Politics and planning: The pitfalls facing Chris Minns’ housing reforms

In 2017, the newly installed NSW Premier Gladys Berejiklian used her first press conference to identify Sydney’s housing affordability crisis as her biggest priority.

It was, she said, “the biggest issue people have across the state”. She intended to “make sure that every average, hard-working person in this state can aspire to own their own home”.

NSW Premier Chris Minns has pushed for Sydney to increase its density to solve the housing crunch.Credit: Images: Wolter Peeters; Kate Geraghty. Graphic: Aresna Villanueva

The then-planning minister Anthony Roberts was tasked with fixing the problem. In a two-year period, housing completions rose to their highest point in the decade. But in the lead up to the 2019 election, in the midst of fierce backlash from his own cabinet, progress stopped and new housing plummeted.

Roberts is upfront in conceding that politics, along with the COVID-19 pandemic, crippled housing reform.

Despite introducing a series of often controversial changes to the system – including planning panels meant to stamp out local government corruption while also streamlining approvals by bypassing councils – changing the system became more torrid as the 2019 election loomed.

“There was massive pushback by backbenchers, within cabinet, from the premier’s office,” he says.

Former NSW planning minister Anthony Roberts says his reforms were met with pushback by cabinet colleagues ahead of the 2019 state electionCredit: NCA NewsWire

Plans for increased housing in places such as the Hills, Ryde and Drummoyne saw fierce pushback from Roberts’s cabinet colleagues David Elliott, Victor Dominello and John Sidoti.

In the end, reforms such as a fast-track approval system for low to medium developments were scrapped, and the government introduced a two-year freeze on new rezoning applications for residential housing in Ryde.

“We introduced the changes and got immediate pushback. Ryde council, through their local member, demanded two years to get their local environment plan right,” he says.

“Overdevelopment became a major issue prior to 2019 election and that was where it all began to unfold.”

Five years on from Berejiklian’s pronouncement, the problem has only gotten worse. Now a new Labor government, led by Chris Minns, has also vowed to fix it.

Four years after Roberts was rolled by his cabinet colleagues, the state government faces the same problems – turbocharging the planning system and the political consequences that entails.

The challenge facing Minns is daunting. Under the national housing accord targets agreed to by national cabinet in August, NSW will be required to build 375,000 new homes — or 76,000 new homes each year for the next five years.

The figure is ambitious not just because it is double what the state is projected to deliver over the next five years, but also because the yearly target is more housing than has ever been delivered in NSW’s history.

Either pessimists or realists, many educated onlookers give the state a little chance of hitting those targets, particularly given building approvals fell by 34 per cent in the first quarter of 2023 to the lowest point since 2012.

Fabrizio Perilli, president of the NSW Property Council and managing director of development firm Versatile Group, lays out the immediate issue facing Minns – the planning approval system in NSW lags terribly behind other states.

The Mecone Report commissioned by NSW Treasury in 2020 found the state’s development application times finished last behind Queensland, West Australia and Victoria across every single type of development.

Across the state’s planning system, on average, rezoning through a planning proposal can take anywhere between 15 and 24 months; a stage-two, mid-to-large scale development application is in the order of 12 to 18 months, Perilli says.

This is compared to four months in Victoria and three months in Queensland and South Australia. Currently, the NSW government’s “benchmark” for a planning proposal is 14 months.

NIMBY councils are largely at fault for this, claims Minns, who has accused mayors of only ever saying “no” or “hell no” to development.

In response, Minns has repeatedly threatened turning to the “nuclear option” if recalcitrant councils fail to meet the government’s targets. It has put the government on a collision course with the local government sector, with councils such as Ryde now promising vocal public campaigns against their plans for increased density.

Consequently, as part of the government’s suite of housing reforms, Minns and Planning Minister Paul Scully have removed planning approvals from councils on large-scale projects, giving the power to a revamped department, the Department of Planning, Housing and Infrastructure.

Under the Machinery of Government restructure, the department will be streamlined to ensure greater accountability, according to stakeholders who were confidentially briefed. The deputy secretaries positions will be reduced to two – Monica Gibson will be handed responsibility for the housing accord targets, rezoning and strategic planning, while David Gainsford will take on state significant development (SSD) applications.

Developments with 15 per cent affordable housing and over $75 million in capital outlay will be tagged SSDs, as will developments in the government’s initial eight high-density housing precincts built around heavy rail and Metro stations.

For the first time, large-scale residential developments will have an expedited pathway through the department, enabling them to bypass the Byzantine council application process.

The issue will be scalability: in 2022-23, only six per cent of dwellings were approved under SSD (developments on Sydney Harbour foreshore and Sydney Olympic Park), and anecdotally many industry insiders complain that state-led approvals are also time-consuming.

“There are great eyes and expectations on the department,” says Tom Forrest, chief executive of development industry body Urban Taskforce.

“I don’t think they have the budget for these approvals. Every TOD (transit-oriented development) zone assessment; every development worth more than $75 million including the affordable housing bonus will be assessed by the state government. Where are these planners?”

The shortage of planners in a tight labour market is a glaring problem facing the government, according to a developer stakeholder who engages closely with the department and asked to remain anonymous to protect his relationship.

The team working on build-to-rent — large scale, purpose-built rental housing which provides tenants with greater flexibility — is only about 10 people, says this insider. A flood of development applications only leaves two options: repurposing and upskilling, or hiring.

Urban Taskforce boss Tom Forrest has questioned where the departmental planners necessary to meet the looming demand will come from. Credit: Nikki Short

“Everyone’s in la-la land if they think all this can be done within four years,” he says.

Property Council NSW executive director Katie Stevenson too has concerns about a lack of capacity, calling on the government to identify changes to bring SSD assessment timeframes down to six months.

“The NSW government must increase the number of staff in assessment roles within the department to enable it to deal with these additional applications and ensure the department has the resources it needs to deliver on the potential of these landmark reforms,” she said.

CoreLogic Asia-Pacific executive research director Tim Lawless expects the constraints facing the department — a lack of departmental planners, slow approval times and an institutional inflexibility cultivated over the past two decades — to take about five years to resolve.

But the inexplicable delays can’t just be ascribed to a lack of capacity, Perilli says. The problem, he sees, is a perverse, deeply entrenched culture of opposition to developments that has permeated councils over the past two decades.

“Culture has a role to play. Planning and planners is the facilitation of development and ensuring things are done correctly. We need to change the culture from how we can stop developments as opposed to how we can improve them,” he says.

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