Housing affordability inquiry told developers funding NSW schools and hospitals
A housing market expert has told a federal inquiry he was stunned to learn property developer contributions — which can run to $90,000 per dwelling — now fund schools and hospitals.
NSW
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The federal agency responsible for improving housing outcomes has revealed its shock at discovering that property developer contributions are being used to fund hospitals and schools.
The National Housing Finance and Investment Corporation told an inquiry into housing affordability that the size of the contributions were increasingly difficult for property developers to predict, but could be as much as $80,000 or $90,000 per dwelling.
Exactly how the money was then used was “hidden”, NHFIC said.
The chair of the inquiry, Sydney Liberal MP Jason Falinski, described the evidence as “probably the most damning” the inquiry has heard.
Recent research by the NHFIC revealed NSW and Victoria allow “special infrastructure contributions” to be used for “environmental conservation” or social housing.
But Queensland, South Australia, Western Australia and the Northern Territory do not.
WA, Tasmanian and the NT will not permit developer cash being spent on health facilities.
But NSW, Victoria, Queensland and SA do.
For the past decade, developers have special infrastructure contributions to the NSW government in high-growth areas of Western Sydney, the NHFIC research said.
These contributions had also been levied in Gosford since 2018 and, for the past year, in both the St Leonards-Crows Nest district and Bayside West.
NSW Department of Planning documents show that the special contributions at Bayside West — Arncliffe and Banksia — will raise $88 million. A quarter of this will be spent on schools.
NHFIC senior adviser Hugh Hartigan told the inquiry: “I didn’t know they (developer contributions) were being used at the state level to help fund schools and hospitals.
“These are things traditional funded out of general revenue”, Mr Hartigan said.
There were better ways for state governments and local councils to raise money for schools and pools, Mr Hartigan said.
With developer contributions, “there is less transparency, so I think these are bit more hidden, which probably tends to reduce the accountability of what’s being raised and how they are being used,” he said.
Mr Falinski told executives from the Australian Bureau of Statistics, who appeared next at the inquiry, that “NHFIC just presented us with evidence that one of the reasons (housing) supply isn’t coming to market … was because builders cannot be sure how much they are going to be charged by local government and state government so they are either abandoning or sitting on the development until they know.
“NHFIC, probably in the most damning evidence so far, said that not only are charges going up through the roof for people trying to build new housing, but also those charges are being hidden or not being made transparent”, Mr Falinski said.
The housing affordability inquiry has received more than 150 submissions and run seven days of public hearings. It is due to report to federal Treasurer Josh Frydenberg in February.
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