BANANAs scuttle NSW planning reforms

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ScreenHunter_24 Apr. 18 12.02

By Leith van Onselen

A few weeks back, I lamented how BANANAs (“Build Absolutely Nothing Anywhere Near Anything”) are becoming a growing feature of the urban landscape. They typically comprise people that bought their homes many years on the cheap (helped by governments that were amenible to development) decrying “evil sprawl” and high-rise development.

The BANANA fraternity, which includes many urban planners, seem to believe in mutually exclusive thinking: that somehow Australia’s capital cities can continue to accomodate increased population without growing the urban footprint and/or higher density.

Unfortunately, the housing BANANAs appear to have won another battle, with the NSW Government drastically watering-down its proposed planning reforms, which were aimed at dramatically streamlining planning approval processes amongst NSW’s 152 local councils. Under the Planning White Paper, released in April, councils were to be required to give approval to 80% of all complying buildings within 25 days, with approvals on straight forward applications (i.e. where new homes and renovations are under two storeys and do not affect neighbours with overshadowing or privacy issues) required in under 10 days.

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However, the AFR reports today that intense lobbying from BANANAs and NIMBYs has provoked a back down from the New South Government, with Planning Minister, Brad Hazzard, yesterday introducing the new planning bill into Parliament, which slashed the 80% code assessment target and reduced its application to areas considered “high density”, namely concentrated around railway corridors.

Urbis managing director, John Wynne, has slammed the planning backdown, claiming that New South Wales had missed “a once-in-30-years opportunity [to] to remove a lot of clutter that bogs down the system” and that “that clutter will no longer be removed”. And Wynne is not alone in his criticism:

Stephen Albin, the Urban Development Institute of Australia’s chief executive in NSW, said the final scheme had watered down the competitiveness offered under the original reforms…

“We need to keep going with the reform process – give the industry more certainty,” he said.

Glenn Byres, the Property Council’s NSW executive director, said code assessment had been stripped back after “demands and foot stamping” from local government.

“Chronic housing shortages, ­crippling red tape and high hurdles to investment are legacies of the current system – and it needs to be junked,” he said.

“There have been other concessions to councils and self-appointed ­community groups who chose volume over valid argument in the public debate,” he said.

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New South Wales’ planning system is regarded by many as the country’s poorest performing, and in most need of fundamental reform. In its 2011 planning report, the Productivity Commission noted that it took up to 119 months (nearly 10 years) to complete land supply processes in Sydney, with much of this time consumed by rezoning (see next table).

Any backsliding on reforms to planning and land-use is likely to place further upward pressure on urban land values across Sydney and beyond, reducing housing affordability (despite shrinking home sizes) and worsening congestion. While those lucky enough to be pre-existing land holders will benefit from the rising wealth brought about by higher values, lower income households and those yet to enter the market (including future generations) will suffer, as will the overall competitiveness of the New South Wales economy as escalating land costs feed into the costs of production.

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Once again, rent seekers are proving successful in formulating policy to the detriment of the national interest.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.