infrastructure costs hamper new estates.Every household in Sydney could be hit with a new tax to pay for future housing developments under a government shake-up of planning laws.
A review of the rules has suggested that residential rates on all properties should rise to boost levies and spread the costs of urban development.
The state government’s Green Paper based on the review, which was released on Friday, does not rule out the new tax but supports new avenues for a ”fairer, simplified and more affordable system for infrastructure contributions”.
The review, The Way Ahead for Planning in NSW, was conducted on behalf of the government and recommends the principle of everyone pays. It advocates the biggest overhaul of state planning laws in decades and has been welcomed by the state’s leading business organisation, the NSW Business Chamber.
“Land use is a key economic lever and having the right settings in place will mean that NSW is better able to attract investment, deliver infrastructure and generate jobs,” the chamber’s chief executive, Stephen Cartwright, said.
The chief executive of the developer lobby group, the Urban Development Institute of Australia, Stephen Albin, has said the present system of funding infrastructure is unworkable and a major barrier to new housing projects.
At present, developers have to underwrite the cost of infrastructure in their own developments. The contribution is capped at $$30,000 a house.
The authors of The Way Ahead, Tim Moore and Ron Dyer, both former state ministers, say a new tax is the only way to fund the significant gap between the amount that could be charged to developers without damaging the cost of housing affordability, particularly for first home buyers in greenfield estates, and the cost of the necessary local infrastructure required for the new areas.
”We propose that the settled areas of our community that have had the benefit, in the past, of their infrastructure being funded through general revenue streams rather than by specific development charges should bear part of the cost for new local infrastructure,” they say in the report.
Otherwise, they warn, there will be a significant cost blowout in the price of new homes and affordability if the full costs are to be charged solely as developer contributions, which could lead to delays in some developments and social disadvantage in some communities.
The Green Paper has not adopted all of the review’s recommendations, but says it is ”considering a number of options for reform to implement the new principles for infrastructure levies”.
The paper is aimed at providing a simpler planning system that gives more certainty to what projects can be built and where they can be located. Among the proposed changes are that communities become more involved in planning in advance where developments are wanting to fast-track approvals.
After considering the public and industry response to the green paper, the government will release a more detailed White Paper later this year.
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