Minns government on cusp of rewriting Sydney housing density reforms

A bid by NSW Premier Chris Minns to tackle the state’s housing crisis has been dealt a blow, with the new government on the cusp of rewriting a key reform after industry figures branded it “impractical and unfeasible”.

Six weeks after the policy was announced by the NSW government, the Department of Planning and Environment had been forced back into consultation after peak bodies declared the suite of incentives would fail to deliver on their original intent.

NSW Premier Chris Minns’ efforts to resolve the state’s housing crisis have been dealt a blow after a key pillar of his reform measures faced criticism from industry.Credit: AAP

Minns and Planning Minister Paul Scully announced plans in mid-June to let developers build higher and denser, but only if 15 per cent was set aside for affordable and social accommodation.

Developments worth more than $75 million that clear the 15 per cent hurdle would be fast-tracked through the “state significant development” pathway, which bypasses local councils and planning panels, and get access to a 30 per cent floor space and height bonus.

Minns has repeatedly said he will take the fight to intransigent councils as he seeks to shift to higher-density living in Sydney, and move towards a more equitable planning system with the burden of housing targets shared across the city.

Despite promising to recalibrate the burden of housing density away from the city’s west, the government confirmed to the Herald that the City of Sydney council area would be exempt from the planning reforms.

Last week, Minns visited powerful western Sydney mayors Frank Carbone, Ned Mannoun and George Greiss – the respective heads of Fairfield, Liverpool and Campbelltown councils – seeking support for his plans to increase density in their local government areas.

But as he lobbied for mayoral backing, the reforms underpinning his density plans were facing a backlash from industry.

Urban Taskforce chief executive Tom Forrest said the planning department’s consultation process had highlighted serious issues with the measure. Forrest argued the proposed rules would fail to entice developers to buy into the proposed system.

“Industry is becoming increasingly concerned that the planning bureaucrats have whittled the government’s policy down to effectively make it impractical and unfeasible,” he told the Herald.

The Minns government wants to shift to higher-density living in Sydney.Credit: Michael Quelch

“I think it’s inevitable that the whole thing will be revisited. It’s better for the government to come back to the table sooner rather than later to get the political credit for increasing housing supply.”

The government’s reforms were undermined by three key issues, Forrest said.

First, the floor-space ratio and height bonuses attached to developments would not supersede existing council development controls – a departure from what was originally proposed by Labor when the policy was announced in June.

Second, even if developers did not use the entirety of the 30 per cent bonus, there was no flexibility on the 15 per cent affordable housing requirement.

Finally, the affordable housing requirements were in addition to any existing targets set by council, meaning some buildings could need up to 25 per cent affordable housing.

In response to questions from the Herald, Scully said the ongoing consultation with industry was “always envisaged” and the policy was based on “substantive feedback ... informed by their modelling”.

“Happily, we’ve seen tremendous support from the industry when it was released, and community housing providers are looking to get engaged to supply more affordable housing and housing generally,” he said.

Property Council of Australia NSW executive director Katie Stevenson said the organisation was “productively engaged with government” in an effort to overcome challenges such as resolving conflicts with local council rules.

Chris Minns has sought the support of powerful western Sydney mayors such as Fairfield’s Frank Carbone for his government’s housing reforms.Credit: Steve Siewert

“We are having productive conversations with government to refine the implementation of its important but complex policy to ensure it realises its commendable ambitions,” she said.

Urban Development Institute of Australia NSW chief executive Steve Mann said the 30 per cent height and floor space bonuses needed to be fully realised for developers to privately fund affordable rental housing, calling for the government to consider an alternate model.

“The recently announced affordable housing bonus is a step in the right direction, however industry is concerned that the Department of Planning is drafting a policy which will fail to deliver its stated intent,” he said.

Any change to the reforms would be the second time the government has retreated on housing policy, after Better Regulation and Fair Trading Minister Anoulack Chanthivong shelved efforts to outlaw secret rent bidding following criticism by tenants’ advocates and homelessness groups.

Minns’ appeal to the influential mayors had mixed success.

After meeting Minns last Thursday, Carbone said the two leaders could not agree, accusing the premier of “dumping” Sydney’s population in the western suburbs and seeking to redistribute taxation to pay for amenities for residents “east of Parramatta”.

“It’s one rule for the west and another for the east,” he said.“He is burdening and taxing the working people west of Parramatta, to pay for infrastructure for those that live in the east.”

While open to increased housing targets, Mannoun said any additions required improved social and transport infrastructure to handle the influx of people.

“I told him I was open to what he was saying, in terms of density. Liverpool can be the solution to Sydney’s housing problems. We can take extra growth, but we need the support in terms of amenity,” he said.

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