Concerns Sydney levy could push prices higher

The revised Metropolitan Strategy for Sydney along with the six District Plans contains a 10-per-cent levy proposal on new housing to fund affordable housing, which could increase the cost of all new housing according to Urban Taskforce Australia.

“While there’s a lot of good work in the long-awaited District Plans for Sydney, there’s an ominous proposal to add yet another levy onto new housing,” Urban Taskforce CEO Chris Johnson says.

“The plans use a false logic that by requiring developers to provide up to 10 per cent of new housing as affordable this will help with Sydney’s rapidly escalating house prices.

“Clearly, the cost of giving away 10 per cent of new homes will have to be distributed across the other 90 per cent of new homes, therefore forcing house prices up.”

The Urban Taskforce, Johnson says, has presented a better way to create even more affordable housing by allowing new projects an increased floor space of 20 per cent, provided it’s for affordable housing.

“We estimate that this could provide 40,000 new affordable homes over the next 10 years,” he says.

“The Greater Sydney Commission fact sheet is now targeting 189,100 new homes over five years, which requires an average of 37,820 new homes a year. The highest number of new homes in recent years has been 30,000 last financial year so the most important task the Greater Sydney Commission has is to increase housing supply, but by adding a new tax the opposite is likely to occur.”

According to Johnson, a Greater Sydney Commission Fact Sheet does suggest that the levy would be in areas where some floor space uplift would compensate for the levy but the approach to “give away affordable homes” under SEPP 70 rather than providing them as low-cost rental for 10 years as indicated in the Affordable Rental Housing SEPP will definitely affect the feasibility of future housing development, he says.

“Sydney needs a plan to increase housing supply dramatically and to provide large numbers of affordable homes. The Urban Taskforce approach achieves both of these aims.

“The District Plans seem to be fairly general documents with little data on heights or density,” Johnson continues.

“There are broad jobs and housing targets but the real definition of built form would appear to be delegated to the development of Local Environmental Plans by councils.

“This could leave certainty in the planning system on hold for a few years, particularly as elections for new amalgamated councils are a year off.

“The new data in the draft District Plans is likely to generate many planning proposals that want to vary existing controls.

“We have a concern that the definitions of District and Strategic Centres now do not include residential accommodation. The Urban Taskforce supports mixed-use urban centres that are activated all the time rather than only being nine-to-five work environments. With so much focus on providing transport infrastructure to major centres, it’s important that this investment supports a bustling 24/7 mixed use environment.”

Johnson believes the package of documents doesn’t address the issue of value capture either, which was recently raised by the federal government to help fund new infrastructure, adding: “This could become another tax on the cost of new homes.

“The Urban Taskforce is keen to work with the Greater Sydney Commission to ensure housing supply is maximised and that quality, mixed-use urban centres can be achieved.”

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