States compete for a share in $3bn to build new homes, but Greens slam new rental agreement

NSW could score $1 billion from the Albanese government for building more new homes — but the Greens says Labor leaders also “spat in the face” of renters with a new agreement for them.

ACT Chief Minister Andrew Barr, SA Premier Peter Malinauskas, Queensland Premier Annastacia Palaszczuk, NSW Premier Chris Minns, Prime Minister Anthony Albanese, NT Chief Minister Natasha Fyles, Victorian Premier Daniel Andrews, West Australian Premier Roger Cook and Tasmania's Premier Jeremy Rockliff have committed to build 1.2 million homes over five years. Picture: NCA NewsWire

Anthony Albanese has offered Chris Minns a $1 billion prize if NSW can increase the number of new home builds by about 30,000 a year.

The Prime Minister pitched a bonus payment of $15,000 per dwelling in a meeting with state and territory leaders in Brisbane on Wednesday.

Mr Albanese said a total of $3bn was on the table to incentivise an extra 200,000 new home builds nationally over five years.The current target over that period is one million.

“We don’t control zoning regulations,” he said. “We don’t control approvals.

“What we can do is indicate our support for those jurisdictions who are putting their shoulder to the wheel to increase housing supply,” the PM said.

BRISBANE, AUSTRALIA - NewsWire Photos - AUGUST 16, 2023. Prime Minister Anthony Albanese (centre) during a National Cabinet meeting in Brisbane. Picture: Dan Peled / NCA NewsWire

The move is the first time in decades that the federal government has offered funding linked to the production of more homes.The leaders also agreed on planning reforms meant to improve affordability.

Urban Taskforce CEO Tom Forrest said the federal government was “leading the way” and that it was pleasing that states were on board.

To meet the new goals and get the full $1bn, NSW would need to add about 77,000 homes annually from next year, Mr Forrestsaid, up from 47,000 in 2022.

Experts said governments must also stop adding to new home costs.

From October 1, thermal performance standards for apartments will be tightened in NSW, increasing the price of a typical two-bedroomunit by as much as $22,000, the Urban Taskforce says.

Other states apart from Queensland have deferred such changes for all new dwellings until supply chain constraints ease. Macquarie Street only did so for houses and duplexes.

CEO of the NSW Urban Taskforce is pictured in front of the Ryde Civic Centre which is set to be demolished. Picture: David Swift

Mr Forrest said: “For some inexplicable reasons they decided not to do that for apartments even though they are the more affordableend of the market.”

And a new “housing productivity contribution” charge will add $12,000 to houses and $10,000 per apartment.

Charges for transport infrastructure and biodiversity are also in the pipeline.

“Those numbers are not known yet,” Mr Forrest said. “They could be $30,000 or $5000.”

Property Council NSW executive director Katie Stevenson also noted that Sydney Water was preparing to reintroduce developercharges, at the direction of the NSW Government.

Urban Taskforce’s Mr Forrest said with all the added costs, some more projects won’t go ahead because banks will decide theyaren’t financially viable.

Housing Industry Association chief economist Tim Reardon said: “Every time that we add to the cost of a new home we get fewernew homes.

“That, at its core, is what’s caused this problem over a few decades,” Mr Reardon said.

He said it was good that the Prime Minister wanted to “intervene,” but he added that “I don’t think yet that the three tiers of government have worked out how to improve housing supply.”

Construction workers at an apartment building. Picture: NCA NewsWire / David Geraghty

Mr Forrest said: “Whenever any local community or council wants to approve the amenity or lifestyle of their area, the firstpeople they go to are developers.

“They see developers as the ATM or the goose that lays golden eggs. It’s just not like that anymore,” he said.

“When you do that it simply adds to the price of homes when they are sold to consumers.”

NSW Housing Minsiter Rose Jackson said the government welcomed the “ambitious targets”.

“We are absolutely aware of the challenges facing us to deliver our fair share of homes across the state and we’re getting on with the job of building more homes in places people want to live,” Ms Jackson said.

“The reality is every day our housing crisis gets worse and delivering more homes is a key priority for our government.”

It comes as Greens warn Labor leaders have “spat in the face” of renters with a new agreement to standardise protections that largely already exist.

The New Home Bonus scheme was one of two major announcements following a meeting of national cabinet in Brisbane on Wednesday, but the second agreement, dubbed A Better Deal For Renters, has been slammed by the Greens.

Under the deal states and territories have agreed to work toward nationalising standards for reasonable eviction, fees for breaking lease, basic liveability requirements for rentals like hot and cold water, as well as bans on soliciting rent bidding.

The Commonwealth will pay states $15,000 for every new home they build over their existing required share over the next five years. Picture: Dan Peled

However of the eight points related to renting rights, standards and protections leaders agreed to, Greens housing spokesman Max Chandler-Mather said almost all were either already in operation or being worked toward by states and territories.

“The Prime Minister today has tried to dress this up as a real announcement, when in reality he’s announcing the status quo,” he said. “The status quo is unlimited rent increases every year.”

Mr Chandler-Mather likened the deal to Labor leaders attempting to “polish a turd” and said limiting rent increases to once-per-year wouldn’t protect Australians from huge annual hikes.

Mr Albanese rejected suggestions the national cabinet meeting had elicited little for renters, arguing the reforms were aimed at working towards “greater national consistency”.

The PM said housing supply was the solution to easing rental stress, again rejecting Greens’ calls for caps or a temporary freeze on rent rises.

“Supply is … the key to putting downward pressure and assisting renters in addition to the sensible renters rights that we‘ve agreed to,” he said.

“There is no jurisdiction in the country that is arguing for (a rent freeze).”

Many states like Victoria have already implemented the renting protections agreed at national cabinet. Picture: Dan Peled

Mr Albanese said the $3bn on the table to incentivise new home builds would drive construction at the national level as the Commonwealth did not control land release.

“We don’t control zoning regulations,” he said. “We don’t control approvals.

“What we can do is indicate our support for those jurisdictions who are putting their shoulder to the wheel to increase housing supply.”

In addition to the building incentive, the Commonwealth will also stump up $500 million for local and state government to kick start housing supply in “well-located areas” through supporting infrastrure such as connecting roads, sewerage and other essential amenities to new housing development.

This Housing Support Program will be a competitive funding program that can also be used to improve building planning capability.

Property Council chief executive Mike Zorbas welcomed the “competition-style” incentive scheme to drive new housing builds.

“National cabinet is tackling our housing supply deficit in a co-ordinated way for the first time in a long time,” Mr Zorbas said.