‘As confused as it is confusing’: The big handbrake holding back housing in Sydney
If Sydney is ever able to tackle its housing crisis and become affordable for young people, addressing the development application system needs to be at the top of the list of reforms.
By Daniel Lo Surdo and Kayla Olaya
NSW’s DA system is a maze holding up housing supply. Credit: Artwork: Marija Ercegovac
Before any home can be built in NSW, a development application must be approved. But the process leading to the final sign-off couldn’t be more complicated.
Here lies a convoluted, contorted system that resembles snakes and ladders better than a multistaged assessment system. Premier Chris Minns agrees that the process has slowed new supply – putting a handbrake on attacking Sydney’s housing crisis.
To address this, Minns created the Housing Delivery Authority (HDA) – the three-person body with special powers to fast-track select new builds separate from the complicated approval system managed by local and state governments.
Councils don’t like the HDA and have pointed the finger at Minns’ public servants for inefficiencies in the system – a view shared by one prominent developer and former Labor chief of staff.
How does the DA system work?
All new housing starts with a DA, which allows councils and state government agencies to assess the impact of a proposed development on a given area.
The environmental, social and economic implications of a new build are among the factors addressed, which also considers construction standards and energy usage.
A DA must be approved by a council and lodged with a state agency before a construction certificate can be obtained.
What are the criticisms of the DA system?
Excessive red tape is blamed for a sluggish DA system.
A one-page flowchart demonstrates the five-stage approval process for a DA. This includes a “post-determination” process DAs face once given provisional approval and a final modification process in which the application can be returned to the first stage if amendments require a fresh review.
Councils also face criticism for delaying housing supply. Only 57 per cent of the state’s councils are lodging DAs with the state government in the two weeks after the application is first submitted – the time frame that applications are expected to be filed under an order from Planning Minister Paul Scully.
Scully called the DA approval process “as confused as it is confusing” and claimed some councils are “just using it as an excuse for NIMBYism”.
North Sydney Mayor Zoe Baker – who oversees a council that took 246 days to assess an average DA in the past financial year – has blamed agencies such as Sydney Water and State Emergency Service for slowing housing supply, saying some taskforces can take up to six months to decide on one housing development.
“We’re at a scale where it just can’t be the councils’ fault,” Baker said. “Councils have no authority to make applications move any faster than state agencies are prepared to.”
North Sydney Mayor Zoe Baker says agencies such as Sydney Water and State Emergency Service slow housing supply. Credit: Janie Barrett
Darriea Turley, the outgoing president of peak body Local Government NSW, said builders were also responsible for delaying construction on applications swiftly approved by councils.
“The legislated DA system that councils have been delivering under for many years now provided tens of thousands of approved dwellings that still have not been able to be constructed for a variety of reasons,” Turley said.
“If even a portion of those dwellings had been completed, that would have added to the market homes for everyone.”
Billionaire apartment builder Harry Triguboff listed planning inefficiencies at the local level among the biggest handbrakes to new developments, telling the Straight Talk with Mark Bouris podcast he would “love to build more” but he is impeded by councils who “don’t approve anything fast”.
What is the HDA?
The HDA is a three-person body designed to accelerate supply and counter inefficiencies within the DA process.
It will include Premier’s Department secretary Simon Draper, Department of Planning secretary Kiersten Fishburn, and Infrastructure NSW chief executive Tom Gellibrand, who will steer a new pathway to fast-track large-scale housing developments across the state.
NSW Planning Department secretary Kiersten Fishburn.Credit: Edwina Pickles
Developments worth more than $60 million in Sydney, and $30 million in regional NSW, will be reviewed by the HDA. Proposals reviewed by the HDA must be close to transport hubs and business centres.
Scully, who will receive recommendations from the HDA and hold final decision-making power on projects green-lit through the pathway, said the triumvirate would “streamline approvals” to improve housing outcomes across the state.
“We’re working to remove the red tape that has made building a home, or starting a job-creating venture, in NSW too difficult,” he said.
Tom Forrest, chief executive of property developer lobbyist group Urban Taskforce, supported the HDA, finding that the state agencies had been dragging the chain for several years.
“Councils actually suffer because they pick up the phone and no one answers,” Forrest said. “It’s an opportunity to relieve them of the burden to deal with highly complex developments traversing council boundaries.”
What are the criticisms of the HDA?
The HDA has been staunchly opposed by the state’s councils, which have raised concerns about the accountability mechanisms monitoring the decisions of the three-person body.
Among the dissidents is Georges River Mayor Elise Borg, whose council was the slowest to respond to DAs (259 days) in the past financial year. Borg instead proposed a “balanced, integrated approach that respects the values of our local community”.
“The proposed fast-track rezoning pathway that bypasses council involvement is concerning, and places significant decision-making power in the hands of a few,” Borg said.
Transparency concerns were echoed by University of Sydney urban planning lecturer Catherine Gilbert, who found it was “not clear” how the HDA would be making its assessments.
“We just need to know more about what they’ll be using to determine whether an application is acceptable, and how much variation they will grant, and on what basis,” Gilbert said.
Forrest called much of the criticism levelled at the HDA “pantomime scaremongering”. He said it would create a “greater imperative to build” in areas with higher rents and low supply.
“They won’t do something causing traffic chaos or environmental degradation but will focus on housing supply and take into account the performance of the local council,” Forrest said. “I really don’t think that’s a realistic critique.”
Will it help young people find a home?
The HDA doesn’t include any criteria that gives preference to a particular age cohort when assessing housing applications. There’s also no mandated affordable housing allocation for proposals, or proportion of homes set aside for essential workers.
Gilbert suggested that a mandated affordable housing contribution for “targeted cohorts”, such as young people in housing stress, could ensure equitable access to new builds approved by the HDA.
“We’re at a point in Sydney where the median market price is beyond what an essential worker can afford – the gaps are in the hundreds of thousands, so it’s something we really need,” Gilbert said.
“In some ways I’m all for improving the efficiency of the planning system, but we need to think about the nuances that we’re losing if we expedite planning approvals.”
Turley backed the prospect of an affordable housing allocation within HDA applications, finding that it would help young people access housing security in Sydney.
“The opportunity for younger people and other low- to moderate-income earners to get into homes would be assisted by including a requirement for an affordable housing component as a condition of acceptable into this new pathway,” Turley said.
Woollahra councillor James Ardouin.Credit: Nick Moir
James Ardouin, a 25-year-old Woollahra councillor, didn’t think a policy governing affordable housing provisions for young people was required, noting that developers were already aware that allocating affordable homes in a DA helps as a “sweetener” to fast-track an approval.
“Developers understand that any approval body is going to view their proposal more favourably if they have affordable housing for essential workers,” Ardouin said. “We need to create genuinely affordable housing.”
Scully didn’t address the Herald’s questions about an affordable housing allocation within HDA-reviewed builds, nor offer further detail about how the assessment criteria would be applied to proposed builds.
What happens next?
The HDA was established by the NSW government on December 20. It followed one month of formal consultation centred on the eligibility criteria for developments wishing to be fast-tracked by the body, and environmental assessment requirements that successful proposals will be obliged to follow.
The HDA began accepting proposals for major housing developments on January 8, with recommendations expected to be made to Scully early this year.