Housing Affordability - Yes we are here to help

Posted 4 August 2015

Housing Affordability - Yes we are here to help

Canberras poor housing affordability is freezing many young people out of the ACT housing market and its unresponsive land and planning arrangements are inextricably linked.

Unless there is urgent action to fix the broken planning system and ensure that land release is properly timed so that there is an adequate supply of blocks in the pipeline to meet demand, we are not going to be able to satisfactorily address the ACTs declining housing affordability.

Housing affordability is a growing problem nationally and Canberra is neither unique nor immune from the problem.

Canberra has its own especially cumbersome land and planning systems which gives planning bureaucrats and public objectors extensive opportunities to frustrate development. Those builders and developers who are going to continue to operate in Canberra and not de-camp to some easier and potentially more attractive market need a special sort of endurance and patience and very deep pockets.

The territorys inherently complex planning regime is additionally complicated and the opportunities for delay and frustration of development proposals are further enhanced by the overlapping responsibilities of ACT and Federal National Capital Authority planning bodies. The NCAs powers extend well beyond areas of genuine national interest in the Parliamentary Triangle and Canberras gateways into planning control in areas without any real national significance.

The recent Federal Government decision to review the NCAs areas of responsibility is a welcome but small - step forward for rational land planning in the ACT. Unfortunately however, the building and development industry has witnessed reviews of duplicated planning powers before only to see them fizzle out as officials demonstrate more energy and commitment to preserving their bureaucratic empires than they have previously shown in getting the wheels of the economy turning.

All these elements compound to create a mountain of frustrations for the building and development industries.

In addition, land release planning in the ACT often fails to take account of the delays and permanent obstacles to release which are likely to arise by the intrusion of other government requirements such as environmental controls. When environmental obstacles drastically cut the number of blocks released in sub-divisions as has occurred in Jacka and Throsby the Land Development Agency too often has no plan B to fall back on: and the result is a shortage of land supply and a failure to meet land release targets, rather than switching development to an alternative sub-division.

Canberras demographics also hide the extent of declining housing affordability. The most widely-quoted housing affordability index uses average family income and Canberras high proportion of two-income families the highest in the country hides the very large number of young people and families who are being frozen out of Canberras housing market.

The unique features of land, planning and demographics in Canberra means that the Federal Governments examination of housing affordability in conjunction with the states and territories (through the Council of Australian Governments) while welcome, is unlikely to come up with solutions for the ACT.

Undoubtedly hopefully there will be some factors affecting affordability which we share with the states and some measures from the COAG inquiry which the ACT could usefully adopt. But the ACT has to have its own solutions to its own problems as well.

There is no silver bullet or single magic solution. However one important way of addressing this problem and making progress towards a solution is for the ACT Government to adopt the proposal which Master Builders ACT has put to it on a number of occasions: to more seriously engage the building industry in all elements of the planning process at their initial stages, not as an afterthought so that it can claim industry consultation. Any ACT Government which does this will get the benefit of a wealth of industry knowledge early in the process when that knowledge is most likely to be useful.

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