have a prob­lem.

There are di­rect taxes (GST, stamp duty, land tax, coun­cil rates), as well as hid­den and am­bigu­ous taxes (ex­ces­sive in­fras­truc­ture, zon­ing re­stric­tions and plan­ning de­lays and un­cer­tain­ties). The bur­den in Tas­ma­nia is about 40 per cent of the con­struc­tion cost of a newly built dwelling.

For a build of $300,000, the ex­tra cost is about $120,000, ac­cord­ing to Hous­ing In­dus­try As­so­ci­a­tion se­nior econ­o­mist Shane Garrett.

Among the big­gest de­lays and im­ped­i­ments to devel­op­ment is lo­cal govern­ment, which shows no un­der­stand­ing that de­lays add costs to de­vel­op­ments.

Hav­ing a large sup­ply of land blocks avail­able would solve many of the prob­lems with sup­ply and af­ford­abil­ity.

Many op­por­tu­ni­ties ex­ist to de­velop blocks in fringe ar­eas where ser­vices al­ready ex­ist. The cur­rent ur­ban growth bound­aries should be re­viewed, and neigh­bour­ing ti­tles amended where ex­ist­ing in­fras­truc­ture and ca­pac­ity ex­ists or can eas­ily be pro­vided.

The Govern­ment and com­mu­nity have noth­ing to lose by do­ing this, be­cause it would in­volve pri­vate in­vestors and de­vel­op­ers us­ing their own funds to pro­vide ad­di­tional land and hous­ing that would be con­trolled by nat­u­ral mar­ket forces of sup­ply and de­mand. This would pro­vide a lot more hous­ing stock in the medium term, which should in turn reg­u­late prices and al­low Tas­ma­nia to grow.

Rules should be changed to al­low an­cil­lary dwellings, dual-occupation homes and mi­cro-apart­ments to be de­vel­oped quickly at higher den­si­ties.

Al­low­ing high-den­sity zon­ing within ex­ist­ing res­i­den­tial zones — when it is to pro­vide a mix of so­cial hous­ing — would make projects vi­able for de­vel­op­ers.

Ur­ban growth bound­aries need to be re­viewed to iden­tify green­field sites for devel­op­ment where in­fras­truc­ture needs to be con­structed or up­graded.

Plan­ning au­thor­ity should be re­moved from all coun­cils and given to a State De­part­ment of Plan­ning, Devel­op­ment and the En­vi­ron­ment, which could op­er­ate through Ser­vice Tas­ma­nia of­fices. This would pro­vide a con­sis­tent ap­proach and re­move the im­ped­i­ment of al­der­men and coun­cil­lors some­times bas­ing de­ci­sions on emo­tion and per­sonal pref­er­ence, rather than com­pli­ance with the plan­ning scheme.

This should also pro­vide faster as­sess­ment and ap­proval times, which can be painfully slow.

Block­ages that slow or pre­vent devel­op­ment ap­pli­ca­tions for sub­di­vi­sions and unit de­vel­op­ments — such as costs, fund­ing or tim­ing — could be re­moved by es­tab­lish­ing a means for the State Govern­ment to en­gage di­rectly with de­vel­op­ers.

One way to help get these projects and re­move the “block­ers” could be by es­tab­lish­ing a Premier’s Devel­op­ment Fund to pro­vide loans or pre-sale de­posits to de­vel­op­ers to get projects off the ground.

These loan funds could be re­cy­cled ev­ery 12-18 months, de­pend­ing on the length of the project, to pro­vide sup­port for growth and devel­op­ment.

Re-sale de­posits could be used by the Govern­ment to add to their ex­ist­ing hous­ing stock.

Pay­ing and re­leas­ing these de­posits to de­vel­op­ers would al­low projects to be started ear­lier, over­com­ing fund­ing as a ma­jor prob­lem for de­vel­op­ers.

Ex­ist­ing res­i­den­tial sites suit­able for Govern­ment and pri­vate devel­op­ment should be iden­ti­fied for in­fill devel­op­ment. In­cen­tives could be pro­vided through the Premier’s Devel­op­ment Fund so sites could be de­vel­oped sooner.

Apart from ini­tial fund­ing and in­cen­tives to get projects off the ground, the re­main­ing work and in­vest­ment would be done by pri­vate de­vel­op­ers. There would be very lit­tle risk or work re­quired from the Govern­ment to pro­duce more hous­ing stock.

Though a great deal of land re­zon­ing is nec­es­sary, the process is ridicu­lously long and the time taken must be mas­sively re­duced and the process over­hauled.

The plan­ning pro­cesses for modest res­i­den­tial de­vel­op­ments are scan­dalously slow. It takes many months to process devel­op­ment and build­ing ap­provals. This is ex­tremely frus­trat­ing and of­ten costly, fre­quently re­sult­ing in a devel­op­ment not pro­ceed­ing.

The time taken for small res­i­den­tial de­vel­op­ments — say, be­tween two and 12 res­i­den­tial units — is tak­ing many months and some­times years to gain ap­provals, due to an­ti­quated bu­reau­cratic pro­cesses.

There is a re­luc­tance to make de­ci­sions, un­less pa­per­work has le­gal opin­ion that gives a coun­cil the con­fi­dence to de­cide. In many cases, these small de­vel­op­ers sim­ply give up.

There is a gross lack of re­sources in coun­cil plan­ning de­part­ments. Statu­tory time­frames should be pro­vided for devel­op­ment ap­pli­ca­tions and build­ing plans to min­imise abuse of the Re­quest for In­for­ma­tion (RFI) process. To speed up the process, all de­part­ments should as­sess or re­view ap­pli­ca­tions at the same time, rather than in order through the var­i­ous de­part­ments.

Many RFIs are just un­nec­es­sary rev­enue-raising costs. For ex­am­ple, traf­fic im­pact state­ments and bush­fire as­sess­ments are re­quired for de­vel­op­ments, when these have al­ready been pro­vided as part of a prior sub­di­vi­sion ap­proval.

TasNet­works’ role needs to be re­viewed. The costs and de­lays caused by the TasNet­works monopoly should be dereg­u­lated and com­pe­ti­tion in­tro­duced.

If plan­ning stays with lo­cal govern­ment, one ded­i­cated plan­ner should be as­signed to each pro­posal, so the pro­ce­dure is stream­lined, not stopped just be­cause some­one is on leave. As things stand, the ap­proval and han­dover process can come to a halt be­cause a coun­cil of­fi­cer is on hol­i­days or un­avail­able.

De­vel­op­ers run full-time busi­nesses and costs don’t stop ac­cu­mu­lat­ing just be­cause some­one is on leave.

Hank Petrusma, a di­rec­tor of EIS Prop­erty, has been in the real es­tate in­dus­try for 47 years. He was the mem­ber for Ho­bart in the Leg­isla­tive Coun­cil from 1982-92, and has been a pa­tron and sup­porter of com­mu­nity or­gan­i­sa­tions, in­clud­ing foun­da­tion chair of Com­mon Ground, which de­vel­oped ac­com­mo­da­tion for home­less and low-in­come Tas­ma­ni­ans.

The plan­ning pro­cesses for modest res­i­den­tial de­vel­op­ments are scan­dalously slow

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