The Labor Opposition’s proposal, Affordable Homes in Sydney, contains some constructive ideas; yet adding taxes to development is “the wrong move,” according to the Property Council of Australia.
“We all agree that something urgently needs to be done about housing affordability in NSW, and [the] industry stands prepared to deliver the homes the state needs,” said Cheryl Thomas, Property Council of Australia’s deputy executive director for NSW.
While Thomas commended Labor’s commitment to helping vulnerable residents secure affordable housing, she strongly criticised the new taxes. “We cannot have a generation missing out on the opportunity to own their own home, yet placing additional ‘mandates’, a clever word for taxes, on the development of homes is not the way to go about it,” she said.
Labor wants a quarter of new homes on government land reserved for low- and middle-income earners. Opposition Leader Luke Foley said he plans to take the proposal to the next election. Labor also wants property developers to reserve 15% of new homes on rezoned private land for affordable housing.
“Families and those on moderate incomes struggling to get a roof over their heads will now have a chance [to live] closer to work,” Foley said.
The proposal could worsen housing affordability in NSW
“We agree the government should be looking at utilising their own land for affordable housing, yet the suggestion of a 15 per cent affordable housing tax on privately owned land fails to take into account the myriad of levies, taxes and costs placed on development at a federal, state and local government level,” Thomas said. “Without taking into account these additional costs, there is the real chance that prices will go up under this proposal, worsening the problem.”
She pointed out that local councils are sitting on about a billion dollars in unspent infrastructure levies. The state government isn’t exactly cash-strapped either, as it’s sitting on $8bn in stamp duty revenue. “It’s time we saw a proposal to use some of this money for local infrastructure and for tax relief,” she said. “Any affordable housing model needs to incentivise investment rather than act as a disincentive. Height and floor space bonuses as well as tax incentives must be part of any model, as they have been in other parts of the world facing similar challenges.”
The Property Council recommended an audit of all the publicly owned land available for development, as this would give policymakers a better idea of what can be accommodated on such land. “[The audit] should be extended [to accommodate] development capacity mapping across local government areas to ensure the current zoning and planning approaches can accommodate the housing Sydney needs,” Thomas said.
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