Philip Bull jumps in again with another acerbic tilt at planning in New South Wales and its constant change and walk-backs.
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Don’t spend your life waiting is good advice. It’s important to make decisions to get somewhere. Well, TOD (transport oriented development) knows that feeling. After being on show over the summer of 2023-24, all that optimism, all that promise, all those documents and all those explanations of intended effects.
Why wouldn’t you expect something to happen? Reform in New South Wales is like a Barbara Streisand movie; the more things change, the more they stay the same.
The barrier TOD was aimed at was our nationalised development rights system. You can own land privately in Australia. Our Torrens system of titling is as good as it gets by international standards. We have secure private land and strata titling and registries that have stood the test of time.
The reality for most of the world (the not so developed bits) is that private land ownership is still at a semi-bandit level. If your father dies and the property is up for transfer, you might have to pay the bigger bribe so the guy down the road doesn’t grab it. We have secure private ownership of land, that’s lucky, compared to most of the world.
What you can do with land, its development rights, are all nationalised rights. Owned in trust by the Crown (long may King Charles reign). The Crown delegates that right to state government which then coordinates local government to make land use plans that tell you what you can do with your privately owned land.
The problem was that this system of empowering private ownership and then having a highly nationalised system of development rights seems to produce perverse outcomes. Not enough housing, too much heritage and swampy regulation – an entrenched status quo.
No one wants to live in a command-and-control society like some of our cousins to the north but a bit more of a national interest focus wouldn’t hurt sometimes.
Who controls those development rights? The Environment Planning and Assessment Act with its focus on consultation (who’s idea was that?) has empowered group decision making within the propertied classes.
I suppose it’s always been like that, ma lord. The agreed nationalised outcome seems to be an R2 Low Density Residential zone, and if it’s near to something handy like an old railway station or a beach, it has a heritage or protection thingy on it too.
That’s seems to be the outcome when you have this strong imbalance between the power to privately own land and then an often-unclear nationalised system of what you can do with it.
If I had to place a bet on who controls development rights in established Sydney (where TOD is meant to prosper), it would be existing noisy landowners using their local council as their proxy. That group is not hoping for a six-storey building next door to them.
The state government comes second, even though it has the big stick, because its interest in land use planning is periodic and inconsistent. Noisy landowners and local councils are constant and consistent. Like Paul Keating used to say, bet on self-interest, at least you know it’s trying – as TOD found out.
TOD now knows all about these entrenched interests in NSW. The planning system belongs to who’s in charge. Right now, that’s still the propertied classes imposing their self-interested economic vision on our city. Big houses for those in the tent, barriers for the rest.
TOD was meant to be a change in economic mood in a few places. A bit of Edward Glaeser The Triumph of the City in our cities.
embracing some more economic and dynamic ideas about cities, agglomeration and exchange; changing some values about how we see cities, what we give a tick too. Busy is good, congestion is a sign of healthy vibrant places. When that city river flows, it can also be directed and utilised. However, consistent with our culture of control, TOD was constrained, generally near a railway station or a commercial area. There was still a lot of R2 Low Density Residential land for the faithful.
Why is a bit of laissez-faire important? Well, it’s hard to address market demand with the council land use monkey on your back and at the end of the day when you throw your own money at a site, you want a reasonable say over the building.
The current environment in NSW, where planners and heritage officer’s crudely redesign architect prepared schemes, and hand it back to you via amended plans lodged under duress, well let’s just say, it really takes the enthusiasm out of a project and quite often financially ruins it.
TOD got out of the box, but more like a nobbled greyhound than an urbane thoroughbred.
The big reveal came on February 28 this year. TOD got his own chapter in the State Environmental Planning Policy Housing 2021 – that’s where the state government tells local government what’s what on housing. The key new policy was the low and mid-rise (LMR) provisions. This was meant to be a mass upzoning around commercial centres and railways stations in big metro Sydney (Newcastle to Wollongong out to The Blue Mountains Sydney). Economic hope for the little guy (small capital) who could build some housing, well they might, if it’s worthwhile and not too much of a pain.
The actual controls nominally allow up to six-storey buildings. The new legislation looks like it was purpose-written for NSW Land and Environment Court disputes. The pain of a DA is only available to land where you can satisfy the council you have the right zoning, walking distance to the centre/railway station, aren’t a heritage place etc. It’s an up-zoning with an argument.
Check the indicative map (you can still have a fight with the council over whether your site is really up-zoned).
The consultation on TOD seemed to only go one way, taking the policy backwards in terms of its application and bite. And crucially, for most housing DAs, there is still no preferential approval pathway.
Housing is not treated like the necessary infrastructure it is but is still a merit-based DA to the local council. If you don’t have big pockets for a NSW Land and Environment Court appeal, you’re stuck in the council bottle neck.
The TOD consultation process was an opportunity for local government to do what it does best – look for new barriers. The best one was the ANEF (aircraft noise) contour capper, according to the habitation experts at the Inner West Council (IWC) any urban land within the 20 ANEF aircraft noise contour (the red bits – see map) is basically uninhabitable and excluded from any rezonings. The real estate agents in Newtown just haven’t read the legislation.
Second favourite, new minimum lot sizes, secondary prohibitions.
Places like Ku-ring-gai and Blue Mountains do it. If you have big houses and large lots, you should do it, too. The process was sneaky: How do you prohibit and slow down townhouse building on your land? Identify what the average lot size is and then make the minimum lot size required in the Local Environmental Plan (the LEP) so much bigger that medium-density housing becomes prohibited on most land (existing lots) and requires site amalgamation.
In general, another bureaucratic response to TOD, was a weird fetish for site amalgamation and cars. One day you like the existing lot owners, next day you don’t. Why site amalgamation? Well, it slows you down and allows for more cars. TOD takes the metro.
The response of local government to TOD has been more local restriction and more complex controls. A kind of, well, I lost the argument, and now I am going to wallow on the issues and let everyone know how bad a decision this is. Historically low housing approval numbers, after a year+ of TOD, can’t all be just about the increasing cost of building materials.
I suppose all those councils still kicking the zoning can down the road a bit more (that’s called consultation) might come up with a viable housing plan that addresses need and created opportunity in their community. That’s a fairy tale, based on past performance.
As if to prove this point, the Inner West Council has, after the third attempt to plan for metro rail, released its Fairer Housing Strategy.
The state government had a go in 2013-2017 – that was too scary, was shelved and planning making given back to council. Then again in 2022 the council released it consultation agenda for new housing (again, too scary, shelved). To get them to do it again, the IWC was given $2.6m to get us to a nuanced local response.
Here’s what 10 years of ruminating on doing the right thing for metro Sydney looks like.
So far NIMBYs 3, Metropolitan Sydney 0. The big new zoning idea is a heritage listed bungalow townscape in convenient walking distance of metro and light rail, but don’t worry it’s only a draft and the timeline for change is slow and uncertain.
And don’t fret about above station development and those cathedral metro stations they got everywhere else, the inner west prepared for metro rail by heritage listing its 19th century railway station buildings.
A Fairer Plan, in this instance, means supporting the already well housed and wealthy established landowners – is that fair?
The IWC zoning plan is like Trump offering refugee status to white South Africans – karmically, that sort of pain just needs to play out.
The new Labor government has looked to housing and productivity for its new term after a thumping victory.
So far Albo’s promises are a 5 per cent low deposit scheme for first home buyers and more money for social and public housing. No sign of the real productivity issue with Australian housing – that huge chunk of money and often productive land sitting below the lucky few.
“My house makes more each year than me” is not an uncommon refrain in the eastern suburbs, lower north shore and increasingly the inner west. The idea of the bank of mum and dad is real, for some. The lack of tax liability on owner occupied land, and then a few free kicks with negative gearing and concessional taxation of capital gains makes property a great asset, if you can get it.
We could be living in smaller houses, walk a bit more and not drive monster sedan Utes around. That great chunk of money could be doing something a bit more productive, other than supporting heritage listed barge boards and more renovation of existing.
Not allowing city housing markets to build to desire is a dangerous productivity move. Long commutes, commuter suburbs, heritage listed bungalow townscape with Metro Rail, young and old parts of the city separated, that’s a city pandering to aging property owners who probably need urban housing themselves as their age. That type of city is already there in many parts of Sydney. Zoning reform is easy, the problem in Sydney is squeezing it past the entrenched property interests that local government represents.
What is the real productivity reform needed in Australian cities?
Maybe time to have a look at local government. It needs a big micro economic dust off, like Bob Hawke did to a few sectors in the 1980s. Are Sydney’s 19th century collection of local government authorities delivering?
Councils have their own alignment with their own property owners, as they should, that’s how they are structured. Maybe there are better structures for delivering urban services in one of the richest and most governed places on earth? Local government has become a very small place where big ideas about new housing are meant to happen with the National Housing Strategy. Their response so far has been more about being special and seeking exceptions, as opposed to getting on with housing. That’s a red flag for structural reform, and TOD.