Property Council wants government to bypass ‘ineffective’ councils to fast-track planning

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Property developers are stepping up pressure on the Andrews government to push through major reforms ahead of next month’s state budget, including fast-tracking planning approvals by bypassing councils and establishing a housing affordability council.

In a budget submission, obtained exclusively by The Age, the Property Council asked the government to cut out “ineffective” local governments so that more medium and high-density homes can be delivered in Melbourne’s middle-ring suburbs.

The state government has flagged plans to add an extra one million homes to Melbourne’s existing suburbs by 2050.Credit: Paul Rovere

It comes after this masthead revealed on Tuesday that the government was working behind the scenes on a bold reform package to streamline planning, which would likely reduce the role of local councils.

The Property Council submission urges the government to fully implement 27 recommendations from a major review of the planning system undertaken by commissioner for better regulation Anna Cronin between 2019 and 2021 that was never acted on.

It also calls for a shake-up of property taxes and the establishment of a Victorian Housing Supply and Affordability Council to ensure the government achieves targets for land supply and to advise on ways to improve planning.

Property Council executive director Cath Evans said the planning system was “straining under the weight of its own inefficiencies and widespread resourcing issues … with the end result being that the consumer wears the cost”.

She said reform would be crucial to support the government’s target of building 70 per cent of all new housing in established suburbs close to transport and jobs.

On Tuesday, The Age reported on Planning Minister Sonya Kilkenny’s concerns about urban sprawl and her vow to urgently promote development in established suburbs, rather than greenfield areas on the city fringe.

Two government ministers – who were not allowed to discuss cabinet deliberations publicly – said Kilkenny and Infrastructure Minister Jacinta Allan were working on reforms to streamline planning for new housing near public transport in established suburbs, including along the government’s flagship Suburban Rail Loop.

News of the government’s planning revamp comes just over a year after it proposed a 1.75 per cent levy on the expected value of all newly built developments with three or more dwellings. The fee was designed to help pay for an extra 1700 social and affordable homes each year.

But the plan, which was expected to raise $800 million a year for social housing, was scrapped after an acrimonious dispute in which the government accused the development sector of breaching a “grand compact” and running a campaign of misinformation by vastly overstating the impact of the tax.

On Tuesday, social housing groups said that a fairer outcome for Victorians in housing should be central to major planning reforms.

“Changes to the planning system could deliver the pipeline of social housing growth our state needs by including a statewide mechanism that requires developers to contribute to social and affordable housing,” said Jason Perdriau, the acting chief executive of the Community Housing Industry Association.

Deborah Di Natale, chief executive of Council to Homeless Persons, said building reforms should be tied to growth in social housing.

“Chronic under-investment in Victoria’s social housing needs an urgent boost after decades of neglect,” Di Natale said.

The Property Council flagged its preparedness to support more social housing on Tuesday. “Any proposed solutions to the housing affordability crisis we’re facing must acknowledge the simple reality that we need to deliver more housing of all types, including social and affordable housing,” Evans said.

Matthew Kandelaars, Victorian director of the Urban Development Institute, blamed the state’s current planning system for making homeownership unreachable, driving up rents and acting as a handbrake on the state economy.

He said while the UDIA supported urban infill to maximise existing infrastructure in established suburbs, development in greenfield areas on the city’s fringe was crucial for tackling housing affordability.

Opposition planning spokesman David Hodgett said both emerging and established suburbs deserved a real plan and proper infrastructure to manage growth.

“The starting point to manage our growing city is to ensure all residents, whether they live in the inner-city or outer suburbs, have access to high-quality transport and community infrastructure,” he said.

Hodgett said cutting councils from the planning process was no substitute for real planning or investment in local infrastructure.

“The Andrews Labor Government needs to stop looking for shortcuts on planning, and work with local communities to improve liveability across Melbourne.”

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