Building lots of new homes is a target that can’t be met, but filling empty dwellings would be a good start

NSW Labor had a plan to build 75,000 new homes every year. But that turned out to be way to ambitious. However, there’s one way of improving the situation that should be gaining traction, writes James O’Doherty

If you are still admirably sticking to any resolutions you made as the clock struck midnight on January 1, congratulations. You are doing better than Premier Chris Minns.

Less than three weeks into 2024, Minns has officially abandoned what was arguably his government’s most important goal for the year.

The goal, to build about 75,000 new homes every year until 2029, was always going to require a herculean effort.

It would have required NSW to deliver about twice as many homes as it was forecast to build before national cabinet agreed to its lofty ambition to ease the housing crisis.

But instead of ramping up construction, NSW has actually gone backwards.

The latest Australian Bureau of Statistics data has now blown those targets out of the water, with building activity plummeting to the lowest levels in more than 10 years.

In NSW, the number of new homes started in the September quarter fell by more than 35 per cent. Commencements were down by more than 28 per cent compared to a year earlier.

None of this comes as any surprise to industry leaders, who have been warning for months that Prime Minister Anthony Albanese’s goal of building 1.2 million homes over five years was unachievable.

Premier Chris Minns has backtracked on an ambitious housing plan. Picture: Justin Lloyd.

Minns was right on Wednesday to bite the bullet and concede defeat. Anything else would have been disingenuous.

While the Minns Government has made significant headway in clearing planning red tape and moving to increase density, it will take some time for construction to catch up.

However, he needs to be held accountable for failing to meet targets that he agreed to.

Minns will not even concede that falling short of his yearly housing targets would be a “failure”.

The Premier has also failed to say how many new homes he expects NSW to deliver this year, simply adding that we will build “as many as we possibly can”.

In other words, Minns wants as much room for error as possible.

I am no fan of corporate buzzwords but one phrase attributed to a so-called ‘management theorist’ comes to mind: “what gets measured gets managed”.

If building 75,000 new homes by the end of the year is impossible, Minns should set himself a new goal by which he can be measured.

Instead, Minns’ measure of success is if we finish 2024 with more new homes than Victoria, “given we’re the biggest population, given we’ve got the highest rents (and) given we’ve got the highest median house prices”.

That might be easier said than done.

The latest ABS data shows that building activity ramped up by almost 21 per cent in the September quarter. They are only down six per cent on a yearly basis.

The outlook isn’t all bad.

One of Sydney’s biggest cheerleaders for more housing, David Borger, believes that the Minns government’s reforms will eventually pay off.

David Borger believes the Minns Government’s housing plans can work in the long run. Picture: David Swift

Minns isn’t just throwing the kitchen sink at the problem, Borger says, “they’re throwing the whole kitchen at it”.

Borger thinks Minns was right not to give himself a more realistic target when conceding that building 75,000 homes this year was unattainable.

“I think it’s better to have a bigger target even if it’s unachievable,” Borger told me. “What we want to achieve is meeting the targets over the long term.”

The former Labor Housing Minister turned Business Western Sydney executive director last year pulled together an “unlikely alliance” of industry groups and unions to form the new pro-development advocacy body Housing Now.

Borger said reforms making it easier to build dual occupancies, low-rise terrace homes and higher density apartment blocks near transport hubs will all play their part in speeding up housing supply.

A new “pattern book” of terrace house designs is also expected to be completed by the end of this year, promising developers faster approval if they choose from a list of approved designs.

The problem, he says, is that construction is currently “just not profitable” and has too much risk.

While we wait for changes to planning rules to transform into concrete in the ground, Borger thinks that governments should do more to fill empty dwellings.

If empty dwellings that are converted to long-term housing are considered as “new homes” being delivered, that could go some way to helping governments meet their ambitious housing targets, while getting a roof over the heads of families.