What next for development policy?

Aug. 17, 2010 - PRLog -- This Saturday Australians go to the polls to elect a new Federal Government. However, whereas the pre-election debate in 2007 included policies to increase housing supply and affordability, there has been scant focus on housing in 2010 by either Gillard or Abbott, something quite remarkable considering community concern about the cost of living.
While the Kevin 07 election message was about sympathy for family mortgage or rental payments, and policies aimed at increasing supply, house prices and rents have simply increased throughout the current Government’s term.
The doubling of the first home-buyers’ grant to $14,000 helped 250,000 households and individuals into the housing market. However, it pushed up prices and average first home loans also increased from $230,000 to $290,000. So, many households now have increased debt burdens with 11 per cent of income now going on interest bills. While this may be down from 14 per cent before the GFC, it’s actually double that of a decade ago.
Renters remain ‘stressed’ with almost 170,000 lower-income households paying more than half their income in rent.
Labor’s National Rental Affordability scheme has run at a slower pace than anticipated with investors complaining about an excessively bureaucratic approval process. Superannuation funds have also given the scheme a wide berth.
The commitment to build 20,000 affordable homes has similarly faltered, with new construction of low-income apartments being stymied by ‘not in my back yard’ community groups. Accusations have been made that the scheme undermines the ability of local Governments to create and plan decent communities because of poor design and lack of parking.
The opposition has not released its policy but according to its spokesman Gary Humphries, ‘there isn’t likely to be a great deal of reorganisation, as in wholesale ousting of programmes. There will certainly be a refocusing of some of them, but the changes won’t be massive.’
Julia Gillard’s initiative to help councils clear the way for development with a $200 million regional building fund looks like a step in the right direction, however the money is simply being shifted from the rental affordability scheme.
What’s entirely absent from the 2010 election debate is what First National Real Estate and many industry lobby groups have called for – the need to reform planning laws to help private developers increase housing stock.
The Housing Industry Association (HIA) held a one-day summit in Sydney last week, the outcome being statements that the supply of new housing was being negatively affected by inequitable infrastructure funding models. It believes the lack of planning and approval coordination and the requirement for developers to fund community infrastructure to win approval makes the cost of development unaffordable.
Gary Humphries admits that local and state governments have been a key part of the problem with supply and intimates that the opposition would offer policies to remove the stumbling blocks. Detail, however, is lacking. Meanwhile, the current government has commenced an inquiry into local and state planning laws through the Council of Australian Governments (COAG).
Either way, neither major party appears to offer new policies related to supply and affordability with Labor offering yet another ‘review’ and Liberal, a suggested but yet to be announced policy to remove obstacles to development.

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